United States Office of Personnel Management

                  For the

         2007 Presidential Award
         Management Excellence
                 Submitted by:
        United States Environmental Protection Agency
                August 10, 2007

                       2007 PQA NOMINA TION FORM

NOMINATION CATEGORY: (Please check one only. A separate Nomination Form is
required for each category nominated)

Category One Award, falling under:

	    Strategic Management of Human Capita]   	    Competitive Sourcing

	    Budget and Performance Integration       	    Improved Financial Performance

	Expanded Electronic Government

Category Two Award for:

	    Strategic Management of Human Capital  •	    Competitive Sourcing

	Budget and Performance Integration        	    Improved Financial Performance

	    Expanded Electronic Government
Category Three Award   x
1.  Name of Organization (responsible for the project/initiative/process being submitted):

    Office  of  Policy, Economics and Innovation

2,  Name of Parent Department or Agency (e.g., Department of Labor, Department of
   Defense, Environmental Protection Agency, etc.):

     Environmental Protection Agency
3.  Department/Agency Point of Contact:

   XT       Louise Wise                      Titl"1'  Deputy Assistant Administrator

   Mailing Address:  120° pennsYlvania Avenue NW
                     Washington, DC  20460 Mailcode 1804A
   Phone Number:  202 554-4332           E-mail Address:  wise.Louise@epa.gov

               4. Certification by Responsible Organization:  I'hc person most senior in the organisation
                  responsible for the project must sign below:
                  I eertify thai, to the best ol'rm knowledge, the information contained in this applieaiion ;-
                    Marcus Peacock

                   Prinled name
 Deputy Administrator
                   M'lilin"  Vidress"   1200 Pennsylvania Avenue NW
                                      Washington DC 20460   mailcode  1101A

                   Phone Number:    202  564-6956    ___      1  -mail Address  	Peacock.

                5.  Head of the Depurtmcnt/Ascncy:
                                                                     AUG 1 0  2007

                      Organizational Background

What is your mission?
The mission of the Environmental Protection Agency is to protect human health and the
environment. Since 1970, EPA has been working for a cleaner, healthier environment for
the American people.

What are your primary strategic goals and objectives?
•  Clean air and global climate change - Protect and improve the air so it is healthy to
   breathe and risks to human health and the environment are reduced. Reduce
   greenhouse gas intensity by enhancing partnerships with businesses and other sectors.
   Specific objectives are: healthier indoor and outdoor air, protect the ozone layer,
   radiation, reduce greenhouse gas emissions, and enhance science and research.
•  Clean and safe water - Ensure drinking water is safe. Restore and maintain oceans,
   watersheds, and their aquatic ecosystems to protect human health, support economic
   and recreational activities, and provide healthy habitat for fish, plants, and wildlife.
   Specific objectives are to: protect human health and water quality, and enhance
   science and research.
•  Land preservation and restoration - Preserve and restore the land by using
   innovative waste management practices and cleaning up contaminated properties to
   reduce risks posed by releases of harmful substances.  Specific objectives are to:
   preserve and restore land, and enhance science and research.
•  Healthy communities and ecosystems - Protect, sustain, or restore the health of
   people,  communities, and ecosystems using integrated and comprehensive approaches
   and partnerships. Specific objectives focus on chemical and pesticide risks,
   communities, restoring and protecting critical ecosystems, and enhancing science and
•  Compliance and environmental stewardship - Protect human health and the
   environment through ensuring compliance with environmental requirements by
   enforcing environmental statutes,  preventing pollution, and promoting environmental
   stewardship. Encourage innovation and provide incentives for governments,
   businesses, and the public that promote environmental stewardship and long-term
   sustainable outcomes. Specific objectives are to achieve environmental protection
   through environmental compliance, improve environmental performance through
   pollution prevention and other stewardship practices, improve human health and the
   environment in Indian Country, and enhance society's capacity for sustainability
   through science and research.

Who are your primary customers?
EPA's primary customer is the public, which depends on  our agency to protect human
health and the environment. This expectation extends not only to this generation, but to
those generations that will follow. Other customers include domestic and international
government agencies, non-governmental organizations, and educational and research
institutions, which rely on EPA for environmental information and tools. As co-
regulators, States are EPA's most important partners and customers.

What is your primary product or service?
EPA sets standards, develops and implements regulatory programs, enforces
environmental laws, and conducts research, education and assessment efforts. Specific
products and services are described below:

•  Develop and enforce regulations: EPA works to develop and enforce regulations
   that implement environmental laws enacted by Congress. EPA is responsible for
   researching and setting national standards for a variety of environmental programs,
   and delegates to states and tribes the responsibility for issuing permits and for
   monitoring and enforcing compliance. Where national standards are not met, EPA
   can issue sanctions and take other steps to assist the states and tribes in reaching the
   desired levels of environmental quality.
•  Offer financial assistance: In recent years, between 40 and 50 percent of EPA's
   enacted budgets have provided direct support through grants to State environmental
   programs. EPA grants to states, non-profits and educational institutions support
   implementation of delegated programs, high-quality research that will improve the
   scientific basis for decisions on national environmental issues and help EPA achieve
   its goals.
•  Perform environmental research: At laboratories located throughout the nation, the
   Agency works to assess environmental conditions and to identify, understand, and
   solve current and future environmental problems; integrate the work of scientific
   partners such as nations, private sector organizations, academia and other agencies;
   and provide leadership in addressing emerging environmental issues and in advancing
   the science and technology of risk assessment and risk management.
•  Sponsor voluntary partnerships and programs: The Agency works through its
   headquarters and regional offices with over 10,000 industries, businesses, non-profit
   organizations, and state and local governments, on voluntary pollution  prevention
   programs and energy conservation efforts. Partners set voluntary pollution-
   management goals;  examples include conserving water and energy, minimizing
   greenhouse gases, slashing toxic emissions, re-using solid waste, controlling indoor
   air pollution, and getting a handle on pesticide risks. In return, EPA provides
   incentives like vital public recognition and access to emerging information.
•  Further environmental education: EPA advances educational efforts to develop an
   environmentally conscious and responsible public, and to inspire personal
   responsibility in caring for the environment.
•  Publish information: Through written materials and the Web, EPA informs the
   public about our activities.

How many employees  do you have  in your organization?
EPA employs 17,000 people across the country, including our headquarters offices in
Washington, DC, 10 regional offices, and more than a dozen labs. Our staff are highly
educated and technically trained;  more than half are engineers, scientists, and policy
analysts. In addition, a large number of employees are legal, public affairs, financial,
information management and computer specialists. EPA is led by the Administrator, who
is appointed by the President of the United States.

Narrative Summary

Over the past five years, EPA greatly improved its management systems. As of March
31, 2007, EPA achieved 'green' status scores on four of five President's Management
Agenda initiatives; Competitive Sourcing; Improved Financial Performance; E-
Government; and Performance Improvement. For the one 'yellow' status initiative,
Human Capital, EPA is 'green' for progress. But, of all of these achievements, we are
most proud of our success in using measures to drive results.  Through innovative new
approaches, we continue to convert the Agency from a "reporting" organization to a
"learning and doing" organization; from a "compliance" culture to one devoted to

Much of this change has come recently. EPA's mission is to protect human health and
the environment.  Since 1970, EPA has provided a cleaner, healthier environment to the
American people. Until last year, however, many top managers were "flying blind."
Although the Agency extensively collected and used annual indicators of progress, few
managers could honestly say that they were using these measures to manage or improve
their programs. Only in the last few years has EPA revisited its approach and developed
a system for identifying its highest priority outcomes, for streamlining and focusing its
measurement systems on those outcomes, and for cascading from those long-term
outcomes all the way down to quarterly commitments and measures that can be used in
the day-to-day  management of the Agency.

In the last 18 months EPA has become a federal leader in performance management by
further integrating these systems and adopting a common vision for their use. Now, more
than ever before, EPA has a system to improve its operations and results through:
engaging Agency managers and staff across organizational units and at various
management levels in performance management activities; facilitating the collection and
accessibility of performance data; and improving the presentation and the use of
performance measures to inform decisions. Each of these actions reinforces the Agency's
conversion to a results-based organizational culture.  For instance, we believe EPA is
now the only agency that does any of the following:
   •  provides web-based quarterly updates of our performance to the public and has
      the Chief Operating Officer personally meet with each top policy official every
      quarter to review these results;
   •  maintains a regular public blog regarding Agency performance and management
      improvements;  and
   •  systematically identifies, diffuses, and monitors best management practices.

EPA's management activities emphasize continuous learning though participation,
evaluation, information sharing, and replication.  These management actions provide
EPA the tools to measure and learn from its performance.  They are a necessary aspect of
ensuring what we get better and better at completing our mission of protecting human
health and the environment.

A. Describe how your management systems are integrated.

The President's charge to EPA is to "accelerate the pace of environmental protection
while maintaining our nation's economic competitiveness."  This means protecting and
enhancing our air, water, and land resources through cost-effective means that go hand-
in-hand with a growing economy.

How it all comes together

EPA has integrated its management systems so that its workforce can constantly learn
how to better achieve the President's charge through its day-to-day work.  First, to make
sure what we do results in outcomes (i.e., real environmental improvement) rather than
outputs (i.e., activity-based measures), EPA has employed a logic model approach.
Logic modeling systematically focuses on the environmental and public health outcomes
that EPA is working to achieve while helping its offices and programs identify the
activities and outputs needed to obtain those outcomes.

The figure below provides a visual representation of this framework for understanding
how EPA's ongoing work enables progress toward the Agency's longer-term goals.
                               EPA Logic Model
Short term
At different points in the logic model, EPA issues performance reports and information.
These include:
       a Strategic Plan outlining our mission, goals and objectives;
       annual planning and budgeting process
       an annual Performance and Accountability Report (PAR);
       Program Assessment Rating Tool (PART) measures and goals;
       annual performance measures as part of EPA's annual commitment system
       (Measures Central); and

   •   a Quarterly Management Report.

How do these all fit together? At EPA we sometimes use a metaphor of a fountain to
describe the linkage.
                                   How is it a metaphor?  Start at the top. The water
                                   jets that surmount the fountain represent EPA's
                                   mission: To protect human health and the
                                   environment.  The next level down represents the
                                   five broad goals that support the mission; clean
                                   air, clean water, protecting land, providing healthy
                                   communities/ecosystems, and promoting
                                   environmental compliance and stewardship. The
                                   five goals, in turn, cascade down into 20 more
                                   specific objectives. The mission statement, the
five goals and 20 objectives are all laid out in EPA's long-term Strategic Plan.

How do we know if EPA is on the right track to meeting its long-term goals and
objectives? The objectives further flow down into a pool of many sub-objectives that
have annual goals and measures. These are tracked once a year using the Performance
and Accountability Report, Program Assessment Rating Tool measures and the annual
commitment system (what we call "Measures Central"). All these pieces add up to a lot
of annual measures - well over 300 of them.

Finally, dipping into the large pool of annual measures on a  more frequent basis is the
Quarterly Management Report.  This examines about 60 metrics every 3 months.  The
purpose is to not just track what is going on, but help us learn what is going on so we can
change how we do what we do.  If we can find ways to exceed our annual goals, we will
exceed our long-term objectives and goals. That means we will better meet our mission
to protect human health and the environment and make the United States an even safer,
better place to live.
The integrated pieces

We have different systems that then use the information from this integrated network of
measures to drive results throughout the Agency.  These systems are: Strategic Planning,
Accountability Systems, Continuous Learning Initiatives, Evaluation Programs,
Budgeting and Financing for Results, Human Capital Strategies, and Electronic Support

Each of these systems, and its purpose, is described below; but, in summary, here is how
they fit together. The Strategic Plan sets forth the overall goals and objectives. These
goals and objectives drive the annual and -more recently - the quarterly commitments
and measures that EPA uses to guide work and track progress. In turn, these
commitments and measures drive accountability, continuous learning, and budgeting

systems.  Within the last two years, the Agency has undertaken a major effort to assure
that these systems are not just aligned, but used to manage for results.

Strategic Planning

EPA's 2006 -2011  Strategic Plan was updated to include input from state, tribal and other
stakeholders. The Plan sets forth five goals.  They are: (1) to protect and improve air
quality, (2) to provide Americans with clean and safe water resources, (3) to preserve and
restore land and clean up contaminated properties, (4) to sustain healthy communities and
ecosystems, and  (5) to assure compliance with environmental laws while promoting
environmental stewardship. More specific objectives and sub-objectives cascade down
from these broad goals.

EPA's Strategic Plan directs  the Agency's priorities on an annual basis. Each year, EPA
develops commitments related to each of its five goals. We also work with states, tribal
partners,  and other co-regulators to establish the annual guidance that is used by EPA's
national programs to negotiate annual commitments with our regional offices, states and
tribes. In this way,  EPA's national goals help to align environmental work conducted at
multiple levels of government.


Once goals, objectives, and annual and quarterly commitments and measures are
established, EPA uses accountability systems to assess progress, report results and assure
that all EPA employees are well-directed, motivated and driven to achieve results. In
recent years, EPA has made extensive and ambitious revisions to its accountability
processes with the ultimate goal of driving real results.

   1. Organizational Assessments: In 2003, EPA launched a new system of
      organizational assessments whereby national programs and regions describe  their
      activities, accomplishments, and key challenges from the past year. The collective
      results reveal where the Agency is performing well and where there are
      challenges in need of attention.
   2. Quarterly Management Reporting (the QMR):  In 2006, for the first time in our
      history, EPA now has a system for collecting, reviewing, analyzing, and using
      results on a quarterly  basis. Rather than relying on data that may be more than a
      year old,  EPA uses quarterly commitments and measures to gauge progress every
      three months. These measures are the focus of quarterly management meetings,
      whereby the Agency's senior leadership discusses results, constraints,
      opportunities to improve performance, and best practices that have potential  for
      improving results on a larger scale.  The QMR is also made public via the internet
      so that the people we  serve can hold us accountable for how we are doing.
   3. Measures Central: Historically, EPA has collected and housed measures and data
      in a variety of repositories. Over the last several years, EPA has united its systems
      for storing and accessing data into a central repository.  In addition, EPA
      launched complementary efforts with states to review the value of all reporting

       requirements. States were asked to identify the top five most burdensome, least
       value added reporting requirements and any measures that should be modified or
       eliminated. As a result, by FY 2008, EPA will have reduced the number of
       measures being reported by 15% percent below FY 2005 levels without
       compromising our ability to account for program results.
       Prioritizing Measures: EPA also prioritizes measures so that top executives have
       a manageable number of measures to inform decision-making. The pyramid
                      Prioritization of Measures
                               Deputy Administrator
               Assistant Administrators/
               Regional Administrators
             Regional and
              Deputy Assistant Administrators/
              Deputy Regional Administrators
-orresponaing nmiiea
  set of measures
    used by
next level managers
program level
       above illustrates how information in the central repository is available for
       managers at different levels.  It shows a set of "senior management" measures
       used routinely by senior management that are supported by corresponding
       measures used by other Agency managers and staff. As measures cascade down
       the management chain, the total set of measures becomes larger to reflect the
       multiple tasks necessary to conduct day-to-day operations. This approach
       recognizes that different levels of management have different needs for data in
       assessing results. By linking these measures to specific objectives in EPA's
       Strategic Plan, this approach also creates stronger alignment between ongoing
       work and our long term goals.

Human Capital Planning

To ensure these strategic priorities and commitments cascade down to all levels of
Agency employees, EPA also established new accountability mechanisms for managers
and staff.
   (1) Senior Executive Service (SES) Performance Commitments: The generic job
       elements in each SES members' annual performance agreements are now linked
       to EPA's Strategic Plan. They stress achievement of mission results and also
       respond to priorities under the President's Management Agenda and additional

       EPA objectives. Each year, the Deputy Administrator uses the Organizational
       Assessments and the SES Performance commitments to determine senior
       executives' performance ratings, salary increases, and bonuses.
   (2) GS Performance and Accountability Rating System (PARS): Senior Executive
       commitments are, in turn, cascaded down into the performance agreements of
       their GS managers and staff. These also link to EPA's Strategic Plan.
Continuous Improvement

Just in the last two years, EPA established processes to assure that measures drive results.
The figure below illustrates the Agency's general approach.
                                • ,,,      ,  ,__


These processes include:

   (1) Quarterly Reporting: Every quarter, EPA tallies results in "Measures Central" and
       reports on the findings through two mechanisms - the Quarterly Management
       Report and meetings with national programs and regional offices. At these
       meetings, the top managers examine the data, assess progress toward "stretch"
       goals, identify constraints that may be inhibiting performance, look for potential
       improvement opportunities, and identify best practices that can be disseminated
       throughout the organization. All of these actions focus attention on results and
       continuous improvement.
   (2) Best Practice Memos: When effective practices are identified in an EPA national
       program or region, the Deputy Administrator sends a memo to that organization
       to congratulate them on their success and investigate whether the practice could
       be replicated by others. If so, these best practices are then documented, shared,
       posted on the "continuous learning website," and discussed with senior managers.
   (3) Cross-Agency Senior Management Meetings:  In addition to the quarterly
       management meetings described above, EPA now systematically uses other
       cross-Agency senior management meetings to  discuss best practices and
       improvement opportunities.  These include weekly meetings of the Agency's
       leadership, as well as periodic senior management forums. For example, EPA is
       transforming EPA's Innovation Action Council (consisting of the senior Deputy
       Assistant Administrators and Deputy Regional Administrators) into a new
       "Performance and Innovation Action Council" devoted to management
       improvement and innovation.


In addition to using and improving measures to continuously track results, EPA
recognizes that it needs a system for looking holistically at programs to evaluate whether
they are achieving outcomes most efficiently and effectively. To promote these
evaluations, EPA established a training program to improve program evaluation and logic
modeling. The Agency also launched an annual Program Evaluation Competition
whereby programs compete to obtain contract assistance in conducting evaluations of
select initiatives. The Agency is making commitments to do certain program evaluations
in each Strategic Plan. Using these evaluations, along with the Report on the
Environment, PART scores, and external evaluations and audits, EPA  is able to
continuously reconnect programs activities and outputs to ultimate outcomes set forth in
the  Strategic Plan.

Budgeting and Finance

Strategic planning, accountability, and evaluation, in turn, are critical to EPA's budget
planning and execution.  In devising a budget, EPA begins with the overall goals set forth
in the Strategic Plan. We then take into account results from our accountability and
evaluation systems. These are supplemented with evaluative information from other
sources  such as the Inspector General and Government Accountability Office. Prior to the
preparation of a draft budget, the Deputy Administrator and Chief Financial Officer hold
hearings where the national programs, regional offices, and state and tribal partners
explain their resource needs and priorities. These discussions, combined with the
evaluative information and financial indicators, inform the development of a draft budget,
which is then discussed by the senior leadership prior to completion.

In addition to strengthening ties between budgeting and other management systems, EPA
is improving budgeting and finance in another way - by replacing all outdated legacy
financial systems with a new system that will promote increased integration of EPA's
financial management, planning, budgeting, performance analysis and accountability
systems. By using state-of-the-art technology, this new financial system will improve the
efficiency and effectiveness of internal processes, and reduce the number of systems and
associated costs for financial management. EPA expects this new system, which is being
developed under a competitive sourcing procurement, to meet our needs for the next 15
to 20 years.

Electronic Support

EPA has worked hard over the last several years to streamline the electronic mechanisms
and tools that support the above management systems. These improvements unify
common work processes, provide individuals with one-stop access to services, help
reduce redundant information collection, and ensure the data and information are
collected online only once, then shared and updated as needed.  To this end, two major
projects are particularly noteworthy:

   (1) The Dashboard:  In 2006, EPA undertook development of a desk-top computer
       "dashboard" that could be used at all levels of the organization to track results.
       Structured like a logic model, the dashboard will connect Strategic Plan goals and
       objectives to annual and quarterly commitments and measures. When fully
       developed, it will allow users at all management levels to integrate performance
       information and monitor progress in real time - another first and one that will
       take performance measurement and accountability to a whole new level at EPA.
       Prototype dashboards are already being piloted in EPA Region 2 and the Agency
       is now progressing with developing a consistent national product. Performance
       and financial reports are available to EPA through OCFO Reporting and Business
       Intelligence Tool (ORBIT)  on a real time basis.  This allows managers and staff to
       select standard reports or develop ad hoc reports at their desk top to inform
       management decisions and  assessing results.
   (2) Central Data Exchange (CDX): CDX is EPA's point of entry and exit for
       electronic data, information, and documents. CDX is also the heart of the
       Environmental Information Exchange Network, our collaborative effort with
       states, territories and Indian Tribes to exchange data and information
       electronically over the Internet. The numbers of states and tribes flowing data
       over the Network are also tracked in the QMR. CDX now supports 33 Agency
       information systems or data flows on  an ongoing or "production" basis, and 15
       more flows are in development. We have 48 states engaged in the Network, and
       three Tribes. Where it has been used,  CDX has delivered a combination of lower
       costs, enhanced data quality, and much better timeliness of data  and services. This
       benefits both EPA and our environmental protection partners.

B. Describe how critical management information  is made
   available to all levels of leadership and management within
   the agency.

Sharing critical management information and ensuring its availability are key elements of
EPA's planning and accountability systems. EPA relies on participatory processes and
systems to facilitate the sharing of critical information. This participatory approach
leverages the broad-range of EPA staff experiences and expertise with timely and
relevant information. Processes and systems are designed to be transparent and to
facilitate communication across organizational boundaries and management levels.  EPA
is also deploying and implementing electronic tools such as the Dashboard, described in
the previous section, to make information accessible. For example, access to critical
management information is emphasized through the following processes:  (1) Team
Approach to Strategic Planning; (2) National Program Annual Guidance to Regions and
States; (3) Quarterly Management Reports; (4) Measures Central; and (5) Enterprise-wide
management tools.

Team approach to strategic planning

To develop a practical and pragmatic strategic plan, EPA relies on both internal cross-
functional teams and external stakeholders to develop its strategic plan. These teams,
which are set up around specific goals, include executives, middle-managers and key
staff. This approach ensures that strategic plan goals and objectives are on the one hand
visionary while on the other hand realistic and practical. By including a cross-section of
staff across EPA programs and across management levels, EPA supports information
sharing and discussion of critical management information.

National Program Annual Guidance to Regions, States and Tribes

EPA programs and regions rely on an annual guidance process to support development of
their own annual goals. This interactive and iterative process facilitates discussion and
the sharing of critical management information among EPA national programs, EPA
regional offices, state and tribal environmental departments and agencies. Executives and
managers in the national program offices develop, with consultation of regional planning
managers, broad goals and program areas of emphasis for a particular year. This
framework is shared with regional offices and provides areas of management emphasis in
the coming year. Regional executives and managers use this guidance to set their own
priorities and identify areas where they can contribute and support the national goals.
Much interaction occurs with state and tribal partners during this process to make
commitments realistic.  This process helps align priorities and commitments among  state,
tribal, regional, and national priorities through the explicit sharing of critical management
information across management levels and organizational units.

Quarterly Management Report

EPA's Quarterly Management Report (QMR) was launched in 2006 and is now used by
executives and managers to track the Agency's progress on a more "fresh and frequent"
basis than our traditional budget, performance, and financial reporting mechanisms.  The
report provides Agency managers and staff the most current data available on a select set
of regional and national priorities.  Measures include operational activities related to the
President's Management Agenda such as: timeliness of hiring (Human Capital); small
business contracting (Competitive Sourcing); status of the Agency's selection and
deployment of a new financial tracking system (Financial Performance); and electronic
transactions (Electronic Government). The report also includes program and regional
measures that relate to environmental outcomes such as: number of days specific areas
exceed the Agency's ozone standard; the number of water pollution limits set;  and the
number of contaminated properties cleaned up. Each measure is linked to the Agency's
Strategic Plan (Performance Improvement Initiative). In June 2006, the most recent QMR
was made available to the public via the web, so anyone who wants to see how we are
doing can do so.

Measures Central

As discussed earlier, EPA has, within the past two years, consolidated and streamlined
the Agency's performance measures into a central repository. Historically, the Agency
took a decentralized approach. Each program office was encouraged to work with the
Agency's ten regional offices to define and report on relevant measures. This
decentralized approach led to many similar and overlapping measures. This created a
problem for managers at different levels and across organizational units.

By creating a central repository of measures, EPA has reduced the internal reporting
burden by reducing the number of measures tracked by  15% while increasing the
Agency's ability to use performance data by Agency managers. This approach has
strengthened data quality and governance by clarifying "ownership" of measures and
data. Measures Central  also supports the ongoing deployment of enterprise-wide,
electronic desktop tools that are increasingly easing access to critical data for managers
throughout EPA.

Enterprise-wide management tools

EPA has deployed several enterprise-wide (agency-wide) electronic management tools to
increase the accessibility of critical information to Agency managers. In the previous
section, we described the electronic Dashboard. This tool provides managers at different
levels and across organizational boundaries access to relevant and timely data at their
desk. This effort builds upon experiences gained by EPA managers over the last several
years from two web tools that generate management reports out of the Agency's financial
and budgeting system or pulls information from a variety of sources (e.g., financial
systems, environmental  results, social indicators) and combines it to provide EPA
managers with critical information related to environmental, programmatic, budget and
financial information.

A second tool, Scout, tracks the development and status of regulatory, policy and
guidance activities throughout EPA. Scout provides managers an easy-to-use database to
identify and describe priority actions, establish key milestones, and produce meaningful
reports. Scout reports, for example, are used to monitor performance in meeting internal
milestones, track statutory and court deadlines, and share upcoming actions with OMB
and others in the Executive Branch. Scout reports are used by senior executives (e.g.,
political appointees and senior career staff) during weekly meetings as well as middle
managers to track regulatory activities and by regional offices as a means of
communicating key information to headquarters.

C.  Describe how  this information has been and is being used in
making critical management decisions.

Over its thirty-six year history, EPA has developed lots  of measures and measurement
systems.  Some have come and gone, others have come  and stayed, and some are required

by law. But EPA has never, until now, had a consistent set of measures that have been
reported frequently or regularly at a high level.  These new measures are giving EPA
more immediate feedback for making critical management decisions.  To quote the
Deputy Administrator, "Metrics for reporting don't mean much; metrics for managing are

As you have been reading, EPA has accomplished much over the past 18 months in using
performance measures to drive results. EPA has put into place a system that reports on a
limited set of measures, which reflect priorities at a high level.  These are reviewed at
quarterly meetings between the Deputy Administrator and  senior executives in the
program and regional offices. These measures and quarterly results are shared with
managers and staff throughout the Agency via the Quarterly Management Report.  The
key result is that EPA is learning and doing a better job because of that learning.

Using Measures to Drive Environmental Results

The best way to show how EPA is using measures to drive environmental results is with
an example. Consider EPA's work to improve water quality. Let's follow the 'logic
model' from overall result down to 'day-to-day' work.

EPA's mission is to protect human health and the environment.  Within EPA's Strategic
Plan, one of the five goals for completing this mission is achieving clean water. Under
the goal of clean water, a sub-objective focuses on improving water quality in
watersheds. It calls for pollution prevention and restoration approaches to protect the
quality of rivers, lakes and streams on a watershed basis. To determine some near-term
actions, EPA's Office of Water develops National Program Guidance.  This annual
document takes the goals and objectives in the Strategic Plan and describes the work that
needs to be done to reach clean water goals.

An essential step in restoring watersheds is calculating the  maximum amount of water
pollution a water body can receive and still meet water quality standards. These
maximum amounts are "allocated" to the pollutant sources in the watershed. These
calculations, known as total maximum daily loads, or TMDLS, set a pollution "budget"
for the watershed, which drives water quality permitting and local, state and federal
watershed programs.

To make  these strategies operational, EPA's national water program develops measures
to determine whether activities are aligned with goals and leading to progress. Again, for
our example, EPA has two measures related to TMDLs. One measures the number and
national percent of TMDLs that are developed by States and approved by EPA on  a
schedule  consistent with national policy. Another measures the number of water
segments identified as impaired in 2002 for which States and EPA agree initial
restoration planning (including development of all needed TMDLs) is complete.

These measures are reviewed quarterly and annually by EPA managers in the TMDL
program as well as by Office of Water Senior Managers and the Deputy Administrator to

evaluate progress. EPA uses the measures in three ways - to produce national water
program performance reports, to inform regularly scheduled dialogues between the
national program and EPA's regional offices, and to conduct evaluations using the
Program Assessment Rating Tool.

The results from EPA's measures then become the basis for organizational and individual
assessments. Thus, the number of TMDLs developed and approved has a direct bearing
on the performance rating and award potential of SES managers with clean water
responsibilities, and lower-level managers and staff working on TMDL issues. In this
way, the whole chain of command is held accountable for achieving results.

That's the big picture, but the story does not end there. EPA routinely tracks how many
TMDLs EPA and states set every quarter to make sure we are getting the job done.
Here's what senior managers saw over the first half of fiscal year 2007.
                                      Total Maximum Daily Load Approvals (FY07)
                                                as of April 1,2007


14 1



26 44 51 64 10°
i — i i— i i — i r~i

                                                  EPA Region
Through April 1, Region 3
had approved over 1,000
TMDLs, an extraordinary
number compared to the
typical TMDL production

Through EPA's new
continuous learning process
(Best Practices Memo,
Discussions in Generals and
Regional Priority Meetings),
Region 3 has described three
things that led to this success:
   •   Used a template for mine sites.  EPA and Pennsylvania concentrated on a large
       number of waters that were contaminated by abandoned mine sites. They had a
       standard template for setting TMDLs for theses sites that helped them set a lot of
       TMDLs in a short period of time.
   •   State/EPA partnership. In general, the states and EPA shared information early
       and often.  That reduced delays by letting people identify and resolve differences
       earlier rather than later in the process.
   •   Streamlined Review Process. EPA implemented an intensive and streamlined
       TMDL review process.

EPA has pointed out this finding to other regions and states and is looking to see if others
can learn from the Region 3 success. A similar process is being replicated for all priority
problems tracked on a quarterly basis.

Using measures to improve Agency operations

In addition to using performance measurement on activities aimed at environmental
results, EPA is also using this approach to improve its internal operations.  Two examples
illustrate EPA's approach.

Timeliness of Regulatory Actions
EPA is a regulatory agency and developing regulations, policy and guidance materials are
at the heart of its core business. Many of EPA's actions have court deadlines and the
Agency frequently found itself against a deadline with analysis or policy issues still under
discussion. To address this 'rush at the end,' the Agency began tracking how well it was
meeting internal development milestones. In essence, could the rush at the end be
avoided by improved performance up front? The Agency began measuring the average
number of days ahead (behind) schedule for a limited set of actions.  The chart below
illustrates the Agency's performance over the period from October 2006 through March
2007. EPA's timeliness in meeting internal milestones declined from October though
February 2007. Clearly, the data was confirming the impression that we were falling
behind and would likely need to 'rush at the end.'
                Average Number of Days Ahead (Behind) for
               DA Priority Actions (1O/1/2OO6 thru 3/31/2OO7)
Prompted by a memo from the Deputy Administrator, further analysis by the Agency's
process managers found that a relatively small number of regulations fall significantly
'behind schedule' and drive the adverse timeliness results.  Consequently, the Agency is
focusing  on 'unsticking' these relatively few actions. To further encourage results, new
management reports have been developed and the Deputy Administrator reports on
progress  each week at a senior management meeting. This has resulted in performance
'leveling out' at about 50 days late on average. Senior management is now engaged on
the most  'delayed' actions and the Agency expects continued progress will occur.

Timeliness of Congressional Correspondence

In an average week, EPA receives about 65 letters from Senators, Governors,
Congressman, and other elected officials.  Many ask us to provide information or answer
questions. A timely response affects how and whether the elected official is serving their

constituents and is a reflection of whether EPA has its act together. EPA's current goal is
to respond to every letter within two weeks or have a very good reason why we need
more time to respond.

Sentiment within the Agency was generally that it would be 'impossible' to meet such a
goal.  All these letters must be routed to the correct individual at EPA who can draft a
response. That person must draft the response and then it must be reviewed by their
supervisor(s) as well as other offices, and sometimes Departments, for accuracy,
grammar, consistency, etc. Just having the wrong person out sick for a couple days can
make this a tough goal to meet.

And, indeed, it is a very tough goal.  In early 2006, EPA typically had 65 to 75 responses
that were overdue. Then we     	
decided to do the impossible.
The Agency revamped the
system to cut down on the
number of reviews.  Each EPA
office was held more
accountable for getting
responses done swiftly. For
instance, performance was
tracked at a senior staff meeting
every Monday. Offices started
getting on letters right away
rather than waiting until they
were 'late.' As you can see, we
met the goal during the last quarter of FY2006 and we continue to keep the number very
            Timeliness of Correspondence
        (average # of correspondence letters overdue)
              	0	1

Apr-Jun'06   Jul-Sep'06  Oct-Dec'06  Jan-Mar'07
D. Describe how your agency has developed a common
management culture and language to address issues relating to
the  planning and execution of work.

Over the past two years, EPA's Deputy Administrator has led an effort to develop a
consistent vision, culture and language around performance management. In January
2007, the Deputy Administrator articulated his vision in a memo entitled "Performance
Management - The Road Ahead:"

      A limited set of measures are regularly used to manage programs and make
      decisions. Specifically, we will:
      •   Use measures for stronger program and organizational accountability.
      •   Access measures through and automated central repository.

       •  Achieve stronger central governance and periodic Agency-wide consultation
          which results in a concise set of measure that are relevant, clearly defined,
          stable, timely, and meet multiple needs.

This effort resulted in the creation of a continuous learning/best practice process, all-
hands meetings, and the actual use of performance measures in senior staff meetings,
national program meetings, and regional program discussions.  Several examples are
noted below.  As a result, EPA has adopted new terminology that immediately reinforces
and supports the practical use of performance management.

Quarterly Management Report (QMR)

Organizational change is difficult for most organizations; EPA is no exception.
Implementation of the QMR in effect required changes and improvements to set ways of
establishing, reporting and using information about performance on a frequent basis. The
development and distribution of the Agency's Quarterly Management Report (QMR)
illustrates an example of how EPA is working to develop a common performance culture.
EPA launched the QMR during 2006. Since that time, the QMR's distribution has
increased from just the senior executives to all staff and the public.  Quarterly
management meetings that focus on the QMR provide additional focus on performance
management that infuse a 'results-based' culture.

Senior Leadership Councils

EPA has continued to build on previous PMA successes to strengthen overall systems
integration and performance measurement through networking and leadership at all levels
of the Agency. EPA's Office of the Chief Financial Officer (OCFO) established and
currently chairs an Agency-wide PMA Coordinating Council to enhance collaboration
among EPA's PMA initiative owners. The Council meets with EPA's Deputy
Administrator every six weeks to discuss key issues and facilitate implementation of the
PMA. Through this effort, EPA's senior leaders consistently focus on and discuss
performance and accountability at all levels of the Agency.

The Agency is also tapping into senior management councils to foster a performance
culture. These councils are comprised of the Agency's senior career staff and provide
consistent leadership across  administrations. For example, the Agency formed a Quality
Information Council to lead  its information technology efforts, including e-Government.
The Agency is also in the process of refocusing the activities of its Innovative Action
Council to better incorporate its performance based culture. This council has
traditionally spurred innovation through the testing, evaluation and dissemination of new
approaches. EPA is renaming the council the Performance and Innovation Council to
emphasize and reinforce its evolving results-based culture.

Alignment with State Partners

EPA's Deputy Administrator initiated two complementary efforts in 2006 to improve
EPA's overall performance management strategy: states should identify high-burden,
low-value reporting requirements (burden reduction), and states and regions should
identify measures in Measures Central for modification or deletion (measures
streamlining). This effort strengthens both the EPA culture and spreads this performance-
based ethic to the Agency's state partners.

For example, the states and EPA are working together to streamline state reporting and
focus on the highest priority problems. When asked to assist EPA in reducing the
number of measures and improving their quality, thirty-eight states submitted a total of
239 specific recommendations. After review by EPA program offices and regions, the
Agency has found that 20 percent of the states' budget reduction recommendations can
be implemented in FY 2008 or sooner. Also, in the past year, EPA has reduced the total
number of measures in the system by 15 percent from FY 2005 to FY 2008. EPA will
continue to review and adjust measures on an annual basis, as part of the Agency's
program planning and budgeting processes, in order to make sustained incremental
improvements to performance  measurement.  Key benefits of measures refinement and
streamlining include gaining a better set of measures (many measures were revised to
improve their clarity), increased collaboration between EPA and states on measures that
require state input, and greater transparency in EPA's processes.

Program and Regional Program Discussions

To enhance day-to-day decision-making, EPA now has a limited set of metrics that are
regularly used to manage programs and make decisions. This set of approximately 30 top
tier measures, developed in early 2007, are known as EPA's Senior Management
Measures.  This set of measures will also be discussed each  year as part of EPA's annual
organizational assessment process, in which each region and program office describes
their previous year's activities, accomplishments, and unique challenges (with associated
performance results),  in an efficient one-page template customized for EPA's regions,
national programs, and environmental support programs.

Performance and Accountability Rating Systems (PARS)

As described under Question A, EPA's accountability systems, including Organizational
Assessments, SES commitments and General Schedule PARS agreements, reflect an
Agency-wide commitment to results.   For example, all generic elements must be linked
to EPA's Strategic Plan., stress achievement of mission results, and respond to PMA and
additional EPA objectives.  One example of an individual commitment is, "Enhance [the
office's] ability to assess our responsiveness to the Administrator's priorities and the
PMA by identifying key performance and productivity measures for [the office's]
activities.  Close tracking of this performance information will enable [the  office] to
measure its progress,  make necessary midcourse adjustments, deliver high  quality
products and services in a timely manner, and identify future research priorities." The

Deputy Administrator discusses individual achievement of the critical job elements and
annual commitments at the conclusion of each performance cycle with each program and
regional senior executive. Achievement on critical job elements and annual
commitments is reflected in executives' performance ratings, salary increases, and bonus

In addition, the Agency's annual General Schedule (GS) employees' performance and
accountability rating system (PARS) was changed to ensure that critical elements in
individual performance agreements cascade from strategic plan, annual commitments,
and SES commitments. The Agency moved to a five-tiered rating system to provide
additional accountability.  This supports EPA efforts to create a culture that ties rewards
to results.

The Web, Blog and Metro Signs

EPA has taken substantial steps within the  last two years to enhance the ability of
managers, at all levels, to access information on the web. In particular, EPA is improving
                                its performance management web resources to
                                communicate a common vision and set of tools.
                                This includes communicating results and critical
                                information to  managers using tools such as the
                                availability of the Quarterly Management Report.
                                EPA  is about to launch a new "continuous learning"
                                intranet site featuring best practices. In addition, the
                                EPA  Deputy Administrator launched a public Blog
                            ,; :r;  that focuses on performance management.  This
                            '",•'"-,;  enables every EPA employee and the public to
                            liJs  engage and participate in the Agency's performance
                                management system. This informal discussion
provides a vehicle for employees to comment on the management system, provide
suggestions for improvement, and make recommendations for celebrating success. EPA
also has designed posters at the Metro exit and entrance of the Agency's Headquarters
Office that feature environmental results from Agency programs. These posters allow
employees entering and exiting the building to see what progress is being made and what
results have occurred.
E.  Describe, as quantitatively as possible, your results. This
   should include before and after improvements in decision
   making, survey results relating to management  culture,
   examples of more effective use of resources, etc.

As described above, in prior years, EPA managers were "flying blind" with respect to
performance measurement. There was no Report on the Environment, no Measures
Central, no Quarterly Management Report, no senior management measures, no regular

and frequent management meetings to examine results and discuss improvement
strategies, no mechanism for sharing best practices and encouraging continuous learning.
Within the last two years, EPA has focused on establishing new systems and integrating
them with old systems to put in place an overall performance management process that
allows EPA managers to use data to manage. Here are examples of results to date:


Through a series of regulatory actions, the United States has made significant progress in
reducing air toxics from industry, fuels, and vehicles. Since the Clean Air Act was
amended in 1990, EPA has issued 96 standards for 174 types of major industrial sources
of air toxics and 15 categories of smaller sources. When fully implemented, these
standards together are projected to reduce annual emissions by 1.7 million tons from
1990 levels. Vehicles and fuels also emit air toxics. By 2020, EPA's fuels and vehicles
programs will reduce air toxic emissions  by another 2.4 millions tons compared to 1990
levels. In  2006, EPA reported in its Performance and Accountability Report that it had
achieved a 37.6 percent reduction in air toxics emissions from stationary and mobile
sources but did not meet the annual performance goal of 40 percent. EPA has since
focused efforts on the most significant problems in an effort to accelerate  progress.

One example of a focused effort is EPA's work to reduce emissions from  old diesel
engines. Old diesel engines are a major source of soot or particulate matter (PM).  In
2006, EPA held a "leapfrog" meeting of high-level managers across its programs in an
effort to brainstorm ideas that could 'leapfrog' current expectations and accelerate
progress in addressing these engines. Region 9's West Coast Diesel Collaborative was
highlighted as a "best practice" to be replicated by other Regions. Under the
Collaborative, EPA's San Francisco, CA and (Region 9) Seattle, WA (Region 10) offices
have brought together over 800 partners,  including outreach efforts across international
borders into Canada and Mexico to discuss,  raise awareness, and address public health
concerns of reducing diesel emissions. Within the last two years, this approach to
addressing diesel emissions has expanded across the nation and a list of 'best practices'
for these Collaboratives has been developed as part of the Agency's Best Practices
process. The number of diesel engines retrofitted to reduce emissions under these
programs is now tracked in the Quarterly Management Report (see below) and
experiences are being shared between the Regions in the Quarterly "Regional Priority"
meetings and at meetings of the Innovation Action Council.
            s -are a »7%5^F se^rc? ofs
            s,- c^s^e'/ D2^e*%c
            V/. ^*M^S mie .-aoaTs
            i'Ssssora 5 3 Tf an
            ^^ris Q 3 -fCJ.
        Air Quality
    itikS K S**£W3T.^ft DSPS1^ ' f
=«*C!E ardl Serdib: Dsssl P^cjsra, h S-stsd: Rsgcrss
Source: EPA Quarterly Management Report, Jan-Mar 2007
                                                                      r .fl 1 V( 4 1 -wfe


In 2000, EPA established a goal in the Strategic Plan to restore 25 % of the nation's
impaired water bodies by 1012. Restoring impaired water bodies is a tremendous
challenge and involves coordinating state and EPA efforts, using a variety of tools under
the Clean Water Act.  EPA and States must work together on keeping water quality
criteria up-to-date, assessing waters, and establishing pollutant reduction budgets or Total
Maximum Daily Loads (TMDLs). As described under Question 3, TMDLs are essential
in determining permit limits and strategies for reducing pollution loads that contribute to
a water body's impairment.  In 2006, EPA and States completed 24,131 TMDLs,
compared to a target of 20,501.

As noted above, EPA began to use the new Quarterly Management Reports in 2006 to
track the number of TMDLs developed in for several Regions. This tracking led to the
identification of potential "best practices" in Region 3, where the number of TMDLs in
the first half of FY2007 were double the number of any other Region (1,083 TMDLs
compared to the next best of 547). (See graph page 12.) These practices have been the
subject of a Best Practice memo from the Deputy Administrator and the topic of
conversation at "Generals"  with senior managers from the Office of Water as well as the
Innovation Action Council  meetings.


                                               In 2006, EPA began tracking the
                                               number of homes at which lead
                                               cleanups were performed in the
                                               Quarterly Management Report and
                                               discussing these in "Regional
                                               Priority" meetings with the Deputy
                                               Administrator.  These discussions
                                               and reports have lead to the
                                               identification of a potential "best
                                               practice" in Region 7 for lead
                                               cleanups. As with other potential
                                               "best practices," Region 7's methods
are being evaluated and shared with  other Regions and will be the topic of future senior
management and Innovation Council meetings.

Source:  EPA Quarterly Management Report, Jan-Mar 2007

Other Examples

There are numerous examples in which the new quarterly tracking system and senior
management discussions have resulted in improved results.  These include:

CAFO Compliance Assistance
Combined Animal Feeding Operations
have become a significant source of
pollution to both air and water. In the
first Quarterly Management Report
published in 2006, Region 9 reported
that it had delivered compliance
assistance to 2,200 facilities,
significantly more than the next best
Region. The Region has since shared
its methods with other Regions and
those practices are being adapted and
replicated as appropriate.
                                                  j.ieveii rttar: CAFOs. f&siws 3 af.ti £ "la/e m^jtf
                                              Krf m-t'r 2QC7 jwtywrc? iirscfs

                                              « cf«K0 frrite: RcKhed T-ni.gh Cs-p arst A:a:lHKe
Benchmarking Energy Star Buildings
Benchmarking the energy used by
buildings allows building owners and
operators to monitor energy use and
improve their energy efficiency.  Since
tracking this metric in the QMR,
results have gone up in every Region
every quarter.
                                                           use av>*£ biA-Wv cwicn
                                                           «flft^-."o- I'^vro.-Te'TW'.Tj CQr.z'iter.t
                                                        . ::: ai* iecior:*. .Vtrt mar."^effic*,^ aVfrr in flfwr
                                           Ia«t *--nv»  I
                                           £E « i'-VV*  |
                                          ft*^,-  ».*rt- I' fHv-.J -.;
EEO Complaints
EPA firmly believes that maintaining a diverse workforce is key to its productivity and
the quality of its decisions. EPA tracks the diversity of its workforce compared to the
National Civilian Labor Force in the QMR. And the Deputy Administrator tracks and
discusses additional measures in quarterly meetings with senior managers in the Office of
Civil Rights. Since tracking began, the Office of Civil Rights has reported steady
improvements in reducing the number
of EEO complaints in the Agency and                 Workforce Recruitment
has developed a training and
communications strategy to sustain
that trend.
                                           Rerrjtrfl a taenttd sla* -z crt:cat IV martarrcttre i
                                           ccrttnran:e nf 1'* AaeTcy. 'Averse* Caji to- SS tim i lasWna 1iS
                                                 : and 'Average 3&-iS Itr SES h rts (caitrnj ; vi:an:l«
                                                  d jng Q2.
Timeliness of Recruitment Processes
In years past, EPA's performance in
turning around SES recruitment
packages once advertised has lagged.
With recent management focus
through the PMA scorecard, the QMR,
and Deputy Administrator "Generals"
                                                                        * ff1 Ds/s 
with the Office of Administration and Resource Management, EPA has succeeded in
going from an average of 134 days to 56 days between advertisement and offers for SES

These are only a few examples of the ways EPA's new integrated management systems
are making a difference.