BILL ANALYSIS
By: Uresti
BACKGROUND AND PURPOSE
Texas’ system of performance based budgeting for state government agencies does not provide the legislature and the public with adequate information about agency effectiveness. While performance measures are an essential component of the state’s budget system, they are not tied to an agency’s mission. They are tied instead to agency strategies and programs. As a result, performance measures tend to proliferate each legislative session as the legislature creates new agency policy initiatives or amends existing ones. For example, the Texas Education Agency reports on 160 performance measures across 17 strategies in the 2004—2005 biennium. In preparation for the 79th legislature, TEA added more than a dozen new measures as it prepared and submitted its 2004 strategic plan.
A management scorecard approach to state government will improve the information that an agency provides to the legislature and the public. Management scorecards emphasize agency alignment to mission and preparation to achieve policy goals by using a few core performance measures to predict agency performance and evaluate an agency’s ability to achieve its mission. Measures and strategies are included in the scorecard only if they improve an agency’s focus on customer satisfaction, financial accountability, and the alignment between legislative policy goals and agency business process effectiveness, staff expertise, and training.
The Texas State Auditor’s Office received the Balanced Scorecard Hall of Fame award for its ability to order to deliver more service without increasing costs. In 1999, before implementing a scorecard the fiscal impact of SAO activities was $58M. In 2003, SAO’s fiscal impact increased to $667M. Using the scorecard has created budget savings of $200,000 by focusing the agency on delivering its reports on time.
House Bill 2860 will improve state agency management, agency accountability, and provide better information about agency performance to the legislature and the public.
RULEMAKING AUTHORITY
It is the committee's opinion that rulemaking authority is expressly granted to the Legislative Budget Board in SECTION 1 of this bill.
ANALYSIS
H.B. 2860 amends the Government Code and directs the Legislative Budget Board to review the performance of state agencies using data presented to the board that has been derived using a management and workforce scorecard approach, as defined by the bill. The bill requires the board to develop a system to rate the performance of state agencies using the data submitted by the agencies as set forth above, and the bill sets forth the requirements for the board's ratings, publication of results, and when the board may begin assigning ratings. The bill also allows the legislature to consider the resulting performance review and rating of state agencies in connection with the appropriations process.
H.B. 2860 amends the Government Code to include management and workforce scorecards in a relevant state agency’s strategic plan. H.B. 2860 defines the requirements of a state agency management scorecard and a state agency workforce scorecard.
H.B. 2860 adds a state agency’s performance on its management and workforce scorecard to a review of agency performance that may be conducted by the State Auditor’s Office, the Sunset Advisory Commission, the Comptroller, the Legislative Budget Board, or another agency.
H.B. 2860 requires a state agency to publish scorecard and other performance data on its Internet website on a quarterly basis.
H.B. 2860 sets forth a schedule for agencies to implement management and workforce scorecards, providing different dates for agencies based on their size.
EFFECTIVE DATE
September 1, 2005.