THE GOVERNMENT PERFORMANCE PROJECTReport Card: Missouri FINANCIAL MANAGEMENT: A- Missouri is careful not to make decisions that will get it into trouble in the future. Its fiscal notes process is deliberate, with five-year to 20-year projections required for major spending. Many contracts with the private sector have performance criteria attached, though state budgeters would like to see this done more uniformly. And Missouri gives its individual agencies considerable flexibility to handle their business, allowing them, for example, to move cash around fairly easily within programs. What's more, if a department can convince the budget office and the General Assembly that it has the necessary controls in hand, it can win approval to transfer resources department-wide. The departments of Conservation and Revenue both have earned this privilege. The state does good revenue and expenditure forecasts, is in solid structural balance, is moving toward the use of cost accounting, and is developing a written debt policy (the informal practice in the past has simply been to minimize debt). Equally important, unlike most states, Missouri applies its fiscal caution to its treatment of the localities under its control. Since 1980, the state constitution has forbidden the legislature from imposing unfunded mandates on local government. CAPITAL MANAGEMENT: A The long view that drives financial management in Missouri has been applied very effectively here as well. There are solid five-year capital plans that include repair and rehabilitation of existing facilities, as well as construction of new projects. The state has moved to biennial capital budgeting, which makes the effort more realistic. "It transferred people's thinking to the long term," says Budget Director Mark Ward. Missouri has made substantial capital investment in the past few years, a result both of the healthy economy and of a fiscal policy that invests surpluses in one-time expenditures. The state maintains a Land and Building System that is unusually good at reporting the condition of state properties and forms the basis of maintenance, repair and improvement schedules. A cost-allocation plan carefully estimates the state's needs for maintaining assets over time, including preventive measures. A 1996 constitutional amendment created a facilities maintenance reserve fund, which will eventually reach a funding level of 1 percent of net general revenue collections and will "set aside money to do preventive stuff that will reduce costs in the future," says Ward. HUMAN RESOURCES: B Though Missouri has decentralized decision making on personnel issues, it has carefully streamlined the flow of information between central offices and the agencies. Managers still hire from certified lists, but the lists have been expanded to 15 applicants or 15 percent of the applicant pool, whichever is greater. A new automated application system has cut the typical length of time to get an eligible list from six weeks to two weeks. Though the state does not have a formal pay-for-performance system, managers have flexibility to make decisions about pay levels; within the pay range of a title, there are no restrictions on the salary selected. Missouri is instituting a new performance evaluation system that emphasizes customer service, measurable standards and individual planning for career development. Unfortunately, the state does very little true workforce planning outside of the information technology area. MANAGING FOR RESULTS: A- Missouri has led in managing for results for 20 years—and the effort has advanced steadily through both Republican and Democratic administrations. Governor Carnahan includes the legislative branch in his strategic planning process, and this pays off with significant buy-in from that branch. All state agencies have long-range strategic plans tightly linked to the budget. Statewide, Missouri produces "show me" results. These are 23 goals that all agencies work toward, both individually and as part of interagency teams. All state programs use performance measures. Agencies report on "objective measures"—specific results that are clearly within their control—as well as broader outcomes and outputs. Results information is woven into the fabric of decision making. An Internet "show me" site provides excellent performance information. One small complaint: Departments still feel that training needs to improve if measurements are to reach full usefulness. INFORMATION TECHNOLOGY: B+ Missouri's technology acquisition process has won several prestigious awards. It features a "prime vendor" system: The state arranges with a single vendor to offer virtually every needed commodity item at 6 percent over acquisition price. The state probably could have negotiated down to 4 percent, but wanted guarantees that the vendor would provide top-notch service, as assessed through customer satisfaction surveys and performance measures. Primary systems, while functional, fall short on providing specialized information to managers. To call the HR system an information system "would be to flatter it," says one manager. But next July, Missouri will roll out the first stage of a new, completely integrated accounting, budgeting, purchasing and human resources system that should make access to data a stroll in the cyber-park. It is scheduled for complete implementation in about two and a half years. Missouri has a centralized management structure, in which the CIO reports directly to the governor, controls budgets and is responsible for IT standards and planning. Agencies as well as the state plan out three years ahead. The state is in the first stages of measuring the effectiveness of its IT systems from a central perspective. AVERAGE GRADE: A-
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