THE GOVERNMENT PERFORMANCE PROJECTReport Card: Kansas FINANCIAL MANAGEMENT: B- By and large, financial management in Kansas is handled in an exemplary way. Revenue and expenditure forecasting are better than average, and there is no trace of structural fiscal imbalance. Budgets usually are enacted on time, and investment and cash management policies have resulted in strong, consistent returns, with excellent oversight. Then you look at financial reporting and, like Dorothy, you don't think you're in Kansas anymore. This is the only state in the country that has not begun converting to generally accepted accounting principles. In the past, the state budget office made a vigorous and articulate argument that inasmuch as Kansas didn't do general obligation borrowing, it didn't need GAAP. However, the Division of Accounts and Reports admits that the no-GAAP policy makes interstate comparisons difficult and hampers managers and leaders who want a clear picture of the state's financial position. Two other problems: The ability of the budget office to analyze and provide information has long been crippled by a computer system so antique that it had to be fixed a few years ago to accept billion-dollar figures. Also, despite favorable overall economic conditions, the state has put no money in its rainy day fund. CAPITAL MANAGEMENT: B About 10 years ago, Kansas decided to give priority to the maintenance of existing infrastructure rather than to the launching of new projects. With a decentralized administrative structure, it does not always know what the costs of maintaining its assets are. However, some agencies—including the Board of Regents—use sophisticated methodology to determine necessary maintenance costs and time frames. Similarly, the state has no centralized data on the amount of deferred maintenance it has. But the Board of Regents reports that it deferred 14.3 percent of its maintenance costs in fiscal year 1996 and 33.3 percent in FY 1997, and the deputy budget director says that the universities have particularly large budgets for maintenance. The quality of maintenance in other agencies varies. Five-year capital budget plans are prepared by agencies, reviewed by the Division of Architectural Services and submitted to the governor. Generally, the governor's recommendations are followed, though some legislative additions creep in every year. While agencies track their own projects, the Division of Architectural Services also conducts an ongoing evaluation of the process in order to ensure accuracy in cost estimation. HUMAN RESOURCES: B+ Kansas does many things right in this category. It has reduced the number of civil service job classifications to 750. It also has eliminated restrictive civil service testing. Jobs are posted centrally, and managers are not limited by constrictive lists. Workforce planning is not done on a centralized basis, but the state's highly integrated human resources management information system will provide a wealth of data for future workforce planning in the agencies. Kansas has built up impressive training programs and evaluates them to make sure they're delivering. Supervisors are schooled in the skills of documentation to provide feedback and potentially dismiss employees in a timely way when necessary. There is one significant weak spot: As long as they haven't reached their salary cap, the so-called annual "merit" increase can be given to 98 percent of state employees, all of whom are rated as satisfactory. "There's no way to financially reward employees who are top performers," says one personnel manager. MANAGING FOR RESULTS: C Kansas has used performance measures to provide budgetary flexibility. Several of the state's universities agreed to be held accountable to these measures in exchange for retaining tuition dollars rather than receiving an annual appropriation from the state. Foster care contractors earn incentives if they meet standards tied to the number of placements they make. This sensible approach is risky, however, if the measures aren't quite right. In foster care, it can encourage contractors to rush their clients into placements too quickly. And for many agencies, the performance data still relate more to output than they do to outcome. Not much pressure is brought on agencies that make minimal effort here, and the performance measures are pretty much ignored by the legislature. There is, however, an active evaluation process conducted by the legislative Division of Post Audit, whose recommendations are generally heeded by the legislature. INFORMATION TECHNOLOGY: C+ Each Kansas agency has its own budget information system; the data from these individual systems is keyed into a central system. This antique accounting procedure produces little useful information. It's due for replacement in three years, but if the state decides to follow the rest of the nation and adopts GAAP accounting, the informational transition can't begin until the books are converted. Kansas' IT policies are in a state of metamorphosis generally. New legislation has created a position of chief state information architect, a high-level policy committee to develop the IT architecture itself, and IT officer positions for all three branches of government. Detailed cost-benefit analysis is being conducted for all new projects. A new statewide training program will be keyed to the architecture that's being developed; the state will pay bonuses to employees who develop necessary skills. Though the state makes most commodity items available through master contracts, procurement of larger, more complex systems is overly time-consuming. AVERAGE GRADE: B-
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