Download to read offline
Priority Setting for Budgeting 11.17.14
- 1. Priority Setting for Budgeting FGFOASCHOOL FOR GOVERNMENT FINANCE NOVEMBER 19, 2014 MELANIE D. PURCELL, CPFO – OPENGOV, INC.
- 2. What is PrioritySetting in the Budget? “Priority setting is a process by which an entity articulates the functions or programs considered most important to the attainment of service goals and objectives to be pursued…” Roland Calia, Priority-Setting Models for Public Budgeting, GFOA * Limited Resources + Unlimited Demands = something doesn’t get funded or pursued. * The budget is the most important policy document the organization will adopt, communicating policies, priorities, resources and uses, services, challenges, opportunities, and organizational structure. * Regardless of legislative, economic, or environmental constraints, we use our resources for what matters most to us.
- 3. Priority Setting isalways happening “If you choose not to decide, you still have made a choice.” (Rush, Freewill) Informal Formal Internal External
- 4. Priority and GoalSetting Goals/ Priorities Budget Adoption Implementation Evaluation
- 5. Effective Priority Settingin the Budget All Methods * Carry forward for multiple years * Apply equally in lean or lush times by guiding reductions and increases * Output is publicly adopted in the budget Formal Methods * Defensible, i.e. consistent and defined * Transparent; increases understanding and trust * More and better information
- 6. Key components ofa priority setting program * Content and focus â—¦ Education: Context, Perspective, â—¦ Communication: Incoming and Outgoing â—¦ Framework * Structure and methods â—¦ Education and Communication Plans â—¦ Priority Setting Model Elements â—¦ Understandability and Usability (internal and external
- 7. Education- Definitions andLanguage Participants and observers need to understand how priorities are set and for what purpose. Explain issues, challenges, parameters, resources, and demands. Identify what outcome is desired from the process. TIPS * Provide clear definitions- ensure everyone has the same glossary for terms. i.e. public safety means… * 3rd to 5th grade reading level makes it easier for all participants to gain a similar understanding * Avoid advanced vocabulary and complex sentence structures to minimize misinterpretation
- 8. Education- Context andPerspective * Context and Perspective: ◦ “The City spent $12 million on Police services last year” ◦ Compare to prior year ◦ Compare to other services and departments ◦ Compare to other agencies with similar demands and situation ◦ Show how much revenue was received for Police services last year
- 10. Communications- Plan beforestarting Outgoing- Providing information to priority setting participants for use during process. â—¦ Multiple media: print, electronic, audio â—¦ Multiple styles: narrative, pictures, charts, & graphs, language styles â—¦ Frequent and repeated â—¦ Consistent and comprehensive â—¦ ACCURATE Incoming- Receiving information from participants with which to compile priorities â—¦ Multiple methods â—¦ Multiple points in the process â—¦ Ensure equal voice and opportunity to participate â—¦ Acknowledge input
- 11. Framework Provide a structurefor priorities and goals â—¦ Input or Output driven or both â—¦ Service categories â—¦ Recipient categories â—¦ Geographic categories â—¦ Stakeholder categories â—¦ Goals with priorities Provide a process framework â—¦ Participants â—¦ Outcomes desired/ Expectations â—¦ Timeline for process and for priorities
- 12. Participants Internal- â—¦ Legislative Body â—¦Staff â—¦ Leadership â—¦ Managers â—¦ Unions â—¦ Staff External â—¦ Legislative Body â—¦ Staff â—¦ Leadership â—¦ Citizens â—¦ Advocate/ Special Interests
- 13. Framework- Indirect Priorities Haveto â—¦ Legal mandates â—¦ Charter/ Local â—¦ State/ Federal â—¦ Financial Need to â—¦ Community Reality â—¦ Financial â—¦ Socio-economic â—¦ Health, Safety, and/or Welfare Want to â—¦ Value of community and/or leadership
- 14. Structure- Define theProcess Identify Issues Identify Goals to Address Issues Objectives for Goals Evaluate Programs & Projects Develop Budget Workplans
- 15. Define the Process;Customize it Identify Issues Identify Goals to Address Issues Objectives for Goals Evaluate Programs & Projects Develop Budget Workplans What will improve this specific concern or situation? What does improvement look like? What steps take us there? How do we know what progress or success looks like? How do these steps get taken? What resources are needed and what are we willing to give up?
- 16. Between Framework &Structure Priority setting is about choosing between issues and related solutions * Identify the issues * Prioritizing the issues * Identifying possible solutions * Prioritizing the solutions
- 17. Issue is Identified,then… Input/ Implementation AssignmentOutcome Goal Objectives Action Steps Action Steps Objectives Action Steps
- 18. Too much crimein our neighborhoods How much does each Action Step cost? How is success defined and measured? Action Steps Fewer incidents and opportunity Less crime Reduce crime Reduce Opportunity for Crime Start and support Neighborhood Watch # trained neighborhood leaders Increase crime prevention education # of monthly meetings and attendees Increase arrests to reduce activity Increase patrols in neighborhoods # of arrests by beat patrol Targeted Task Force # of arrests by Task Force
- 19. Define the discussion Prioritizingissues & prioritizing solutions Too much crime Reduce crime Increase Patrols Create Targeted Task Force Places for kids to play Create play opportunities Add Parks Add activities People need jobs Grow more businesses to hire people Expand business loans Waive development fees
- 20. Evaluation- Influencing Factors Wehave a list of Issues, Solutions, and Resources; NOW WHAT? Identify the various factors that influence each issue and options including: ◦ Financial Resources- How much does it cost? ◦ Human Resources- How many people are needed to implement it? ◦ Other Resources- What other resources need to be dedicated to this? ◦ Legislative Impact- Does it require changes in local, state, or federal law, guidelines, or policies? ◦ Impact on other operations- Do other services have to be adjusted to make this happen? ◦ Educational Needs: what kind of publicity or public education will be needed to implement it ◦ Affected Parties: Has everyone to be affected been identified and, if intended, been contacted? ◦ Affected Parties: How many people, especially relative to the total possible, will be affected? ◦ Affected Parties and Alternatives: How critical is this to the affected parties’ health, safety, and wellbeing? ◦ Timeframe: How quickly will this affect stakeholders? Identify those issues and factors that cross your mind as you evaluate your decision.
- 21. Evaluation- Weighting &Ratings Think of how important each of the factors is on making your decision. Do one or two of them make the decision, regardless of the answers to the others? Rank the factors in order of importance to the decision. Then determine how much relative importance each factor has. Consider the total bucket as worth 100 points, then assign each factor a certain number of points that reflects how important it is to the discussion. This represents its weight or the maximum value the answer to that factor can have. For each issue and option, assign a value to each factor, based on the maximum number of points it can have to influence the decision. Add up all the assigned points per issue and option, and rank by total value. The points assignment is one method for establishing weighting and ratings. Others include Grades (A-F) and Yes/No.
- 22. Linking the Prioritiesto the Budget Community & Organizational Goals Department Goals Department Work Plan Performance Measures
- 23. Priorities become theBudget Budget Work Plan Organizational Structure; Processes; Procedures Financial Assignments Reporting Back
- 25. Understandability & Usability Consistent-similar methods are used over time; regular and routine communication updates stakeholders. Comprehensive- Encompasses all aspects of operations or operations & capital; can be broken down but does not evaluate in isolation. Accurate- Information is made available to all parties and is based on facts; errors are corrected quickly and clearly. Timely- Deadlines are anticipated and programmed into the process. Simplicity- make it easy for stakeholders to understand.
- 26. Questions? Melanie Purcell mpurcell@opengov.com mdpcell13@gmail.com More than150 governments in 30 states use OpenGov to access, analyze, and share financial data. OpenGov's web-based platform empowers senior executives to see trends, drill down to transaction-level details, and compare actual spending to the budget. It also enables governments to share the financial data with elected officials and the public to improve communication and build trust.
Editor's Notes
- #3Â Priorities at any given level of government are heavily influenced by the priorities or policy decisions at other levels of government but inherently, these policies reflect societal priorities, even if not necessarily the different concentrations of society or the individuals.
- #5Â Priority and Goal setting establish the tone and context for the budget process, ideally, and are often thought of as the kick-off point for the annual exercise.
- #6Â Formal methods enhance decision making, internal or external focus through more consistent and inclusive information, structure that quiets and focuses dominating voices, and creating a defensible mechanism by virtue of having a mechanism. People are more inclined to discuss policy and goals when the numbers and structure are already established. Builds trust for more effective decisions and implementation.
- #7Â To be effective and sustainable, priority setting is a program, ongoing, comprehensive, and top of mind/ pervasive.
- #8Â Regardless of internal or external priority setting process, all participants need education on the issues, challenges, opportunities, and resources available. The goals is understanding with the least confusion or effort by all parties; make it easy. It is not about being patronizing or leading.
- #11Â While equal weight may not be placed on input, each and every participant selected to be a part of the process should have access and venues to provide input.
- #13Â Note: not all stakeholders are participants: bond holders, rating agencies, children, animals, neighboring communities, state, and federal, and non-profits
- #15 Taken from GFOA’s Priority–Setting Models for Public Budgeting
- #17Â Important to note that there are in fact two processes which may overlap and can confuse participants, stakeholders, and those charged with implementing.
- #21Â Example of other operations impact- Move activities from one park to another to make room for targeted audience activity. Redirect code enforcement efforts to support a moratorium on commercial citations. Always remember the law of unintended consquences.
- #26 To make the priority setting methodology effective and assist in quality decision making, it must permeate all activities, especially the budget process. Does any given decision move forward the organization’s priorities? adequate time is allowed for communication, identification, evaluation, implementation, revisiting. We distrust what we don’t understand. Is this in the best interests of the community? Is this in the best interests of the organization? Priorities and goal setting articulate those best interests.