Report Title:

Performance-Based Budgeting; Department of Education

 

Description:

Requires DOE to fully institute performance-based budgeting system beginning with 2007-2009 fiscal biennium. Exempts DOE from state six year plan required by HRS 37-69. Expands purpose of the legislative analyst to include evaluation of performance-based budgeting data submitted to the legislature. (SD1)

 

THE SENATE

S.B. NO.

567

TWENTY-FIRST LEGISLATURE, 2001

S.D. 1

STATE OF HAWAII

  

 

A BILL FOR AN ACT

 

relating to performance-based budgeting.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature understands the increasing frustration of the general public in determining how their tax dollars are spent on education, especially in the face of growing program costs, salary increases, and increased spending. The legislature also recognizes that it has an inherent duty to account for how and where the tax money of our residents is spent and the results of that spending.

Part II of Act 230, Session Laws of Hawaii 1998, established a committee to evaluate and make recommendations to ensure that state government was more efficient, accountable, and competitive by creating and piloting a performance-based budgeting system. The committee defined performance-based budgeting as a plan that connects appropriations to program performance, and that allows the legislature and the governor to know:

(1) What to expect for the appropriations allocated and spent;

(2) How proposed activities will make a difference in the community; and

(3) How departments or programs intend to measure their progress toward meeting their goals.

Following the committee's recommendations and continuing the legislature's commitment to educational reform, it is the desire of the legislature to:

(1) Move the department of education from the current budget system (PPBS) to an improved performance-based budgeting system;

(2) Measure outputs and outcomes; and

(3) Provide clear information about resource allocation choices.

SECTION 2. (a) The department of education shall fully institute a performance-based budgeting system beginning with the 2007-2009 fiscal biennium in accordance with the requirements in this section; provided that in order for the department of education to migrate to a performance-based budget, the department shall be exempt from relevant sections of part IV of chapter 37, Hawaii Revised Statutes.

(b) By June 30, 2003, the department shall:

(1) Review, clarify, and revise as necessary the mission and goals of the department and its programs;

(2) Shift organizational and program focus to the end results;

(3) Determine how progress can be measured;

(4) Communicate an action plan to all stakeholders;

(5) Collect and validate data for performance measures;

(6) Simplify and modernize its presentation of budget and program information; and

(7) Begin full cost allocation practices, starting with central services costs (e.g., risk management, worker’s compensation insurance, employee benefits).

(c) By June 30, 2004, the department shall:

(1) Institute accounting changes to allow for dis-aggregation of information to enable program managers to compile reports for management purposes as well as for financial purposes;

(2) Continue to improve on data collection and validation to capture information on outcomes;

(3) Provide training for analysis and evaluation of performance;

(4) Expand the effort toward full cost accounting by allocating overhead and central administrative costs down to a controllable level; and

(5) Use performance information for planning and management purposes.

(d) By June 30, 2006, the department of education shall:

(1) Institutionalize performance-based culture at all levels of the department; and

(2) Develop reporting formats that have the potential for being used consistently by all stakeholders.

(e) The department of education shall submit status reports to the legislature on the implementation of this Act not less than twenty day prior to the regular sessions of 2002, 2003, 2004, 2005, 2006, and 2007.

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $ , or so much thereof as may be necessary for fiscal year 2001-2002, and the sum of $ , or so much thereof as may be necessary for fiscal year 2002-2003, to enable the department of education to fully institute a performance-based budgeting system beginning with the 2007-2009 fiscal biennium.

SECTION 4. The sums appropriated shall be expended by the department of education for the purposes of this Act.

SECTION 5. Section 21F-7, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) The purpose of the office of the legislative analyst shall be:

(1) To provide the legislature with research and analysis of current and projected state revenues and expenditures;

(2) To provide the legislature with a report analyzing the governor's proposed levels of revenue and expenditures for biennial budgets submitted under chapter 37 as well as other supplemental budget submittals to the legislature by the governor;

(3) To provide an analysis of the impact of the governor's proposed revenue and expenditure plans for the next biennium;

(4) To conduct research on matters of economic and fiscal policy and to report to the legislature on the result of the research;

(5) To provide economic reports and studies on the state of the State's economy, including trends and forecasts for consideration by the legislature;

(6) To conduct budget and tax studies and provide general fiscal and budgetary information;

(7) To review and make recommendations on the operation of state programs in order to appraise the implementation of state laws regarding the expenditure of funds and to recommend means of improving their efficiency; [and]

(8) To recommend to the legislature changes in the mix of revenue sources for programs, in the percentage of state expenditures devoted to major programs, and in the role of the legislature in overseeing state government expenditures and revenue projections[.]; and

(9) To assist with the evaluation of performance-based budgeting data submitted to the legislature."

SECTION 6. Section 37-69, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) The governor shall prepare a state six-year program and financial plan encompassing all state programs[.], except for the department of education. Not fewer than thirty days before the legislature convenes in every odd-numbered year, the governor shall submit to the legislature and to each member thereof the six-year program and financial plan. The program and financial plan shall be annually and continually updated and maintained. The program and financial plan, in general, shall contain:

(1) The state program structure;

(2) Statements of statewide objectives and program objectives;

(3) Program plans that describe the programs recommended to implement the statewide and program objectives and the manner in which the recommended programs are proposed to be implemented over the next six fiscal years; and

(4) A financial plan that shows the fiscal implications of the recommended programs for the next six fiscal years."

SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 8. This Act shall take effect on July 1, 2001.