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Management Savings

<< Return to FY 2006 Budget Summary

 

Desired Outcome

To support the Administration's goals by reducing administrative and information technology costs.

 

Program Objective

By implementing the President's Management Agenda and Secretarial reform initiatives, FDA has achieved increased efficiencies by streamlining its organizational structure, improving the delivery of administrative and IT services, and through a re-invigorated and strategic-orientated IT plan linking mission critical programs with performance outcomes and cost-effective IT solutions.

Management savings were achieved during FY 2004 with the creation of the shared services organization, results from competitive sourcing competitions, and consolidation efforts by the Department. These savings, which are continuing in FY 2005, have permitted FDA to meet its Administration goals for reducing spending and administrative staff by 15 percent.

The total aggregate savings has amounted to over $80 million and a loss of 204 FTE. While some costs savings may be achieved in

FY 2006, FDA will not be able to replicate the degree of savings previously achieved. Further staff and resource reductions will directly impact on FDA's programs.


FY 2006 Management Savings
(Dollars in $000)
Item Dollars FTE
Administrative Efficiencies ($1,154) (14)
Information Technology Reduction ($5,116) (15)
Total ($6,270) (29)

 

Why is FDA's Contribution So Important?

Human and IT resources are essential to accomplishing FDA's mission, as it is more people-intensive than many government agencies, with payroll accounting for more than 60 percent of its total budget. Critical IT systems allow FDA to handle the large amounts of data used for applications review processes as well as monitoring post-marketing surveillance of regulated products. Mission critical work includes:

  • The Agency's regulatory mandate to protect the public health. Interpretation and enforcement of this mandate is an inherently governmental function;
  • Inspectional responsibilities which require hands-on coverage domestically and abroad;
  • Product review functions which require numerous interdependent specialists in product areas who interact with industry on a regular basis;
  • Regulatory responsibilities which require staff to monitor the entire life cycle of all FDA-regulated products; and,
  • Review an estimated 14.4 million import line entries in FY 2005 of FDA regulated products for admissibility into domestic commerce.

 

USER FEES — $31,320,000

 

 

User Fee Overview

 

This budget requests a $31,320,000 increase. This increase is based on a current service estimate and does not account for workload adjustments or payroll adjustments. The increase includes $20,938,000 for Prescription Drug User Fee Act (PDUFA) fees, $6,362,000 for Medical Device User Fee Modernization Act (MDUFMA) fees, $2,964,000 for the recently enacted Animal Drug User Fee Act (ADUFA) fees, $254,000 for Mammography Quality Standards Act (MQSA), $24,000 for Drugs/Devices Export Certification and $778,000 for Color Certification.

The user fees FDA collects support the following FDA strategic goals:

  • Enhance public health and reduce suffering by providing quicker access to important lifesaving, safe, and effective drugs and devices; and,
  • Prevent unnecessary injury and death caused by adverse drug reactions, injuries, medication errors, and product problems.


User Fee Increases for FY 2006
(Dollars in $000)

Program

PDUFA Total

$20,938

MDUFMA

$6,362

ADUFA

$2,964

MQSA

$254

Export Certification

$24

Color Certification

$778

Total

$31,320


PDUFA: + $20,938,000

The Bioterrorism Act of 2002 reauthorized the collection of PDUFA user fees to enhance the review process of new human drugs and biological products and established fees for applications, establishments, and approved products. This authority is effective for five years and directs FDA to strengthen and improve the review and monitoring of drug safety, consider greater interaction with sponsors during the review of drugs and biologics intended to treat serious diseases and life-threatening diseases, and develop principles for improving first-cycle reviews.

For FY 2006, FDA requests an increase of $20,938,000 for a total of $305,332,000 in PDUFA user fees. This increase is based on inflation and workload factors for the FDA drug review program.

 

PDUFA Increase for FY 2006
(Dollars in $000)

Program

Human Drugs

$14,356

Biologics
$6,624
Field Activities
$1,550
Other Activities
$1,408
White Oak
($3,000)
Total
$20,938

 

Fees collected support the following FDA performance goals:

  • Improve the efficiency and effectiveness of the new drug review program to ensure a safe and effective drug supply is available;
  • Review and approve 90 percent of standard original PDUFA NDA/BLA submissions within ten months; and review and act on 90 percent of priority original PDUFA NDA/BLA submissions within six months of receipt; and,
  • Review and approve 90 percent of standard PDUFA efficacy supplements within ten months; and review and act on 90 percent of priority PDUFA efficacy supplements within six months of receipt.


MDUFMA: + $6,362,000

The Medical Device User Fee and Modernization Act (MDUFMA) of 2002 is patterned after the successful Prescription Drug User Fee Act that has enabled FDA to add over 1,000 employees to the drug review process over the last decade.

This multi-year effort is designed to improve the quality and timeliness of the medical device review process. It authorizes the collection of user fees to supplement the appropriated portion of the medical device review program for the review of medical device applications. The fee is collected from device manufacturers that submit premarket applications, certain supplements to those applications, and premarket notifications.

Implementation of MDUFMA makes available new revenue for completing more timely and complete device reviews, by reducing the cumulative approval time, reducing the number of review cycles, encouraging and supporting high quality applications, and providing a more efficient resolution of outstanding issues.

For FY 2006, FDA is requesting an increase of $6,362,000 for a total of $40,300,000 in MDUFMA fees. This increase is based on inflation for the medical device review program.

 

MDUFMA Increase for FY 2006
(Dollars in $000)

Program

Biologics $673
Devices
$4,886
Field Activities
$308
Other Activities
$495
Total
$6,362

 

Fees collected support the following FDA performance goals:

  • Complete review and decision on 80 percent of expedited PMAs within 300 days;
  • Complete review and decision on 80 percent of 180 day PMA supplements within 180 days; and,
  • Complete review and decision on 75 percent of 510(k)s (Premarket notifications) within 90 days.


ADUFA: + $2,964,000

The Animal Drug User Fee Act (ADUFA) was enacted on November 18, 2003 through the Consolidated Appropriations Act of 2004. This legislation provides a cost-efficient, high quality animal drug review process that is predictable and performance driven, to ensure the safe and effective animal drugs are available on the market The program requires new animal drug applicants, sponsors, and establishments to incur a fee to expedite their respective applications.

The availability of safe and effective animal drugs allows food animal producers to maintain healthy animals with the assurance that resulting food products will be safe, wholesome, and free of drug residue. A safe and effective drug supply also ensures companion, service animals that assist the disabled, and other animals such as zoo animals will live healthier and longer lives.

 

ADUFA Increase for FY 2006
(Dollars in $000)

Program

ADUFA
Veterinary Medicine
$2,462
Other Activities
$502
Total
$2,964

 

The fees collected support the following FDA performance goal:

  • Promote safe and effective animal drug availability ensuring public and animal health by meeting ADUFA performance goals. This goal is dependent upon a sustained level of base and user fee resources.


MQSA: + $254,000

Breast cancer is the most commonly diagnosed cancer and the second leading cause of cancer deaths among American women. Experts estimate that one in eight American women will contract breast cancer during their lifetime. The Mammography Quality Standards Act (MQSA), which was reauthorized in October 2004, addresses the public health need for safe and reliable mammography. The Act required that mammography facilities be certified by October 1994, and inspected annually to ensure compliance with national quality and safety standards.

The reauthorization codified existing certification practices for mammography facilities and laid the groundwork for further study of key issues that include ways to improve physicians' ability to read mammograms and ways to recruit and retain skilled professionals to provide quality mammograms.

FDA is authorized to collect fees to pay for the costs of the annual inspections. In FY 2006, FDA is requesting a $254,000 increase for a total of $17,173,000 in MQSA fees. This increase is based on inflation and workload factors for the medical device review program.

 

MQSA Increase for FY 2006
(Dollars in $000)

Program

MQSA
Medical Devices
$163
Field Activities
$81
Other Activities
$10
Total
$254

 

This program supports FDA's strategic goal of reducing the risk of medical devices and radiation emitting products on the market by assuring product quality and correcting problems associated with their production and use.

Export Certification (Drugs/Devices):

+ $24,000

FDA is required to issue certificates to any person wishing to export a drug, animal drug, or device, that the product to be exported meets certain requirement of the law. This applies to products approved for sale in the U.S., as well as unapproved products. The purpose of these certificates is to promote the export of products made in the U.S. The $24,000 increase will cover the programs' inflationary costs.


Color Certification: + $778,000

The Federal Food, Drug and Cosmetic Act (FFD&C) requires the certification of color additives. This function, which is administered by FDA's Center for Food Safety and Applied Nutrition, involves assessing the quality and safety of color additives used in foods, drugs and cosmetics. Employee salaries and expenses are funded directly by FDA's Revolving Fund for Certification and Other Services which is financed entirely by fees paid by commercial organizations. The FY 2005 increase of $778,000 will cover the programs inflationary costs and covers a anticipated fee increase with industry.

 

Requested Certification Increases for FY 2006
(Dollars in $000)
Program Center Field Total
Export Cert. $24 $0 $24
Color Cert.
$778
$0
$778
Total
$802
$0
$802

 


 

President's Management Agenda

 

The President's Management Agenda (PMA), announced in the summer of 2001, is an aggressive strategy for improving the management of the Federal government. It focuses on five areas of management across the government where improvements and progress can be made to deliver results to the American people. It reflects the Administration's commitment to achieve immediate, concrete, and measurable results in the near term, while focusing on remedies to serious problems, and commits to implement them fully.

The five government-wide goals are Strategic Management of Human Capital, Competitive Sourcing, Improved Financial Performance, Expanded E-government, and Budget and Performance Integration. These goals are mutually reinforcing. For example, workforce planning and restructuring undertaken as part of Strategic Management of Human Capital will be defined in terms of each agency's mission, goals, and objectives — a key element of Budget and Performance Integration. Agency restructuring is expected to incorporate organizational and staffing changes resulting from Competitive Sourcing and Expanded E-government. Likewise, efforts toward Budget and Performance Integration will reflect improved program performance and savings achieved from Competitive Sourcing and will benefit from financial and cost accounting and information systems which are part of efforts in Improved Financial Management. This review will give an update of the Agency's progress and achievements made during the past year.

 

Strategic Management of Human Capital

FDA is moving assertively to meet the goals of the PMA and is firmly committed to the DHHS goals to significantly improving efficiency and controlling FTE growth. The Agency has already taken a series of important steps towards achieving these goals and will continue to do so to meet the PMA and the DHHS initiatives.

Workforce Development Programs — The FDA has expanded its FAME [Formula for Achieving Managerial Excellence] leadership training created to assist supervisors, managers and team leaders in identifying and developing the critical management and leadership skills necessary to communicate effectively, manage successfully, and create and contribute to motivated high-performance teams. FAME has also been expanded to include a fourth course, Supervisory Potential Program, which was designed to address FDA's succession planning needs and supports the FDA's strategic workforce plan to build a strong FDA by identifying future supervisors early in their careers. FDA widened its audience to include non-supervisory employees seeking the opportunity to explore supervision as a career. A leadership development program was redesigned to internally groom the future leaders of the agency.

Workforce Analysis and Workforce Planning — A strategic workforce restructuring plan was submitted during the FY 2005 budget process outlining FDA's on-going restructuring initiatives to right-size FDA's workforce transitioning from a large administrative support staff within each of FDA's components to a smaller, centralized unit providing administrative and support services customized according to component's needs and funded on a reimbursable basis.

FDA is moving toward competency-based business processes that depend on the correct mix of skills and abilities. With improved business processes and realigned support services, FDA should be able to redirect its resources into more mission critical positions whose skills and abilities would enable the Agency to meet its performance commitments.

Workforce Restructuring — In an effort to improve upon our Human Capital Management Initiative, FDA offered Voluntary Separation Incentives (VSIP) to an estimated 900 employees in various administrative series. The incentives were offered in an effort to reduce administrative FTE and to assist those employees affected by the current competitive sourcing studies. A total of 320 employees accepted this incentive in FY 2004.

In January 2004, FDA began to receive its human resource (HR) services from the Department's Rockville HR Center. FDA retained the strategic workforce planning and several customized programs tailored to Agency operations. These include the administration of the Peer Review System, Commissioned Corp HR liaison, performance management, and award ceremonies.

In early FY 2004, the Office of Shared Services (OSS) was launched to provide administrative services from a single organization. By the end of FY 2004, all of FDA components including the ORA and NCTR were integrated into the OSSframework. The promise of OSS, combined with improved business processes, will allow FDA to maintain administrative service levels with substantially fewer staff.

Special Recruiting — The Agency has embarked on a strategic recruitment outreach initiative designed to ameliorate the most significant area of under representation in the FDA workforce, namely the Hispanic community. FDA has also participated in the implementation of the Department's Hispanic Outreach Initiative.

Accountability — In FY 2004, all of FDA's employee performance contracts and plans were linked to Agency and Departmental program goals and management objectives. This requirement will continue in FY 2005.

 

Improved Financial Performance

 

Erroneous Payments

FDA participated in the DHHS' Recovery Auditing Work Group, to develop uniform policies and procedures to be used across the Department in complying with the Improper Payment Improvement Act. The final Statement of Work has been submitted for review. FDA also conducted improper payments risk assessments for its Foods, Human Drugs, and Medical Devices programs.

Financial Management Improvement —

At the beginning of FY 2004, FDA transferred its processing of financial transactions (commercial payments, travel, payroll, etc.) from the Office of Financial Management (OFM) to the OSS, which was created to provide administrative services for all FDA staff in the centers, field, and headquarters using the "shared services" model to achieve savings through management efficiencies and cost effective service delivery. OFM retained the functions related to policy, reporting, systems, application management, budget formulation, and budget execution.

FDA created the User Fees Team to better manage the execution, reporting and accountability of the FDA's user fee programs, in addition to the information provided for the budget formulation process. These programs include the Prescription Drug User Fee Act (PDUFA), Medical Device User Fee and Modernization Act (MDUFMA), Animal Drug User Fee Act (ADUFA), Mammography Quality and Standards Act (MQSA), and Export Certification user fees. The User Fees Team is also responsible for implementing the new user fee system to administer user fee transactions and assist in the development of the financial reports required by Congress for PDUFA, MDUFA, and ADUFA.

FDA received its seventh consecutive unqualified, or clean, audit opinion on its financial statements from the DHHS Office of Inspector General in December 2004.

FDA jointly lead a financial shared services center study for HHS which will be used along with the information obtained from other OPDIVs to formulate DHHS policy on financial services.

Data clean-up and process improvement activities continued in multiple areas, including Open Documents, fund Balance with Treasury, SF-224, Accounts Receivable, Travel Advances, and Grants Reconciliation.

Financial Systems — In FY 2004, FDA entered the development phase of UFMS. This involves evaluating the software to see if it meets FDA-specific needs, testing the new system and determining training requirements for users. The Agency will also continue data clean-up, collect management reporting requirements, and support the upgrade of the legacy systems.

In FY 2005, FDA will complete implementation of UFMS, replacing its old general ledger accounting system and continue planning for additional modules while continuing to support its current systems. FDA-specific projects are known as the Financial Enterprise Solutions (FES) that is comprised of a set of distinct and separate FDA financial systems that are integrated with HHS' UFMS.The following is a description of the UFMS and FESproject activities:

 

UFMS

  • Completed the business process flows that document the FDA approach to processing financial transactions through the system;
  • Began the Data Conversion strategy discussions for FDA in preparation for the cutover on October 1, 2004 and April 2005;
  • Began validating the FDA accounting transaction codes and associated pairs against the Treasury Standards to identify the gaps;
  • Began participation in global interface teams for both global and FDA specific interfaces including: payroll, grants, procurement, travel and property;
  • Worked on refining the plan for incorporation of Business Transformation Activities;
    • Conducted the FDA Conference Room Pilot with FDA components to demonstrate that Oracle Financial software could meet FDA business needs and that FDA's implementation strategy will meet the UFMS global needs; and,
    • Drafted plans for communication, and began reviewing strategies for organizational assessments and Agency-wide end user training.

FDA's share of the FY 2006 UFMS costs is $ 11.595 million, which excludes operations and maintenance costs.

 

FES

  • Modernized financial management infrastructure for the remaining user fee programs (PDUFA, MDUFMA, MQSA, and export certification) based on the successful implementation of the Animal Drug User Fee Act. Accomplishments include:
    • Interfaced to obtain applicant data, track user fee billing and collection, and provide financial reports of user fee activities; and,
    • Modified the Accounts Receivable System by capturing initial user fee program receipts and transitioning these receipts to the Accounts Receivable module of the new financial system.
  • Continued the implementation of the Purchase Request Information System (PRISM) by:
    • Working with FDA contracting staff to develop requirements for the contracts implementation of PRISM; and,
    • Beginning planning the implementation of i-Procurement software that will automate the process of requisitions and interface with PRISM and UFMS. I-Procurement will begin implementation in April 2005 and continue through FY 2006.
  • Travel Manager and 348 Sponsored Travel Module
    • Completed implementation of FDA Travel Manager for the entire Agency;
    • Completed (HHS-348) Sponsored Travel module roll-out;
    • Provided safeguards to insure complete review of documents, compliance with travel regulations and official approvals, including on-line signature capabilities; and,
    • Allowed users to assign and allocate cost differentials among sponsors, handle diverse travel reimbursement categories, certify and print associated documents, and electronically route documents and forms to correct destinations.

Accountability — FDA has strong internal controls over financial reporting and management practices. Some examples include the following:

  • Prepared monthly and quarterly reconciliations as required by the Department to ensure the balances reported in financial reports are accurate;
  • Ensured that training, communications, completing critical reconciliations, and holding managers accountable for their assigned areas of responsibility.
  • Included financial performance measures in the performance plans of all senior executives at FDA;
  • Prepared and submitted FY 2004 Corrective Action Plan to DHHS; and,
  • Prepared and released the MDUFMA and PDUFA reports on the management of both user fee funds.

The FY 2004 Conformance Statement determined that FDA's financial management systems were in general conformance to financial system requirements found in OMB

Circular A-127. This determination was based on a review of previous audit findings, completed corrective actions, and the design and implementation of new financial management system that is intended to bring all of the Agency's financial systems into substantial compliance to Section 803(a) of the Federal Financial Management Improvement Act (FFMIA).

While the OIG determined in the financial statement audit that FDA's financial management systems do not substantially comply with FFMIA, this noncompliance should be removed once UFMS is fully operational. No instances exist in which FDA's financial management systems do not substantially comply with Federal accounting standards and the U.S. Standard General Ledger at the transaction level.

Integrate Financial and Performance Management Systems — The requirement to support the integration of performance and financial reporting that meet the specifications in OMB Circular A-11, Part 6 has been identified within UFMS. Currently, no method exists for reporting. A custom reporting solution in the Oracle Federal Financial software will be created to comply with this requirement.

In addition, the FDA's Annual Financial Report includes both cost information and performance results. Performance results come from select performance goals and measures chosen by FDA programs, while cost information is derived from the Statement of Net Costs. Combining these elements provides a picture of the program, its accomplishments and costs.

 

Expanded E-Government

IT Consolidation - FDA continued its progress towards the consolidation of its IT infrastructure by collaborating with DHHS towards achieving its "One HHS" goals and objectives; initiating efforts to accomplish the IT consolidation goals mandated by the reauthorization of PDUFA, and establishing an IT Shared Services organization to manage the FDA's consolidated IT infrastructure. To this end, FDA has:

  • Launched the Office of Information Technology Shared Services (OITSS) - The goal of the FDA was to facilitate the goal of IT consolidation, enabling the Agency to deploy IT effectively and efficiently. This was achieved on October 1, 2003. The support of the ORA and NCTR completed by the end of FY 2004. This organization will facilitate management of FDA's IT resources, enabling the Agency to devote more time and effort to its E-Gov. efforts;
  • Reorganized the Office of the Chief Information Officer (CIO) to ensure key strategic leadership in IT and improved capability for ensuring that IT strongly supports FDA mission goals and objectives;
  • Transitioned all Center, OC and ORA formal IT organizations to directly report to the CIO;
  • Awarded the Single Source Infrastructure Service Support Contract in August 2004 that will provide efficiencies and savings through consolidation of services and management of contractors;
  • Completed its PDUFA III IT Strategic Plan which outlines long term strategies for meeting PDUFA goals and effecting consolidation;
  • Instituted the PDUFA IT Governance process to more closely link PDUFA IT initiatives to satisfying PDUFA III IT goals;
  • Made substantial progress in the area of standardization by implementing the Electronic Common Technical Document (eCTD) specification, releasing draft guidance, and deploying the eCTD Viewer system as a tool in reviewing the new application submitted in the eCTD format.

Enterprise Architecture - IT Projects-

  • Developed "As Is" baseline architecture and initiated the Agency e-submission strategy by developing requirements and the appropriate target architecture;
  • Produced, and initiated implementation of a Corrective Action Plan to effect mature project management practices throughout the Agency including establishment of a project management (PM) training program;
  • Developed and implemented the FDA Unified Registration and Listing; in the short term, produced a Food Registration and Account Management Module that met the mandatory requirement for Food Facilities to begin registration on October 12, 2003 and; in the long term, will consolidate other FDA registration systems; and,
  • Advanced the Capital Planning and Investment Control process as a result of the establishment of the Project Management Office, which has fostered project management training, and development of policies relating to the systems development life cycle and governance process; and the acquisition and institutionalization of a portfolio investment management tool.

Government E-Projects- FDA has made significant contributions to this effort by providing key IT and technical personnel to actively participate on each DHHS project team. This collaborative effort also extends to the Enterprise Human Resource Planning project and HHS Corporate University. Agency IT staff has also made contributions as part of the development of the HHS 5-Year IT Strategic Plan. The FDA has begun the development of an Enterprise Architecture (EA), having completed an "As Is" baseline. The EA efforts continue to be closely aligned with the DHHS EA Program.

FDA is continuing to contribute key IT and financial technical personnel in support of various Departmental projects. For example, FDA is participating with the Department, who is a managing partner, in the Federal Health Architecture initiative, which is a set of guiding technology and management principles that will impact the health industry by enabling innovation in care, reduced cost, and improved access and enhanced public health threat preparedness.

The Agency is involved in the Business Gateway E-Gov initiative by participating in design and implementation meetings and using the E-Forms Catalog to register FDA forms.

FDA assumed a leadership role in the Department for the Online Rulemaking Initiative - the formal launch of Phase I of www.regulations.gov was successfully held on January 23, 2003.

Work has begun on structuring Module 2, and a team has been set up to provide continuing maintenance and web site change control.

The team is now involved in the Phase II requirements process. The team has a representative on the technical and the legal workgroups. The legal workgroup is currently identifying legal issues that will have to be resolved before moving to a central system. The technical workgroup is working to define the technical blueprint/road map for the construction of the eRulemaking system.

In addition to these activities, FDA supported various Departmental initiatives such as:

Secure One HHS - The goal of Secure One is "to create an enterprise-wide secure and trusted IT environment in support of the overall HHS mission". FDA has supported this goal by establishing a comprehensive security program that:

  • Contains security performance measures and metrics, regularly monitored by the FDA Chief Information Systems Security Officer;
  • Characterizes and categorizes systems and resources to identify what is most critical and vulnerable, in order to develop reliable and appropriate security plans;
  • Institutionalizes an Agency-wide training program impacting both system managers and the general user; and,
  • Makes use of a well-coordinated communications effort to highlight security as the highest priority of the FDA CIO and inform all levels of the FDA workforce.

In FY 2004, FDA documented in formal reports (Privacy Impact Assessments, Plan of Actions and Milestones, and Certification and Accreditation) outcomes demonstrating FDA successfully and fully met the goals of the Secure One HHS Program.

Grants Consolidation - FDA is working with NIH staff regarding details of the migration to the eRA/IMPAC II Grants Management System. FDA has also participated in two DHHS subcommittees established to achieve efficiencies and uniform processes across the Department.

HHS enterprise-wide initiatives - Consolidation of like-services has been a linchpin of the "One HHS" strategy. FDA has provided expertise and resources, with special emphasis on the following projects:

  • HHSnet - HHSnet is a department wide initiative to architect a comprehensive network design that encompasses all aspects of the HHS Enterprise Network including the build-out of the HHSnet Network Operation Center (HHS/NOC), while maintaining a strong security posture. The goals of the network redesign are to support intra-operational division communications, to ensure high performance and reliability of strategic systems. FDA assumed a leadership role in the effort, working closely with OPDIV and HHS counterparts, and meeting regularly with senior HHS leadership to discuss progress. FDA was the first OPDIV to transition to the new network, and then coordinated the deployment of other segments throughout HHS. FDA will relinquish control in October when the network is operational; and,
  • Unified E-mail - Another consolidation strategy has been unifying e-mail systems across HHS in order to take advantage of economies of scale and common standards. FDA has been a strong participant, having appointed a team responsible for managing FDA's responsibilities from design to rollout. The team is currently working to define FDA requirements and incorporating them into the final design.

 

Competitive Sourcing

FAIR Act Inventory
In accordance with the Federal Activities Inventory Reform (FAIR) Act of 1998, FDA submitted its 2004 FAIR Act inventory, which identified 1,516 FTE as commercial and 9,044 FTE as inherently governmental. The development of the FY 2004 FAIR Act inventory began in March 2004.

Competition Schedule - In FY 2003, FDA completed all six scheduled studies involving 230 FTE in an average of 12 months or less meeting both the competitive sourcing standards for success.

Full cost comparison studies of graphic arts/visual information services, medical/scientific library services, and a television studio were done in FY 2003. The decision was to retain the functions in-house, with Most Efficient Organizations (MEOs) implemented in December 2003. Full cost comparison studies on General Accounting, Facilities, and Biological Physical Science Technicians were completed in FY 2003. These MEOs were implemented in March 2004.

FDA estimated total expected savings over a five year performance period for the six MEOs at $16.4 million with no involuntary separations. Coupled with the other administrative restructuring taken in FY 2003 and FY 2004, FDA met the Secretary's goal of administrative staff reduction set in FY 2005 and achieved significant savings that were redirected into mission critical activities. FDA formally began its study for clerical support services on

February 26, 2004. This study encompasses 350 FTE and is currently in the source selection phase of the competition with a target completion date of February 25, 2005.

Participates in Department-wide Initiatives — FDA is also renegotiating its Memorandum of Agreement with the National Treasury Employee's Union to reflect changes to OMB Circular A-76. FDA has also been instrumental in helping HHS formulate its competitive sourcing and green plans. In addition, FDA is working with HHS to develop criteria to define a high performing organization.

 

Budget and Performance Integration

The Office of Management and Budget specified criteria that DHHS had to show progress in order to achieve a passing score. Progress is shown in four areas: performance information in the DHHS FY 2006 budget request, development of the FY 2006 HHS Annual Performance Plan, use of PART information in Agency decision-making, and using reports integrating financial and performance information for agency deliberations.

FDA's FY 2005 Congressional Justification (CJ) integrated performance information throughout the budget narrative and aligns program sections by FDA strategic goals. The CJ contained an efficiency goal and several outcome performance goals that were recommended in the first PART assessment, and explained how OMB's PART evaluation was used to guide resource and performance decision-making in creating the FY 2005 budget and performance request. The CJ also included full cost information for each performance goal.

Development of Annual Performance Plan / Report — FDA has worked with the HHS Office of Budget staff to complete the final FY 2006 HHS Annual Performance Plan. Two of the 19 representative programs are from FDA. FDA provided accurate and timely performance and budget information on both of its represented programs.

FDA has decreased the overall number of goals in the performance plan from 71 to 44 and also included new long-term outcome goals. In addition, the mix of goals has been refocused toward high-risk goals, particularly to guard against the terrorist threat.

In the FY 2006 budget period, the FDA budget request and performance plan are combined into one performance budget document. This document adds performance plan information along with the FY 2006 performance goals and its full cost information to the traditional budget program chapter. The remaining items contained in the former plan are part of the performance budget's appendices.

Use of Information From PART in the Integration Process — Since FDA was fully assessed in FY 2005, the Agency did not have any programs to propose for FY 2006-2008.

FDA has responded to the OMB PART with a concerted effort led by our Commissioner and his leadership team. The result of that effort yielded FDA a moderately effective rating. OMB requested FDA to provide yearly updates to show progress on the development of new long-term outcome goals.

Accordingly, FDA developed eight new long-term outcome goals for the FY 2005 PART. In order to meet the strategic goals' performance commitments specified by the annual performance and outcome goals, Agency leadership also developed a Strategic Action Plan (issued in August 2003) which provided the framework for building the capacity and capability for meeting these commitments.

To monitor the Strategic Action Plan's objectives and GPRA performance commitments, FDA leadership established the Strategic Planning Council to ensure timely progress.

In January 2004, this council agreed to establish a performance framework that systematically linked an array of program activities, outputs, and outcomes to support and demonstrate progress in meeting the long-term outcome goals. This council has also charged that the Agency should prepare for the FY 2006 PART process with DHHS and OMB in order to improve the Agency's PART score and make performance and resource decisions for the upcoming budget cycle.

In addition, the budget and performance integration efforts of the past several years have more consciously linked resources with results. Under this new methodology, the traditional budget presentation is now coupled with performance information presenting a complete resource and performance picture. The presentation order in the FY 2006 performance budget is: base activities (justification), program activity data (PAD), and performance targets. The resource request funds base activities that in turn support the accomplishment of discrete workload outputs, PAD and performance goal targets, which contribute to the achievement of long-term public health outcomes and strategic goals.

Examination of Reports Integrating Financial and Performance Information -Through two of its senior Agency level decision-making bodies, the bi-weekly Strategic Planning Council and the Management Council, FDA uses integrated performance and resource information to review the progress of implementing long-term outcome performance goals, to prepare for the PART meetings with DHHS and OMB, and to make performance and resource decisions for the upcoming budget cycle.

FDA also developed a marginal cost methodology that will enable program managers to determine performance and cost impacts on various budget scenarios. This methodology was presented at the Strategic Planning Council for review and concurrence. The Animal, Drugs and Feeds Program is being used as the pilot to test this methodology.

 


 

Program Assessment Rating Tool (PART) Summary
Food and Drug Administration FY 2004 – 2006

(Dollars in Millions)

FY 2004 PARTs**
FY 2004
Enacted
FY 2005
Appropriation
FY 2006
Request
Narrative
Rating

FDA's Five Centers were evaluated:

  • Center for Biologic Evaluation & Research
  • Center for Devices & Radiological Health
  • Center for Drug Evaluation & Research
  • Center for Food Safety & Applied Nutrition
  • Center for Veterinary Medicine
  All received Results not Demonstrated    
**No resources are shown because OMB decided in the FY 2005 PART process to evaluate FDA as a whole entity and not as separate components as in the FY 2004 PART.        

FY 2005 PARTs

FY 2004
Enacted
FY 2005
Appropriation
FY 2006
Request
Narrative
Rating
Food and Drug Administration

$1,800,541,000

$1,881,489,000

+$80,948,000

moderately effective

FY 2006 PARTs

No PART was performed in FDA during the FY 2006 budget cycle.

 

Narrative

 

For the FY 2005 PART, OMB decided to evaluate FDA as a single entity and not five programs. FDA senior leadership made a concerted effort to improve the PART score by developing outcome and efficiency goals, reducing the number of performance goals, and implementing management improvements. Based on these actions, OMB gave FDA a rating of moderately effective. Specifically, the FY 2005 PART assessment found:

  • FDA has a clear mission and a unique Federal role in protecting public health;
  • FDA is well managed, and a has strong and comprehensive strategic planning process;
  • FDA's annual performance goals allow for measurement of performance results;
  • FDA generally meets most annual performance goals;
  • Financial management at FDA is sound; FDA has received a clean audit free of internal material control weaknesses for five consecutive years; and
  • FDA is improving collaborative efforts with stakeholders and other Federal agencies.

FDA's senior leadership used integrated performance and financial reports to deliberate and decide on the Agency's approach to preparing FDA's Performance Budget submission. These reports enabled senior managers to understand the FY 2004 funding environment, the projected budget environment in FY 2005, and the cumulative impact of these conditions on the FY 2006 performance budget submission. This information also enabled FDA senior leadership to examine the performance impact under various budget scenarios. The FY 2006 Performance Budget reflects the deliberations of this group, based in large part on the information contained in integrated financial and performance reports.

NOTE: The OMB PART Summary Rating, which follows this summary narrative, contains a correction in the "Actual" column of the Long-term efficiency measure. This number, 2,766, is the correct number. In the FY 2006 President's Budget, this document contains the error.

 

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