THE GOVERNMENT PERFORMANCE PROJECTReport Card: South Carolina FINANCIAL MANAGEMENT: B+ There aren't too many flaws in South Carolina's finance operation. Revenues and expenditures are in solid balance. The rainy day fund is filled to the maximum. Investment and cash management policies are comprehensive and detailed, and financial reporting is straightforward and clear. The legislature takes into account the future fiscal impact of state action—something that doesn't happen everywhere. One proposed change in sentencing guidelines was accompanied by fiscal notes that predicted implications 10 years out. It didn't pass. A recurring problem, however, is the state's habit of expecting more from the feds and other non-general-fund sources than actually becomes available. This nearly always causes overall revenue to come in on the low side (6.7 percent in fiscal year 1997). "We're making a concerted effort to adjust estimates on federal and other funds," says Les Boles, the state budget director. CAPITAL MANAGEMENT: B- A 1994 study here identified about a half-billion dollars in deferred maintenance needs. Since then, the state has done a better job at planning for these expenses, with new projects frequently accompanied by a detailed maintenance plan. "There's definitely a heightened awareness of maintenance needs," the budget director says, "but there's never enough funding." There's also a shortage of information at the state level about how agencies are maintaining their facilities. On the positive side, South Carolina does reasonably careful strategic analysis and monitoring of its new capital projects. Agencies submit five-year plans in preparation for passage of a capital improvement bond bill in the legislature every other year. A Statewide Permanent Improvement Reporting System tracks all capital projects in the state, and monthly monitoring is done to make sure that project expenditures do not exceed budget authority. HUMAN RESOURCES: A- South Carolina has undergone substantial personnel reforms lately, aimed at giving more flexibility and control of personnel operations to agency managers. It has reduced the number of classifications from 2,500 to fewer than 500. It has instituted pay reform, making it easier to award raises without onerous paperwork. While it has decentralized many personnel activities, it has been careful to retain centralized information. The state doesn't yet do formal workforce planning, though the strategic plan for 1997-2000 contains an objective to "provide training on workforce analysis, to include succession planning." The Human Resource Information System does allow agencies to maintain training records on their employees. There are a variety of fee-based training programs for state workers, and while agencies complain that they can't always afford adequate training, the state also maintains "train the trainer" programs that limit agency expense. State personnel policies require continuous communication between manager and employee, and serious attention to substandard work. Agencies are allowed to tailor performance appraisals to their own needs. In some agencies, employees are held accountable for achieving agency missions, or for completing certain training requirements. In some, the appraisal process involves comments by both superiors and subordinates. MANAGING FOR RESULTS: B- Though there is no statewide strategic plan, about three-fourths of the state agencies have their own plans, and the number is increasing each year. While the quality of performance measurements varies widely here, there's a great deal of activity. Agency leaders produce annual performance plans outlining personal goals and objectives, tied to those of the unit they head. Each agency also is required by the legislature to submit an annual performance accountability report, which contains missions and objectives and measures to show whether objectives have been met. There are many examples of effective managerial use of these measures. State colleges are now appropriated money based on meeting performance criteria—for example, student graduation rates—rather than on straight enrollment figures. This is particularly impressive in that in many states, higher education functions like a semi-autonomous fiefdom. INFORMATION TECHNOLOGY: B South Carolina put in a new human resources information system in 1997, and has also implemented new procurement technology. The state's accounting system needs replacement, though; many agencies have had to design their own to make up for its poor quality. The comptroller general has asked the general assembly for funds for a new statewide system. South Carolina has a reasonably fast procurement schedule for IT. It is moving toward a coordinated training approach, and is developing a core curriculum for IT professionals to use as a model. There is no chief information officer; planning and oversight of IT are divided among three separate offices. The state also has an unwieldy collection of 11 different data centers; a state controller's report has recommended that they be consolidated into one by July 2001, and estimated that this would save the state $30 million over 10 years. South Carolina does a good job of sharing information with citizens. Rather than just sending agencies out to set up Web sites in a helter-skelter fashion, it did a survey to determine what kind of information its citizens wanted on the Internet. The first thing they wanted? Job leads. AVERAGE GRADE: B
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