The CFPB Has Established Effective GPRA Processes, but Opportunities Exist for Further Enhancement

Appendix C: Management’s Response

June 12, 2014

Mr. Mark Bialek
Inspector General
Board of Governors of the Federal Reserve System and
Consumer Financial Protection Bureau
20^th and Constitution Avenue, NW
Washington, DC 20551

Dear Mr. Bialek,

Thank you for the opportunity to review and comment on the Office of the Inspector General’s draft report The CFPB Has Established Effective GPRA Processes, but Opportunities Exist for Further Enhancement.  The CFPB’s management appreciates your acknowledgement that over a short period of time the CFPB has developed effective and robust strategic and performance planning processes and that the Bureau’s top leaders have demonstrated commitment to these processes.  As noted in your report, the Government Accountability Office has found that support for strategic and performance planning at the highest level of an organization is the single most important factor in the success of any performance improvement initiative.  The Bureau’s leaders have taken this responsibility seriously, and the successes noted in your report are the result.

We also appreciate your recognition of the Bureau’s focus on development of division-level strategic plans and a quarterly performance review process as a commendable action.  Involving division-level management in strategic and performance planning has created an environment in which leaders throughout the Bureau hold themselves accountable for successful performance towards strategic goals.

The CFPB maintains a strong commitment to ensuring transparency of the agency’s goals, expected outcomes, and performance measures, and we continue to invest in efforts that promote greater effectiveness and accountability across the agency.  Our Management’s Response provides the CFPB’s perspective on recommendations made in the OIG’s report, highlights enhancements made since your review, and outlines our proposed approach for building on successes achieved to date.

Sincerely,

/signed/

Christopher D’Angelo
Chief of Staff

 

Formal program evaluations recommendation: Identify areas in which formal program evaluations as described by the U.S. Government Accountability Office, could assist the CFPB in meeting its goals.

The OIG’s fieldwork covered the CFPB planning and performance review processes for FY2012 and FY2013, when the CFPB focused on standing up its programs and reporting systems.  As noted in the course of discussions with the OIG team, throughout FY2012 and FY2013, the CFPB relied on the agency’s robust quarterly review process (QPR) and regular program reviews between the Director and the division officials to develop baseline assessments of the overall effectiveness of the agency’s programs.  Since the conclusion of the OIG’s fieldwork, the CFPB has engaged third parties to conduct formal effectiveness evaluations in some of the key programmatic areas, such as the supervision examinations reporting process and strategic communications.  The CFPB will continue to utilize its QPR process and program reviews with the Director to identify holistically and systematically additional areas for formal program evaluations, as recommended by the OIG and the U.S. Government Accountability Office, and will engage internal and/or third party resources to conduct program evaluations with a view to further improving program designs and sharing favorable practices to address this recommendation. As described in management’s response to the OIG’s second recommendation, the CFPB will develop a multi-year schedule for these additional program evaluations.

Schedule for program evaluations recommendation: Establish a schedule for program evaluations and incorporate the schedule into future strategic plans to fully satisfy the strategic planning requirements of the Government Performance and Results Act of 1993, as amended by the GPRA Modernization Act of 2010.

Based on decisions identified in the course of the quarterly performance reviews (QPRs) and regular program reviews between the Director and the division officials, the CFPB will develop and update a multi-year schedule for program evaluations. The CFPB will incorporate the schedule into its future strategic plans to fully satisfy requirements of the Government Performance and Results Act of 1993, as amended by the GPRA Modernization Act of 2010 to address this recommendation.

Annual performance plan enhancement recommendations: Build on the CFPB’s efforts to comply with the Government Performance and Results Act of 1993, as amended by the GPRA Modernization Act of 2010, by satisfying all applicable requirements in its annual performance plan. Specifically, future performance plans should:

1. 1. Include performance targets for all performance goals.
   2. Include a balanced set of performance indicators to be used in measuring or assessing progress toward each performance goal.
   3. Fully identify how the agency will ensure the accuracy and reliability of its performance information.
   4. Identify major management challenges and fully describe how the agency will address those challenges.
   5. Identify low-priority program activities.

   The CFPB is committed to advancing the overarching intent of GPRA and promoting greater efficiency, effectiveness, and accountability through the CFPB’s planning processes.  The CFPB has further enhanced its planning efforts following the FY2012-13 period in scope of the OIG’s fieldwork and will continue to increase robustness of its annual performance planning.  In particular:

   1. 1. Performance targets for all performance goals: At the outset of its operations, the CFPB established a range of breakthrough performance goals and corresponding measures that required baseline development to inform meaningful annual targets.  In our FY 2013 Strategic Plan, Budget and Performance Plan and Report the CFPB indicated completion of baseline development for several performance goals in FY2013 and established performance measures for FY2014 and FY2015.  As planned, the CFPB intends to complete the baseline development process in FY2014 and set performance measures across all performance goals to be reflected in our FY2014 Strategic Plan, Budget and Performance Plan and Report, which will fully address subsection a) of this recommendation.
      2. Balanced set of performance indicators: The CFPB currently captures leading and lagging indicators for performance goals through the division strategic plans, thus ensuring balanced assessments of progress against performance goals.  The division strategic plans serve as foundations for the quarterly performance reviews (QPRs) and equip the Director and officials across the CFPB divisions with consistent sets of indicators for periodic progress reviews.  Moreover, the CFPB has highlighted balanced assessments against some of the key consumer-facing goals (for example, performance goal 2.1.1 – decrease time between receiving and closing a complaint) in its Strategic Plan, Budget and Performance Plan and Report documents published in FY2012 and FY2013.  To address subsection b) of this recommendation, the CFPB will work to identify and publish meaningful balanced progress indicators for increasing numbers of goals as the agency continues to refine its strategic and performance planning frameworks.  
      3. Accuracy and Reliability of Performance Information: The CFPB provided summaries of its performance data verification procedures in its Strategic Plan, Budget and Performance Plan and Report documents for FY2012 and FY2013.  As an example, the Bureau is subject to an annual independent audit of operations and budget, which includes a review of the CFPB’s performance-based budgeting processes and data validation and verification policy and procedures.  On November 18, 2013, following the period of the OIG team’s fieldwork, the CFPB established a GPRA Data Accuracy and Validation Policy that requires officials from all CFPB divisions to identify formulas, data sources, data capture, verification procedures, and data limitations and provide corresponding attestations to OCFO and OCSO.  The CFPB utilized procedures defined in the GPRA Data Accuracy and Validation Policy to inform its FY2013 Strategic Plan, Budget and Performance Plan and Report.  The Bureau will continue to rely on established procedures and will provide a more robust summary of Data Validation efforts across Divisions in FY2014Strategic Plan, Budget and Performance Plan and Report, thus fully addressing subsection c) of this recommendation.
      4. Addressing management challenges: The CFPB included discussions of management challenges in its Strategic Plan, Budget and Performance Plan and Report publications in FY2012 and FY2013.  The CFPB is committed to continued transparency and open discussion of these aspects of operations to fully address subsection d) of the current recommendation.
      5. Low-priority program activities identification: The OIG’s fieldwork covered the period of FY2012 and FY2013, when the CFPB worked to stand up its operations and deliver on critical rule-making commitments defined in the Dodd-Frank Wall Street Reform and Consumer Protection Act (Public Law No. 111-203).  At the time, the agency’s limited resources were focused on a concentrated set of statutorily defined high priorities. As the CFPB has expanded its capabilities and continues to deliver on key statutorily mandated requirements, thus providing scope for prioritization, the agency will aim to utilize its quarterly performance review and performance planning processes to drive prioritization of activities, in line with subsection e) of the current recommendation.