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


Federal Legislation

Government Performance Results Act (GPRA) 1993

New Mexico Accountability In

Government Act (AGA)

1999



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

http://www.in.gov/omb/2342.htm

http://www.in.gov/omb/2342.htm

Clinton- Gore AdministrationGovernment Performance Results Act (GPRA)1993Bush- Cheney Administration 2000President’s Management AgendaLink Budget Funding to:

Performance

E-GovernmentHuman 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 AgencyInfluence of Agency EfficiencyPolitical Considerations QualityNumber of Employees Outputs

Traditional Budgets Outcomes


Logic Performance Based Budget Model

SITUATION

OUTCOMESINPUTS OUTPUTS


HEADACHE

Feel betterGet pills Take pills

Everyday Model


Possible Programs or Activities to Use:

Procurement BureauFinancial Management Constituent Services Human ResourcesPublic InformationCapital ManagementReprographic ServicesAdministrative 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/ OutputsShort 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)



Inputs


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

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

What we do and who we are



Inputs


OutputsActivities /Participation/ Outputs

Short Term Medium Term Long Term

What we do:MeetingsData entryReportsCertification Inspections Who we reach: Internal StaffSelect members of the communityOther special interestsCity/State/Local/Gov.

Quality

Efficiency

Outputs

Outcomes

Assumptions

External Factors

What we invest:

Resources

FTE’s

Money

Special Equipment

Outside Contractors

Special Materials

Time


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


But what about other standards of performance…..

% of Indiana Bridges Deficient




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

Situation: Lead and assist the department in change.



What we invest:

ResourcesFTE’sMoneySpecial EquipmentOutside ContractorsSpecial Materials Time

What we do:MeetingsData entryReportsCertification Inspections Who we reach: Internal StaffSelect members of the communityOther special interestsCity/ 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

What are the Assumptions

And

External Factors Present ?


Outcomes – Impact

Situation: Lead and assist the department in change.

OutputsActivities /Participation/

Outputs Short Term Medium Term Long Term

What we invest:

ResourcesFTE’sMoneySpecial EquipmentOutside ContractorsSpecial Materials Time

What we do:MeetingsData entryReportsCertification Inspections Who we reach: Internal StaffSelect members of the communityOther special interestsCity/ 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?

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:



Assumptions

External Factors

Performance Based Budgeting will help:Better Understanding of what programs are effectiveBetter Understanding of Program costsBetter Understanding of what programs are efficientBegin 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


Lessons Learned for Local Governments

Start Small

Don’t Shoot for the Moon

What Gets Measured Gets Managed

Excellent Schools

Cost of Living

Quality of Life Affordable Housing

Low Crime Rate Ease of Commute


http://www.businessweek.com/


Questions and Dialogue

Thank You!

Nick Mandel

New Mexico Public Strategies Group

a primer on performance based budgeting for state & local government agencies

Business

city performance measures

programs performance

unit quality measures

program inputs qualities

quality of work

agency mission

work key results

services output