Item A: Budget Service Realignment

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DonÕt settle for activity data that is readily available; commit toCreating such a map requires those involved to be clear about indicators of real results. how they think activities add up to results. Doing so subjects each Òtheory of what matters mostÓ to a challenge from every compet- Use an index if necessary to capture multiple sources of related ing theoryÑexactly the kind of debate the budgetary process data. Washington developed an index of health that combines should stimulate. data on the incidence of major diseases, for instance. In the end, the acid test is whether the priorities and indicators These cause-and-effect maps help purchasers choose from you have chosen make sense to citizens. Snohomish County in among many possible strategies and to assign a relative priority to Washington literally put their priorities in the terms that citizens each. Washington StateÕs health team identified four possible use. Here they are: strategies: increasing healthy behaviors (getting citizens to eat bet- I want reasonable and predictable 1. TransportationÑ ter, drink less, quit smoking, get more exercise, etc.); mitigating travel times. environmental hazards (ensuring cleaner water, air, and food); identifying and mitigating risk factors related to gender, socioeco- I want to feel safe where I live, work, and play. 2. SafetyÑ nomic hardships, and genetic predispositions; and providing I want kids in my community schools to pass 3. EducationÑ access to appropriate physical and mental health treatment. the state school achievement tests. These four strategies appeared on the stateÕs map. I want to improve the health 4. Health and VulnerabilityÑ of people in the community and reduce vulnerability of When the team ranked these strategies in terms of their contri- those at risk. butions to the end result, it decided that mitigating environmen- tal hazards was most important, increasing healthy behaviors was I want to live in a thriving community, one 5. CommunityÑ second, providing access to health care was third, and mitigating with infrastructure sufficient to support planned growth. risk factors was fourth. With limited resources, it decided to I want my community to be prepared to 6. PreparednessÑ increase the stateÕs emphasis on the first two. Research data had respond to emergencies. convinced team members that this was the way to get the most I want 7. Effective, Efficient, and Transparent GovernmentÑ bang for its buck, even though it meant reducing spending on to get the level of service I need at an affordable price and more traditionalÑand highly expensiveÑpatient care. In fact, see that my dollars are spent wisely. their analysis showed that these two strategies would yield a 16-to- Divide total revenue 3.Set the price of each priority. 1 return on investment. among the priority outcomes on the basis of their relative value to The old budget game would have led the health team to focus on citizens. Here again, ask citizens for guidance. Give them $100 or the strategies with the greatest costs. The new approach required 100 percent to divide among the priorities, based on their assess- the team members to ignore last yearÕs numbers and figure out ment of relative value. There is no right answer to this questionÑit where the best results could be obtained for the money available. is a matter of judgment. The goal is to put a relative value on each result citizens seek. Executives must make the final call, but know- 5.Solicit offers from providers to deliver the desired ing what citizens think makes their job a lot easier. With their outcome goals and strategies clearly in mind, results. buyers then solicit offers to see who can deliver the most results Create 4.Develop a purchasing plan for each priority. for the money. This is the step that departs most radically from the Òbuyer teamsÓ to act as purchasing agents for the citizens. Ask each one to determine what matters most when it comes to delivering its old budget game. Instead of asking agencies or departments to assigned result. This is a crucial stepÑand an exciting one. It chal- add or subtract from last yearÕs costs, the purchasing agents incor- lenges team members to get outside of their day-to-day work, step porate the results, price, and purchasing strategy they have set- back, and explore which factors have the most impact on the tled upon into something like a request for proposalsÑcall it a desired result, whether they are part of what government does or not. Òrequest for resultsÓ. This solicitation replaces the traditional budget instructions. The request for results can be sent to all agen- This means answering questions such as, ÒWhen it comes to stu- cies and departments, to other governments, even to unions, non- dent achievement (or the health of citizens, or decreasing conges- profits, and for-profit organizations. It asks each of these potential tion), which factors have the most impact, and how do different fac- suppliers to identify how they would help deliver the expected tors interact?Ó The answers can be compiled into cause-and-effect results, and at what price. maps that provide the basis for deciding which routes to follow. October 2004 Government Finance Review13 |