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Week 14: Developing Performance Measures and Budgets: Best Practices

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Title: Week 14: Developing Performance Measures and Budgets: Best Practices


1
Week 14 Developing Performance Measures and
Budgets Best Practices
  • Performance budgeting
  • theory v. practice
  • Performance measures
  • theory v. practice
  • examples
  • Best practices sites
  • Course evaluation

2
Performance Budgeting
  • Definition Systematic incorporation of
    performance information into the budgetary
    process
  • Basic Requirements
  • availability of performance information
  • use of that information in budgetary decision
    making
  • program structure (or at least program thinking)
  • match between planning and budgeting structures

3
History of Performance Budgeting
  • 1949 Hoover Commission
  • Planning-Programming-Budgeting-System (PPBS)
  • Johnson 1965
  • Management by Objective
  • Nixon 1973
  • Zero-Base Budgeting (ZBB)
  • Carter 1977
  • GPRA
  • Clinton 1993

4
GRPA Anything New?
  • Involves Congress
  • Tries to integrate performance and budget
    information
  • eliminate need for crosswalks
  • More realistic
  • less mechanistic
  • accepts role of politics
  • strive toward outcomes (not process or output)
  • evolutionary
  • start with strategic plans and performance plans
  • several years before performance budgets

5
Performance Budgeting State and Local
  • National Perf. Review and GPRA spurred local
    efforts
  • States primary use of performance budgeting is
    at agency level
  • used to support internal management
  • not coordinate in central budget office or used
    in legislative budget process
  • Cities
  • less than half of cities gt25,000 use performance
    measures
  • less than ¼ have centralized performance
    monitoring systems

6
Performance Budgeting in Theory
  • improvement over line-item budgeting
  • focus on performance, not compliance
  • connects resource needs to results (tight links)
  • integrates performance information into budget
    structures and budget process
  • provides for informed choices impact of
    support levels
  • improves accountability
  • improves management

7
Steps in Performance Budgeting -- Theory
  • Ideal performance budget helps decision makers
    understand performance consequences of budget
    decisions
  • Establish a program plan (mission/goals/objectives
    )
  • Select means to measure results
    (measures/indicators)
  • Set performance targets (or standards)
  • Determine strategies for meeting targets
  • Provide cost projections for meeting strategies
  • Allocate funds based on cost projections
  • Collect data on performance measures (the
    measurements)
  • Adjust funding???

8
Performance Budgeting in Practice
  • hard to define and measure outcomes
  • many factors outside control of agency long-term
  • limited knowledge of cause/effect relationships
  • setting targets is problematic and arbitrary
  • budget structures dont match program structures
  • loose linkages with budget at best
  • possible perverse incentives whats measured
    gets done

9
Approach to Developing Performance Budget --
Reality
  • Good performance budget helps decision makers
    connect to program results to try to affect
    outcomes
  • Are the program purposes and outcomes clear?
  • Can you determine the service effort and
    accomplishments?
  • Are major funding issues highlighted and
    supported with performance data?
  • Does the narrative and performance information
    tell the main budget story in a manner that is
    easy to understand?

10
Performance Budgeting Issues
  • Rationality revisited--is performance budgeting
    just another attempt to rid budgeting of
    politics?
  • What should be the budgetary consequences of not
    meeting performance goals?
  • Rewards v incentives
  • Rewards to unit budget or individuals (salaries)
  • How much of budget should be allocated based on
    performance?
  • Will managers focus too much on technical
    measurement and lose sight of meaningful results?
  • Do we really need to measure outcomes? Does
    effort matter?

11
Performance Measures -- Theory
  • Follow from mission/goals/objectives
  • Objectives specific, measurable,
    outcome-oriented
  • Performance measures
  • outcome oriented
  • efficiency (better in conjunction with outcome)
  • outputs
  • service (customer satisfaction)
  • limited number
  • most directly related to objectives
  • meaningful and useful
  • available (be careful with this one)
  • standards/benchmarks available (external and
    internal)
  • linked to budget choices

12
Performance Measures -- Practice
  • Objectives not always possible/practical to set
    targets
  • Measures activity or process measure may be
    reasonable
  • Customers may not always the best judge of
    service
  • Best measures may not be available need to take
    time to get them
  • Keeping it simple may misguide or disadvantage
    the organization
  • Organizational incentives may discourage setting
    meaningful targets
  • There may not be a strategic plan or vision to
    guide objectives and performance measurement

13
Performance Measurement -- Example
  • Public Library
  • Goals
  • increase access to desired library materials
  • increase reading and improve literacy
  • increase information competence
  • Objectives?
  • Performance measures?

14
Performance Measurement Exercises How well does
the outcome measure address the objective?
  • Objective
  • improve quality of life of clients in drug
    treatment program
  • Measures
  • monthly visits with clients to determine quality
    of life
  • completion rates of treatment programs
  • Objective
  • reduce delays in power plant siting process
  • Measures
  • average time to completion of application
  • satisfaction of applicants

15
Performance Measurement Exercises How well does
the outcome measure address the objective?
  • Objective
  • increase awareness of issue and availability of
    service
  • Measures
  • creation of a media campaign
  • number and type informational materials
    distributed
  • estimated number of people reached by the
    campaign
  • Objective
  • reduce customer complaints about potholes
  • Measures
  • of potholes repaired
  • percentage of customers satisfied
  • number of complaints

16
CSUS
  • Change in process to make planning information
    more useful to budgeting
  • http//www.csus.edu/portfolio/index.htm

17
Examples from CSUS Planning old v new approach
  • Old objective
  • To increase opportunities for students to engage
    in experiential learning (e.g. service learning,
    internships, cooperative education, involvement
    in research) during their academic career at CSUS
  • New objective
  • Increase enrollment in service learning,
    internships, and cooperative education coursework
  • Measures enrollment data CASPER phone poll

18
Examples from CSUS Planning old v new approach
  • Old objective
  • To assist students in becoming effective learners
  • New objective
  • Implement and evaluate programs or practices
    aimed at helping students become more effective
    learners
  • Measures effectiveness of new programs or
    practices

19
Examples from CSUS Planning old v new approach
  • Old objective
  • To create an environment in which all employees
    are supportive of University efforts to achieve a
    pluralistic community, are knowledgeable about
    University efforts, and have the skills,
    awareness, and motivation to support these
    efforts at the University, unit, and individual
    levels.
  • New objective
  • Reduce the perceived discrimination and
    insensitivity on campus with respect to race,
    ethnicity, culture, religion, gender, sexual
    orientation, and disability as reported by
    members of the campus community
  • Measures CASPER phone survey SNAPS new campus
    climate survey

20
Examples from CSUS Planning old v new approach
  • Old objective
  • To improve the ability of the University to serve
    a qualified, diverse student population while
    responding to changes in enrollment demand and
    societal needs
  • New objective
  • Increase the percentage of classes and labs that
    are scheduled on Fridays, evenings, and weekends
    to better utilize campus facilities
  • Measure new report on of sections scheduled by
    time period Chancellors Office measure on of
    FTES served by time period

21
Texas Performance Budgeting
  • Integrates strategic planning, performance
    monitoring, budgeting
  • Agency budget requests include relate to
    strategic plan goals, objectives, strategies
  • Include performance reporting for all measures
    included in request
  • Legislature and Governor use performance
    information to make funding decisions
  • Key performance measures and targets are
    displayed in Appropriations Act

22
Missouri Managing for Results
  • Five themes early childhood, education,
    security, health, safety
  • Fact-based decision making for better results and
    accountability
  • Published results
  • small number of measures (only the good ones?)
  • meaningful measures
  • explanations
  • what works -- (not directly linked to results)
  • links for more information
  • http//www.mri.state.mo.us/MFR/Succeed.html
  • http//www.mri.state.mo.us/MFR/Live.html
  • Link to budget Form 5
  • requests linked to department strategic plan and
    measures

23
Prince William County
  • Based on strategic planning
  • community input
  • strategic goals and measurable community outcomes
  • From plans to budgets
  • community outcomesgtprogram outcomes
  • measurable program objectives
  • activities to meet targets and associated
    costs/budget
  • Budget approval process
  • agencies review prior year performance with Exec
    Management
  • set budget year targets, activities using
    benchmarks
  • agencies submit budget requests based on new
    targets
  • review by Board of Supervisors with community
    input

24
Prince William County (p.2)
  • Accomplishments of performance budgeting
  • shift away from line item budgeting
  • reallocated funds toward strategic priorities
  • major increases public safety, judicial
    administration, human services, capital
    improvement
  • major decreases parks and library,
    administration, general government, planning and
    development
  • more efficient government (cost per capita
    declined)
  • increased citizen satisfaction with value of tax
    dollars
  • won several awards (helps gain citizen support)

25
Bellevue, Washington
  • Budget based on five strategic themes and related
    priorities
  • programmatic, cross-departmental approach
  • Department budget request includes
  • goals and significant budget issues organized
    around citys strategic themes
  • programmatic, not line-item presentation
  • outcomes, activities, performance measures
  • Performance scorecard
  • Bellevues Vital Signs
  • Department scorecards
  • comparisons to other cities

26
Preview of Week 15
  • Ethics
  • Course wrap-up
  • Begin presentation of BCPs
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