THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY SAYLOR, GROVE, STEVENSON, DENLINGER, GINGRICH, GRELL, PICKETT, PYLE, REICHLEY, SONNEY, AUMENT, BLOOM, BOBACK, BOYD, CLYMER, D. COSTA, CUTLER, DUNBAR, EVANKOVICH, EVERETT, GABLER, GEIST, GIBBONS, GILLEN, GILLESPIE, GOODMAN, HARRIS, HESS, HICKERNELL, HUTCHINSON, KAUFFMAN, KNOWLES, KOTIK, METCALFE, MILLER, MILNE, MURT, OBERLANDER, RAPP, ROAE, SCHRODER, TALLMAN, J. TAYLOR, TOEPEL, VULAKOVICH, WATSON AND BROOKS, FEBRUARY 16, 2011

REFERRED TO COMMITTEE ON STATE GOVERNMENT, FEBRUARY 16, 2011  

AN ACT

Providing for accountability in Commonwealth agency program

performance.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Short title.

This act shall be known and may be cited as the Performance,

Accountability and Results Act.

Section 2.  Legislative intent and purpose.

(a)  Declaration.--The General Assembly finds and declares

that accountability in program performance is vital to effective

and efficient delivery of governmental services and to maintain

public confidence and trust in government. To maximize

accountability, a system of strategic planning, performance-

based budgeting and performance audits should be implemented to

measure the effectiveness and efficiency of governmental

services. It is of paramount public importance that this system

encourages full and candid participation throughout State

government. This system will generate information necessary for

the public to be informed fully and for the General Assembly to

make informed and meaningful decisions about the allocation of

resources in meeting vital needs.

(b)  Purpose.--The purposes of this act are to do all of the

following:

(1)  Begin to provide a new approach to the planning,

budgeting and accountability processes within State

government rather than an addition to existing procedures.

(2)  Improve the confidence of Pennsylvania citizens in

the capability of the government, by systematically holding

Commonwealth agencies accountable for achieving program

results.

(3)  Improve Commonwealth program effectiveness and

public accountability by promoting a new focus on results,

service quality and customer satisfaction.

(4)  Help agency managers improve service delivery, by

requiring that they plan for meeting program objectives and

by providing them with information about program results and

service quality.

(5)  Improve legislative decision making by providing

more objective information on achieving statutory objectives,

and on the relative effectiveness and efficiency of

Commonwealth programs and spending.

(6)  Improve internal management of the Commonwealth

government.

Section 3.  Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Administrative Code of 1929."  The act of April 9, 1929

(P.L.177, No.175), known as The Administrative Code of 1929.

"Agency."  A Commonwealth agency.

"Commonwealth agency."  A department of the executive branch.

"Goal."  A statement of result that is intended to be

achieved and which may be defined as either:

(1)  A general goal, which is a general statement of

result that does not include a measurable target level of

performance or other objective indicator of success.

(2)  A performance measure, which is a specific statement

of result that includes a measurable target level of

performance or other objective indicator of success.

"Independent Fiscal Office."  The office established and

provided for in 71 Pa.C.S. Ch. 41 (relating to Independent

Fiscal Office).

"Outcome measure."  An assessment of the results of a program

activity compared to its intended purpose, often used as a

measure of effectiveness.

"Output measure."  The tabulation, calculation or recording

of activity or effort which can be expressed in a quantitative

or qualitative manner, often used as a measure of the direct

result of activity.

"Performance indicator."  A particular value or

characteristic used to quantitatively and effectively measure

program activity and performance. A performance indicator shall

be structured as an outcome measure or output measure.

"Program activity."  A specific activity or project as listed

in the annual budget of the Commonwealth.

"Program evaluation."  An assessment, through objective

measurement and systemic analysis, of the manner and extent to

which programs achieve intended goals.

"Secretary."  The Secretary of the Budget of the

Commonwealth.

"Performance target."  The measurable level of activity,

output or outcome. When a performance indicator showing what

will be measured is combined with a numerical target showing how

much will be achieved, a measurable goal has been defined.

"Strategic plan."  A plan developed under section 4.

Section 4.  Strategic planning.

(a)  Submittal.--In compliance with section 11 and not later

than September 30, 2012, the head of each agency shall submit to

the secretary and to the General Assembly a strategic plan for

program activities, delivering the services and achieving the

objectives required under the laws of this Commonwealth and any

Federal program in which the Commonwealth participates. The plan

shall include all of the following:

(1)  The statutory and constitutional objectives of the

agency.

(2)  A comprehensive mission statement covering the major

functions and operations of the agency.

(3)  General goals and performance measures, including

outcome-related goals and measures, for the major functions

and operations of the agency.

(4)  A hierarchy of outcome, output and program activity

goals and measures whereby the goals at the mid-level and

lower levels of the agency shall include the performance

indicators that define the outputs that support the agency

outcomes. This hierarchy shall clearly link each goal to the

next lower level goals in the hierarchy that support its

accomplishment.

(5)  Descriptions of the strategies for how the goals are

to be achieved, including all of the following:

(i)  The operational processes, skills and

technology, and the human, capital, information and other

resources required to meet those goals.

(ii)  Any new initiative or program activity.

(iii)  Any new approaches or methods to operational

processes that will be adopted or revised.

(iv)  The means of avoiding unnecessary costs and

expenditures.

(v)  The means of addressing any change in objectives

or services since the previous strategic plan.

(6)  A description of any program evaluations used in

assessing the effectiveness of the programs in achieving

their goals, with a schedule for future program evaluations.

(b)  Coverage.--The strategic plan shall cover a period of

not less than four years forward from the fiscal year in which

it is submitted and shall be updated and revised at least every

three years. Each agency shall submit a strategic plan that has

been updated or revised to the Governor and the General

Assembly. The submission shall occur no later than the date by

which the Governor submits copies of original agency budget

requests, all subsequent revised agency budget requests and a

State budget, program and financial plan under section 613 of

the Administrative Code of 1929.

(c)  Consistency.--The performance-based budget required

under section 5 shall be consistent with the agency's strategic

plan. A performance plan may not be submitted for a fiscal year

not covered by a current strategic plan under this section.

(d)  Governmental functions.--The functions and activities of

this section shall be considered to be inherently governmental

functions. The drafting of strategic plans under this act shall

be performed only by Commonwealth employees, while assistance in

guiding the development of the plan may be provided by an

outside source.

Section 5.  Performance-based budgeting.

(a)  Submission.--In compliance with section 11 and beginning

with submissions in calendar year 2013 for fiscal year

2013-2014, in addition to the budget implementation procedures

provided for in Article VI the Administrative Code of 1929, the

secretary shall submit to the General Assembly and the

Legislative Budget and Finance Committee agency performance

budgets as required under this section. The submission of agency

performance budgets shall occur no later than the date by which

the Governor submits copies of original agency budget requests,

all subsequent revised agency budget requests and a State

budget, program and financial plan under section 613 of the

Administrative Code of 1929. Nothing in this section shall be

construed as limiting or reducing the budget implementation

procedures set forth under Article VI of the Administrative Code

of 1929.

(b)  Agency performance budgets.--In carrying out the

provisions of this section, the secretary shall require each

agency to prepare an agency performance budget covering each

program activity set forth in the budget of the agency.

(c)  Structure and contents.--Each agency performance budget

required to be submitted under this section shall include all of

the following:

(1)  A hierarchy of outcome, output and activity goals

and measures whereby the goals at the mid-level and lower

levels of the agency define the activities and their outputs

that support the intended agency outcomes. The hierarchy

shall clearly link each goal to the next lower level goals in

the hierarchy that support its accomplishment.

(2)  Planned outcomes expressed as either general goals

or outcome measures and planned outputs expressed as output

measures, which shall include a performance indicator for

each general goal and both a performance indicator and a

performance target for each outcome or output measure.

(3)  The measures of activity, level of effort, output

and outcome generated or supported by each program activity.

(4)  A per-unit form of each activity, level of effort

and the resulting output for each program activity.

(5)  The cost of achieving the level of effort quantity

target for each program activity which is sufficient to

support the planned levels of output and outcome.

(6)  The actual outputs and outcomes achieved for each

program activity in each agency and their actual costs,

showing past performance for the most recent year for which

results are available and planned performance for each

subsequent year.

(7)  A recommended funding level for each program

activity within each agency necessary to achieve the planned

level of program output.

(8)  Additional recommendations regarding the funding,

the performance, the feasibility and the sustainability of a

program activity that is not meeting the desired outputs or

outcomes.

(9)  Summary descriptions of the strategies for how the

goals and output and outcome measures are to be achieved,

including all of the following:

(i)  The major operational processes to be used, the

key skills and technology to be deployed and the human,

capital, information and other resources that will be

required to meet those goals.

(ii)  Any new initiatives that will be undertaken or

activities that will be engaged in.

(iii)  Any new approaches or methods that will be

adopted or revised.

(10)  A description of the means to be used to verify and

validate the reported results for each measured value.

(d)  Governmental functions.--The functions and activities of

this section shall be considered to be inherently governmental

functions. The drafting of performance budgets under this

section shall be performed only by Commonwealth employees, while

assistance in guiding the development of the performance budget

may be provided by an outside source with expertise in

performance-based budgeting.

Section 6.  Independent Fiscal Office.

(a)  Commonwealth performance budget.--

(1)  The Independent Fiscal Office shall receive agency

performance budgets and performance reports submitted from

the head of each agency under sections 5(a) and 7(a).

(2)  The Independent Fiscal Office shall utilize the

agency performance budgets and reports and the information

contained therein, in addition to State appropriation

information, to craft a Commonwealth performance budget that

includes each agency required to submit agency performance

budgets under section 5(a).

(3)  The Commonwealth performance budget required under

this subsection shall be submitted to the Governor and to the

General Assembly by June 1, 2014, and each June 1 thereafter.

(4)  To aid in its preparation of a performance budget,

the Independent Fiscal Office shall:

(i)  Establish a performance-based budget division

staffed with persons knowledgeable and proficient in

performance-based budgeting, budget analysis and budget

preparation.

(ii)  Gather testimony and other data from officers

and employees of each agency as deemed necessary to carry

out the provisions of this act.

(b)  Performance-based budgeting.--The Commonwealth

performance budget shall include all of the following:

(1)  A hierarchy of outcome, output and program activity

goals and measures whereby the goals at the mid-level and

lower levels of each agency defines the activities and their

outputs that support the intended agency outcomes. The

hierarchy shall clearly link each goal to the next lower

level goals in the hierarchy that support its accomplishment.

(2)  Planned outcomes expressed as either general goals

or performance measures and planned outputs expressed as

performance measures, which shall include a performance

indicator for each general goal, and both a performance

indicator and a performance target for each performance

measure.

(3)  The measures of activity, level of effort, output

and outcome generated or supported by each program activity.

(4)  A per-unit form of each activity, level of effort

and the resulting output for each program activity.

(5)  The cost of achieving the level of effort quantity

target for each program activity which is sufficient to

support the planned levels of output and outcome.

(6)  The actual outputs and outcomes achieved for each

program activity in each agency and their actual costs,

showing past performance for the most recent year for which

results are available and planned performance for each

subsequent year.

(7)  An independent recommended funding level for each

program activity within each agency necessary to achieve each

performance target.

(8)  Additional independent recommendations regarding the

funding, performance, feasibility and sustainability of a

program activity that is not meeting the desired outputs or

outcomes.

(c)  Auditor General assistance.--The Independent Fiscal

Office may request the Auditor General to conduct a performance

audit of any agency program or agency performance report. The

Independent Fiscal Office shall notify the Governor and the

General Assembly within five days of the request.

(d)  Report.--Not before January 1, 2015, and not later than

March 1, 2015, the Independent Fiscal Office shall transmit a

report to the Governor and to the General Assembly on the status

of the implementation of this act. The report shall do all of

the following:

(1)  Assess the feasibility and advisability of including

agency and Commonwealth performance budgets as part of the

annual budget submitted under section 613 of the

Administrative Code of 1929.

(2)  Describe any difficulties encountered by the

agencies or the Independent Fiscal Office in preparing

performance budgets.

(3)  Recommend whether any additional legislation

requiring performance budgets should be proposed and the

general provisions of any legislation.

(4)  Set forth any recommended changes in the other

requirements of this act.

(e)  Specification.--After receipt of the report under

subsection (d), the General Assembly may specify that

performance budgets be submitted as part of the annual budget

submitted by the Governor under section 613 of the

Administrative Code of 1929.

Section 7.  Annual performance reports.

(a)  Submittal.--By March 1, 2015, and each March 1

thereafter, the head of each agency shall prepare and submit to

the Governor and the Independent Fiscal Office a report on

program performance for the previous fiscal year.

(b)  Goals and measures.--Each program performance report

shall set forth the goals and measures established in the agency

performance budget under section (5)(c), along with the actual

program performance achieved compared with the goals and

performance measures expressed in the plan for that fiscal year.

(c)  Contents.--The report submitted in calendar year 2015

shall include planned results for the current fiscal year, the

report submitted in calendar year 2016 shall include planned

results for the current and actual results for the preceding

fiscal year and the report submitted in calendar year 2017 and

all subsequent reports shall include actual results for the two

preceding fiscal years and planned results for the current

fiscal year.

(d)  Requirements.--Each report shall do all of the

following:

(1)  Review the success of achieving the performance

measures of the fiscal year.

(2)  Evaluate the performance plan for the current fiscal

year relative to the performance achieved toward the

performance measures in the fiscal year covered by the

report.

(3)  Explain and describe if a performance measure has

not been met. The explanation and description shall include

one of the following:

(i)  why the measure was not met;

(ii)  (A)  the plans and schedules for achieving the

established performance measure; or

(B)  if the performance measure is impractical or

infeasible, reasons why that is the case and what

action is recommended.

(4)  Include the summary findings of the program

evaluations completed during the fiscal year covered by the

report.

(e)  Financial statement.--An agency head may include all

program performance information required annually under this

section in an annual financial statement required under section

613 of the Administrative Code of 1929, if the statement is

submitted to the General Assembly no later than the date by

which the Governor submits copies of original agency budget

requests and all subsequent revised agency budget requests and a

State budget and program and financial plan under section 613 of

the Administrative Code of 1929 for the applicable fiscal year.

(f)  Governmental functions.--The functions and activities of

this section shall be considered to be inherently governmental

functions. The drafting of program performance reports under

this section shall be performed only by Commonwealth employees.

Section 8.  Auditor General.

(a)  Authority.--In addition to the powers and duties

prescribed to the Auditor General under Article IV of the act of

April 9, 1929 (P.L.343, No.176), known as The Fiscal Code, the

Auditor General is vested with the authority to conduct

performance audits of any agency required to submit a

performance report under section 7.

(b)  Request.--The Auditor General shall receive and consider

any request from the Independent Fiscal Office under section

6(c).

(c)  Performance audit.--If the Auditor General declines to

conduct a performance audit in response to a request made under

section 6(c), the Auditor General shall notify the Governor and

the General Assembly of the decision within 30 days of the

request.

(d)  Report.--The Auditor General shall report the results of

any performance audit to the Governor and the General Assembly

upon completion of the performance audit.

Section 9.  Legislative oversight and legislation.

Nothing in this act shall be construed as limiting the

ability of the General Assembly to establish, amend, suspend or

annul a goal or performance indicator. Any such action shall

have the effect of superseding the goal or performance indicator

in the plan submitted under section 5(b).

Section 10.  Training.

The Office of Administration shall, in consultation with the

secretary and the Auditor General, develop a strategic planning

and performance measurement training component for its

management training program and provide managers with an

orientation on the development and use of strategic planning and

program performance measurement.

Section 11.  Pilot projects.

There shall be a pilot project in strategic planning under

section 4, and performance-based budgeting under section 5,

conducted by at least two agencies for fiscal year 2011-2012 and

by at least three agencies for fiscal year 2012-2013.

Section 20.  Effective date.

This act shall take effect as follows:

(1)  Sections 6(a)(2), (3) and (4)(ii) and (c) and 8

shall take effect January 1, 2014.

(2)  The remainder of this act shall take effect

immediately.