A Primer On Performance Based Budgeting For State & Local Government Agencies

Performance Measures that Matter Nick Mandel New Mexico Public Strategies Group

A short history of Performance Measures to date

Understand the basics of performance management and it’s application at your level of authority and responsibility

A practical exercise using the Logic Model and performance measures

References & Resources

Performance Measures that Matter

Federal Legislation

Government Performance Results Act (GPRA) 1993

New Mexico

Accountability In

Government Act (AGA)

1999

Performance Measures that Matter Sunnyvale California Performance Based Budgeting Starting Point Oregon Shines (1989), Oregon Shines II (1997), & Achieving the Oregon Shines Vision (1999). State of Indiana- DOT City of Coral Springs, Florida

Clinton- Gore Administration

Government Performance Results Act (GPRA)1993

Bush- Cheney Administration 2000

President’s Management Agenda

Link Budget Funding to:

Performance

E-Government

Human Capital Management

Competitive Sourcing

Financial Management

Obama–Biden Administration

Federal Highway Administration – funding possibly tied to State DOT Performance Measures

Slide not on Handouts

Some Definitions (1of 3)

Program- Set of activities undertaken in accordance with a plan organized to realize identifiable goals and objectives

Strategic Planning- a tool to help organizations make decisions consistent with its approach to achieving the organizations/programs mission, goals and objectives

Strategies- The methods to achieve goals and objectives, Formulated from goals and objectives, a strategy is the means for transforming inputs and outcomes with the best use of resources.

Baseline Data- Current Level of a Program’s Performance Measures as established by State Budget

Some Definitions (2of 3)

Performance Measurements- Quantitative or Qualitative indicators used to assess a program

Inputs- Qualities of Resources Needed to Produce Goods or Services

Output- A Measure of Volume of Work Completed

Efficiency - Measures the Efficiency of a Program, often expressed as cost per unit

Quality – Measures the Quality of Work or Service Performed

Outcome-A Quantifiable Measure of the Impact of the Program that captures the program results

Explanatory Data - Used to explain or understand measures or other information related to performance measures.

Some Definitions (3 of 3)

Resources- those assets that might include equipment, special contracts, employees, budgets, and other goods to produce work

Key Results . One of three primary results that includes;

Customer Oriented – benefits or impacts the program from the clients point of view?

Strategic – the social, economic, culture or policy conditions the program seeks to influence?

Operational - the work processes undertaken in conducting business?

Agency Mission- The reason for the agency’s existence, what the agency does and why.

Assumptions & External Factors - an evaluation of key factors that influence the success of agency in achieving its mission and goals.

Traditional Budget Performance

Based Budget

Size of Agency

Influence of Agency Efficiency

Political Considerations Quality

Number of Employees Outputs

Traditional Budgets Outcomes

Logic Performance Based Budget Model S I T U A T I O N OUTCOMES INPUTS OUTPUTS Performance Measures that Matter

Everyday Model H E A D A C H E Feel better Get pills Take pills Performance Measures that Matter

Possible Programs or Activities to Use:

Procurement Bureau

Financial Management

Constituent Services

Human Resources

Public Information

Capital Management

Reprographic Services

Administrative Support Service

Performance Based Budget Practical Exercise

Ask the questions:

Who is the primary client or target group?

Why does the program exist in the first place?

What business is the program in?

Define the purpose of the program or activity:

“ The Purpose of the ____ Program is to provide/produce ______ so they can _____________”

“ The Purpose of the Road Maintenance Program is to provide and produce clean uncluttered streets to enhance the quality and economic development of our city”

Logic Model for: Road Maintenance Program Inputs Situation: The Purpose of the Road Maintenance Program is to provide and produce clean uncluttered streets to enhance the quality and economic development of our city” Outputs Activities /Participation/ Outputs Short Term Medium Term Long Term Assumptions External Factors

INPUTS Budget

Personnel (FTE)

Contractual Services

Capital Outlay

Transfers

Other Resources

What are the Inputs and Resources?

“ Seventeen Full-time Employees(Personnel Services);

Contractual Services of a local company(Operating Expenses);

Purchase of Street Cleaners (Capital Outlay)

Transfers (State, Federal Highway or other Resources)

Logic Model for: Road Maintenance Program Inputs What we invest: Resources FTE’s Money Special Equipment Outside Contractors Special Materials Time Situation: The Purpose of the Road Maintenance Program is to provide and produce clean uncluttered streets to enhance the quality and economic development of our city” Activities /Participation/ Outputs Short Term Medium Term Long Term Assumptions External Factors

What are the activities, operational tasks and other daily events that comprise the next step?

What we do and who we are

Logic Model for: Road Maintenance Program Inputs What we invest: Resources FTE’s Money Special Equipment Outside Contractors Special Materials Time Situation: The Purpose of the Road Maintenance Program is to provide and produce clean uncluttered streets to enhance the quality and economic development of our city” Outputs Activities /Participation/ Outputs Short Term Medium Term Long Term What we do: Meetings Data entry Reports Certification Inspections Who we reach: Internal Staff Select members of the community Other special interests City/State/Local/Gov. Quality Efficiency Outputs Outcomes Assumptions External Factors

What are the Performance Measures?

Output

Quality

Efficiency

Outcomes

PERFORMANCE MEASURES

Outputs– How Many?

Quality – How Well?

Efficiency- What’s the Cost?

Effective Outcome- Overall Result(s)

Each City Street will be cleaned and striped once every 6 months

Output Measure

Outputs are Important, but..

“ City streets will be cleaned based on “City National Clean Safety Act Standards.”

Quality Measure

IRS Call Center Efficiency Slide not on Handouts But what about other standards of performance…..

% of Indiana Bridges Deficient Performance Measures that Matter Slide not on Handouts

Street cleaning crew expenses will be comparable to private sector expenses.

Efficiency Measure

Short, Intermediate and Long-Term Outcomes

What are the big-picture Outcomes?

What will be the results if the program and/or services are successful in the long term?

Outcomes – Impact For operations & program management, Less than a year Situation: Lead and assist the department in change. Outputs Activities /Participation/ Outputs Short Term Medium Term Long Term What we invest: Resources FTE’s Money Special Equipment Outside Contractors Special Materials Time What we do: Meetings Data entry Reports Certification Inspections Who we reach: Internal Staff Select members of the community Other special interests City/ State/Local Governments Outputs: How Many Quality: What standard? Efficiency: What cost ? What are the short term results: Look for increases in efficiency, cost, operations, and other short term indicators For major policy and strategy: Usually 1-2 years What the medium term results are: Longer 2, 3, 4 or even 5 years Look for: Behavior, Practices, Decision Making, Policies, Outcomes The ultimate results are: Can be much longer Look for: Social, Economic, Civic, Policy, Fiscal, Environmental, Outcomes Assumptions External Factors

What are the Assumptions

And

External Factors Present ?

Inputs Outcomes – Impact Situation: Lead and assist the department in change. Outputs Activities /Participation/ Outputs Short Term Medium Term Long Term What we invest: Resources FTE’s Money Special Equipment Outside Contractors Special Materials Time What we do: Meetings Data entry Reports Certification Inspections Who we reach: Internal Staff Select members of the community Other special interests City/ State/Local Governments Outputs: How Many Quality: What standard? Efficiency: What cost ? What the short term results are: For major policy and strategy: Usually 1-2 years For operations and program management, Less time Look for: Awareness, Knowledge, Attitudes, Skills, Opinions, Aspirations, Motivations, Outcomes What the medium term results are: Longer 2, 3, 4 or even 5 years Look for: Behavior, Practices, Decision Making, Policies, Outcomes That the ultimate results are: Can be much longer up to 10 years Look for: Social, Economic, Civic, Policy, Fiscal, Environmental, Outcomes- Outstanding success with the public – Washington DOT, City of Coral Springs, Florida Assumptions External Factors Assumptions Long- term effort. Employees. Middle management and executive leadership. Economic Projections External Factors No institutional history of quality. Lack of human resource expertise and other resources. Economic Projections?

Slide Not on Handouts

Exercise Activities

Defining program purpose,

Identify Inputs- Resources, FTEs, etc.

List key activities and work related duties,

Create quality, efficiency and/ or output measures, measures

Understand and identify potential short, intermediate and long-term outcomes & performance measures

Consider the Assumptions & External Factors

Look for/ consider application within your work group

Logic Model for: Your Bureau/ Program Inputs Outcomes – Impact Situation: Outputs Activities /Participation/ Outputs Short Term Medium Term Long Term Assumptions External Factors

Performance Based Budgeting will help:

Better Understanding of what programs are effective

Better Understanding of Program costs

Better Understanding of what programs are efficient

Begin the connection of Budgeting for Results

Why Performance Based Budgeting &

Management ?

By measuring performance, government can be transparent to the citizens, the executive and the legislature alike by measuring performance, reporting on success and failures and demonstrating a clear and compelling case to fund specific programs and responsibilities