PERFORMANCE PARTNERSHIPS
SUMMARY AND GUIDING PRINCIPLES

How Are The Different From Block Grants?

How Are They "Partnerships"?

PERFORMANCE PARTNERSHIPS
GUIDING PRINCIPLES

A great deal of the current grant system has broken down in a tangle of good intentions gone awry. There are too many funding categories, suffocating regulations and paperwork, misdirected emphasis on remediating rather than preventing problems, and no clear focus on measurable outcomes. The system stifles initiative and squanders resources without achieving sufficient results. Performance partnerships offer improvements to the current system.

What is a performance partnership?

Performance partnerships provide increased flexibility on how a program is run in exchange for increased accountability for results.

• Increased flexibility includes:
  
  • consolidated funding streams
  • elimination of micromanagement,
  • devolved decision-making (national goals and objectives, with much more flexibility for State and local partners to determine HOW these are achieved), and
  • reduced wasteful paperwork.
• Increased accountability for results means the partners will:
  • begin to treat outcomes and outputs as the basic measure of success (e.g., teenage pregnancy rate rather than number of visits to a clinic), and
  • create funding and other incentives to reward desirable results and performance towards results.

Performance partnerships work best:

• When the Federal Government intends to deliver services at State and local levels,
• Where there is shared agreement among Federal, State and local partners about national goals and objectives, and
• Where progress toward the goals and objectives can be measured.

Checklist of Guiding Principles for Designing a Performance Partnership

A number of key characteristics should be considered designing and implementing performance partnerships:

1. Program consolidations
2. Partnership
3. Increased Flexbility
4. Improved Accountability
5. Measuring Performance
6. Performance Incentives
7. Shift in the Locus of Decision-making
8. Administrative Simplification
9. Administrative Savings
10. Implementation
11. Entitlement Programs

(a)	In any policy arena in which there is a strong national interest and a history of Federal grants and other assistance to State and local governments, agencies should give strong consideration to developing one or more performance partnerships.
(b)	If a proposed performance partnership is not consistent with a particular principle, there should be a compelling argument about how the program is otherwise addressing local needs, stops micromanagement, and holds its partners accountable for results.

1. Program consolidations

• Proposals should structure current grant program authorizations to consolidate programs and/or funding streams and eliminate overlapping authorities:
  • Every effort should be made to merge funding streams which now force recipients to wastefully isolate administration and delivery of one program from another to avoid being penalized by auditors.

• Federal, State and local partners should jointly design the partnership and the strategies to implement it.
• Performance partnerships should accommodate different program strategies with different state and local partners.

• Performance partnerships should:
  • Promote multiple approaches to meeting national objectives,
  • Allow federally-funded activities to be fully integrated with State, local provider activities, and
  • Allow flexibility so that State and local institutional forces and incentives achieve the desired results.
• If State plans are necessary, multiple "State Plan" requirements should be replaced with one "community-based strategic plan. "Such a plan would outline basic strategies and tactics, and accommodate much more diversity from community-to-community and state-to-state than existing approaches.
• Partnerships should:
  • Minimize "required" service requirements, and
  • Provide multi-year funding.

• Federal agencies and State or local partners should develop, communicate, and monitor measurable program goals and report progress toward achieving them:
  • Think in terms of shared accountability.
• Performance partnerships should focus on outputs and outcomes (real results) rather than detailed assessment of the inputs and process used by States and localities:
  • An emphasis on results means, for example, concentrating on getting cleaner air (not the existence of State environmental regulations) or whether educational goals are being achieved (not the level of school expenditures).
• Notwithstanding increased flexibility, performance partnerships will maintain Constitutional and critical, national public policy requirements:
  • Non-discrimination requirements, for example, will apply.

• Performance partnerships should be structured, managed, and evaluated on the basis of results (i.e., progress in terms of agreed upon measures of performance).
• Performance measures will typically include a mix of outcome and output measures, including both measures of progress toward national goals and measures of important negative consequences that are likely to result from program activities.
• Partnerships should focus on outcomes (not process) as the principal criteria by which to measure success.
• Authorizing legislation should include a statement of:
  • "National goals and objectives" that the partnership seeks to help achieve.
    For example: "parental responsibility."
  • Types of "performance information that would indicate what types of information would indicate progress toward the national goals and objectives.
    For example: "paternities established"
  • The Federal Agency should be authorized to develop National goals and objectives where the authorizing legislation does not specify them.
    For example: "The Secretary shall, in conjunction with the states, local governments, providers and Consumers develop national goals and objectives."
• "Performance measures" and performance targets should not be incorporated in authorizing legislation.

  For example: "The Secretary shall, in conjunction with States, local governments, providers and consumers, develop and update measures for determining State or local performance in achieving progress toward the national goals and objectives.

  Accordingly, performance measures and targets should be:

  • Mutually developed by the partners, or
  • In the case of certain core indicators, developed by the Federal Government in consultation with grantees, and supplemented with indicators mutually agreed to by the grantees.
  • Refined over time in consultation with the grantees.
  Performance measures require specification of at least the following:

  (1) Type of performance information.
  (2) Data source (or sources).
  (3) Acceptable levels of precision and accuracy.
  (4) Domains of estimations (e.g., Sates, counties, etc.)
  (5) Frequency of data collection.
  (6) Time period covered.

  For example: for "paternities established"
  (1.1)	Percentage of new welfare cases for which paternities have been established, for each fiscal year cohort of new welfare recipients.
  (1.2)	Percentage of the total welfare caseload for which paternities have been established, as of the close of each fiscal year.
  (2)	Selected welfare system case records and information obtained through external quality control review.
  (3)	Total estimation error not to exceed 7% at the county level and/or 1% at the State level.
  (4)	The sample design must support precision and accuracy requirements for State (county) level estimates or for the population generally (e.g., the entire sample may be allocated per county, or even"n" cases per 1,000 per county).
  (5)	Annually.
  (6)	The last fiscal year.

  Performance agreements:

  • Federal agencies should develop individual performance agreements with each State/locality receiving funds.
    For example: "The Secretary shall, in conjunction with the States, local governments,providers and consumers, develop individual performance agreements which specify the program performance measures, performance targets, and the timeframes for achieving the performance targets.

  Assessing progess:

  • The authorizing legislation should include a requirement that the Federal agency work with the partners to develop a system for assessing the extent of progress toward national objectives.
    For example: "The Secretary shall, in conjunction with the States, local governments, providers and consumers, develop a system for assessing the extent of progress toward the national objectives."
  • At least annually, the partners should assess the level of performance achieved, the extent to which performance meets or exceeds agreed-on performance targets, and the extent to which performance has changed over time. These reports should acknowledge the influence of important external factors that may have affected the performance levels achieved.
  • From time to time, annual performance r eports should be supplemented by program evaluations that estimate the net program impacts caused by the program. These program evaluations would use research designs to estimate the difference that the program makes (i.e., the difference between (a) the actual performance levels achieved, and (b) the performance levels that would have been achieved in the absence of the program).

  Data collection:

  • The partners will have to identify or develop data systems to define and assess "results" and "improvement in results.
    For example: "The Secretary is authorized to withhold up to 5 percent of the amount appropriated the program to support the development and updating of data systems tied closely to the national goals; the development of performance agreements with States; and data quality assurance and data quality improvement; and research and development of performance measurement methodology."
  • Partners should consider whether and how to get data that is generalizable, and consistent among and within States overtime.

  Refining the measures over time:

  • It is expected that the performance measurement process and indicators will evolve over time, as Federal agencies and grantees develop greater experience with this approach.

• Agencies should consider whether funds should be allocated in part on performance (but other factors such as need may also be determinants, including population, poverty, disease incidence, morbidity, and morality, as appropriate).
• Partners should be recognized and rewarded for success -- both high performance and improved performance.
• Recipients should be rewarded for achieving ambitious, rather than readily-attainable, performance targets.
• Some portion of the funding should be based on actual performance:
  • Some portion of funding should be available to the Federal agency as an incentive States and localities that make improvement.
    For example: "The Secretary is authorized to reserve up to 10 percent of the funds to be used for performance incentive awards for recipients making process toward meeting national goals."
  • "Up to" is important, since it will first be necessary to get a sensible measurement system in place, before attempting to award performance incentives.
  • Rewards should not be directed toward only "exceptional" performance, but allow the Secretary to reward high or improved performance (i.e., "progress toward achieving national goals").
• High-performing States and localities should be rewarded with additional flexibility or reduced matching requirements.
• Similarly, disincentives should include reduced flexibility:
  • A requirement to shift funds into practices successfully used by high performing States and localities, or
  • Requirements for additional commitments of State or local resources, or
  • Reduction or termination of Federal funding.
• Partners should avoid punishing innovation and experimentation:
  • Keep in mind: no one is accountable for results now under the current system.
• Since there is shared accountability for results, Federal agencies should also respond to problems by providing technical assistance about promising practices:
  For example: "The Secretary shall provide technical assistance to the States to help them expand and improve ...."
• States and localities should be held harmless for cases where outcomes are not achieved despite the use of best practices (given the current state of knowledge).

• The partners should decide largely on the "What" and leave most of the "How" to States and localities.
• Performance partnerships should seek to empower communities to make their own decisions about how to address their needs, and to be held accountable for results.
• Front-line, local level providers should have greater flexibility and responsibility for service design, delivery, and results.
• Partnerships should permit customers and beneficiaries to shape programs to better match their individual needs -- by giving them voice, choice, and the means to integrate services from multiple providers.
• Recipient jurisdictions should have flexibility to set local benchmarks that are consistent with national program goals.

• Partners will seek to reduce barriers to success.
• Partnerships should resemble "performance contracts" (i.e., contract for measurable results) rather than traditional cost-reimbursement, "level-of-effort" grants.
• Performance partnerships should reduce Federal regulation of inputs, and avoid micro-management, and wasteful paperwork:
  • Rigid and costly program restrictions should be eliminated.
• Procedural, detailed application, financial management, auditing and expenditure reporting requirements should be eliminated or simplified to permit comprehensive service delivery:
  • The focus should be "Is the community achieving measurable results that indicate progress toward national goals?" -- rather than "Were the dollars spent on the identified problem?
• Federal agencies should, to the extent feasible, establish or negotiate performance targets, rather than specify the manner of compliance that States or localities must adopt.
• Reporting and monitoring should focus on performance (outcomes and outputs that indicated progress toward strategic goals) rather than inputs.
• Think in terms of reporting results to the public, rather than reports on process among levels of government.

• Administrative savings should be realized through consolidation and program and administrative simplification:
  • Consolidated planning requirements, for example, should enable more integrated services with less overhead.

• Proposals should consider:
  • Phased-in implementation,
  • Initially, shifting toward performance partnerships with self-selected or "volunteer" tates/local partners that are ready.
• Partnership proposals should accommodate different degrees of devolution between Federal, and various State and local governments.

• Performance partnerships for entitlement programs might:
  • Initially allocate funds to States to match what they currently receive,
  • Adjust over time for growth of poverty population and inflation,
  • Authorize the Secretary to provide extra funds to States during economic downturns.
  • As an incentive (since funding levels are fixed), permit high-performing States to re-direct matching funds.
• Eligibility may need to be simplified, for example, to transform public assistance offices from bureaucratic eligibility offices into family support and job preparation centers linking a range of services.
• There may be need to set specific common measures, but allow for flexibility for local circumstances:
  • Measures should be both population- and client-based.