THE GOVERNMENT PERFORMANCE PROJECTReport Card: Iowa FINANCIAL MANAGEMENT: A- In the early 1990s, Iowa was publicly castigated for misleading accounting practices that disguised its financial problems. The state has not only fixed those problems but set an example by moving smartly toward cutting-edge cost accounting. In one pilot project—simple, but to the point—managers used cost accounting to more accurately price signs created for the state and generate them more efficiently. In just about all areas of finance, Iowa hews to the line of careful, well-thought-out planning. Any surpluses go to the state's rainy day fund until it is fully stocked at 5 percent of general fund revenues (as it is now). Expenditures are well in line with revenues, even as the state has been on a prison-building spree. Agencies have a reasonable amount of flexibility to handle their budgets, although they do need gubernatorial permission to transfer money from one program to the other. Budgeters are looking forward to more useful financial information in the near future as the state upgrades and integrates its financial management system. CAPITAL MANAGEMENT: B- Back in fiscal 1996, Iowa established the Rebuild Iowa Infrastructure Fund, and began stocking it with about $120 million a year. But the State Auditor's Office has criticized decisions to spend some of the money on technology and operations and not on buildings as is required by law. In the current fiscal year, $80.1 million out of a $128.9 million fund is going to new capital. Iowa has done a good job at planning and tracking new projects. The state has a five-year plan, but the real focus is the governor's recommendation for the biennium. The Department of Capital Services prepares an annual status report for ongoing capital projects over $250,000, and it is evaluated by the Department of Management and by the governor based on set criteria. Projects have generally come in on time and on budget. The state needs more consistent information about the condition of its assets. It is now developing assessment techniques that will give it a better idea of just what it needs to spend to maintain its assets properly. HUMAN RESOURCES: B+ "I really insist that we try to avoid legalese and bureaucratic mumbo-jumbo," says personnel director Linda Hanson. She has made strong efforts to communicate with state employees through newsletters, manuals, training videos and the Internet. The results have been impressive. Workforce planning also is moving forward, though it is still in the early stages. That's crucial in Iowa, where most state employees are over 40 years old. Training is a high priority here, and the state has aggressively used new technologies—CD-ROM, Web-based training and video conferencing—to reach those who need the assistance. The one big problem in Iowa's personnel management hasn't really been within the control of the personnel shop. Pay ranges are narrowly constrained in classifications by the civil service system, and some 70 percent of the state's employees are currently capped at the maximum pay for their position. At the same time, flattening of Iowa's management structure has limited promotion opportunities. Despite these obstacles, however, the state has made valuable efforts at motivating employees through non-monetary recognition of achievement and by allowing cash bonuses (though the unions have mostly opposed the bonuses). MANAGING FOR RESULTS: B+ Iowa has a solid, enterprise-wide strategic plan, into which its agency, program and individual plans all feed. The state carefully aligns lower-level goals with higher-level ones. All agencies are required to participate in the process. Iowa's statewide report card, which tracks how well the state is meeting its goals, is a real plus. At least one results measure is required for each program, and further results-oriented measures are evolving from the process. The Performance Measurement Task Force keeps a watch on the quality of measures and consults with agencies based on its expertise in data collecting. The state has tried to connect its measurement program to budgeting, an effort that has been only sporadically useful, although there have been some success stories, notably in economic development. Unfortunately, Iowa's performance measurement process is relatively complex and difficult to explain to non-specialists. Says Mary Reavely, coordinator of performance management systems: "We haven't done a very good job at laying it out in a simple fashion that a legislator can look at and say, `Oh, this is what you're doing.'" INFORMATION TECHNOLOGY: C+ The enterprise-wide information systems the state has been working with have not supported management effectively. "If the new governor asks how many employees we have, it can take several dozen people to get the answer," says Tom Shepherd, administrator for business and finance. But in June, the state will begin full implementation of the Iowa Financial Accounting System, which will provide direct interfaces with a brand-new human resources system and should provide managers with tons of online data, allowing procurement policy, for example, to be enforced electronically. The state is justifiably proud that it owns its own fiber-optics network. It is just beginning to eliminate segregated silos of information by putting together data warehouses. Efforts are underway to define more specific technology standards, as well as to develop a comprehensive system for measuring the effectiveness of IT in general. AVERAGE GRADE: B
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