ELGL and CPBB are proud to present “I Want to be Your Analyst.” The series, consisting of a monthly column and webinar, is intended to provide case studies, introductions to unique analytic tools, and expertise into the hands of all local government leaders. As always you can join our webinar at: anymeeting.com/ELGLwebinar.
Register for Webinar: Program Costing with Shayne Kavanagh of GFOA
GFOA Article: The Challenges and Promise of Program Budgeting
It goes without saying that the vast majority of local government’s No. 1 priority is to establish a vibrant and productive community by establishing and delivering great results to its citizens. This outcome is typically met by efficient resource utilization and delivering high-quality services that exceed citizen expectations.
Sounds simple, right? But how exactly do you connect available resources, costs, and outcomes associated with specific services to communicating value (results) to citizens?
Does your local government specifically know, for example, the true cost of your curbside recycling program (including all fees, rates and charges)? With what data would you work with, if you were tasked with analyzing outsourcing (or in-sourcing) vehicle maintenance? What if your organization was approached with a proposal to consolidate inspections services with another jurisdiction – what program data would you have on hand to evaluate and execute the right decision?
Assuming detailed program-by-program level cost data actually exists within your organization, where would you find it? In the budget, on a separate spreadsheet in the Budget Director’s or Mayor’s office? And again assuming this data exists, what else could you do with it?
Could you make ready comparisons to other public-sector, or private sector service providers (to evaluate the efficiency or the appropriate sourcing of your programs); could you bring departments into the process of understanding and communicating better what they do, and how much it costs, on a program level; could you see clearly how your workforce is associated with programs (do you have retirement eligible staff serving a particular program, and are you aware of how you’ll address succession planning?, for example); and will it allow you to transition your approach (or the department’s approach) from line-item budgeting to program budgeting?
Data-Focused Decisions
The truth is that very few governments are able to meet their No. 1 priority because they don’t have the hard data required to make smart and transparent decisions throughout their organization.
Nor do they have the internal structure, a fiscal command center, where the critical data flows together and provides a visual platform for intelligent, transparent, data-focused decisions to be made.
To make smart, proactive decisions, municipal leaders need a fiscal command center for data-creation, data analytics and data-driven decision making. This command center presents an intuitive user-interface to identify the programs and services your organization provides, and translates your line-item budget into a program budget. The development of a program inventory and program costs is the foundational data-set to bring clarity and understanding, data-focused decision-making, in a time when it’s never been so crucial. And it’s never before been so easy to do…
According to GFOA, “Program budgeting is an underlying assumption to many of GFOA’s budgeting best practices, and being able to connect costs and outcomes associated with specific services is critical to communicating value to citizens. However, very few governments actually do this fundamental piece well for a number of reasons, including poor definition of programs and technical challenges in accounting for programs.”
Program costing is not easy. As so many leaders know, engaging in the exercise itself is often the result of controversial questions around “sourcing”, assessing fees and charges as they measure against the “true cost of doing business”, privatization, running government “like a business”, public-private partnerships, efficiency analysis and financial transparency.
And yet, therein lay the most exciting realization. If you can measure Program Costs, you can answer these questions, and so many more.
The only way to get to the answer of questions like “can we do this program more efficiently,” or “are we the best source to provide this service,” or “are we recovering the costs for providing this service, both direct and indirect costs” requires a complete understanding of what the program is, and how much it costs.
The key is a user-friendly, web-based Program Inventory and Program Costing user-interface. It links directly with your line-item budget, translates your line-item budget into a program budget, flows through your payroll data, and generates easy to update Program Costs. Your worksheets are protected and stored on the cloud, providing web accessibility to your organization!
Program Inventory and Program Costing Tool
CPBB created an innovative new web tool because our partner organizations wanted an easy to use, web-based tool that would easily connect to your financial system and give you:
- a tool that allows you to evaluate the fees, rates and charges that you have on a program-by-program basis,
- a tool that allows you to make ready comparisons to other public-sector, or private sector service providers, to the extent that you want to evaluate the efficiency or the appropriate sourcing of your programs,
- a tool that brings departments into the process of understanding and communicating better what they do, and how much it costs, on a program level,
- a tool that can allow you to see clearly how your workforce is associated with programs (do you have retirement eligible staff serving a particular program, and are you aware of how you’ll address succession planning?, for example),
- and ultimately a tool that helps transition your approach (or the department’s approach) from line-item budgeting to program budgeting