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HFRP > Evaluation > The Evaluation Exchange > Issue Archive > Results-Based Accountability #2 > Iowa's Budgeting for Results

Volume ll, Number 3, 1996

Issue Topic: Results-Based Accountability

Theory & Practice

Iowa's Budgeting for Results

Harvard Family Research Project reveals how Iowa is implementing Budgeting for Results in executive branch agencies and programs to answer citizens' demands for greater accountability in government.

Budgeting systems are arguably the most important decision processes in government; and government budgeting systems have grown up to reflect many of the same problems found in the family and children's service system itself: fragmentation, shortsightedness and a preoccupation with process rather than results.
—Mark Friedman (1995)

Results-based decision making requires employing an investment approach to make good, 20-year budget decisions rather than decisions that get us through one year at a time.
—Mark Friedman (1996)

In order to answer citizens' demands for greater accountability in government, Iowa is implementing Budgeting for Results in executive branch agencies and programs by FY2000. Budgeting for Results involves resource allocation, performance measurement, and policy making and integrating these three complex functions. Iowa began this initiative in 1993 when the bipartisan Council on Human Investment (CHI) was created. CHI's mission is to develop and implement a system of performance management for the state. Its budgeting model sets the stage to evaluate the impact of various service delivery strategies on Iowans.

Budgeting for Results differs from the current incremental line item approach to state budgeting in three principal ways:

1. The focus is on results.

    

2. A clearer understanding will result between executive and legislative branches on what is done, why it is done, and how the results will be measured.

    

3. Executive branch agencies take on greater accountability for results while the legislature may provide greater flexibility for management and implementation of policy and service delivery.

Further Reading   Friedman, M. (1996). Moving toward results: An emerging approach to community accountability for child and family well-being. Georgia Academy Journal, 3(3), 2–5. Friedman, M. (1995). From outcomes to budgets: An approach to outcome-based budgeting for family and children's services. Manuscript in preparation, Center for the Study of Social Policy, Washington, DC. The Council on Human Investment. (1995). Budgeting for results: Introduction. Des Moines, IA: Iowa Department of Management. The Council on Human Investment. (1995). Budgeting for results: Technical and training manual. Des Moines: Iowa Deptartment of Management.

The framework developed to achieve the Iowa mission focuses on developing and establishing several difference elements: benchmarks, results-oriented Program Performance Measures, an investment budget model, a methodology to determine the return on the investment, Budgeting for Results that ties allocation of resources to the desired results, and Benchmarking Communities.

The first goal or responsibility set forth by the CHI is to “develop a long-term investment strategy that includes broad measurable policy goals with input from a cross-section of the population.” Specifically, this strategy is aimed at developing benchmarks.

As a central part of the benchmarking process, public input was sought to help identify the priorities for the state. A statewide public opinion poll of Iowa residents was conducted in the fall of 1994 in order to assess their priorities in three areas: Economic Development, Workforce Development and Strategies for Strong Families. These three priority areas were chosen because a great degree of collaboration had been experienced among the affected agencies. Benchmarks have recently been established in the priority areas of Strong Communities and Healthy Iowans.

Benchmarks will be used in several ways:

• Performance Measures: Benchmarks and policy goals become the basis for establishing results-oriented performance measures for individual programs.

   

• Return on Investment: In order to tell taxpayers what they are getting for their tax dollar, it is important to develop the ability to calculate a Return on Investment (ROI) for publicly funded programs. A model is being developed for implementation with select programs.

   

• Investment Budgeting: An investment budget is based on establishing measurable results expected from the services provided, determining the net present value of those results, creating a competitive marketplace for the delivery of services, assessing the return on investment for the different strategies used to achieve the results, and comparing the return on investment produced by the alternative strategies.

   

• Budgeting for Results: Benchmarks and results-oriented performance measures provide the foundation for tying budget decisions to priorities established by Iowans.

   

• Policy Making: Benchmarks are developed through statistically valid public opinion surveys. They are powerful messages from the citizens of Iowa to state policymakers on issues which affect the lives of all citizens.

   

• Benchmarking Communities: Communities will be invited to participate in the work of the Council. One or more Benchmarks established by the Council will be adopted by communities who wish to become a Benchmarking community. These communities will have the opportunity to develop Benchmarks specific to their community.

In making the transformation to Budgeting for Results, the key will be to directly link results to total dollars used to create those results and tie each service delivery strategy to statewide Benchmarks. Once each of those links is established and operational, they can use continuous quality improvement (CQI) to maximize the effectiveness of the core processes used to produce results.

The Iowan model was the result of a collaborative effort of fiscal and policy staff from twelve executive branch departments, with input from the Legislative Fiscal Bureau. An evaluation and learning process will be used to learn as much as possible about the strengths and weaknesses of the model. The model will be amended to reflect that learning. While a few states are implementing portions of performance management strategy, Iowa is the only state to take a comprehensive approach.