Use of performance measures by GFOA members.

• Author: Tigue, Patricia
• Position: Government Finance Officers Association

Performance measures are an important tool for management and decision making in state and local governments. They can be used to guide resource allocation decisions, to assess service delivery alternatives, to provide accountability, and to communicate to the public the goals and results of programs and services.

The GFOA has taken an active role in promoting the use of performance measures by its members. A research bulletin on performance measurements was sent to all members in May 1994, and in the following month a day-long training seminar on performance measures and benchmarks drew more than 200 attendees. A number of articles in Government Finance Review have reported on the experiences of various jurisdictions and researchers. The association recently has released a research report that assesses the use of performance measures in city and county budget documents.

In June 1994, the GFOA adopted a recommended practice that calls for 1) development of performance measures relating to finances, services and programs; 2) for their use by state and local governments as an important component of decision making; and 3) for their incorporation into governmental budgeting. Eight performance measurement criteria are set forth in GFOA's recommended practice, and three levels of practices for performance measures are identified: acceptable, current best and developing practices.

While no consensus has yet been reached on an acceptable set of measures for programs and services or how such measures should be used by governments, a growing number of jurisdictions have begun to experiment with performance measures in management, budgeting and planning activities. In order to assess the extent to which its members are using performance measures and how these measures are used, the GFOA surveyed its members by questionnaire in May 1994. The survey sought to identify how jurisdictions are using performance measures, including the types of measures they are using, and the role they play in management, budgeting and planning activities. This article highlights the results of that survey.

GFOA Survey Results

Of the nearly 1,000 completed survey forms returned, approximately 98 percent were from jurisdictions in the United States and 2 percent from Canada. Almost two-thirds of the respondents were from municipalities, 18 percent from counties, 9 percent from special districts, and 4 percent from states or provinces. The largest percentage (23 percent) of respondents represent jurisdictions with populations between 100,000 and 500,000. The distribution by population size is relatively uniform for jurisdictions under 100,000 population.

Performance measures for management, budgeting or planning purposes were reported in use by 60 percent of respondents. There is some variation in the use of performance measures by type of jurisdiction: states/provinces and special districts were somewhat more likely to monitor performance than municipalities and counties. A strong correlation was found between size of jurisdiction and the use of performance measures, as seen in Exhibit 1. Apparently, larger jurisdictions are more likely to have the resources needed to institute a performance measurement system and to monitor program results.

The most commonly collected performance measures, based on...