Grading the States introduction THE GOVERNMENT PERFORMANCE PROJECT Report Card: Oklahoma GOVERNOR Frank Keating (Republican, elected 1994) LEGISLATURE House — 53 Democrats, 48 Republicans Senate — 30 Democrats, 18 Republicans FINANCIAL MANAGEMENT: C+ The Sooner State sometimes has trouble dealing with things that come later. Unlike most states, it projects revenues and expenditures only one year out. Its fiscal-notes process is informal, and, in the words of budget director Rollo Redburn, “leaves a lot of room for improvement.” Oklahoma does keep some reserves available for the difficulties it refuses to formally anticipate. It appropriates only 95 percent of estimated revenues in any given year, and its unreserved balances have been going up. It has a rainy day fund (called the constitutional cash reserve) which holds about 3.5 percent of general fund revenues. Unfortunately, the state has developed a habit of dipping into the fund before the rain starts. In fiscal 2000, $142.4 million — about half the reserve — was used for non-emergency purposes. They were mostly one-time needs, but call into serious question whether legislators really understand the purpose of the fund. The state needs more formal debt-management policies and guidelines for the debt level it can afford. It also has a large unfunded pension liability: $5 billion. Both the flexibility of procurement and training in this area have improved. CAPITAL MANAGEMENT: C Oklahoma maintains a decentralized capital planning and management process. Its state plan is essentially a compilation of plans drawn up by the individual agencies, which track their projects and plan for maintenance independently. Although they’re encouraged to produce operating cost estimates, few actually do. And even if they do, the legislature sometimes ignores them. During the last few years, that body has gone in heavily for bond-financed capital projects: For fiscal 2001, legislators funded about 500 projects by approving $157 million in revenue bonds. The Department of Transportation, for its part, created a project-management division last July. Prior to that, project-status data were not compiled by a single source and could be difficult to find. Although better technology would help, the state does an acceptable job at tracking maintenance needs for its buildings and roads. Unfortunately, the legislature tends to fund almost every other capital need before maintenance. Even as the state has moved forward on a $1 billion program for road construction, transportation-maintenance funding has decreased. HUMAN RESOURCES: C- Oklahoma has followed the national trend toward easing rigid civil service rules and regulations, but not always with the best of results. An audit of the Health Department last year found that a number of “ghost employees” were occupying unclassified positions. They were friends and relatives of legislators and state managers, employed on paper but not physically present. “The governor is calling on governing boards to put pressure to make sure proper controls are in place,” says Oscar Jackson Jr., administrator of the Office of Personnel Management. On the plus side, a new performance-management process has been well received by both managers and employees. Efforts have been made to replace the outdated system of job descriptions with a more streamlined organization. And the Classification Compensation Reform Act of 1999 creates a lot more flexibility to adjust salaries in jobs that have high turnover or have been unusually difficult to recruit for. MANAGING FOR RESULTS: D+ Oklahoma intends to start moving on a path to strategic planning. Agencies have been asked to submit five-year plans, including agency missions, vision statements, goals and key performance measures. The state has embarked on earnest training programs to get the agencies ready for this effort, and the first plans are due this October. But implementation of a statewide plan is likely to depend on the wishes of the next governor, to be elected in 2002. Still, this is one of the first real signs of managing for results in Oklahoma. Otherwise, things have been pretty bleak. Obstacles to MFR include a lax attitude on the part of agency managers, lack of interest from legislators and fear on the part of employees that measures will be used for disciplinary action. Most agencies do produce some performance measures, but many are simple output data, such as the number of permits issued. Most of the measures don’t have targets, and there’s minimal validation. INFORMATION TECHNOLOGY: B- The past two years have been big ones for IT in Oklahoma. A stellar network system — which connects virtually every entity of significance in the state — has driven agencies to understand the importance of acquiring technology that’s compatible across functional lines. “Everyone is more cognizant of the fact that they’re not sitting on an island,” says Jerry Stillwell, the state’s data processing manager. IT planning has also improved from a process that was tied almost exclusively to procurement to one that is far more strategic in nature. The Y2K experience was partially responsible for this shift of priorities. Entity-wide IT systems are generally functional, but human resources officials complain that their statewide system isn’t sufficient. “We’re dying on the vine because we can’t produce the data we need,” says one. And some important capital management data is still kept in paper files. However, Oklahoma is procuring new systems for human resources, accounting and capital management. They should start rolling out in two or three years. Oklahoma has been a real laggard in putting transactions on the Web; but here, too, it is in the process of setting up an Internet portal, which will open the door to such efforts. AVERAGE GRADE: C Copyright © 2001, Congressional Quarterly, Inc. Reproduction in any form without the written permission of the publisher is prohibited. Governing, City & State and Governing.com are trademarks of Congressional Quarterly, Inc.