Grading the States introduction THE GOVERNMENT PERFORMANCE PROJECT Report Card: Kansas GOVERNOR Bill Graves (Republican, elected 1994) LEGISLATURE House — 79 Republicans, 46 Democrats Senate — 30 Republicans, 10 Democrats FINANCIAL MANAGEMENT: B- Kansas has generally been conservative in estimating revenues, and this has worked out fine. Last year, however, the state underestimated the impact of several tax cuts, contributing to general fund revenue coming in almost 2 percent under estimates. Spending continued to increase at a predictable rate, so the result was an operating budget in which expenditures exceeded revenues. This year, a strenuous effort is being made to return to structural balance by restraining spending growth to a minuscule 0.4 percent. Still, the state has had to use some one-time revenues to keep the budget from jumping out of balance again. Even through this rough patch, however, Kansas has maintained the 7.5 percent general fund account that it uses as a rainy day cushion. “It was a great precedent for us to have set,” says budget director Duane Goossen. Finally, the big news: At long last, Kansas is moving toward compliance with Generally Accepted Accounting Principles — the last of the 50 states to do so. The first comprehensive annual financial report in accordance with GAAP will be produced in fiscal year 2001. CAPITAL MANAGEMENT: B Last year, the Kansas legislature authorized an ambitious and badly needed 10-year highway plan, which will cost more than $13 billion. The state’s transportation department, which has a good record at bringing jobs in on schedule and on budget, is a little worried that the authorized amount may not be enough. Few doubt, however, that the job will be funded and completed. On the non-transportation side, the state hasn’t done as good a job as it should in tying operating costs to its capital budgeting efforts. “I would love to have the time to pursue that further on a more consistent basis across agencies,” says Thaine Hoffman, director of Architectural Services. The Division of the Budget wisely emphasizes maintenance over new construction of buildings. Current funding for rehabilitation and repair accounts is about $40 million. Unfortunately, the state lacks the information about buildings that it has about roads, so it’s difficult to know if this is an adequate figure or not. HUMAN RESOURCES: B+ Kansas has arrived at a nice balance between its centralized human resources office and decentralized decision making. Much of the responsibility for personnel management has been delegated to the state’s 105 agencies, which are free to decide whether or not to use tests, or how long to post jobs. But the message of overall coherence is also clear: “We are still one employer,” says Bobbi Mariani, director of personnel services. “They have to look at the big picture even though we are giving them autonomy.” The hiring process is automated, with lists of candidates generated, scored and sorted according to the specific agency requirements for any individual position. Kansas is at the early stages of developing a full-scale competency approach to human resources, spelling out the skills and behavioral attributes needed for each job and then using that information to drive hiring, performance review and training. One significant weakness: compensation reform is badly needed. The system of pay grades and steps “does not provide the flexibility needed to keep up with dynamic market demands,” one official admits. MANAGING FOR RESULTS: C+ Kansas does some things very well in this category. It has one of the nation’s best evaluation units in its Legislative Division of Post Audit. The state has emphasized performance measures for outside contractors, particularly in service areas such as foster care. But there is a weakness in the actual presentation of the information. Although the budget report includes a great deal of data, performance measures don’t appear in a form easily understandable to legislators and ordinary citizens. Two years ago, we reported that “performance measures are pretty much ignored by the legislature.” They still are. However, officials have been working to come up with a new format that will pull together succinct strategic plans and performance measures for individual agencies. Even the largest agencies will get no more than four pages. This will be a giant leap forward. INFORMATION TECHNOLOGY: A- “The best thing that ever happened to me,” says Kansas CIO Don Heiman, “was Y2K. I was finally empowered with a lot of dough. And it brought together the IT community.” All in all, Kansas has improved its IT management more than virtually any state in the country. Two years ago, it had no formal standards. Now, a thorough enterprise architecture for all three branches of government is mandated by law. Not only is this far more efficient but the existence of standards has drastically sped up a once slothful procurement system. The human resources information system is one of the best in the 50 states, and the tax system is the most automated in the country. The budget information system — “disastrous” in the past, according to Heiman — is being replaced, as is the accounting system, which didn’t support GAAP. With the use of training programs and well-thought-out incentives, Kansas has substantially reduced IT turnover rates and stabilized its staff. It was rated No. 1 in the nation for its IT retention efforts by the Society of Human Resources Management. The state would benefit from a re-examination of IT oversight. Right now, serious scrutiny is applied only to projects over $250,000. What’s more, central offices have good oversight only for the implementation period of any project; after that, there’s no effort to validate that promised benefits are flowing. AVERAGE GRADE: B Copyright © 2001, Congressional Quarterly, Inc. Reproduction in any form without the written permission of the publisher is prohibited. Governing, City & State and Governing.com are trademarks of Congressional Quarterly, Inc.