Small Agencies Benefit from the CEAR Program
By: James B. Lockhart
James B. Lockhart is Director of the Office of Federal Housing Enterprise Oversight (OFHEO)
This spring we received great news. OFHEO submitted its 2007 Performance and Accountability Report (PAR) to AGA and received the Certificate of Excellence in Accountability Reporting (CEAR) Award for the first time. With 10 straight years of clean audit opinions and the third PAR behind us, OFHEO decided to ask for the AGA review. Publishing the PAR is an opportunity to showcase what we do, what we accomplish and how we are benefiting the nation. Receiving the award is a validation of OFHEO’s results and core values—integrity, independence, professionalism and accountability. Our team who developed the PAR were thrilled that AGA recognized the agency. According to the AGA news release, PARs receiving the CEAR demonstrate “the highest standards of clarity in communicating financial information and demonstrating accountability.” We are extremely proud of that distinction.
At OFHEO, we take seriously our mission—“to promote housing and a strong national housing finance system by ensuring the safety and soundness of Fannie Mae and Freddie Mac (“Enterprises”).” These $5 trillion mortgage giants had significant accounting problems. We have been supervising their remediation, which culminated in their issuance in February 2008 of timely financial statements for the first time in four years. The CEAR award shows that we have helped lead by example.
OFHEO is an agency with a small budget of $66 million. Given what has happened to the mortgage market over the last year, our mission has become even more critical to the American economy. With all the turmoil in the mortgage markets, the Enterprises’ market share over the last two years has doubled to 68 percent of all mortgages originated in the U.S.
The Enterprises have been critical to keeping the mortgage market functioning. The Senate has recently been debating legislation to strengthen our regulatory process. With all that is going on in the mortgage market and the legislation, it might have been easy to take our eye off performance management. I am very proud that our team did not.
While OFHEO is not required to submit its own PAR, we followed the guidelines and requirements set for agencies covered by the Chief Financial Officers’ Act. OFHEO is the smallest agency to receive the CEAR Award among this year’s 17 recipients, and we encourage others not to be intimidated by the process. Small agencies sometimes question whether it’s worth the extra effort to meet the standards set for large agencies. The answer is yes. Whatever the size of a government entity, the public is counting on us to deliver results, just as they count on state and local governments to deliver results within their budgets. Following through with the PAR shows the public that we hold ourselves accountable to achieve the goals we set. While OFHEO also issues an annual Report to Congress on the condition of the Enterprises we regulate, for many small agencies the PAR can be the main opportunity to communicate with the public. Agencies can reach stakeholders they never knew they had.
For OFHEO, improving transparency about the mortgage market is also a strategy to achieve our mission. AGA’s feedback from the CEAR review reaffirms that. OFHEO’s PAR includes sidebars on the role of Fannie Mae and Freddie Mac in the secondary mortgage market and OFHEO’s oversight role. In her June 16 blog about the CEAR, Evie Barry, AGA’s director of Performance Reporting, cited these sidebars as “excellent primers for helping the unfamiliar understand a complex government function that is rich in acronyms.” Writing these and the rest of the PAR requires OFHEO staff to have the discipline of explaining our technical work in understandable, jargon-free language. It reflects our third strategic goal of continuing to support the national policy of an efficient secondary mortgage market by providing timely information and analysis on key policy issues such as loan limit changes, Enterprise market share and OFHEO's quarterly House Price Index. To do so, we also work with other federal agencies to coordinate efforts that could affect the nation's mortgage markets and housing finance system.
In many organizations, the less visible functions do not get the credit and recognition that their hard work and professionalism deserve. The CEAR gave us an opportunity to change that shortcoming by showcasing our mission support staff’s successes to the whole agency. As it turned out, we had our annual awards ceremony the next day so we were able to recognize the CEAR award team in front of the whole agency. It’s been almost two months since we learned we were getting the CEAR, and our mission staff continue to congratulate their colleagues and have renewed interest in improving our performance goals and reporting. The credit has been shared with all of OFHEO as everyone contributed to accomplishing the results. I can’t think of a better reinforcement for teamwork.
I came to OFHEO after having been principal Deputy Commissioner and Chief Operating Officer of the Social Security Administration (SSA). SSA publishes a PAR that has received the CEAR award for the last 10 years. It was great to see the SSA team awarded for their tenth straight year, the only agency to do so. It has been my pleasure and privilege to lead OFHEO to this same distinction, its first CEAR award.
I have accepted the CEAR award for the largest and now the smallest agency. I have to again thank AGA for supporting this award and performance cultures in government. I also thank Clay Johnson, the Deputy Director for Management at OMB for his incredible effort to support results, strong management, dedicated career employees, the President’s Management Agenda and the PART Process. Government agencies need to create results for American taxpayers. Too often political appointees emphasize policy and legislation over performance and management. I am hoping that the next Administration will build upon the emphasis on management and performance that has come from President Bush, the Office of Management and Budget, the Government Accountability Office and AGA.
OFHEO values continuous improvement. We review other agencies’ PARs to gather ideas about best practices and adopt what can work well here. Now that we’ve had our own AGA review, we look forward to following up on their OFHEO-specific recommendations to produce even better results and PARs in the years to come.
TOMORROW: Tom Amyot, "The Role of an Educator in Professional Development"
