THE GOVERNMENT PERFORMANCE PROJECTReport Card: Alaska FINANCIAL MANAGEMENT: C Alaska has piles of cash in the bank, including a $23 billion permanent fund that pays out annual dividends to every man, woman and child in the state: most recently, $1,543 per capita. There also is a Constitutional Budget Reserve, slated to be about $2.2 billion at the end of fiscal year 1999. So it's not as though the state is cash-strapped. However, the economy is hostage to oil, and when oil prices are low, Alaska often spends more than it takes in. In fiscal 1998, it had to draw $325 million from the Constitutional Budget Reserve to balance its books. For 1999, the legislature has capped the amount that can be drawn at $700 million, but the estimate is that $941 million will be needed. At this rate, unless oil prices go up, the $2.2 billion left in the fund won't last forever. What's more, the bulk of the permanent fund that throws off the annual dividends is politically all but untouchable. Though the structural imbalance tends to obscure other financial issues, Alaska does a pretty good job at dealing with its investments and long-term debt, and provides some flexibility to managers to transfer money between line items. Agencies also do a reasonable job at overseeing contractors, which is important in a state that outsources many of its services, including building management, salmon hatcheries and the housing of prison inmates. CAPITAL MANAGEMENT: C+ Alaska's Office of Management and Budget used to put together six-year plans, but stopped last year because the legislature ignored them. "It was a waste of time and resources," says a senior policy analyst. Agencies have criteria they use to prioritize capital projects, but there is no requirement for multi-year plans for most agencies. Projects are carefully monitored and tracked. When they are complete, they are reviewed, and reports are written based on lessons learned. Alaska has a complete inventory of all its buildings, updated every few years. The inventory functions as an asset management system as well. There are regular condition assessments for most buildings. Routine maintenance is inadequate, and there's a backlog of major maintenance needs. But both the executive and legislative branches appear to be ready to focus on this area. The legislature has required that a maintenance budget be produced for the state, starting in fiscal year 2000. HUMAN RESOURCES: C- After winning an arbitration case last year against the state's powerful employee unions, Alaska is now free to make a number of heretofore-unthinkable changes. And it has begun making them. Agencies are no longer dependent on hiring from limited lists obtained from a central agency. Personnel officials plan to develop competency-based evaluations and group evaluations. They're working on new assessment tools for managers. And they hope to utilize the assessments to reward all employees for performance. But even with so much reform in the air, labor-management relations still make personnel operations in Alaska quite difficult. Employees in line for termination stay in jobs for months while unions battle on their behalf. And unions aren't the only obstacles to reform. Many human resources managers have been with their agencies for years and tend to like the status quo. "We can't fire these people; they work for their own agencies," says one state official. Given the difficulties in attracting a varied workforce to remote Alaska, it's unfortunate that there's no statewide workforce planning. On the other hand, training efforts here have been recognized nationally as providing high-level, up-to-date instruction in a variety of fields. MANAGING FOR RESULTS: C- Alaska is in the very early stages of measuring performance. It is now recasting its budget document to focus on goals and performance measures. In the next budget cycle, eight departments will be developing measurements for three programs each. Subsequently, others will be added. The state has chosen not to develop a statewide strategic plan, and does not require them of agencies. But there is increasing emphasis from both the executive and legislative branches on planning and measuring results, and there is a great deal of interdepartmental involvement in these efforts. Reducing child abuse and neglect, for example, involves the departments of health and social services, public safety and others. INFORMATION TECHNOLOGY: C- Prior administrations haven't paid much attention to technology in Alaska, and state government is just beginning to move on this front. There is no chief information officer; instead, a Telecommunications Information Council, chaired by the lieutenant governor, serves as the controlling body for IT development and policy standards. The only IT decisions made centrally are those that require interagency cooperation. Right now, some agencies are riddled with non-compatible systems. Better interoperability, groupware approaches and integration projects are needed. The state is just moving to its first automated budget information system. Major improvements have taken place, however, with Alaska's implementation of a wide-area network, which has allowed impressive innovations, such as putting Department of Motor Vehicle functions online. The state requires that any agency projects that require communicating with another unit of state government have the capacity to tie in to the network. While technology specialists are reasonably well trained, IT officials concede that more emphasis needs to be focused on training non-technical managers in the ways they can use information. AVERAGE GRADE: C
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