THE GOVERNMENT PERFORMANCE PROJECTReport Card: Rhode Island FINANCIAL MANAGEMENT: B- Rhode Island has a bit of an overspending problem—its expenditures have regularly come in over budget, if only by a couple of percentage points. The state has instituted a number of reforms to bring the problem under control, such as holding agency heads strictly accountable for spending within limits. The state also has a very high debt burden, although that's largely a function of the fact that there is no county government system. Rhode Island takes on many services funded at lower levels elsewhere. Even so, state government is wisely avoiding taking on any new debt, and it has been able to eliminate short-term borrowing in its most recent budgetary actions. Rhode Island can take some pride in seeing its rainy day fund reach its cap of 3 percent of general fund revenues. Once the fund reaches this level, money goes to the curiously titled Delaware Capital Fund (it was modeled after a similar fund in that state) and is used for infrastructure. Little cost accounting is done, and it is difficult to obtain accurate, useful financial data (in large part because of the weakness of the state's IT systems). CAPITAL MANAGEMENT: C+ Happily, the littlest state is doing a pretty good job at strategic analysis and priority setting for its capital projects. The Capital Planning and Oversight Commission was set up in the early 1990s to evaluate proposals and make recommendations to the governor. A capital management report identifies projects by funding source, and the capital budget spells out what annual funding is available and from where. Funding is also provided at early stages of new projects, so estimates tend to be somewhat realistic. Capital planning has undergone stunning improvement since the mid-'80s, when Rhode Island would spend the income from bonds that were authorized but not yet issued, necessitating additional short-term borrowing. The state still has a long way to go, however. There is no centralized inventory of capital assets; condition assessments are left to the agencies and tend to be sporadic. Factual information on the condition of many of the state's assets is outdated or nonexistent. HUMAN RESOURCES: F You know a state has a problem when routine questions about timely hiring and managerial flexibility cause personnel people to laugh out loud. Competitive job classes in Rhode Island are tied to old-fashioned centralized examinations. Managers are presented with six qualified applicants from whom they must choose (the so-called "rule of six"). Big layoffs in the early and mid-1990s have made it impossible for personnel to keep up with examination needs, so the state has about 2,000 provisional hires. Rigid workforce policies and procedures haven't changed since 1986. Pay for performance has been blocked by union opposition, and managers have no legitimate way to reward superior employees. Promotions are based on seniority, with generous bonuses allocated after each half-decade of employment. After a probationary period, employees don't even get performance appraisals. "I'd like to see a performance-appraisal system," says the chief of merit selection and classification, "but if we're not going to train managers, then it's stupid to even dream of it." MANAGING FOR RESULTS: C Rhode Island is entering its third year under a system of program measurements passed by the legislature in 1996. According to the Office of Strategic Planning, Monitoring and Evaluation, about 80 percent of all programs have at least one outcome measure, and the office has quietly assisted departments in the tricky task of developing data and refining measures. Sadly, after requiring that all programs develop measures, the legislature has not expressed much interest in them. For the next budget, agencies have been required by the budget office to justify spending changes in terms of their impact on outcomes. This is a very useful exercise, but again, there is no guarantee that it will get much attention among legislators. The Bureau of Audits is beginning to sample measures for accuracy. Though there is no statewide strategic plan, many large agencies have begun to do such planning on their own initiative. INFORMATION TECHNOLOGY: D "Giant strides have been taken," Rhode Island says of its IT operations, "but they have just gotten us to the starting line." Absolutely true. The state's central computer systems are Stone Age, providing little information to managers. The state has recently completed a contract to build a new financial management information system, which will begin to roll out over the next few months. Rhode Island has just begun an overall planning process for IT. The state allows agencies to buy many commodity-type items from a master list, but for more complex purchases the process is numbingly difficult. Approvals travel from desk to desk, and can take inordinate amounts of time to be completed. It can easily take two or three years to purchase a major system. Finally, the state has little clue as to whether its purchases are paying off. "We don't have any way of knowing cost benefits or return on investment," says one IT official. "We're still trying to figure out what the costs are." In 1996, the state appointed a chief information officer, and has begun to consider an effort to standardize its IT systems, which are currently very decentralized. AVERAGE GRADE: C-
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