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Customer perspective: The cost of the wild at the U.S. FWS

August 29, 2007

Providing safe habitat and ecosystems for wildlife is important to us. We want to know that grizzlies roam the Rockies, even if we don’t necessarily want to meet one.

Fishermen and conservationists alike would love to see the oceans as they once were. We now realize that swamps are better at filtering water and housing animals than supporting developments.

But how much does it actually cost to preserve these things? And are we trying hard enough?

Green government

What is the top imperative for governments in the 21^st century? Brad Fearn wants to see every government agency become an environmental agency.

“You don’t have to be the Department of the Interior or the Department of Energy to be an environmental leader,” he says. “Every agency can be a leader if they find the one or two things they can truly affect."

To conserve and protect

Government agencies have been the gallant protectors of the natural world for decades.

The United States Fish and Wildlife Service (FWS), for one, has over the years protected countless species and restored critical habitat.

It currently operates 545 wildlife refuges, 69 fish hatcheries for restoring native and sport species, and has 1,200 species on its endangered list.

Every year FWS receives its allocation from Congress and decides which lands will receive its attention and, which partners it can work with to protect which species and habitat.

Finding the actual costs

The annual budget amount and what the service achieves with it has always been a matter of public record.

But the actual cost of specific deeds has remained hidden in the mists of traditional function-based accounting, which divides costs among budget object classes such as Resource Management, capital expenditures, and subactivity program costs.

In the end, we may know that 100 contractors and 200 paper clips in some way colluded to put aside 300 acres of native grassland for future generations. But how much does it cost to save an acre? A species?

“The FWS wanted to be able to tell taxpayers more specifically where their money is going,” says Brad Fearn, Program Analyst, Planning & Evaluation Office, Fish and Wildlife Service (FWS).

“While it’s true that the U.S. Office of Management and Budget (OMB) was pushing for more accountability, for the FWS it was a matter of pride. Employees come to the FWS because of their passion for nature, and they wanted to be able to show that they’re making a difference.”

Green acres

So last year the service added a new way to account for the money they spend.

Activity-Based Costing (ABC) is as simple as it sounds.

Instead of dividing expenses into traditional budget buckets that track headcount, computers, trucks, and thumbtacks, the FWS started tying costs to such specific tasks as listing and recovering species, controlling invasive species and managing and protecting habitats.

This focus on outcomes permits performance-based budgeting.

In its earliest stages, ABC provided a method for FWS to come up with an approximate cost of restoring an acre of wetland: $400 (as an example).

“It’s surprisingly low,” says Fearn, “but the project is still in its early stages. The cost doesn’t include all partner activity, and the methodology is not fully flushed out.”

As the system matures, taxpayers will know what it costs to safely remove a species from the endangered list, to control an invasive species such as the zebra mussel, to understand the biggest threats to migratory birds, and much more.

They will not know down to the penny (as this is a managerial accounting system), but should have a reasonable estimation.

Bear counters

How do they do it? Well, employees account for their efforts by tagging their work with a task code.

For example, the hierarchy of codes includes the process Protect and manage species, which breaks down into sub-processes for protecting endangered, non-endangered, and foreign species, each of which break down to an activity level.

Employees code their time to the work performed, not the ultimate outcome, and have guidance to break their day into no less than 2 hour chunks. This avoids overly specific or gross estimates.

“We try to make it easy for employees,” says Fearn. “We want them tracking bears, not counting beans.”

Cost and performance data is pulled into a data warehouse that supports a variety of integrated business intelligence tools. The FWS wanted to maintain data integrity and use its data to tell one comprehensive story.

The technology and tools help provide transparency into the data with most cost and performance information available directly through the FWS Web site.

Cognos performance management

The FWS has built its performance-based budgeting on Cognos 8 Business Intelligence and Cognos 8 Planning.

The Cognos system draws on existing FWS source systems such as FFS (core financial) and FPPS (personnel) systems, and performance data from programs such as the National Wildlife Refuge System and Fisheries and Habitat Conservation (FHC).

It unites this data in a central staging area and allows such reporting and analysis as performance-based budgets, individual employee performance plans, and performance reports and scorecards.

Using Cognos Analysis studio, users can drill down into the costs of each sub-activity.

Currently 120 employees at varying levels within the organization have licenses to view and analyze the data.

While the system is not intended to provide direct access to everyone, standard reports are available on the FWS website for employees and the public to view.

Disbelief

The project wasn’t a shoe-in. Surprisingly, however, the main stumbling block was not resistance to increased accountability. It was disbelief in the numbers.

“People didn’t believe the costs originally,” says Fearn. “In some cases the costs seemed too high; in others, impossibly low. Costs were now being attributed to outcomes based on a view across programs, not just the primary program delivering the work.”

“We knew that if we could show them the costs were correct, they would embrace the system. So we had a confidence study done on the data. The study returned an accuracy rating of 92 percent. Within minutes, people were on board.”

It also didn’t hurt that the project received the full support of management and a long-term commitment.

Visibility into performance, alignment with goals

How does performance-based budgeting help the FWS with its mission? For one, the service can now see the big-picture perspective: how each program contributes to cross-program outcomes.

“We were used to looking at individual program elements, as funded by Congress,” says Fearn. “Now we can look across programs and get a long-term view.

“For example, the habitat conservation and wildlife refuges programs contribute jointly to many outcomes, but it was difficult to see the interplay before.”

With each FWS employee working towards a tangible outcome, everyone has insight into how they contribute to the overall strategy of the organization.

Individuals work on activities that are mapped to critical success factors (CSFs), which roll up to operational goals. In the National Wetlands Inventory, for example, the goals are listed right in the planning tool.

Climate of decreased spending

Performance-based budgeting sometimes meets with suspicion because of the potential for budget reductions. Congress is already asking us to find efficiencies — to do the same thing for less.

Perhaps when the cost of performance is clear, this will help organizations receive more funding to accomplish work on national/environmental priorities.

“We worked hard to have the system show what results cost,” says Fearn. “The point was to show that we can’t achieve the same performance with reduced budget.

“While it’s true that we found efficiencies in certain areas that seemed excessive to us internally, in most cases we can now show what it costs to preserve species and habitats.”

Now when the FWS goes to Congress, it won’t simply be asking for an allocation based on last year’s amount and this year’s best guess.

This year they’ll ask for the amount it costs to preserve, say, 900 more wetlands, 30 more species, and so on.

“People in the service are very excited about our ability to show the cost of results,” says Fearn. “Since our performance management journey is just beginning, everything we can do right now is exciting because we did not have this level of information before.

“The question now is what step to take next?”

Something to brag about

Besides giving employees a sense of accomplishment and answering to the American people, performance-based budgeting lets the FWS ensure it is answering to the big guys.

“Having performance management has let us easily comply with the main regulations,” says Fearn. “The President’s Management Agenda, OMB 123, the CFO Act: we’re there.”

The system also lets the FWS supply Congress with prompt and accurate answers to its occasional to frequent performance questions. Doing so shows that the house is in order: money is being well spent.

Compliance is no longer a source of pain, but an opportunity to brag.

Many partners, common goal

Last year Harvard’s John F. Kennedy School of Government gave the FWS an Excellence in Government award for a grass roots conservation project it undertook with a great number of partners.

The FWS worked together with private landowners, not-for-profit organizations, other government agencies, NGOs, native tribes, and state and local associations to successfully restore a species and habitat.

The award highlighted the importance of partnerships in conservation. It also recognized the project as a showcase for other agencies working with a complex network of partners toward a common goal.

The ability to capture and share performance information certainly helped smooth this rocky process.

While the award focused on one of a multitude of FWS projects, it illuminates the water in which the agency swims: partnerships let it achieve results.

People may have different reasons, different motives, different stakes in the game, but we all want to protect species and habitat.

At any cost?

While that remains a matter of contention, understanding the cost is the first necessary step in showing stakeholders that their money is contributing efficiently to an important outcome: keeping a piece of our world wild.

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