PRINTER'S NO. 531
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
451
Session of
2015
INTRODUCED BY SAYLOR, CUTLER, TALLMAN, BARRAR, BENNINGHOFF,
BLOOM, BOBACK, DIAMOND, DUNBAR, EMRICK, EVERETT, FEE, GABLER,
GILLEN, GINGRICH, GREINER, GRELL, HAHN, A. HARRIS,
HICKERNELL, JAMES, KAUFFMAN, KNOWLES, KRIEGER, MACKENZIE,
McGINNIS, MENTZER, METCALFE, PICKETT, SACCONE, SIMMONS,
TOEPEL, WATSON AND ZIMMERMAN, FEBRUARY 17, 2015
REFERRED TO COMMITTEE ON STATE GOVERNMENT, FEBRUARY 17, 2015
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
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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 purpose of this act is 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 residents and
taxpayers 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
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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." A qualitative indicator of the results of
a program activity compared to its intended purpose and of the
public benefit derived from the program activity, often used as
a measure of effectiveness.
"Output measure." A quantitative indicator of goods or
services that an agency produces.
"Performance indicator." A particular value or
characteristic used to effectively measure program activity and
performance in a qualitative or quantitative manner. 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
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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, 2015, 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
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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 do the following:
(1) 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.
(2) Include a projection of the information enumerated
in subsection (a)(1), (2), (3), (4) and (5) for the tenth
year following the fiscal year in which it is submitted and
for the 20th year in which it is submitted.
(c) Consistency.--The performance budget required under
section 5 shall be consistent with the agency's strategic plan.
A performance budget 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
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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) Submittal.--In compliance with section 11 and beginning
with submissions in calendar year 2017 for fiscal year 2017-
2018, in addition to the budget implementation procedures
provided for in Article VI of the Administrative Code of 1929,
the secretary shall submit to the General Assembly and the
Independent Fiscal Office agency performance budgets as required
under this section. The submission of agency performance budgets
shall occur not later than January 1 of the calendar year in
which the fiscal year begins. 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.
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(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 the 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 the agency necessary to achieve the planned
level of program output, which shall be not greater than the
funding level for the program activity for the immediately
preceding fiscal year, adjusted by one of the following
factors, whichever is less:
(i) The change in the Consumer Price Index for All
Urban Consumers from the immediately preceding fiscal
year, if expressed as a positive number.
(ii) The rate of population growth in this
Commonwealth from the immediately preceding fiscal year,
if expressed as a positive number.
(8) Additional recommendations regarding the funding,
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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. Annual performance reports.
(a) Submittal.--By January 1, 2019, and each January 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
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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 2019
shall include planned results for the current fiscal year, the
report submitted in calendar year 2020 shall include planned
results for the current and actual results for the preceding
fiscal year and the report submitted in calendar year 2021 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 budget 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
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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 7. Progress reports.
Not later than March 1 of any year in which an agency submits
a performance report under section 6, the agency shall submit a
progress report for the first six months of the current fiscal
year, which includes goals and measures established in the
agency performance budget for the fiscal year under section 5(c)
and program performance achieved toward performance measures
during the six-month period.
Section 8. 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 6(a) not
later than the respective deadlines established in sections
5(a) and 6(a).
(2) The Independent Fiscal Office shall utilize the
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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 March 15, 2019, and each March 15
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 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 performance measures and planned outputs expressed as
performance measures, which shall include a performance
indicator for each general goal, and both a performance
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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) The Independent Fiscal Office's recommendation
regarding the funding level for each program activity within
each agency necessary to achieve each performance target.
(8) Additional Independent Fiscal Office recommendations
regarding the funding, performance, feasibility and
sustainability of a program activity that is not meeting the
desired outputs or outcomes.
(9) If an agency did not meet one or more of the goals
of a program activity for the immediately preceding fiscal
year, one of the following:
(i) A recommended reduction in the funding for the
program activity calculated by applying a rate equal to
the percentage of goals of a program activity that were
missed in the immediately preceding fiscal year to the
funding level for the immediately preceding fiscal year
and subtracting the product from the funding level for
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the immediately preceding fiscal year.
(ii) A recommended alteration of the program to
address the deficiency.
(iii) A recommendation that the program be
terminated.
(c) Auditor General assistance.--The Independent Fiscal
Office or the General Assembly, by concurrent resolution, 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, 2019, and not later than
March 1, 2019, 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) Describe any difficulties encountered by the
agencies or the Independent Fiscal Office in preparing
performance budgets.
(2) Recommend whether any additional legislation
requiring performance budgets should be proposed and the
general provisions of any legislation.
(3) Set forth any recommended changes in the other
requirements of this act.
Section 9. 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
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performance report under section 6.
(b) Request.--The Auditor General shall comply with any
request from the Independent Fiscal Office or the General
Assembly under section 8(c).
(c) 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 10. 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 11. 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 12. 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 five agencies for fiscal year 2016-2017.
Section 13. Open records.
All records produced and maintained under this act shall be
subject to the act of February 14, 2008 (P.L.6, No.3), known as
the Right-to-Know Law.
Section 14. Annual budget to contain agency performance
budgets.
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Beginning with budget submission in calendar year 2017 for
fiscal year 2017-2018, the agency performance budgets prepared
under section 5 shall be incorporated into the annual budget
submitted by the Governor under section 613 of the
Administrative Code of 1929.
Section 15. Effective date.
This act shall take effect as follows:
(1) Sections 8(a)(2), (3) and (4)(ii) and (c) and 9
shall take effect January 1, 2018.
(2) The remainder of this act shall take effect
immediately.
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