Agencies will have to show a return on the investment on their programs

June 24, 2012

There is a front moving in on the federal funding landscape and it is bringing with it a renewed emphasis on evidence and evaluation. In two memo’s last month, the Office of Management and Budget made it clear that agency budgets will need to be based on evidence showing program effectiveness. This will have an amplified impact on smaller agencies receiving federal funds. CMHNetwork faithful who are thinking about applying for federal funding would benefit from taking some time to better understand how the landscape is changing for 2014 and prepare accordingly.

Cut your budgets by 5%
In the first memo, OMB Director Jeff Zients said even if Congress moves to stop sequestration, agencies must cut their budgets by 5 percent.

  • “Your 2014 submission to [OMB] should reflect the president’s commitment to cut waste, set priorities among programs and make targeted investments in critical priorities,” Zients said. “Unless your agency has received different guidance from OMB, your overall agency request for 2014 should be 5 percent below the net discretionary total provided for your agency for 2014 in the 2013 budget.”

Zeits also directed agencies to provide a prioritized list detailing which cuts should be added back, if deemed possible. Zients said this would give President Barack Obama “the options needed to make the hard choices necessary to adhere to the [Budget Control Act]’s discretionary funding levels, invest in priority areas and focus on programs that work.”

Zients said 2014 budget guidance should include:

  • A general narrative of the agency’s management priorities and its plan to improve performance and outcomes.
  • Detailed information on existing initiatives that will impact the agency’s 2014 budget the most.
  • A “discussion” of how the agency would use any savings from implementing management initiatives.
  • At least three program-reform proposals where legislative, budget or administrative changes could improve efficiency, savings or effectiveness.

Increase your focus on evidence-based evaluation
In the second memo, OMB encouraged the use of evidence in evaluating the 2014 budget, providing a detailed description of what OMB will be looking for in agency submissions.

“The budget is more likely to fund requests that demonstrate a commitment to developing and using evidence,” Zients said.

Among its many recommendations, OMB suggested:

  • Low-cost evaluations using administrative data or new technology;
  • Expansion of evaluation efforts within existing programs;
  • Using comparative cost-effectiveness data to allocate resources;
  • Tying grant awards to evidence;
  • Using evidence to inform enforcement of criminal, environmental and workplace-safety laws;
  • Appointing a high-level official to strengthen agency evaluation capacity.

All of this sounds good and necessary, but what does it mean for agencies who are based in communities serving smaller populations? If evaluation of programming is a prerequisite to funding, then how are smaller agencies who are often most effective in providing a system of care approach to programming, going to be able to evaluate their service delivery efforts so they can apply for resources that are already targeted to the mid and larger-sized agencies?

Think of this as the challenge faced by Mom and Pop stores who are competing with the Big Box Chains. How do we ensure that smaller-size quality programming does not get squeezed out because of the inability to provide robust, yet costly, evaluation of programming efforts? Let us know what you think.

The Network will continue to track developments in this area.

 Sources for this story – Gillian Brockell, FederalNewsRadio and CMHNetwork Advisory Council member Elaine Deck.

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