Performance Measurement and Budgeting in Indiana

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Performance Measurement and Budgeting in Indiana

• Adam M. Horst
• Government Efficiency and Financial Planning
• Office of Management and Budget
• June 20, 2005

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Where did we start?

• Observations of the Government Efficiency
  Commission (2004)
• Data for effective management not available
• Limited effective use of technology
• Bewildering array of agencies, departments and
  commissions
• Cost reduction cannot occur without radical
  change to number and composition of programs,
  services and culture

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Where did we start?

• Governing Magazine, Grading the States 2005
• Indiana graded C
• Main Observation
• Comprehensive performance information is not
  routinely provided to the governor, the budget
  office or the legislature. Though some agencies
  are producing it, Indiana is not collecting
  performance information on a statewide basis and
  though agencies generally provide performance
  measures when they testify before the
  legislature, such data is not strongly used by
  the state.

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Aiming Higher First 100 Days

• Governor Daniels issued Executive Orders and
  proposed Legislation that did the following
• Created IEDC (Department of Commerce)
• Created Chief Information Officer (CIO) / Office
  of Technology
• Created Office of Inspector General
• Created Office of Federal Grants
• Created Office of Faith-Based and Community
  Initiatives
• Separated Department of Child Services from
  Family and Social Services Administration
• (Continued)

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Aiming Higher First 100 Days

• Initiated inventory of state assets and sale of
  surplus and underutilized property (vehicles,
  aircraft, and real property)
• Facing a structural deficit of nearly 700
  million, Governor Daniels proposed the first
  honestly balanced budget in more than a decade
  (Legislature passed a biennial budget that is
  balanced in FY07, but not in FY06)
• Created Office of Management and Budget,
  including a new Department of Government
  Efficiency and Financial Planning

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Government Efficiency and Financial Planning

• Responsibilities include
• Establishment of performance metrics for state
  agencies
• Organize and staff the agency review mandated by
  the budget bill (HEA 1001-2005)
• Make recommendations for consolidations and other
  cost savings ideas
• Identify competitive sourcing opportunities
• Coordinate with Indiana Department of
  Administration to organize and staff a Strategic
  Sourcing Initiative

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Performance Measurement

• Some agencies have collected data, particularly
  those receiving federal dollars (Department of
  Transportation, Department of Workforce
  Development, etc.)
• Otherwise, data not collected, monitored or
  analyzed
• 35 Agencies have begun performance measurement
  process (many more to be included when agency
  reviews are initiated)
• 2nd Quarter Report to be released on July 20th

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Governor Mitch Daniels

• Director of the Office of Management and Budget
  (2001-2003)
• Helped create PART (Program Assessment Rating
  Tool) for the federal government
• If youre not keeping score, youre just
  practicing.
• In line with his Aiming Higher agenda, Governor
  Daniels demanded performance measures with
  ambitious targets for all state agencies, even if
  it could take years to reach the green targets.

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HEA 1001-2005 (Budget Bill) The general assembly
requests that the governor direct the office of
management and budget to thoroughly review
the (1) budget of each executive department
agency and instrumentality and (2) overall
functions of the executive department of state
government for the purpose of finding
efficiencies that might yield significant cost
savings. The general assembly requests that both
the size and the scope of these agencies and
functions be thoroughly reviewed.
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Performance-informed Budgeting

• Budget bill requirements relating to performance
  budgeting
• OMB to review the budget and overall functions of
  each executive department
• Review to include size and scope of agencies and
  functions with the purpose of finding
  efficiencies
• Link program needs and performance to budget
  requirements

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What will OMB be looking for?

• Identification of primary programs and functions
  that should tie in with each agencys mission
  statement, strategic plan, and performance
  measures
• Identification of programs that cut across two or
  more agencies (possible solutions realign to
  eliminate duplication, encourage cross-agency
  cooperation)
• Identification of statutory obstacles that
  inhibit exceptional program effectiveness
• (Continued)

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What will OMB be looking for?

• Identification of non-core functions, which are
  often prime candidates for consolidation or
  competitive sourcing
• Special focus on programs and initiatives
  recently launched by Governor Daniels (e.g., RX
  for Indiana, Indianas Fight Against Meth, etc.)
• Demonstration by agencies of recent efforts to
  become more efficient as well as a willingness to
  consider new ideas

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What should agencies do?

• Prioritize primary programs and functions, paying
  special attention to those that overlap with the
  Governors and/or Legislatures agenda
• Consider eliminating non-core functions (or at
  least allowing other agencies or private firms to
  provide these services)
• Create performance metrics that tie back to their
  mission statement and primary programs
• (Continued)

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What should agencies do?

• Seek out opportunities for inter-agency
  cooperation
• Aggressively pursue funding from federal sources
• Track and monitor cost savings initiatives
• Lead agencies in statewide initiatives aimed at
  increasing efficiency and generating savings
  (e.g., strategic sourcing, asset disposition,
  etc.)

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Example Highlights of Governors Plan to Fight
Methamphetamine

• Utilize a partnership with Indianas colleges and
  universities to help reduce the backlog of drug
  cases at state police drug-testing laboratories
  while preparing Indiana students in the forensic
  science field
• Develop a real time reporting database between
  prosecutors and drug-testing labs
• Standardize procedures for removing and
  protecting children exposed to meth production

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Continued Highlights of Governors Plan to Fight
Meth

• In addition, Governor Daniels took the following
  actions
• Supported and signed a methamphetamine bill that
  restricts access to ephedrine pseudoephedrine,
  two products used in the production of meth (SEA
  444 Meth Prevention Act)
• Launched a pilot program at the Miami
  Correctional Facility that is providing
  specialized treatment to help rehabilitate meth
  users and lower repeat offender rates (CLIFF
  Clean Lifestyle is Freedom Forever). The program
  was recently expanded to the Wabash Valley
  Correctional Facility.

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Lessons Governors Plan to Fight Meth

• Multiple agencies have roles to play in the fight
  against meth, and the sharing of criminal justice
  information will be vital to the success of the
  Governors initiatives
• Each agency can identify quantifiable measures
  that will help demonstrate the success or failure
  of their programs. For example
• State Police number of meth labs seized and
  dismantled backlog of drug cases at State Police
  laboratories
• Criminal Justice Institute number of meth
  education programs held amount of federal grant
  dollars directed towards Governors meth
  initiatives
• Department of Correction recidivism rate of
  offenders who have participated in meth
  rehabilitation programs

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• Questions? Comments?
• Adam M. Horst
• Government Efficiency and Financial Planning
• Indiana Office of Management and Budget
• ahorst_at_omb.in.gov