Performance Based Management and BudgetingPerformance Based Management and Budgeting

Shawano County Management Team Mini-Workshop

July 26, 2007

Jay MoynihanCRD Shawano County

Budgeting on the county level may be what is called,

“A Wicked Problem”

“Some problems are so complex that youhave to be highly intelligent and well informed

just to be undecided about them.”

--Laurence J. Peter

The concept of "wicked problems“

was proposed by Horst Rittel

University of California, Berkeley

Rittel, H., and M. Webber; "Dilemmas in a General Theory of Planning“

Policy Sciences, Vol. 4, pp 155-169 (1973)

When is a problem “Wicked” ?

The problem is not understood until after formulation of a solution.

Stakeholders have radically different world views and different frames for understanding the problem.

Constraints and resources to solve the problem change over time.

The problem is never solved.

Performance based management and performance based budgeting is an increasingly popular method to attempt to tame the wicked problems in county budgeting.

“Performance budgets use statements of missions, goals and objectives to explain why the money is being spent. It is a way to allocate resources to achieve specific objectives based on program goals and measured results.” The key to understanding performance-based budgeting lies beneath the word “result”.

Richard D. Young, “Performance-Based Budget Systems,” Public Policy & Practice, p. 12 , January 2003

PBB revolves around:

• The results (outcomes) • The strategy (different ways to achieve the outcomes) • Activity/outputs (what is actually done to achieve an outcome)

OutcomesWe start and finish with outcomes. Results matter. In many respects, outcomes drive the performance measurement system. In order to clearly define your outcomes or desired results, first determine why you do what you do, and next determine how your particular agency program or service benefits your customers and what value it provides them?End outcomes are predicated on

two vital components:1) Outcome goals (benefits)2) Outcome performance measures

From Fairfax county Virginia training manual

Outcomes:

the direct results or benefits for citizens.

•Eau Claire County, among others…

•Fairfax County, Virginia-----most advanced model

•UW-Extension Local Government Center is a resource for our county on this

•Shawano County Extension office is ready to assist in county application of PBM/PBB

http://www.fairfaxcounty.gov/dmb/perf_measure.htm

Next:

http://lgc.uwex.edu//Finance/FM7PerformMeas.ppt