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A Primer On Performance Based Budgeting For State & Local Government Agencies
- 1. Performance Measures that Matter Nick Mandel New Mexico Public Strategies Group
- 2. • 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
- 3. Federal Legislation Government Performance Results Act (GPRA) 1993 New Mexico Accountability In Government Act (AGA) 1999 Performance Measures that Matter
- 4. 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
- 5. 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 Performance Measures that Matter
- 6. Slide not on Handouts
- 7. Slide not on Handouts
- 8. 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 Performance Measures that Matter
- 9. 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. Performance Measures that Matter
- 10. 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. Performance Measures that Matter
- 11. Traditional Budget Performance Based Budget Size of Agency Influence of Agency Efficiency Political Considerations Quality Number of Employees Outputs Traditional Budgets Outcomes Performance Measures that Matter
- 12. Logic Performance Based Budget Model S I T U A T I O N OUTCOMESINPUTS OUTPUTS Performance Measures that Matter
- 13. H E A D A C H E Feel betterGet pills Take pills Everyday Model Performance Measures that Matter
- 14. Possible Programs or Activities to Use: Procurement Bureau Financial Management Constituent Services Human Resources Public Information Capital Management Reprographic Services Administrative Support Service Performance Measures that Matter
- 15. 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? Performance Measures that Matter
- 16. Performance Based Budget Practical Exercise Define the purpose of the program or activity: “The Purpose of the ____ Program is to provide/produce ______ so they can _____________” Performance Measures that Matter
- 17. Performance Based Budget Practical Exercise “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” Performance Measures that Matter
- 18. 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
- 19. INPUTS Budget Personnel (FTE) Contractual Services Capital Outlay Transfers Other Resources Performance Measures that Matter
- 20. 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) Performance Measures that Matter
- 21. 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” Activities /Participation/ Outputs Short Term Medium Term Long Term Assumptions External Factors What we invest: Resources FTE’s Money Special Equipment Outside Contractors Special Materials Time
- 22. What are the activities, operational tasks and other daily events that comprise the next step? What we do and who we are Performance Measures that Matter
- 23. 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 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 we invest: Resources FTE’s Money Special Equipment Outside Contractors Special Materials Time
- 24. Performance Based Budget Practical Exercise What are the Performance Measures? Output Quality Efficiency Outcomes Performance Measures that Matter
- 25. PERFORMANCE MEASURES Outputs– How Many? Quality – How Well? Efficiency- What’s the Cost? Effective Outcome- Overall Result(s) Performance Measures that Matter
- 26. Performance Based Budget Practical Exercise What are the Performance Measures? Each City Street will be cleaned and striped once every 6 months Output Measure Performance Measures that Matter
- 27. Outputs are Important, but..
- 28. Performance Based Budget Practical Exercise What are the Performance Measures? “City streets will be cleaned based on “City National Clean Safety Act Standards.” Quality Measure Performance Measures that Matter
- 29. IRS Call Center Efficiency Slide not on Handouts But what about other standards of performance…..
- 30. % of Indiana Bridges Deficient Performance Measures that Matter Slide not on Handouts
- 31. Performance Based Budget Practical Exercise Street cleaning crew expenses will be comparable to private sector expenses. Efficiency Measure Performance Measures that Matter
- 32. 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? Performance Measures that Matter
- 33. 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 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 For operations & program management, Less than a year
- 34. What are the Assumptions And External Factors Present ? Performance Measures that Matter
- 35. 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 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?
- 36. Slide Not on Handouts
- 37. 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 Performance Measures that Matter
- 38. Logic Model for: Your Bureau/ Program Inputs Outcomes – Impact Situation: Outputs Activities /Participation/ Outputs Short Term Medium Term Long Term Assumptions External Factors
- 39. 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 Performance Measures that Matter
- 40. Performance Measures that Matter 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
- 41. Performance Measures that Matter Lessons Learned for Local Governments Start Small Don’t Shoot for the Moon What Gets Measured Gets Managed
- 42. Excellent Schools Cost of Living Quality of Life Affordable Housing Low Crime Rate Ease of Commute Slide not on Handouts
- 43. Performance Measures that Matter Questions and Dialogue Thank You! Nick Mandel New Mexico Public Strategies Group
Editor's Notes
- Add public service background theme-
- Comment on how the application of this material can be applied at any level in the organization- not simply at the strategic level and management levels.
- GPRA Began in 1993 on limited basis New Mexico – 1999 limited basis 2004 all agencies
- Strategy --- water shortage in Santa Fe/ Northern NM--- leadership sets the course– rank & File must carry through- Low flow toilets, etc
- Definitions included in HB #2
- From Martha files --- remember Discussion items to present in different sections
- What’s Next ? Take Steps at the Local Government Level Not a Cabinet Secretary or Bureau chief--- can still make a difference--- Start small with your area of responsibility Political Considerations- Homeland Security, Terrorism, and Bio chemical agents at the federal level---- Imagine a document like the Compass at the local government level --- what would be the reaction from your constituents and citizens --- And when the need for an increase in revenue and funding is needed the results and performance indicators that can be demonstrated--- Santa Fe employment and wages --- everything seems to go up ---cable fees, food expenses, utilities etc– except revenue for government expenses
- The logic model is a graphic representation that shows the logical relationships between inputs, outputs and outcomes relative to an originating situation. It is a picture of the ‘action’ or … Can be applied too small projects, complex programs, team work, or organizations. A simple series of relationships that links investments to results
- Let’s take a simple example – one that we can all relate to. We have a situation where we are suffering from a severe headache. To alleviate the headache, we rely on medication. First, we need to get the pills, then we take the pills and as a consequence we feel better. Number of embedded assumption: assumes that we can find/get the needed pills; that we take the pills as prescribed; that the pills lead to improvement – not a stomach ache or other negative side effect. All programs have such assumptions – often the basis for failure or less than expected results But, you can see the logic of the diagram and the end results – the impact that is expected. What really matters isn’t whether we get the pills and take the pills, but whether we feel better as a result
- Possible Programs or Activities to Use Information Technology- downtime on e-mail system/ web access Budget– Finance --- correct payment// accurate payment/ number of audits Constituent Services --- time to respond in writing or phone to constituent services Human Resources– turnover of staff/number of employee training hrs. Public Information- number of web hits Emphasize it doesn’t matter if it is at very senior level management or line services---- programs and services vary and extensive
- Be specific if needed--- the taxpayer is not enough unless you work at the White House or Governor’s Office-- Primary Client or target group – citizens who use the streets / cars, public trans. Commercial traffic, bikers, etc Discuss in context of Roads and the taxpayers in general ??? All taxpayers or the driving public??? General services and reprographics examples--- Opportunity to discuss?????? Why does the program exist--- easy to say clean roads --- or help enhance the quality of roads to the citizens of the community --- clean street means s desirable place to live ---
- Next slides will walk through the exercise before we break into groups Remember to ask for input --- don’t try to dominate with your “imagined brilliance!”
- Include all the resources ---- Human services – Volunteer time, matching grants, other resources that provide values and produce results in the work of the program
- Start on Output ---- the most basic and easiest ---- too easy --- be careful
- Self- explanatory---
- Emphasis the point while efficiency, quality and outputs are important it all about overall outcome Why do we clean street, process warrants, provide human resource services --- engage in many of the activities that can be viewed as unclear or some wonder about the value???? Next Slide – (OUTCOMES)
- Standard can and should be based on professional industry standards--- government audit standards,American Correctional Association, Baldrige Criteria Performance Standards, ISO 9002 Standards might be internal for bureaus or programs Standards represent both attainable and benchmarks a department/program or service will strive for ---- Tom’s Pothole story Ask them what professional standards come to mind?????
- Garbage collection in Phoenix Indianapolis pothole story – Good enough for government ---- don’t hear— Private prison – MVD Express etc
- Last part of exercise --- what are the items your assuming --- Iraq war assumptions --- ????\ Limited revenue, competitive demands from private sector companies At the federal level --- assume soaring stock market would continue for ever and the surplus would continue --- External Factors --- Uncompetitive I.T. salaries High turnover rate Retirement --- feds and state numbers Outdated technology –
- When the project is complete – will look something like this
- Reference hand outs More involved because your “ADVANCED”--- Or at the intermediate level
- 1) Look at basic operating processes and areas that you can reasonably expect to make a difference immediately Number of citizen inquiries responded to in a given timeframe Number of public reports completed on a timely basis Number of Audit exceptions resolved completely 2) Performance and measures should be those responsibilities under your control– decrease in smoking, Return on Investment, state of the art Infrastructure Tech. System is difficult to manage – start with the basics 3) The practice of managing managing for results will produce results--- Oregon Benchmarks ---not what they wanted but still progress. Describe Compass evolution