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Contents
Acknowledgments
Part One
Section 1: Purpose, Scope, and Study Procedures
Part Two
Section 2: Strategic Planning
Section 3: Performance-Based Budgeting
Section 4: Agency and Employee Incentives
Section 5: Performance Contracting
Section 6: Interfacing with Local Government
Section 7: Communication with Citizens
Part Three
Section 8: Using Performance Information Effectively
Section 9: Improving Implementation
Section 10: Improving the "Technical" Side of Performance Measurement
Section 11: Analysis of the Information: The Need for Explanations
Section 12: Training and Technical Assistance Needs
Section 13: Data Quality Control
Part Four
Section 14: Special Issues for the Legislature
Section 15: Costs
Section 16: Final Observations
Section 17: List of Recommendations
References
Appendix
A NCSL Report on Governing for Results: Legislation in the States
B-1 Example of Customer Survey: North Carolina Division of Vocational Rehabilitation Services
B-2 Example of Customer Survey: University of North Carolina Graduating Senior Survey
C-1 Excerpt from Texas General Appropriations Act for FY2000 and 2001
C-2 Excerpt from Louisiana 1999-2000 General Appropriations Act
D Departments, Agencies, and Organizations Visited by the Urban Institute
Section 1: Purpose, Scope, and Study Procedures
Purpose of Report
What do state governments and their taxpayers get for the dollars they spend? Are officials making their funding and programmatic decisions in ways that include an explicit focus "on the bottom line" of what is to be achieved? To what extent is the state serving the public interest? Many states are seeking to place a greater focus on what the results of government activity have been and, when making decisions about the future (whether funding, policy, or program choices), want estimates of the results of those decisions.
The purpose of this report is to identify good practices and lessons learned by states that have moved ahead in governing-for-results and to provide recommendations for improving those efforts. This document is a compilation of findings about the state of the art and the practice of governing-for-results.
Until recently, a state’s elected and appointed officials focused primarily on revenue and expenditure information and on the amount and type of activity state agencies were undertaking. Executive or legislative officials rarely received regular information on the out-comes of their programs and legislation. Early in the 1990s, some state legislatures passed legislation to correct this deficiency. Appendix A lists such legislation as of the end of 1999. The National Council of State Legislatures’ (NCSL’s) examination indicated that by the end of 1999, 33 states had "broad governing-for-results legislation"; 17 did not (see table 1-1 in appendix A).
The use of information about the outcomes of state government activities for programmatic and policy-level decisionmaking can be called "governing by results." The term "performance management" is often used to refer to such activities by the executive branch. Since this report discusses both legislative and executive branch roles in delivering effective and efficient state services, the broader term "governing-for-results" is used.
The movement toward focusing on the outcomes, as well as the costs, of public services has become strong at all levels of government and in the private nonprofit sector. The basic rationale of governing-for-results—that service organizations should work to produce the best results possible, given the available resources—makes sense.
But progress is slowed by such factors as unfamiliarity with outcome measurement, concern over the possible cost of new data collection requirements, and fears that public managers, who often have limited influence over many of their program outcomes, will be unfairly blamed for outcomes that are less than expected.
The report is hoped to be useful to any state government, regardless of its level of implementation of governing-for-results. Governing-for-results is still in its early stages in most states and is continually evolving in all states. States can and should learn from each other’s experiences, as well as from the experiences of other levels of government. While each state is different, the basic ideas of governing-for-results are the same.
Beginning in section 2, this report presents the study’s findings and specific recommendations, both for those states beginning to implement governing-for-results and for states that are further along in the process.
Scope
Governing-for-results is meant to permeate most aspects of government. It can be said to begin with strategic planning and link to the development of annual plans and budgets. Governing-for-results should also become a major concern of operating managers, encouraging them to motivate their employees to focus on results and, similarly, motivating state service contractors and grantees to focus on results.
This results-based focus should also be applied in the state’s dealings with its local governments, both when the state actually provides funding support to local governments and in encouraging local governments to apply results-based government.
Finally, a results-based focus in communicating with state citizens is not only more meaningful than solely telling them the costs and descriptions of state agency activities. Citizens become more interested in their state government if they have information on results of direct interest to them, especially if the state’s information identifies outcomes for their own communities (their own county and/or city).
Part 2 presents the study’s findings and recommendations pertaining to each of the following state government activities:
- Strategic planning
- Budgeting (and its governing-for-results counterpart, performance-based budgeting)
- Agency and employee motivation/incentives
- Contracting (and its governing-for-results counterpart, performance contracting)
- Interface with local governments
- Communication with citizens
Successfully implementing governing-for-results also requires states to pay considerable attention to the processes involved in obtaining and using the performance information effectively. Thus, part 3 attempts to address a variety of specific governing-for-results process issues, including
- Use of performance information
- Handling of problems in implementing governing-for-results
- Improving the "technical" side of performance measurement
- Analysis of the information; the need for explanations
- Training and technical assistance
- Data quality control
Finally, part 4 presents
- Special issues for the legislature
- Costs of implementing governing-for-results initiatives
- Final observations and a summary list of the recommendations made throughout this report
It is impossible to cover all the issues relevant to successfully implementing a state governing-for-results process. This report addresses those issues common to a number of states and that appear to be important to successful implementation and use of governing-for-results.
Finally, we note that information on the results of state activities is only part of the total picture that elected officials and agency managers must consider when making policy, program, and budget decisions. Other factors, such as the reputation of an agency and its key personnel, recent media attention, and a variety of political considerations, can play major roles in state government decisions.
Methods
This report draws on the experiences of a number of states to provide recommendations for improving efforts to implement results-based state government. The recommendations are the result of an in-depth examination of results-based efforts in 5 states, many discussions at the local level with citizens and officials, and information gleaned from material disseminated or made available by agencies in many of the other 45 states.
The Urban Institute, with the National Conference of State Legislatures (NCSL), began this work in May 1998. From Spring 1998 through Spring 2000, the team reviewed state governing-for-results practices.
The team concentrated its efforts on uncovering information on the topics listed above, and used a variety of procedures and sources: Internet searches; telephone interviews with state officials; discussions with personnel from other organizations interested in governing-for-results, such as the Governmental Accounting Standards Board (GASB); and review of miscellaneous documents from state governments.
The single most important information collection procedure was the firsthand examination of the governing-for-results practices in five states. The team chose Florida, North Carolina, Minnesota, Oregon, and Texas for site visits because of their lengthy histories in performance measurement and management. The team prepared an information collection guide on the above topics for use in interviews, although its wide coverage of topics meant that only a portion of it was used in any single interview. Each site visit lasted approximately five days. The team held 237 meetings, averaging about 47 per state. These meetings were held with executive branch officials, legislators, legislative staff, local government officials, and nongovernmental officials. In addition, focus groups with citizens were held in North Carolina and Texas, and a focus group with local government officials was held in Texas.
The team conducted interviews with a wide variety of agencies and individuals to gain a comprehensive view of the governing-for-results effort in each state. Executive branch agencies covered in one or more of the states included departments of health, human services, transportation, education, revenue, community affairs, environmental protection, corrections, management and budget, economic development, and labor. The team met with between 15 and 31 executive departments in each state. The majority of these interviews were with program managers and other key staff. Interviews in the legislative branch included individual legislators, legislative staff (both legislators’ individual staff and committee staff), and state auditors.
The team met with between 15 and 21 legislators and legislative staff in each state. Finally, the team conducted interviews with a small number of nongovernmental entities (such as university professors and advocacy groups) and local government officials (such as mayors and city and county managers).
The team interviewed approximately 440 individuals in the 237 meetings. A comprehensive list of the agencies that the team interviewed in each of the five states is provided in appendix D.
Study Limitations
The findings and recommendations presented throughout this report have at least three important limitations.
First, the information presented in this report provides neither case studies nor quantitative evaluations of the governing-for-results efforts of any of the states examined. Case studies or evaluations of specific states were not the focus of this work, and study procedures were not designed to provide sufficient information for those purposes.
Second, governing-for-results is a rapidly changing field. New developments are occurring all the time, and key personnel changes and elections can quickly alter the atmosphere for governing-for-results efforts, for better or for worse.
Third, we did not have the resources to evaluate the effects on outcomes of the examples described (or which examples helped serve as a basis for our recommendations). Even with more resources, it would have been extremely difficult to evaluate the outcomes of the governing-for-results elements examined. Thus, the recommendations are based on the early successes that were observed and on the team’s best judgments of the basic soundness of the procedures.
This report is also available in the Portable Document Format (PDF), which many find convenient when printing.
The entire report can be ordered from the Urban Institute Press.
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