THE GOVERNMENT PERFORMANCE PROJECTReport Card: North Dakota FINANCIAL MANAGEMENT: B North Dakota has one of the lowest debt burdens per capita of any state in the country. All its general fund dollars are invested in the Bank of North Dakota (owned by the state), which has earned competitive returns. Last year, the state gave the bank $17 million, in exchange for which the bank promised a $23 million credit line. This sounds a little odd, but it seems to work. Still, the state needs to watch its structural balance closely. The past couple of bienniums, it has done catch-up spending in higher education and other important areas, and expenditures have been growing somewhat faster than revenues. North Dakota, perhaps appropriately for the state with the lowest crime rate, has difficulty predicting its inmate populations. It underestimated its corrections budgets by more than 5 percent in the past two years. CAPITAL MANAGEMENT: B+ Many states do well at planning for their new capital acquisitions but then fall apart when it comes time to maintain them. They find it more fun to cut ribbons than to repair roofs. Not so in North Dakota. Though the state has a first-rate means for prioritizing new projects, maintaining existing facilities has been a higher priority than building new ones for the past several years. North Dakota uses industry standards and formulas to determine how much it should spend on buildings to prevent them from deteriorating. That's not to say that it's spending enough: "I think we do need to put more money into maintenance as a general statement," says Sheila Peterson, director of the state's fiscal management division. "This coming budget will continue to move in that direction." HUMAN RESOURCES: B- North Dakota has an extremely decentralized personnel structure. The central personnel office offers advice to agencies, but little in the way of oversight. As a result, some small agencies don't have any written personnel policies at all. Despite this (or perhaps because of it), hiring is done quickly and effectively by most agencies. Jobs are posted centrally through a Web site, local job offices and a bulletin board in the Capitol. After that, agencies have complete authority to make their own hiring decisions. There is no centralized testing process. Agencies pay the central office a fee to conduct training in workforce issues, administrative and management skills. The classes are evaluated regularly to test their effectiveness. In 1996, the legislature freed agencies to award salary increases based on employee performance. About four out of five agencies said they made some judgments on a performance basis, but there is no oversight to see how effectively the once-a-year appraisals are being conducted. MANAGING FOR RESULTS: D State officials put together a strategic plan in 1994. More precisely, they borrowed one from Texas, and then substituted "North Dakota" in the place where "Texas" had appeared. This dubious kind of one-size-fits-all planning was labeled a pilot effort and hasn't been revised since. Meanwhile, outcome measures are being tried out in pilot agencies, but there's some question as to whether the state has the sincere intention of moving beyond the pilot stage, as it hasn't added new agencies to the experiment for the past several years. The pilots had been required to report on their results to citizens, but even that requirement seems to have been dropped in the current biennium, possibly the result of a bill-drafting oversight. A legislative committee recently debated the future of performance measurement and budgeting in the state. Nothing happened. No recommendations were made. The good news: Some non-pilot agencies have actually moved on their own to utilize performance measurement, and all agencies are required to list goals and objectives in their budget request documents. A state auditor and a small legislative counsel staff do some program audits and evaluations. INFORMATION TECHNOLOGY: B- North Dakota's budget passes through both the executive and legislative branches without ever needing a paper document. There is a centralized accounting and management information system, and it is online in real time for all agencies. But the personnel information system does not provide centralized information for agencies. Each agency is responsible for much of its own personnel data. North Dakota currently has a chief information officer, appointed by the state director of OMB; legislation is being introduced to have the CIO report directly to the governor. The state is heading in the right direction in a variety of ways. Its Information Services Division recently completed the first statewide technology plan, and has been given authority to exercise oversight on the agencies. Multi-year technology planning has begun. Agencies have been asked to provide a cost-benefit analysis for new projects. The first round of such efforts produced some information, and the project is moving forward. And although the state is only now embarking on an effort to produce formal IT standards, many agencies have been following de facto standards. Even absent a powerful central authority, North Dakota hasn't had many problems with fragmentation. A small state, it has just one data center, one agency out of which operational services work, one network. The state Web site is excellent. AVERAGE GRADE: B-
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