Introduction and Agenda

1. Success Through Proactive Leadership: Using Performance Information to Achieve ResultsTerry CarnahanManaging Director, KPMG LLP

2. Introduction and Agenda • Open Government Framework • High Performance Management Structure • Performance Management Legislation and Guidelines • Selecting a Measure • Using a Measure

3. Open Government Framework

4. High Performance Management Structure

5. Budget and Spending Planning After areas of improvement have been determined, budgeting can be adjusted accordingly. Without monitoring internal performance, budgeting is mostly guesswork. So much more than “just compliance”.

6. Government Performance and Results Act • Enacted in 1993 following Congressional findings of waste and inefficiency in the government. • Purpose: • increase management accountability and public confidence in the government. • Why is measuring performance vital to effective and efficient management?

7. GPRA Modernization Act of 2010 Required Strategic Plans and Performance Goals be made publicly available online. Description of how each Performance Goal ties into the higher level Agency Goal. Transparency as to how data for each Performance Goal is obtained and assessed. More specific instruction as to what is reported and how.

8. GASB In 2010, GASB published guidelines for voluntary reporting of Service Efforts and Accomplishments (SEA) Performance Information. More specifically tailored to State and Local Governments. Established four key components and six qualitative characteristics of an effective SEA report. Also provides guidance on effective performance measures.

9. SEA Guidelines • Components • Purpose and Scope • Major Goals and Objectives • Key Measures • Results and Challenges

10. SEA Guidelines • Characteristics • Comparability • Consistency • Relevance • Reliability • Timeliness • Understandability

11. SEA Performance Measures • Measure of Service Efforts • Input Measures • Cost of road maintenance. • Measure of Service Accomplishments • Output Measures • Number of lane-miles of road repaired. • Outcome Measures • Percentage of roads in good or excellent condition. • Measures Relating Efforts to Accomplishments • Efficiency Measures • Cost per lane-mile of road maintained. • Cost-Outcome Measures • Cost per lane-mile of road maintained in good or excellent condition.

12. SEA Performance Measures Independently of each other, these measures do not provide much information. When integrated within the agency plan and to each other, these measures act as complements and can be very useful. So much more than “just compliance”.

13. Selecting the right Measure • Measures should be: • Outcome based. • Easily and objectively measurable. • Understandable. • Directly linked to agency goals. • Able to provide a meaningful frame of reference. • Comparable with previous years and/or other agencies.

14. Outcome Based Rather than “output” or “input” (spending) based. Measures the desired outcome rather than a quantity of output. In previous example, “percentage of roads in good or excellent condition,” more useful than “number of lane-miles of roads repaired”.

15. Objectively Measurable All terms in the measure should be objectivity defined. Once defined, data can be easily measurable. In road example, “good or excellent condition” would need a definition. Perhaps based on user survey of road conditions.

16. Understandable • Since the users of this data are the general public, measures should be clearly stated and defined. • Example – • “Percentage of roads in good or excellent condition” is easy to understand, whereas “lane-miles” might not be as accessible.

17. Directly Linked to Agency Goals • Each measure must be linked to a higher level goal, all the way up to the top agency goals. • Road example – • maybe the departmental goal is to “maintain a road system in good condition”. • Agency goal “achieve a top 10 statewide infrastructure score”. • Clear how maintaining the roads in good/excellent condition ties back to both of these goals.

18. Provide Frame of Reference • Use of “percentage” or “percentage of total” or “percentage of eligible” provides usable data. • Avoid “number of” measures. • Example – • 510 roads are in excellent condition. • Not clear how many roads are being measured. • Extremely poor performance if this is New York City. • Extremely good performance in a more rural area with 520 total roads.

19. Comparable with Previous Year and/or Agency • Comparing data period by period or year by year shows trends. • Comparing data to another agency or state highlights relative performance. • Example – • 90% of roads in good/excellent condition in current year. • If this figure was 95% in the previous year, this number should be a cause for concern. • If, however, the next best state uses the same measure and has a number like 80%, clearly our agency is excelling.

20. Using the Measure • A well constructed and defined measure is extremely valuable • Analysis of results can: • Identify areas for improvement within the agency. • Reveal the agency’s strongest performers. • Determine positive and negative trends from period to period. • Making results publicly available: • Increases accountability within the agency. • Improves public confidence in the government. • Gives the public a better general understanding of the uses of their tax dollars.

21. Performance Measures Success Leadership is a primary determinant Managers use output measures Data Calls are prevalent Data driven reviews So much more than “just compliance”.

22. Building Consensus Formulate implementation goals to advance the performance agenda Build a performance community Develop a performance management framework Implement repeatable processes Develop IT systems and tools Collaborate with stakeholders Showcase performance information

23. Questions? Questions?

24. Contact Information Terry Carnahan Managing Director KPMG LLP Cell: 703-220-7181 Office: 703-286-8560 tcarnahan@kpmg.com