THE GOVERNMENT PERFORMANCE PROJECTReport Card: Montana FINANCIAL MANAGEMENT: B After two successive biennial periods in which the state spent more than it took in, Montana has a small surplus in the current biennium, ending in June. "We got burned in the mid-eighties and in the early nineties," says budget director Dave Lewis. "We're not going to be burned again." Montana generally does well at estimating revenues and expenditures, though it had a big miss on corrections in the last biennium. The state has no traditional rainy day fund. It does have a $650 million coal trust fund, which can be expended for any purpose with the approval of a three-quarters vote of the legislature. But since interest from this trust fund is crucial to the state's finances, the legislators are unlikely to want to use it for shortfalls in time of recession. Looking toward the future, Montana has decided that its fiscal notes have been too technical, and not useful to legislators. It's redesigning the process, after a nationwide review in search of best practices. CAPITAL MANAGEMENT: B+ Montana has a thorough six-year capital planning process, with clear criteria for prioritizing projects. The legislature trims money from the recommendations and alters some of the priorities, but it doesn't tend to make substantial changes from the governor's plan. The state deserves credit for catching up on a big backlog of maintenance problems, notably in the prisons and at the state capitol in Helena. Montana also has done a good job of converting old buildings to make the best use of existing infrastructure. It uses a Facilities Condition Inventory, adapted from a system developed by one of the state universities. Agencies are in the first cycle of performing their own condition assessments, which will be used to organize future deferred maintenance needs. Managers look forward to completion of the Montana Prime computer system to give them better on-line inventory information and much improved inventory management (see information technology, below). HUMAN RESOURCES: B- Each state agency has responsibility for its own recruitment and employee selection. Hiring decisions are made rapidly, and internship programs are increasingly widely used. Unfortunately, the highly decentralized nature of the system means that applicants have to apply for every state job with a separate application. Employee performance appraisals are not taken seriously in Montana—sometimes they're not even done. Workers are rewarded according to longevity of service. But a major reform is coming, based on the governor's initiative to link pay to "competency and initiative of the employee." A sizable pilot is in place to allow people to move through a range of salary steps based on performance. The Governor's Award for Excellence honors dozens of employees yearly and is a "big deal," says Gale Kuglin, policy coordinator for the state personnel division. Little is being done here to project the state's future workforce needs. But the new computer system will provide far better tools for future analysis—if it's desired. MANAGING FOR RESULTS: C Montana embarked in 1993 on a performance budgeting pilot that so far has involved 14 programs. The legislature did not officially continue the pilot in the current biennium, however, and the state cut costs on its new integrated information technology system by temporarily dropping the module that was to support performance budgeting "They just flat-out didn't know what to do with those budgets," says one official. But a number of the agencies have chosen voluntarily to keep up the performance measurement work. Despite the problems, the executive branch is continuing in its efforts to get agencies to pursue better information about the results of services. Past and projected performance measures will appear in the next budget, though most measures are output-oriented, rather than being keyed to outcomes. There is no overall statewide strategic plan, but there have been some attempts to set statewide goals. All 16 executive agencies and most elected officials are employing strategic planning. One big plus: Montana has long had an active Legislative Audit Division, which produces about 20 audits each biennium; its recommendations are taken very seriously. INFORMATION TECHNOLOGY: B- Montana is engaged in one of the biggest IT upgrades around, with the so-called Montana Prime, a comprehensive and integrated financial, human resources and budgeting system. On April 1, the HR component will come on line, and the financial piece will be implemented on July 1. "Now we can dream up and craft a report in a day or two that would have taken months before," says Tony Herbert, administrator of the information services division. Standardization is important and widespread in the state. Agencies publish plans that are fundamentally project-oriented, not very strategic, but are eventually rolled up into a statewide plan, with a more potent strategic overlay. The process of purchasing large systems is cumbersome and time-consuming; it goes through the state's standard procurement procedures, which are not appropriate for fast-moving IT. Training is not a strong point, and many IT professionals have to fly out of state to keep up to date. For end users, "typically, they don't want to get training," says Herbert, "and they don't have the budgets anyhow. So it doesn't happen." AVERAGE GRADE: B-
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