introduction and agenda

© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered

trademarks of KPMG International, a Swiss cooperative.

Success Through Proactive Leadership: Using Performance Information to Achieve Results

Terry CarnahanManaging Director, KPMG LLP

Success Through Proactive Leadership: Using Performance Information to Achieve Results

Terry CarnahanManaging Director, KPMG LLP

© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.

All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.2

Introduction and Agenda

Open Government Framework

High Performance Management Structure

Performance Management Legislation and Guidelines

Selecting a Measure

Using a Measure



Open Government Framework

Transparency

Participation

Collaborat

ion



High Performance Management Structure



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”.



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?



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.



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.



SEA Guidelines

· Components

Purpose and Scope

Major Goals and Objectives

Key Measures

Results and Challenges



SEA Guidelines

· Characteristics

Comparability

Consistency

Relevance

Reliability

Timeliness

Understandability



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.



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.




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.



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”.



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.



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.



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.



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.



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.



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.



Performance Measures Success

· Leadership is a primary determinant

· Managers use output measures

· Data Calls are prevalent

· Data driven reviews




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



Questions?

Questions?



Contact Information

Terry CarnahanManaging DirectorKPMG LLPCell: 703-220-7181 Office: 703-286-8560 [email protected]

introduction and agenda

Documents

kpmg llp

kpmg logo

swiss cooperative

effectiveness of government

government agencies

levels of government

open government framework3

cornerstone of open