Results-Based Budgeting: Preparing for the 2009-11 Biennium

1. Results-Based Budgeting:Preparing for the 2009-11 Biennium Office of State Budget and Management Erin Wuchte, RBB Coordinator Joe White, RBB Analyst

2. Purpose of Today’s Presentation • Develop a common understanding of the results-based budgeting (RBB) process in anticipation of the 2009-11 budget • Review the components of RBB, explain how to develop each component, and begin the development process Office of State Budget and Management

3. What is Results-Based Budgeting? Formal Definition: • Emphasizing measurable results as an integral part of budgeting to encourage the efficient and effective management of state resources. Informal Definition: • A budget process that ensures agencies state what they are trying to accomplish, explain how it will be accomplished, identify the cost of services, and document how well services are performed. • The process also ensures that agencies are adequately preparing for the future, decision makers are provided with detailed information in order to assess the effectiveness of state programs, and citizens are informed about state government work and subsequent results. Office of State Budget and Management

4. Why Results-Based Budgeting? • To establish a budget process that: • Increases transparency • Ensures accountability • Promotes proactive management • Focuses on performance Office of State Budget and Management

5. Why Results-Based Budgeting? • To establish a thought process that: • Emphasizes longer-term planning and continual assessment • Considers not just necessary inputs but also outcomes • Engages individuals and organizations in deeper analysis of performance • Challenges traditional practices and initiates healthy dialogue about future direction Office of State Budget and Management

6. RBB for FY2007-09 Documented the following: • Why an agency exists • What an agency wants to achieve • Why agency programs exist • What activities are performed • What resources are used • How well work is performed Office of State Budget and Management

7. Next “Steps” #4 #3 How do we measure our progress? #2 How do we get there? #1 Where do we want to be? Where are we now? Office of State Budget and Management

8. Where Are We Now? • Required Elements • Agency Overview (New) • Mission Statement (Update) • Fund Purpose Statements (Update) • Service Statements (Update) • Service Analysis (Update) Office of State Budget and Management

9. Where Do We Want To Be? • Required Element • Goals (Update) Office of State Budget and Management

10. How Do We Get There? • Required Elements • Strategies (New) • Key Agency Indicators (New) Office of State Budget and Management

11. How Do We Measure Our Progress? • Required Element • Measures (Update) Office of State Budget and Management

14. Public Availability of RBB Information • The following will be published on OSBM’s website • Agency overview • Mission statement • Goals • Strategies • Key agency indicators Office of State Budget and Management

15. Public Availability of RBB Information • The following will be published in the Governor’s Recommended Budget: • Mission statement • Goals • Key agency indicators • Fund purpose statements • Service statements • Service analysis • Measures Office of State Budget and Management

16. Agency Overview • High-level summary of current performance • Opportunity to provide broader context • Up to three pages in length • Addresses the following: • Current performance • Major initiatives and progress • Customer and workload trends • Future direction, expectations, and priorities • Challenges Office of State Budget and Management

17. Questions? Office of State Budget and Management

18. Mission Statement • Describes an agency’s fundamental reason for being • Straightforward and easy to understand • Address the following: • Why does our agency exist? • What does our agency do? • For whom is our work done? • What is the impact of our work? Office of State Budget and Management

19. Example of a Mission Statement • The mission of the Office of the State Auditor is to provide assurance to interested parties that state resources are properly accounted for and managed and to improve the performance and accountability of state government through the independent examination of the state’s financial affairs and program services. • Why is this a good mission statement? Office of State Budget and Management

20. Mission Statement Breakdown • Why does our agency exist? • To provide assurance that state resources are properly accounted for and managed • What does our agency do? • Independently examines the state’s financial affairs and program services • For whom is our work done? • Interested parties (citizens, legislators, media, etc.) • What is the impact of our work? • To improve the performance and accountability of state government Office of State Budget and Management

21. Example of a Suggested Mission Statement Revision • Administer the tax laws and collect the taxes due the state in an impartial, uniform, and efficient manner. • How could this be revised to ensure all components of a quality mission statement are present? Office of State Budget and Management

22. Example of a Revised Mission Statement • Administer the tax laws and collect the taxes due the state in an impartial, uniform, and efficient manner in order to fund public services that enhance the quality of life for North Carolina citizens. Office of State Budget and Management

23. Example of a Suggested Mission Statement Revision • The North Carolina Division of Social Services is dedicated to assisting and providing opportunities for individuals and families in need of basic economic support and services to become self-sufficient and self-reliant. The Division of Social Services advocates for and encourages individuals’ rights to select actions appropriate to their needs. Primary to the Division is our commitment to provide families and children with family centered services that strive to achieve well being through ensuring safety and permanency. Furthermore, we recognize our responsibility through teamwork and professional effort to assist in this practice. Toward this end, in cooperation with local departments of social services and other public and private entities, we seek to identify needs, devise and focus resources, and deliver services responsively, timely and compassionately. • How could this be revised to succinctly state the fundamental reasons why this division exists? Office of State Budget and Management

24. Example of a Revised Mission Statement • The North Carolina Division of Social Services provides opportunities for families, children, and individuals in need through a client-centered approach in which services are delivered in a responsive, timely, and compassionate manner in order to promote self-sufficiency, permanency, and safety. Office of State Budget and Management

25. Questions? Office of State Budget and Management

26. Goal Statement • Broad statement of what an agency wants to achieve • Supports the mission statement • Three to six goals ideal; 12 is the maximum • Answers the following questions: • What are you doing or going to do? • Who will be affected? • What method or approach will you use? • What results or outcome do you expect? Office of State Budget and Management

27. Tips for Writing a Goal Statement • Action oriented. Begin each goal statement with an action verb that explains what the agency wants to do. • Results based. State the desired specific outcome by which you can tell the goal has been achieved. • Method based. State the method or approach used to achieve the desired outcome. • Client based. State who is served or affected and how many (if appropriate). Office of State Budget and Management

28. Example of a Goal Statement • Maximize disabled individual’s independence, productivity, integration, and full inclusion in society by providing services and equipment that enable these individuals to live independently and function in their homes and communities. • Why is this a good goal statement? Office of State Budget and Management

29. Goal Statement Breakdown • What are you doing or going to do? • Maximize disabled individual’s independence, productivity, integration, and full inclusion in society • Who will be affected? • Disabled individuals • What method or approach will you use? • Provide services and equipment • What results or outcome do you expect? • Enable disabled individuals to live independently and function in their homes and communities Office of State Budget and Management

30. Example of a Suggested Goal Statement Revision • Assure pregnant women in the state have access to early and continuous prenatal care. • Re-written goal statement: Assure pregnant women in the state have access to early and continuous prenatal care by providing services focused on medical supervision, health promotion, nutrition, and health/nutrition support to ensure pregnancies lead to the delivery of healthy infants. Office of State Budget and Management

31. Questions? Office of State Budget and Management

32. Strategies • Describe the actions an agency will take to achieve its mission and goals • Consider longer-term needs (3 to 5 years) • Serve as the foundation for budget requests such as expansion items • Submit a minimum of five strategies • Strategies may be related to one or more goals • Each goal should be addressed by one or more strategy Office of State Budget and Management

33. Examples of Strategies • Goal: Promote systems, policies and practices that enhance the quality and quantity of vaccination delivery services in order to improve the health of all citizens. • Strategies: • Target program resources to the “Pockets of Need” program • Implement an immunization registry in the public and private sectors • Increase private provider enrollment in the Vaccines for Children Program • Increase community participation, education and partnership • Improve and expand monitoring of vaccination coverage (Adapted from the Virginia Department of Health Service Plan) Office of State Budget and Management

34. Questions? Office of State Budget and Management

35. Key Agency Indicators • Focus on the most pivotal tasks of an agency • Areas of work which will be most critical to the success of the organization over the next few years • Identify up to three indicators • Develop indicators that do the following: • Reflect the mission statement • Focus on results rather than inputs, outputs or processes • Impact and link to budget decisions Office of State Budget and Management

36. Examples of Key Agency Indicators • Teenage pregnancy rate • 4th grade reading proficiency rate • High school graduation rate • Juvenile recidivism rate • Percent of deficient bridges Office of State Budget and Management

37. Questions? Office of State Budget and Management

38. Performance Measures • Gauges the effect that services are having in accomplishing desired results • Assists in the decision making process • Submit at least one but no more than three measures per fund with service statements • Agencies will need to identify the service statement(s) associated with each measure • It is encouraged to use outcomes measures to the extent possible Office of State Budget and Management

39. Office of State Budget and Management

40. Questions? Office of State Budget and Management

41. RBB Exercise: Realizing A Healthy, Productive Life

42. Mission Statement • To enhance my health through positive lifestyle choices in order to live a long, productive life. Office of State Budget and Management

43. Goal Statements • Eat healthy, balanced meals through advanced planning to limit portion size, reduce calories, and minimize consumption of saturated fats in order to lose weight. • Become physically active through various daily exercises in order to limit chances of heart disease, osteoporosis, and the onset of mental health problems such as depression. • Stop smoking by establishing a tiered quitting plan and obtaining support from others in an effort to avoid cancer and other related health problems. • Maintain regular check-ups and communication with my doctor to ensure that my body is healthy and to reduce the risk of sickness, disease, and cancer. Office of State Budget and Management

44. Strategies • Eat a balanced daily diet and ensure that the number of calories burned equals or exceeds the number of calories consumed. • Participate in physical activity at least 30 minutes a day, four days per week. • Consult my doctor to establish a plan to reduce and eliminate my smoking habit within six months. • Maintain a health log tracking personal exercise routines and eating habits to ensure adherence to a healthy, productive lifestyle. Office of State Budget and Management

45. Key Indicators • Blood pressure level • Cholesterol level • Body Mass Index Office of State Budget and Management

46. Performance Measures • Percent of weeks in which exercise was completed for a least thirty minutes per day for four days a week • Pounds of weight lost and remained off since start of diet on 9/1/07 • Percent of days in which a balanced diet was consumed Office of State Budget and Management

47. Breakout Session • Following the guidelines just presented: • Review and refine your agency’s mission and goals • Identify potential strategies and key indicators Office of State Budget and Management

48. Fund Purpose Statements • Describes the purpose of the programs, services, activities or functions funded • Answers the following questions: • Who is being served or helped by the services covered in the fund? • What is the major work that is done? • Why is the work done? • How does the work contribute toward advancing the agency’s goals? • How is the program carried out – what major activities are done to accomplish the work? Office of State Budget and Management

49. Additional Notes on Fund Purpose Statements • Fund purpose statements that are strictly accounting should be very specific. • This is an accounting fund used to collect and distribute indirect cost payments from federal grants to the Secretary’s Office (fund code 1110) . • If an organization or program is supported by multiple funds, start the statement by saying, “This fund is one of three (xxxx, yyyy, zzzz) for the ABC Program.” Office of State Budget and Management

50. Additional Notes on Fund Purpose Statements • Newly Budgeted Governmental and Proprietary Budget Codes • Fund purpose statements are required to be entered for all governmental and proprietary budget codes • Budget codes with a 2007-09 BD307 certification should already have fund purpose statements • Fund purpose statements must be entered for codes budgeted via type 11 budget revisions in 2007-08. • No additional RBB elements are required for budget codes without a 2007-09 BD307 certification. Office of State Budget and Management