Renewing the consideration of performance and results in government IPAC-IAPC 2011 National Conference: Public Service Capacity
Jim Copeland, National Managing Partner, Advisory Services Leah White, Partner, Governance, Risk & Compliance Services Paul Avender, Partner, Advisory Services Bill Reid, Director, Advisory Services
What do we hope to cover today?
Bill Reid, Director, Advisory Services • Integrating results-oriented practices – Seeking the linkages to enable broader use and benefit Paul Avender, Partner, Advisory Services • Revisiting zero-based budgeting – Learning from experience Leah White, Partner, Governance, Risk & Compliance Services • Understanding the value of performance auditing – Getting your money’s worth 2
Integrating results-oriented practices
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Integrating results-oriented practices continued
Provincial Crown Agency Case Study One • Embarked on a nine-year strategic planning process that is linked with three-year service delivery and business plans: o
Combined governance and assigned responsibilities
o
A shared portfolio of initiatives
• Renewed their approach to enterprise risk management with direct ties to business plans, in content and accountabilities • Project scoping, resourcing, budgeting, and measures are also integral parts of the divisional (branch) business plans 4
Integrating results-oriented practices continued
Provincial Crown Agency Case Study Two • Faced a mosaic of a public plan, corporate operating plans, divisional plans, and regional plans • Repositioned the strategic plan to serve as the foundation for the public plan • Created a corporate business plan, combining operating and divisional plans with budgeting and resource allocations • Looking now at the more explicit integration of the corporate risk inventory, mitigation strategies and risk indicators 5
Integrating results-oriented practices continued
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Integrating results-oriented practices continued
Provincial Ministry Case Study Three • Established a common framework of indicators: o
Categories of environment, functioning, and foundational
o
Initial executive governance orientation
o
Now reflected in public planning and reporting
• Created a SharePoint site and process to enable reporting • Formalizing a business intelligence function • Opportunities to advance the use of evaluations and reviews 7
Revisiting zero-based budgeting
The Promise • Improves allocation of resources, through bottom-up prioritization based on needs • Highlights obsolete legacy programs and activities • Provides the ability to make funding decisions as a portfolio o
“Comparable" funding packages cross department
• Assists in selecting specific levels of service
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Revisiting zero-based budgeting continued
The Pitfalls • Significant work effort involved • Focused on the current "what" and "how" • Very difficult to achieve comparable decision packages – eliminates the ability for cross department prioritization • Does not encourage innovation
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The Challenge
Shifting customer and stakeholder expectations
The tasty satisfying deli sandwich
Existing Offer / Expectations (level of service)
= Whole-wheat bread Lettuce and tomato Cheddar cheese Ham 11
The tasty satisfying deli sandwich continued
Shifting Customers Expectations
= Artesian organic wholegrain bread Locally grown organic lettuce and tomato Local produced cheddar Grain fed pork, naturally smoked 12
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Making the leap
Engage Align Innovate
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Zero-based analysis
Engage:
Understand expectations, but also their cost and performance curve
Align:
Integrate planning – strategic to operational
Innovate:
Utilize zero-based budgeting decision packages to create a plan: o Assign resources and accountability for both operations and innovation investment
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Case study Municipal Internal Service Provider The Challenge: Rising costs, due to customer expectations Approach: • Confirmed division accountabilities • Interviewed 30 customers to validate cost and performance expectations • Reviewed current programs and services through development of zero-based budgeting like decision packages • Developed improvement portfolio and supporting implementation committee Expected Results: Improved service levels, maintain costs to inflation 15
Evolution of zero-based budgeting
Zero-Based Budgeting
Zero-Based Analysis
• Line item analysis
• Starting from zero, input from customers and stakeholder
• Reduction of spend and services
• Rigor toward assignment of resources and accountability
• Incremental improvement
• Provides vehicle for innovation to meeting shifting expectations 16
Understanding the value of performance auditing
Success… • Do you know what success looks like? • Do all stakeholders share the same definition of success? • How do you know if your program is successful? • Is your program as successful as it could be? • Is your program unsuccessful but the reasons aren't clear? 17
Understanding the value of performance auditing continued
What is a Performance Audit? An independent evaluation of the economy, efficiency, and effectiveness of an organization, department, program or process What Does That Really Mean? Helping you do more with less – figuring out whether money is being spent in the right areas to get to a shared vision of success 18
Understanding the value of performance auditing continued Public Agency Case Study One • Faced a project that was threatening to go off the rails – over budget and overdue • Met with various stakeholders to get a wide variety of perspectives regarding the current situation – including employees, management, contractors, and funding partners • Identified the current issues that were driving the major project problems, and provided a roadmap to move forward • Recently followed up to review progress – significant changes have given all stakeholders a new perspective and greatly improved the outlook for project success 19
Understanding the value of performance auditing continued
Government Agency Case Study Two • Recognized there were issues with program delivery, such as duplication of services, which hindered efficiency and effectiveness • Benchmarked the current state against best practices – gathering data through interviews and document review • Identified root causes of current issues, allowing the agency to deal with the source of the issues, rather than the symptoms 20
Chair reflections on the panel presentations
• Integrating results-oriented practices o Seeking the linkages to enable broader use and benefit • Revisiting zero-based budgeting o Learning from experience • Understanding the value of performance auditing o Getting your money’s worth • Considerations for the session theme o Public sector capacity 21
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