THE GOVERNMENT PERFORMANCE PROJECTReport Card: Louisiana FINANCIAL MANAGEMENT: B- Revenue and expenditure forecasting are handled well these days, and the state is struggling for balance between the two. Getting to this condition hasn't been easy. For some time, under a system that might have been designed by Lewis Carroll, Louisiana got $3 back from the feds for every $1 it spent on Medicaid for indigent care. "A sweet deal," says one budgeter. Result: Medicaid spending soared. But the feds quit this foolishness, and Louisiana had to come to earth and restructure its fiscal practices very quickly. It has done this: Spending is now down from $4.5 billion to $3.2 billion, a level managers say is sustainable. Louisiana's rainy day fund is a different story. It was supposed to be filled by growth in mineral revenues, but growth has been nonexistent and so has the fund. A constitutional amendment passed in 1998 requires one-fourth of all non-recurring revenues to be socked away, so improvements here may be forthcoming. Louisiana's financial statements have been subject to auditors' qualifications in the past couple of years, but the complaints have not been major. Agencies have the flexibility to move money around within programs. Five-year fiscal notes, incorporated into the budget process, are generally accurate, revised regularly and taken seriously. CAPITAL MANAGEMENT: B Louisiana's Division of Administration prioritizes projects and creates a statewide five-year plan. Five-year capital outlay requests are reviewed closely by state staff architects, who make recommendations for possible alternatives. Though the legislative and executive branches have agreed to limit bonding to $200 million annually, the legislature generally authorizes twice that in new projects, to give them a foot in the door in future years. Louisiana is trying to catch up on a huge backlog of repairs. A major roofing program, for example has replaced 86 percent of substandard roofs on state buildings. The widespread leaky-roof problem—like many others—resulted from neglecting routine maintenance. Now, the state is emphasizing basic upkeep, and the director of facility planning has told agencies that future requests for major repairs stemming from neglect will not be looked upon kindly. To provide more maintenance dollars, Louisiana is setting up reserve funds for new buildings, and starting to charge agencies rent. HUMAN RESOURCES: C+ Louisiana has been cutting the number of its job classifications, but the process has stalled at a relatively high 2,800, with no plans for further reduction. Formal workforce planning isn't viewed as the role of the human resources department, though the department has emphasized strategic planning and forecasting, which will have payoff in this arena. Managers still select from lists of five candidates for about four out of 10 jobs. For the rest, agencies have authority to make their own hiring decisions. Testing has been vastly improved, with 150 job-specific written exams now reduced to 10 generic ones given on an open schedule. One huge problem: The state has a 21 percent employee turnover rate every year. Partially to help address that problem, the civil service commission now allows one-time payments for special projects or extraordinary achievements. In addition, Louisiana has redesigned its performance appraisal system to create closer ties between individual goals and agency goals. Some 13,000 individuals have trained in the new technique. But training is in short supply at agencies strapped for cash just to fill needed positions. MANAGING FOR RESULTS: B Louisiana agencies have long prepared performance measures, only to see them ignored by anyone in power. Those days are over. The state has now begun the process of seriously tracking input, output and outcome in its agencies. Unlike many other states, Louisiana audits its measures for accuracy. The sincerity with which the state has approached this effort is evidenced by the recent implementation of a unique computer system that allows paperless performance progress reporting and tracking on some 6,000 measures. Among other things, it calculates variances between annual standards and year-end indicators, and makes information available to anyone interested in Louisiana state government. Agencies have been required to produce strategic plans since 1997. The state does not develop an enterprise-wide plan, preferring to focus on wide-reaching plans for individual needs, such as economic development or the delivery of services to children. INFORMATION TECHNOLOGY: C- Louisiana suffers from the drawbacks of deeply decentralized, unplanned IT, with unintegrated, unstandardized systems slowing many processes. A modern budgeting system is needed and is in development. There is a great deal of momentum in other information areas. A new financial accounting system went on line last May, and by next year, a new human resources system will be in place. A chief information officer will be appointed by the governor sometime in 1999, and will report to the commissioner of administration. Louisiana has far too many databases and is trying to coordinate them, beginning with an inventory project that started last summer. It seems to have gone overboard in negotiating master contacts with too many vendors: It now has more than 60 individual brand-name contracts. This "takes up a great deal of time with only one person to handle the process," a state official complains. AVERAGE GRADE: B-
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