Linking resource allocation to performance measurement: a look at Chester County, Pennsylvania.

• Author: Phillips, Stephanie
• Position: [PM.sup.2] CONNECTIONS: PERFORMANCE MEASUREMENT & MANAGEMENT

In March 2008, the Board of Commissioners in Chester County, Pennsylvania, signed a resolution that committed the county to developing a strategic plan to help foster greater accountability and transparency in Chester County government. The commissioners' aim was to build a dynamic management system that not only linked available resources to the services required by citizens, but also monitored and improved performance. In addition to authorizing the strategic plan, the board also adopted managing for results, a management system for all county departments that further addressed the twin goals of fostering accountability and transparency. As a result of these initiatives, the entire organization now focuses on the same six key priorities (see Exhibit 1). Officials can track resource allocations across these priorities and determine how the related services are performing.

Government officials looking to implement and sustain a performance-based budgeting methodology or performance management system must answer basic questions and make decisions in several key areas: getting started, determining the finance officer's role, making the transition from one budgeting method to another, communicating progress to stakeholders, evaluating potential pitfalls, and identifying desired benefits.

GETTING STARTED

A variety of tools are available to help governments that are thinking about adopting a comprehensive performance management and/or performance budgeting system. These tools include consultants, surveys, model systems based on performance management books, and the teachings of performance technology gurus, to name a few. The crucial factor in successfully launching any performance management system, however, is obtaining the support of elected officials, department heads, and key departmental staff. Without the cooperation of these stakeholders, it will be difficult if not impossible to create a viable performance management system.

Chester County's Board of Commissioners drove its strategic planning initiative. An outside agency conducted a citizen survey to help the board define the strategic priorities. The final selection of priorities was also influenced by the findings of a separate survey of department heads, who were approached as subject matter experts. While the resulting list of priorities did not contain surprises, the effort undertaken ensured that the board considered the opinions of citizens and department heads from the outset and that the final plan included areas important to stakeholders.

After defining the key county priorities and underlying goals, the focus shifted to individual departments. To develop their own strategic plans, each department defined its formal activities, identified the customer services it provides, and set the departmental strategic goals. Each department then developed a set of performance measures supporting its specific activities and goals. All components of a department's strategic plan are focused on customer needs and the benefits the customer receives from the services provided. Staff then develops the departmental budgets around the key activities defined in the plan (see Exhibit 2).

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THE ROLE OF THE FINANCE OFFICER

The finance officer's role differs from organization to organization as performance-based budgeting is developed, implemented, and ultimately put into use. In jurisdictions where the budgeting or finance...