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

Finding 2: The CFPB Developed an Effective Performance Planning Process but Is Not in Full Compliance With Some GPRA Requirements

We found that the CFPB developed an effective performance planning process that incorporates division-level performance goals and measures not required by GPRA as well as a practice that GAO has identified as effective for implementing GPRA. We also found that the CFPB satisfied 11 of the 12 applicable GPRA performance planning requirements, 7 in full and 4 in part. The CFPB issued its Strategic Plan, Budget, and Performance Plan and Report less than two years after beginning operations. As such, OCSO officials stated that agency priorities were not yet fully identified, and therefore, some GPRA requirements were unmet. We recognize that as a relatively new agency, the CFPB was still in the process of addressing certain GPRA requirements. Moving forward, the CFPB can build on its current success in implementing its performance planning process, which is consistent with GPRA's intent of promoting greater efficiency, effectiveness, and accountability, by fully complying with all GPRA requirements.

The CFPB's Performance Planning Process Is Robust

GPRA requires that agency-level performance plans be developed and published annually. The CFPB developed its first performance plan and strategic plan concurrently. Similar to the strategic planning process, the OCSO led the performance planning process, which involved benchmarking, creating an agency-wide task force, and soliciting input from the divisions. The CFPB further expanded the performance planning process beyond GPRA requirements by developing a division-level strategic planning process that incorporates division-level performance goals and measures specific to the work each division conducts.

Further, CFPB officials stated that performance information collected through the performance planning process helps CFPB officials make informed decisions. Additionally, division management stated that performance information demonstrates the division's progress toward achieving its goals. This use of performance information aligns with a GAO-identified practice for effective implementation of GPRA that underscores the importance of ensuring that performance information is used in decisionmaking.

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The CFPB Demonstrates High Use of Performance Information
In its June 2013 report, Managing for Results: Executive Branch Should More Fully Implement the GPRA Modernization Act to Address Pressing Governance Challenges, GAO recognized the role of performance information in the achievement of agency goals, but it reported that less than 56 percent of federal managers surveyed use performance information in a variety of management activities to a great or very great extent. This level of use of performance information by federal managers has not changed significantly since 1997. In comparison, all four of the CFPB divisions primarily responsible for the agency-level strategic goals, as well as the OCSO, attested to using performance information to inform decisionmaking.

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The CFPB Effectively Ensures the Reliability of Its Performance Information

As part of its performance planning process, we found that the CFPB has an effective process for ensuring the reliability of its performance information. In November 2013, the Director of the CFPB approved a GPRA data accuracy and reliability memorandum establishing policy and procedures by which the Office of the Chief Financial Officer (OCFO) and the OCSO will ensure the accuracy and reliability of the CFPB's performance information. The policy states that the CFPB will develop and report accurate and reliable performance information on a quarterly and annual basis. The procedures include the following three activities:

• Measure definition and data documentation. For each performance measure, the Division Associate Directors must be prepared to report to the OCSO and the OCFO regarding the performance information and its reliability and maintain supporting documentation.
• Attestation of data. Each year, the CFPB will publish its annual performance results, which must include an attestation by the Director of the CFPB on the reliability and completeness of the information. To support the Director's attestation, each Division Associate Director will provide a signed attestation of the division's annual information. The Division Associate Director's attestations are intended to provide assurance to the OCFO, the OCSO, and the Director of the CFPB as to the accuracy of the data and the outcomes of the CFPB's program performance to be publicly presented.
• Internal verification and validation. The CFPB will verify and validate performance information on "a regular basis" to ensure the reliability of the reported performance information, reduce the risk of inaccurate data, and provide a higher level of confidence in the performance data. Verification and validation reviews will be performed or managed by the OCSO.

To assess the effectiveness of the CFPB's performance information reliability process, we tested the accuracy of the fiscal year (FY) 2012 performance information reported in the Strategic Plan, Budget, and Performance Plan and Report.¹³ During our testing of five performance measures in two divisions, we did not identify any issues with the accuracy of the performance information reported for FY 2012.

The CFPB Complies With 11 of 12 GPRA Performance Planning Requirements, in Full or in Part

We found that of the 12 applicable GPRA performance planning requirements, 7 were fully satisfied, 4 were partially satisfied, and 1 was not satisfied (table 3).

 Table 3: The CFPB's Compliance with Applicable GPRA Performance Plan Requirements in Its Strategic Plan, Budget, and Performance Plan and Report

GPRA performance planning requirements applicable to the CFPB	Fully satisfies	Partially satisfies	Does not satisfy
The agency should:
Develop a performance plan
Make the plan available on public website and notify Congress of its availability	a
The performance plan should:
Cover each program activity in the agency's budget
Describe performance goals with the desired level of performance during the plan's year and next fiscal year		b
Describe how the performance goals contribute to the general goals and objectives in the strategic plan
Describe how the performance goals are to be achieved
Include a balanced set of performance indicators to be used in measuring or assessing progress toward each performance goal		b
Include a basis for comparing actual program results with the performance goals
Describe how the agency will ensure the accuracy and reliability of its performance data		b
Identify major management challenges and fully describe how the agency will address those challenges
Identify low-priority program activities
Be drafted by federal employees

• Source: OIG analysis of the CFPB's Strategic Plan, Budget, and Performance Plan and Report, April 2013;31 U.S.C. § 1115.
• Note: See appendix B for further description of GPRA performance planning requirements.
• ^a GPRA requires that the performance plan be consistent with the agency's current strategic plan. We determined that the CFPB complies with this requirement, even though the strategic and performance plans did not meet the February deadline. Return to text
• ^b We found that since publishing its Strategic Plan, Budget, and Performance Plan and Report, the CFPB continues to make additional progress toward fully satisfying this requirement. Return to text

A description of the five requirements that are not fully satisfied, and the CFPB's progress toward satisfying the requirements, follows.

Performance Targets

GPRA requires agencies to identify, for each performance goal, performance targets for the fiscal year covered by the plan and for the following fiscal year. The CFPB did not establish performance targets for 9 of its 27 performance goals.¹⁴ However, CFPB officials stated that they have developed meaningful measures that require the divisions to collect baseline information to be used to develop realistic targets for performance goals. Further, the QPRs we reviewed confirmed that the CFPB is making progress toward developing performance targets. Specifically, the QPRs identify time frames and corresponding strategies, plans, and variables that the divisions are using to develop these targets.

Balanced Performance Measures

GPRA requires agencies to develop a balanced set of performance indicators to be used in measuring or assessing progress toward each performance goal. Balanced performance indicators may include, as appropriate, measures for timeliness, customer service, efficiency, output, and outcome. Overall, we found that the CFPB has developed at least one of each of these types of performance indicators in its Strategic Plan, Budget, and Performance Plan and Report.

However, we found that 7 of the CFPB's 27 performance goals did not have balanced measures that adequately represent the range of priorities or activities needed to meet the goal. One example is the following CFPB goal and associated performance measure related to consumer outreach:

Goal	Measure
Significantly increase targeted outreach activities and digital education materials to engage consumers at the right moment	Target populations or organizations directly . . . reached by digital content, decision tools, educational materials and resources

We found that quantifying the number of consumer populations reached addresses the goal's output. However, the measure does not address whether consumers had been reached at the "right moment," which would indicate timeliness. The measure also does not address outcomes of the goal, such as whether consumers are making more informed financial decisions. One program official from the responsible division acknowledged the need to define additional measures for outreach goals. Further, two other CFPB division officials reported that their divisions are in the process of developing additional types of measures, such as outcome measures, for their division's performance goals.

We also found that while the CPFB included efficiency measures in its Strategic Plan, Budget, and Performance Plan and Report, none of these measures related to cost efficiency. Both Congress and GAO have emphasized the use of cost-efficiency measures in performance planning. Congress encouraged agencies to develop performance measures that compare the level of program activity with program costs.¹⁵ In addition, GAO reported that cost information can demonstrate the effectiveness and productivity of agency programs.¹⁶ We believe that balanced performance measures, including cost-efficiency measures, could assist the CFPB in managing its programs.

Performance Information Reliability

GPRA requires that annual performance plans identify (1) means to verify and validate measured values, (2) sources of data, (3) level of required accuracy, (4) data limitations, and (5) how the agency will compensate for any such limitations. We found that the information in the Strategic Plan, Budget, and Performance Plan and Report did not address data sources, level of required accuracy, or data limitations. However, the CFPB's November 2013 policy and procedures addressing the accuracy and reliability of its performance information establishes requirements for all divisions to collect and internally report on all five of these GPRA requirements. Therefore, if the CFPB reports on these five requirements in its next performance plan, it will satisfy this GPRA requirement.

Major Management Challenges

GPRA requires agencies to identify (1) major management challenges and planned actions to address such challenges; (2) performance goals, performance indicators, and milestones to measure progress toward resolving such challenges; and (3) the agency official responsible for resolving challenges. While the CFPB's Strategic Plan, Budget, and Performance Plan and Report identifies the statutory cap on its funding as its sole major management challenge, it does not identify planned actions to address this challenge, the means to measure progress in addressing this challenge, or an agency official assigned to resolve this challenge. In our opinion, developing efficiency measures that compare program costs with program outcomes may help inform the CFPB's decisions regarding the use of its funding.

Low-Priority Program Activities

GPRA requires agencies to identify low-priority program activities. A low-priority designation is to be based on an analysis of the activity's contribution to the mission and goals of an agency, and the agency is to include an evidence-based justification for the designation in its performance report. The CFPB did not identify any low-priority program activities in its performance report. CFPB program officials stated that they did not incorporate low-priority program activities because at the time the plan was developed, the CFPB was still implementing its programs and none were considered low priority. However, we believe that the CFPB's GPRA activities, such as its robust QPR process, can help the agency identify low-priority programs for future performance plans.

Recommendation

We recommend that the Chief Strategy Officer

3. Build on the CFPB's efforts to comply with GPRA 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.

Management's Response

The CFPB's Chief of Staff stated that the agency will continue to improve its annual performance planning process for the following requirements.

1. 1. Performance targets. The Chief of Staff stated that the CFPB was developing baselines for several performance goals when the FY 2013 Strategic Plan, Budget and Performance Plan and Report was issued. The CFPB plans to complete baselines and establish targets for all performance goals in FY 2014.
   2. Balanced performance indicators. The Chief of Staff identified multiple performance measures that the CFPB currently captures in its divisions' strategic plans and the FY 2013 Strategic Plan, Budget and Performance Plan and Report. He also stated that the CFPB will identify and publish meaningful, balanced performance indicators for its performance goals.
   3. Performance information reliability. The Chief of Staff reiterated that in November 2013, the CFPB implemented a GPRA data accuracy and validation policy that addresses the GPRA data reliability requirements. The agency intends to use information obtained under the new policy guidelines to provide a complete summary of its data validation efforts in the FY 2014 Strategic Plan, Budget and Performance Plan and Report.
   4. Major management challenges. The Chief of Staff stated that the FY 2013 Strategic Plan, Budget and Performance Plan and Report included a discussion of management challenges. He further noted the CFPB's commitment to transparency and open discussions of management challenges.
   5. Low-priority program activities. The Chief of Staff indicated that the OIG's period of review covered FY2012 and FY2013, when the CFPB was standing up its operations and focusing its limited resources on addressing specific requirements in the Dodd-Frank Act. In the future, the agency plans to use its QPR and performance planning processes to prioritize activities.

Management's full response is included as appendix C.

OIG Comment

In our opinion, the majority of the actions described by the Chief of Staff address our recommendation. However, management's response to our recommendation regarding major management challenges does not fully describe how the CFPB will address our recommendations.

We recommended that the Chief Strategy Officer both identify major management challenges and fully describe how the agency will address these challenges, as required by GPRA. As stated in our finding, the management challenge in the CFPB's Strategic Plan, Budget and Performance Plan and Report does not identify planned actions to address the challenge, the means to measure progress in addressing the challenge, or an agency official assigned to resolve the challenge. Management's response states that the agency included discussions of management challenges in its Strategic Plan, Budget and Performance Plan and Report and that the CFPB is committed to continued transparency and open discussion of management challenges. However, management's response does not address how it intends to fully comply with GPRA, which requires agencies to identify (1) major management challenges and planned actions to address such challenges; (2) performance goals, performance indicators, and milestones to measure progress toward resolving such challenges; and (3) the agency official responsible for resolving challenges. Incorporating these components in the agency's annual performance plan will help the CFPB to fully comply with this GPRA requirement, help it develop efficiency measures, and inform its decisionmaking.

We plan to follow up on actions taken by the Office of the Chief Strategy Officer to ensure that our recommendations are fully addressed.

• 13. An explanation of the performance information that was tested is in appendix A. The November 2013 memorandum was issued after the data we tested were reported; therefore, we were unable to verify implementation of this memorandum. Return to text
• 14. One CFPB performance goal addresses a performance planning requirement to assess each significant rule the CFPB adopts and to publish a report of the assessment within five years of the effective date. We did not include this performance goal as unmet in our analysis, as the CFPB has been operational for less than five years. However, we note that the CFPB includes annual interim steps for developing performance targets in its Strategic Plan, Budget, and Performance Plan and Report. Return to text
• 15. U.S. Senate Committee on Governmental Affairs, Government Performance and Results Act of 1993 (to accompany S. 20), S. Rep. No. 103-58 (1993) reprinted in 1993 U.S.C.C.A.N. 327. Return to text
• 16. U.S. Government Accountability Office, Executive Guide: Effectively Implementing the Government Performance and Results Act, GAO/GGD-96-118, June 1996. Return to text