OMB directs agencies to use evidence-based budgeting

Tuesday - 6/5/2012, 1:41pm EDT

Robert Gordon, Executive Associate Director, OMB

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The White House wants agency budgets to be based on evidence showing programs actually work.

That means agencies will have to show a return on the investment on their programs, with more successful programs being more likely to receive funding.

In a memo last month, OMB Acting Director Jeff Zeints directed agencies to use evidence and "rigorous evaluation" in submitting their 2014 budgets.

"We're not being ideological. We're not saying we should do X or Y just because that's the way we've always done it. We're asking the question, What works and what doesn't?" said Robert Gordon, OMB executive associate director, in an interview with The Federal Drive with Tom Temin and Emily Kopp.

The prioritization of programs is even more crucial because OMB has told agencies it must cut their budgets by 5 percent for their 2014 requests.

The budget agency is encouraging agencies to use administrative data or new technology and to expand evaluation efforts.

Evaluating programs is not something new, Gordon said. However, now OMB is trying to systemize the practice, he said.

OMB is also encouraging grant-making on a tiered system. A program with evidence that uses strong research techniques is likely to not only get funding but to be eligible for even more funding, Gordon said.

Another evidence-based approach to budgeting is a "pay for success" model. In this model, federal funding is provided to a program only after the program shows results. In the short-run, investors — such as local and state governments or foundations — provide the initial operating dollars.

"It's a very pure form of pay for performance, where the taxpayers only pay if the program gets results," Gordon said.

Evidence alone does not make a strong program. Success also relies on a strong organizational structure, financial capability and management, he said.

"It's one part of the puzzle, but it's an important part," Gordon said.

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