FY2012 House 1 Budget Recommendation:
Issues in Brief
Deval L. Patrick, Governor
Timothy P. Murray, Lt. Governor
Massachusetts government can no longer function as it has in the past, new fiscal constraints caused by the global recession require greater efficiency and more effective management to ensure we stretch every taxpayer dollar as far as possible. We need more informed and evidence-based decision making; real time awareness, greater ability to monitor, manage, and fix problems; more meaningful public engagement; and increased clarity about performance tradeoffs and resource allocations. In addition, the public is demanding and the federal government is mandating more transparency and accountability. We also need to make sure that all of our Executive Branch agencies are strategically aligned in support of the Governor and Lieutenant Governor’s priorities for the next term. To this end, the Patrick-Murray Administration is proposing changes to the Executive Office for Administration and Finance (A&F) that will expand their authority and role in monitoring government performance, accountability and transparency. Specifically, the Patrick-Murray Administration proposes to establish a new Office of Commonwealth Performance, Accountability and Transparency (CPAT) within A&F (M.G.L. Chapter 7). The office will be charged with overseeing and implementing the following responsibilities.
Performance management is an ongoing, systematic approach to improving results through the use of evidence-based decision making and management, continuous organizational learning, and a focus on accountability for performance accomplished by:
When fully implemented, performance management will result in improved decision making, enhanced transparency and will facilitate thoughtful public engagement.
Building on lessons learned from previous efforts to implement performance management through the MassGOALS program, the new office will have the responsibility of expanding performance management strategies to all Commonwealth Secretariats and Agencies and to position Massachusetts as a national leader in results-driven performance management, government transparency, and performance-based program budgeting. The new office will work with state agencies, local governments and quasi-public agencies to advance performance management throughout the Commonwealth.
In this economic environment, the Patrick-Murray Administration realizes the importance of securing and properly utilizing all the federal dollars that the state is eligible to receive. The CPAT will help meet this goal by eliminating inefficiencies and duplication of effort among state agencies in the management and coordination of federal grants. Currently, each sate agency applies for and administers federal grants without the benefit of any statewide coordination. In any given fiscal year the state spends over $2 billion in federal grants. Furthermore, the state receives billions in additional federal revenues to support the state budget, mainly through services offered by the MassHealth program. In order to better identify, track, monitor and spend federal funding, the office will work collaboratively with other Executive Branch agencies to ensure proper use of and compliance with federal funding. This will be accomplished in two ways:
Federal Executive Order 12372 “Intergovernmental Review of Federal Programs” encourages states to utilize a single point of contact for federal funding oversight. The increased flow of funds from the federal government to the state government since the passage of the American Recovery and Reinvestment Act (ARRA) in February 2009 underscores the importance of such oversight. In addition, the creation of this unit will be an important element in ensuring that federal assistance is properly managed after the phase- out of the Massachusetts Recovery and Reinvestment Office, which was created specifically to manage federal ARRA funds. The state needs to ensure that proper mechanisms are in place to maximize federal resources, increase coordination among agencies, and provide enhanced transparency for federal grant spending
Building on the lessons learned and the work done by the Executive Office for Administration and Finance and the Recovery & Reinvestment Office (MA RRO), the new office will have the responsibility for overseeing the Commonwealth’s compliance with the Federal Financial Accountability and Transparency Act (FFATA) that went into effect this past October. The intent is to empower every American with the ability to hold the government accountable for spending decisions by giving them access to information about the use of federal funds. The FFATA legislation requires information on all federal awards be made available to the public via a single, searchable website. Starting on October 1, 2010 all new Federal grants awarded to any state agencies are subject to certain reporting requirements issued by OMB under FFATA. The information will then be made available to the public on a Federal website at www.usaspending.gov.
The Patrick-Murray Administration has set a goal to be a national leader in results-driven performance management and government transparency. To help further this effort, legislation was passed giving responsibility for developing and maintaining a transparency website to A&F. The legislation establishes transparency requirements for the state. On January 1st, the Commonwealth launched “Massachusetts Transparency”, the first phase of the new transparency website. Despite our progress in launching the new site, much work lies ahead. Over the next year, the Patrick-Murray Administration will work collaboratively with Treasurer Grossman and his team to fulfill our collective goal to make more spending and revenue information available to the public and to bring the “open checkbook” concept to Massachusetts. For more information on what we have done to improve transparency, review the “Budget Transparency” Issue Brief.
This past year, the Lieutenant Governor chaired a Fraud, Waste and Abuse taskforce. One of the many recommendations that have come out of that effort is to ensure the Commonwealth develops stronger connections between the various oversight agencies like the State Auditor, the Attorney General, and the Inspector General with the various program integrity units that exist in the Executive Branch. One of the responsibilities of this new office will be to help coordinate these various activities and do everything we can to enhance program integrity throughout the Commonwealth and ensure that taxpayer dollars are not being wasted and are being used for their intended purpose.
The purpose of the economic forecasting unit is to provide state government with accurate, unbiased, transparent, and widely understood caseload and revenue forecasts, to analyze key forecast drivers, and to identify the potential risks to forecasts. A primary benefit of establishing the unit is that it will allow state government to apply the resources necessary to perform complex forecasting analysis. The unit will be charged with assisting agencies in developing their forecasts and providing scenario and risk analysis that will better prepare agencies to respond and adapt to changes in the economy and in the demand for different programs and services. Finally, the unit will develop standard guidelines and methodologies for how agencies should approach spending and revenue forecasting and will require periodic reviews of agency revenue and spending forecasts.
Outside section 9 in the Governor’s House 1 recommendation for fiscal year 2012 provides for legislative changes to ensure that these proposals are implemented and sustained for the long-term. Additionally, House 1 makes investments of $650K in line item 1100-1201 for the purposes of implementing and maintaining the new CPAT office. Another $200K investment has been provided in line item 1100-1205 to fund enhanced oversight of the Commonwealth’s ability to forecast caseload driven programs and services. All together, these investments will ensure that the benefits that come with greater performance, accountability and transparency are realized.