GFOA'S New Performance Management Initiative.

As this issue of Government Finance Review demonstrates, governments at all levels are attempting to link performance measurement to budgeting and strategic planning. One of the main reasons for the renewed interest in the art and science of performance management is the realization that performance measurement systems that are isolated from the strategic planning and budgeting process are merely "counting" exercises. The "new" performance management emphasis in government is being fueled by management innovations such as balanced scorecard, process reengineering and the development of intergrated enterprise resource planning systems (ERP).

The GFOA has established a new Performance Management Initiative to help government understand and utilize tools that will shape a new era in public management. Governments today are moving from evaluating performance of select program areas to assessing program and service outputs and outcomes on an organization-wide basis. GFOA endorses the voluntary use of public-sector performance measurement. More specifically, GFOA strongly recommends that all governments develop and utilize financial, service, and program performance measures as an integral part of their strategic management and budgetary processes. However, GFOA remains adamantly opposed to attempts by the Governmental Accounting Standards Board (GASB) to mandate non-financial performance measures in audited financial reports. GFOA has long held the view that the appropriate place to report on government performance is the budget document and/or internal management reports, not the Comprehensive Annual Financial Report (CAFR).

In the context of management and budgeting, performance measurement can help governments assess how well resources are being used to achieve program and service goals, objectives and outcomes. More specifically, governments can use performance measures to:

* identify financial and program results;

* evaluate past resource allocation decisions;

* provide information that facilitates program and service delivery improvements for future years; and

* communicate to stakeholders how well goals, objectives and outcomes are being met.

In the recently issued recommended budget practices, the National Advisory Council on State and Local Budgeting (NACSLB) amplified GFOA's earlier recommendations to clearly identify performance measurement and benchmarking as an integral part of the monitoring and evaluation phase of the budgeting...