Theme 1: Executive Branch Performance

The following goals were established to enhance performance across the Executive Branch through the optimization of ongoing operations and efficient delivery of enterprise services.

1A. Institutionalize Optimization

Details

Institutionalize the optimization process within State agencies by restructuring the Governor's Office of Planning and Budget to include a strong operations management function that facilitates operational oversight and continual improvement.

Target Outcomes

1. Enterprise culture of continuous improvement.

2. Budget aligned to Administration Agenda, Missions.

Status

Although the Optimization Commission determined that the State of Utah is an efficient and well-run organization, it recommended the implementation of additional processes for continuous improvement. The Commission also recommended a review of the structure of the Governor’s Office to improve span of control and operational oversight.

Consequently, Governor Herbert implemented structural changes in the Governor’s Office, further fostering a culture of continuous improvement in business processes and communications. In addition to Derek Miller, the Chief of Staff, Governor Herbert has named two Deputies to the Chief of Staff: Allyson Isom for communications and Michael Mower for operations. These changes have more firmly anchored the State to its commitment to continuously improve programs and enhance public relations and communications.

The State of Utah continues to utilize the Balanced Scorecard approach to enterprise measures and has launched an initiative to incorporate best practice methodologies into business process re-engineering efforts. 6 Pilot projects were chosen across the enterprise to launch this effort.

Target Completion Date

1B. Combat fraud, waste, and abuse through a statewide recovery audit initiative

Details

Outsource independent, contingency-based recovery audits to the private sector. The audits will verify payments, and find overpayments and double payments in Medicaid and other State programs.

Target Outcomes

The Department of Administrative Services plans to implement the following:

  • Purchasing: 100% of Vendors complying with contracts and ensuring that all customers are receiving the negotiated discounted prices
  • Achieve optimal state savings from employees using the appropriate cell phone plan
  • Construction: minimize duplicate and billing errors
  • Utilities: minimize duplicate and billing errors
  • Vehicles: right sizing fleet; use of most fuel efficient and economical vehicle for the job
  • Telematics: ensure proper usage of state vehicles
  • Post Audits: minimize errors and monitor proper compliance with accounting procedures
  • Internal Auditing: ensure compliance with statutory requirements and best practices
  • Risk audits: compliance with insurance industry best practices
  • Rule filing only by authorized personnel

The Department of Health plans to implement the following:

  • Increase recoveries through contracted reviews and collection services.
  • Correct or strengthen system and policy and procedural weaknesses identified by the contractor.

Status

Department of Administrative Services: Purchasing recently issued an RFP on behalf of the Western States Contracting Alliance (WSCA) for Contract Compliance and Cost Recovery Services. Responses to the RFP have been evaluated and WSCA Directors have approved the contract. Utah will begin signing contracts with the firms, on behalf of WSCA, as soon as contract Terms and Conditions are agreed upon.

Divisions within the department have also created ongoing processes to review items ranging from payables to fleet usage. With regards to payables, the Division of Finance conducts post audits, as required by the Budgetary Procedures Act, on payables and disbursements. The audits are conducted quarterly on random samples of payments. Additional testing of higher dollar and higher risk payments are also conducted. Payments are tested for, among other things, proper supporting documentation; proper authorization; and compliance with state policies and rules. Exceptions and audit results are reported to agencies.

Department of Health: The Recovery RFP was issued on August 2, 2010. After multiple addendums, the Recovery RFP was awarded on October 22, 2010. The Kick-Off Meeting with the successful contractor was held on January 4, 2011. All necessary data files were provided to the contractor on March 31, 2011. The first contractor recoveries began on July 1, 2011.

Final recommendations for correcting or strengthening system, policy, or procedural weaknesses will not be received from the contractor until the contract is completed, which will be sometime between January 1, 2012, and March 1, 2012. Following the receipt of that report, the Department of Health and the Office of Medicaid Inspector General can begin implementing the recommendations.

Target Completion Date

Department of Health: 2012.

Department of Administrative Services: The Department has completed the cell phone pilot project and made the contract available for agency use. The Department has also completed and set as ongoing processes: monthly auditing of bills, annual review of fleet usage, and performance and report of audit findings. For Purchasing, the Department plans to implement and automate auditing process in Fiscal Year 2011.

Outcomes

Several contract audits resulted in significant initial savings of over $200,000. Additionally, audit contract is being utilized by 41 cities; 6 counties; 18 school districts and institutions of higher learning resulting an additional $378,000 over a year period ending March 2011.

1C. Direct Cabinet members to implement enterprise efficiency recommendations

Details

Agency heads should be directed to:

  • Conduct an independent review of customer surveys;
  • Utilize benchmarks and balanced scorecards on a regular basis;
  • Accelerate implementation of technology; and,
  • Increase communication between departments.

Target Outcomes

1. Culture of continuous improvement to achieve optimal program outcomes.

2. Effectively utilize measures to achieve service levels intended by mission, legislation, and agenda.

3. Identify process automation opportunities that return value to stakeholders and reduce operational costs.

Status

Cabinet members have been working hard to implement a culture of continuous improvement to achieve optimal program outcomes, effectively utilizing measures to achieve the services levels intended by mission, legislation, and agenda and identifying process automation opportunities that return value to stakeholders and reduce operational costs.

The Governor’s Office of Planning and Budget (GOPB) has identified best practices and workforce services and will use its Lean Six Sigma capabilities in other state agencies.

Target Completion Date

Ongoing

Outcomes

Cabinet meetings include focus on efficiencies and Governor’s Agenda items of Education, Economic Development, Energy, and Efficiency.

1D. Refine the Balanced Scorecard Initiative

Details

Agencies should work with the Governor's Office of Planning and Budget to review how performance metrics relate to the outcome of the agency mission and establish refined metrics that point to outcomes, costs per unit and service levels.

Target Outcomes

Aligned budget to achieve outcomes in alignment with mission intent at service levels expected by stakeholders.

Status

To align the budget to achieve outcomes in alignment with mission intent at service levels expected by stakeholders, the Governor’s Office needs to select enhancements to the scorecards to increase the success rate of reviews and provide more timely feedback to agency heads, use new tools to increase internal accessibility, and work with state agencies to better define targets and outcomes. This item is currently in progress.

Target Completion Date

July 31, 2012

1E. Accelerate the Internet Service Fund implementation directed by HB 402, Department of Administrative Services Modifications

Details

H.B. 402, Department of Administrative Services Modifications, provides that the Department of Administrative Services may operate a division within the department, except for the Office of State Debt Collection, as an internal service fund agency. The Division of Purchasing and General Services will implement this bill by applying an administrative fee on cooperative contracts.

Presently, the Division of Purchasing and General Services currently administers approximately 650 cooperative contracts. Cities, counties, school districts, higher education, and local governments are the largest users of these contracts. For example, State agencies’ total use of these cooperative contracts is approximately 38 percent, compared to use by non-state governmental entities of approximately 62 percent. While all users of these contracts (including the State) receive the benefits of cooperative contracting, the Division of Purchasing and General Services is not reimbursed for expenses incurred in developing and administering these contracts widely used by non-state governmental entities.

To take advantage of current economic conditions, achieve additional savings, maximize efficiencies and optimize procurement best practices, the Division of Purchasing and General Services should accelerate the expected implementation process of eight to 10 years to three years.

Target Outcomes

Three divisions are actively moving toward an ISF model:

  • Purchasing: Right-size operations by imposing an administrative fee on all eligible contracts.
  • Division of Facilities Construction and Management: Continue expanding services to non–state-funded projects and capitalize on economies of scale.
  • Finance: Adopt transformative technologies and improve internal financial functions.

Status

Purchasing

  • To date, the Division of Purchasing and General Services has attached administrative fees to 300 cooperative contracts. The Division hopes to have this initiative completed by Fiscal Year 2014.

Finance

  • The Division of Finance has gone through the process of competitively bidding a contract with a qualified firm to provide state vendors with the ability to receive payments through a credit card account rather than a check or an electronic funds transfer. The state benefits from this arrangement by receiving a rebate from the firm that clears the payment through the credit card process. Bid proposals are currently being evaluated, and the Division of Finance anticipates that the contract will be awarded in the latter part of July 2011.

Division of Facility and Construction Management

  • The Division of Facility and Construction Management will be applying a project management fee to non-state funded projects. DFCM received authorization to accrue dedicated credits for project management fees on non–state-funded projects during the 2011 legislative session. This initiative was implemented on July 1, 2011.

Archives

  • The State Archives is currently imposing a micrographic services fee as government entities request records microfilming. The division is also studying the feasibility of imposing a Records Management Services fee.

Target Completion Date

1. Purchasing—Fiscal Year 2014.

2. Division of Facility and Construction Management—Ongoing.

3. Finance—Ongoing.

Outcomes

Administrative fees have been applied to 326 contracts to date as an on-going effort.

1F. Review purchasing functions

Details

"Conduct an in-depth review of purchasing functions to determine if changes are needed. Examine delegation of authority for purchasing in order to better understand the controls and create efficiencies in the operations.

Findings can be used to identify and understand efficiencies, determine whether changes should be made, and recognize the authority/controls of the Division of Purchasing and General Services."

Target Outcomes

Centralization of procurement personnel would:

  • Standardize procurement training
  • Facilitate the proper assignment of Purchasing Agents
  • Improve efficiencies with strategic sourcing, contract compliance, and shorter sourcing cycle times

Status

The Department of Administrative Services’ proposal for the consolidation of purchasing functions has been selected and funded as an Operational Excellence pilot. The Department of Administrative Services anticipates that the feasibility study will commence in the near future and will be completed by Fiscal Year 2013.

Target Completion Date

Fiscal Year 2013

1G. Reemphasize role of the Office of the Chief Information Officer

Details

The Department of Technology Services has been extremely effective and exceeded expectations in engaging state agencies in the consolidation of IT infrastructure and spending. Now that Phase I of the infrastructure consolidation is complete, there should be an increased focus on Phase II, which is currently in progress. This includes effective IT governance, coordination, collaboration, and prioritization of technology initiatives between State agencies and the Department of Technology Services.

The Commission believes H.B. 109 empowers the CIO to accomplish this, but a more formal endorsement is needed to accomplish this.

Target Outcomes

Involve the CIO Office in policy level discussions and enterprise optimization.

Focus on strategic business relationships with agencies.

Status

The CIO Office is working in conjunction with the Deputy Chief of Staff over Operations on optimization initiatives.

Agency IT Director Structure changes have been implemented to improve strategic relations with agencies.

Target Completion Date

Ongoing

1H. Improve coordination of financial services functions within agencies

Details

The Departments of Administrative Services, Agriculture, Community and Culture, Environmental Quality, Health, and Natural Resources have decentralized financial service functions.

Redundancies result from having separate finance personnel for each division within an agency. These redundancies could be eliminated by restructuring so the Financial Director of each agency oversees and coordinates the work of all finance personnel.

Target Outcomes

Department of Administrative Services

  • Improvement in internal financial functions and services as recommended by the Optimization Commission.
  • Proper alignment of employee duties and responsibilities with individuals’ skills and expertise. Distribute excess employee expertise and capacity to scarce resource needs.
  • Create a shared services transactional process center focused on employee production and performance
  • Standardize processes while maintaining specialization, coordinate policies and procedures, eliminate duplication of efforts, and look long-term for enterprise-wide technology solutions.
  • Develop organizational structure so that the Department of Administrative Services functions more as a single enterprise and improves its efficiency and effectiveness of operations.

Department of Community and Culture

  • Consolidate the Finance function and staff in the Department of Community and Culture.

Department of Health

  • The Department of Health believes that a better coordination of financial services within the Department will result in improved accuracy and efficiencies. The goal is to reduce duplication of efforts and streamline processes. We anticipate personnel savings (already taken in the Fiscal Year 2012 budget) as well as an increase in time resources for those staff with financial responsibilities.
  • Another important goal of this effort is to improve satisfaction levels of stakeholders or those relying on these financial processes to complete their program responsibilities.

Department of Agriculture and Food

  • The Department of Agriculture and Food is already organized with only one finance director for the agency. The finance director coordinates all budget and accounting activities with each of the division directors.

Department of Natural Resources

  • The Department of Natural Resources is in the process of reviewing existing finance operations and will determine any potential adjustments to improve operations.

Department of Environmental Quality

  • The Department of Environmental Quality will perform a Lean Six Sigma evaluation process to determine how financial service functions could be best performed and organized.

Status

Department of Administrative Services

The Department of Administrative Services Consolidated Budget and Accounting Office was officially created on May 16, 2011. It will report to the department CFO. Organizational structure has been created, and final staffing decisions are being made.

Department of Environmental Quality

Department of Environmental Quality. The Project Team held the “data gathering” meeting on July 14. Instruction on the process was given and assignments were made to gather information on financial processes in the Department of Environmental Quality. This information will be used to help in the meetings scheduled in September.

Department of Community and Culture

Department of Community and Culture. The Department of Community and Culture completed a new finance structure design in July 2010. The Department also eliminated one full-time position in March 2011. The finance employees were centralized under the CFO on July 1, 2011.

Department of Health

Purchasing processes were evaluated and process improvement recommendations were developed in December 2010. Implementation of these recommendations is in process and is targeted for completion by the end of September 2011.

An evaluation of the process improvements, the development of satisfaction surveys and updatedprocess flow timelines, and the identification of personnel efficiencies is targeted for completion by the end of November 2011.

In June 2011, financial service coordination patterns were updated. Biweekly meetings of all financial supervisors to consider processes, known issues, and potential improvements have been instituted.

All positions and salaries for financial positions have been reviewed to evaluate needs and potential efficiency gains. These reviews have been approved by the chief financial officer.

On July 13, 2011, the Department was notified that it was awarded seed money for an operational excellence project to further the coordination and process improvement for financial services. A consultant will be selected for this improvement project, and further development efforts will be subsequent to this initiative.

Target Completion Date

Various dates for different agencies.

1I. Consider moving the Department of Human Resources back into the Department of Administrative Services

Details

The Department of Human Resource Management became a separate department of State Government in 1988. A full review of whether the functions of the Department of Human Resource Management could be efficiently merged with the Department of Administrative Services to find administrative savings without losing service.

Target Outcomes

Further study is required, but there may be a potential for personnel savings through the elimination of duplicated positions and services.

Status

This review is part of the state agency realignment project. Further study is required, but there may be a potential for personnel savings through the elimination of duplicated positions and services.

Target Completion Date