Success Through Proactive
Leadership: Using Performance
Information to Achieve Results
Terry Carnahan
Managing Director, KPMG LLP
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG
International, a Swiss cooperative. All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a
Swiss cooperative.
Introduction and Agenda

Open Government Framework

High Performance Management Structure

Performance Management Legislation and
Guidelines

Selecting a Measure

Using a Measure
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
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Open Government Framework
Collaboration
Participation
Transparency
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
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High Performance Management Structure
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
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Budget and Spending Planning
 After areas of improvement have been determined, budgeting can
be adjusted accordingly.
 Without monitoring internal performance, budgeting is mostly
guesswork.
 So much more than “just compliance”.
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
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Government Performance and Results Act
 Enacted in 1993 following Congressional findings of
waste and inefficiency in the government.
 Purpose:
 increase
management accountability and public
confidence in the government.
 Why is measuring performance vital to effective and
efficient management?
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
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GPRA Modernization Act of 2010
 Required Strategic Plans and Performance Goals be
made publicly available online.
 Description of how each Performance Goal ties into the
higher level Agency Goal.
 Transparency as to how data for each Performance
Goal is obtained and assessed.
 More specific instruction as to what is reported and
how.
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
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GASB
 In 2010, GASB published guidelines for voluntary
reporting of Service Efforts and Accomplishments
(SEA) Performance Information.
 More specifically tailored to State and Local
Governments.
 Established four key components and six qualitative
characteristics of an effective SEA report.
 Also provides guidance on effective performance
measures.
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
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SEA Guidelines
 Components
 Purpose
and Scope
 Major
Goals and
Objectives
 Key
Measures
 Results
and Challenges
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
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SEA Guidelines
 Characteristics
 Comparability
 Consistency
 Relevance
 Reliability
 Timeliness
 Understandability
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
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SEA Performance Measures
 Measure of Service Efforts

Input Measures
−
Cost of road maintenance.
 Measure of Service Accomplishments

Output Measures
Number of lane-miles of road repaired.
 Outcome Measures
−
−
Percentage of roads in good or excellent condition.
 Measures Relating Efforts to Accomplishments

Efficiency Measures
Cost per lane-mile of road maintained.
 Cost-Outcome Measures
−
−
Cost per lane-mile of road maintained in good or excellent condition.
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
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SEA Performance Measures
 Independently of each other, these measures do not
provide much information.
 When integrated within the agency plan and to each
other, these measures act as complements and can be
very useful.
 So much more than “just compliance”.
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
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Selecting the right Measure
 Measures should be:

Outcome based.

Easily and objectively measurable.

Understandable.

Directly linked to agency goals.

Able to provide a meaningful frame of reference.

Comparable with previous years and/or other agencies.
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
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Outcome Based
 Rather than “output” or “input” (spending) based.
 Measures the desired outcome rather than a quantity of
output.
 In previous example, “percentage of roads in good or
excellent condition,” more useful than “number of lanemiles of roads repaired”.
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
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Objectively Measurable
 All terms in the measure should be objectivity defined.
 Once defined, data can be easily measurable.
 In road example, “good or excellent condition” would
need a definition.
 Perhaps based on user survey of road conditions.
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
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Understandable
 Since the users of this data are the general public,
measures should be clearly stated and defined.
 Example –

“Percentage of roads in good or excellent condition” is easy
to understand, whereas “lane-miles” might not be as
accessible.
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
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Directly Linked to Agency Goals
 Each measure must be linked to a higher level goal, all
the way up to the top agency goals.
 Road example –
 maybe
the departmental goal is to “maintain a road
system in good condition”.
 Agency
goal “achieve a top 10 statewide infrastructure
score”.
 Clear how maintaining the roads in good/excellent
condition ties back to both of these goals.
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
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Provide Frame of Reference
 Use of “percentage” or “percentage of total” or
“percentage of eligible” provides usable data.
 Avoid “number of” measures.
 Example –
 510
roads are in excellent condition.
 Not
clear how many roads are being measured.
 Extremely
poor performance if this is New York City.
 Extremely
good performance in a more rural area with
520 total roads.
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
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Comparable with Previous Year and/or Agency
 Comparing data period by period or year by year
shows trends.
 Comparing data to another agency or state highlights
relative performance.
 Example –

90% of roads in good/excellent condition in current year.

If this figure was 95% in the previous year, this number
should be a cause for concern.

If, however, the next best state uses the same measure and
has a number like 80%, clearly our agency is excelling.
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
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Using the Measure
 A well constructed and defined measure is extremely valuable
 Analysis of results can:

Identify areas for improvement within the agency.

Reveal the agency’s strongest performers.

Determine positive and negative trends from period to period.
 Making results publicly available:

Increases accountability within the agency.

Improves public confidence in the government.

Gives the public a better general understanding of the uses of their
tax dollars.
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
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Performance Measures Success
 Leadership is a primary determinant
 Managers use output measures
 Data Calls are prevalent
 Data driven reviews
 So much more than “just compliance”.
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
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Building Consensus
 Formulate implementation goals to advance the performance
agenda
 Build a performance community
 Develop a performance management framework
 Implement repeatable processes
 Develop IT systems and tools
 Collaborate with stakeholders
 Showcase performance information
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
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Questions?
Questions?
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
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Contact Information
Terry Carnahan
Managing Director
KPMG LLP
Cell: 703-220-7181
Office: 703-286-8560
[email protected]
© 2012 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Printed in the U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative.
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