The Governmental Accounting Standards Board (GASB) was organized in 1984 by the Financial Accounting Foundation (FAF) to establish standards of financial accounting and reporting for state and local governmental entities. Its standards guide the preparation of external financial reports of those entities. The Foundation is responsible for selecting the members of the GASB and its Advisory Council, funding their activities and exercising general oversight-with the exception of the GASB’s resolution of technical issues.

The GASB’s function is important because external financial reporting can demonstrate financial accountability to the public and is the basis for investment, credit and many legislative and regulatory decisions.

The Mission of the Governmental Accounting Standards Board

The mission of the Governmental Accounting Standards Board is to establish and improve standards of state and local governmental accounting and financial reporting that will:

• Result in useful information for users of financial reports and
• Guide and educate the public, including issuers, auditors, and users of those financial reports.

State of Arizona

The primary focus of the performance measurement movement in the State of Arizona is on “what matters.”  The direction has been primarily from within the executive branch with departments developing performance measures and the Governor focusing on key “themes” of government.  Legislative use of performance measures is just beginning and expected to expand during the 2000-2001 budget cycle.

There are a number of citizen groups that are active in the state.  Although there are no clear indication that these citizen groups helped choose the performance measures that are used, their interest in the government and its programs certainly helped identify areas of concern to the agencies. 

                Although legislation was passed in 1993 and subsequent years, the first test of performance measures comes in the 1999-2001 biennium budget cycle.  Agencies have been using performance measures for many years, many before the 1993 required use.  Because of the length of time, approximately seven years from formally requiring the use of performance measures and the use of performance measures in the budget cycle, agencies, in general, realize the management purposes for using performance measures.  Many agencies are using performance measures to improve “what matters.”   

City of Austin, Texas

        The government of the City of Austin is in the midst of implementing a system of performance management designed to build on prior performance measurement, performance auditing, and program budgeting experiences, and strengthen performance management by making it more results oriented and systemic.  The systemic nature of this citywide performance management initiative starts with departmental business plans in which departments define their programs, desired results, and related program goals and performance indicators.  All employees’ individual performance evaluations are also intended to be linked to relevant department and program goals and performance indicators, to align goals and performance throughout the organization, down to the point of service delivery to the public.  The program performance indicators are also included in department budgets, creating the policy and resource link to the business plans.  Performance reporting and performance auditing are also an important part of the system, creating the accountability link and a feedback link for performance improvement.  

State of Texas

                The State of Texas is an excellent example of a state government that has effectively institutionalized the use of performance measures.  Performance measures have been used for more than twenty years, and the most notable improvements have been the legislative requirements for including performance measures in the printed budget beginning in 1991 and the actual use of performance measures in the budget allocation process. This most recent initiative has survived changes in the executive administration and appears to be thoroughly institutionalized in the state government.

                It is evident that the state of Texas is serious about performance measurement. It has invested in this effort through refocusing energies and reorganizing around performance measures.  There have been no new funds appropriated for this effort, with the price being shouldered by each agency and department.  While it appears that this effort will continue to evolve, there are important linkages expected between performance and appropriations, which are expected to materialize in the next biennium.  

State of Oregon

        This case study is of the State of Oregon, which is best known in the field of performance measurement for its Oregon Benchmarks, a comprehensive set of indicators of various societal attributes identified as being important to the well-being of citizens and businesses in the State of Oregon. The site visit and interviews for this case study were done jointly with researchers from the Urban Institute’s project on state efforts to encourage use of performance measurement. However, these benchmarks grew out of a statewide planning initiative of the 1980s called Oregon Shines. Because of the broad nature of these benchmarks and because they were developed without concern for the programs and responsibilities of the state government, a lengthy process has followed in developing methods to use Oregon Benchmarks within the state government to provide strategic direction for its programs and to monitor progress in achieving desired results. Oregon provides an excellent example of the difficulty of trying to link government services to broader, society-wide issues and concerns.            

City of Portland, Oregon

The City of Portland, Oregon, has several systems that incorporate use of performance measures for decision making, strategic planning and performance improvement, and accountability and communication.  These systems include the Portland-Multnomah Benchmarks and Oregon Benchmarks; strategic planning; the annual budget; departmental use of performance measures; performance audits by the City Auditor; and the City’s Service Efforts and Accomplishments (SEA) Report, which incorporates an annual citizen survey as well as performance reports on major city programs.  The SEA Report began in 1988, when the Audit Services Division was authorized to pursue experimentation with Service Efforts and Accomplishments reporting (Tracy and Jean, 1993).  In 1991, the Portland Auditor’s office concluded a feasibility study on SEA reporting (Office of the City Auditor, April 1991), and the SEA Report has been annually produced since that time.   Those interviewed for the case study report that despite the number of measurement activities, the measurement systems and processes are not necessarily related.  The City is arguably best known for the SEA Report, since Portland has been producing the SEA Report for a longer period of time than any other jurisdiction, and for the Portland-Multnomah Benchmarks, which have received extensive national coverage.  It is on the basis of the SEA Report and the Benchmarks that Portland stakes its reputation as a hotbed for accountability related activities.

Multnomah County, Oregon

The modern era of performance measurement in Multnomah County can be traced back to 1975, when the program structure was introduced.  A Catalog of Multnomah County Programs, 1975-1976 presented a description of the County’s program structure, and demonstrated the use of productivity indicators to measure program accomplishments and units of service for measuring outputs.  Establishing program and activity structures and developing missions, goals, and objectives are generally considered to be prerequisites for developing a managing for results orientation.  Over the past seven years, Multnomah County has incorporated performance measurement into strategic and decision processes to focus on, and highlight achievement of, outcomes and results.  Beginning in 1993-1994, departments identified Key Results of programs.  These are reported in the annual operating budget, as a result of County Board Resolution  93-2758, which provided guidance on the development of a program performance based budget for Multnomah County.  The Resolution mandated a budget format, budget cost centers, and a request that the Board Chair provide a comprehensive set of program descriptions and performance measures for use in the 1994-1995 budget (Board of County Commissioners, August 1993).  The Oregon Benchmarks provide a statewide focus on community outcomes; the Portland-Multnomah Benchmarks provide a regional focus on outcomes.  According to the County’s web page, citizen involvement in developing County benchmarks and selecting urgent benchmarks was coordinated by a Citizen Involvement Committee, which directly targeted more than 6,000 people who identified themselves as being interested in Multnomah County government.  Efforts involved briefings to citizen advisory groups, community meetings, newsletter articles and a cable television show.  Citizens also completed at-home ballots to vote on urgent benchmarks.  

City of Tucson, Arizona

Throughout the 1990s, the City of Tucson, Arizona, refined a culture to encourage use of performance measures.  In the early to mid-1990s, the City Manager emphasized use of output and workload measures for resource allocation and encouraged development and reporting of an extensive number of performance measures for the budget process.  A new City Manager appointed in 1996 wanted to simplify collection and reporting of measures, preferring development of department and division missions with collection and reporting of a smaller number of output and outcome measures.  A Budget Format Committee made up of department directors became the driving force for reform of the performance measurement process.  A desire by the Mayor and City Council to involve the community in setting goals for the City led to establishment of Livable Tucson, an initiative that involved over 1,000 citizens in identifying 17 community goals, with 69 key outcomes to determine if goals were being achieved.  These activities, combined with participation in the ICMA Comparative Performance Measurement Project, set the context for an evolving performance measurement system in Tucson. 

Winston-Salem, North Carolina

                Winston-Salem, North Carolina has been using performance measures for almost twenty-five years.  Efficiency, effectiveness, and workload measures were formerly collected and reported at least semi-annually as a component of the budget process.  In 1994, the City Budget Director proposed that local governments in North Carolina begin a comparative performance measurement project.  Phase I of this project was successfully completed in 1997.  In 1998, the seven larger cities participating in the comparative benchmarking project voted to extend the project for five years, and in 1999 fire services was added to seven other service areas being compared.  In 1998, a failed bond referendum led the City to establish a Citizen Efficiency Review Committee (CERC) to examine the efficiency and effectiveness of all City services.  Concurrently, under the leadership of the Office of Organizational Effectiveness, the City began developing annual performance reports and business plans, which incorporated many of the efficiency, effectiveness, and workload measures that the City had previously been tracking in the budget process.  The CERC developed over 300 recommendations in its final report, which was presented to the Board of Aldermen in November 1999.  Many of the recommendations, a majority of which have been adopted or are in process, will incorporate, expand, or support the use of performance measurement in the future in Winston-Salem.

Other Relevant GASB Links: