Category: Administration (page 1 of 2)

The classics: Traditional modes of information sharing

 

Consider these tactics and efforts the Moby Dick, Wuthering Heights, and Alice in Wonderland of sharing budget information.  Except no one makes you read (or watch) these in high school.

Earlier this week I covered an overview of the first phase of citizen engagement.  For my examples of information sharing I tried to highlight some ways that local governments are doing this that you may not have seen before.  However, I wanted to make sure to also cover the classics, for those who are interested.  Consider this a bonus post!

There are three common methods of information sharing employed by many local governments.  The first is simply making budget information available online, at your government offices, or at places like local public libraries.  This is a basic and, in North Carolina, a mandated way to share information and ensure basic transparency.  It also requires a commitment of very limited time and resources, which makes it attractive to many local governments.  The main shortcoming of this method is that the information will likely be too complicated and overwhelming for your average citizen to gain a great deal from it.  For example, citizens may not understand their local government’s revenue streams, debt constraints, levels of mandatory spending, specific program functions, or budget terminology.  Additionally, this approach only reaches citizens are proactive in attaining that information.

Another often used method is the creation and dissemination of budget factsheets.  A major advantage to factsheets is that they allow local governments to communicate complicated budget information in an easy to understand manner.  The primary disadvantage is that creating a brief factsheet from a lengthy budget requires significant practitioner time and it is difficult to synthesize all the necessary information and context. Practitioners tend to find it difficult, if not impossible, to provide a full picture of the budget in a single factsheet causing fears that this method may actually misinform or mislead citizens.  Additionally, it can difficult to create a factsheet that is purely neutral and does not advance arguments by highlighting certain areas of spending or choosing not to.  Practitioners should be aware of factsheet elements that may make an argument, however subtle. The use of terms such as “myth”, “truth”, and “reality” are examples of elements that subtly imply a position or advocacy.  Local governments that use budget factsheets should take the necessary due diligence to ensuring that they are producing neutral and informational factsheets.

 

Informational videos are emerging as another standard means for information sharing.  In today’s digital age, conveying budget information in a video is an easy and appealing approach.  Creating informational videos is a time and cost effective process producing a highly informational product.  Many municipal governments in North Carolina have public access channels dedicated to government programming.  These channels would be a good avenue for to educate the public about budget information.  Public access television still struggles with the constraint that only proactive citizens watch these channels.  This requires local practitioners to be creative in developing multiple mediums in which to disseminate these videos.  Local governments with tech savvy and creative practitioners (or college interns) may be successful in creating engaging videos and using different social mediums (consider Youtube, Facebook, and Twitter among others) to reach a broader audience.  When creating video content, make sure that the public response will be positive and not feeling that the government wasted resources on a overly complicated video.  Many local governments have been criticized by citizens for creating over ambitious videos that take resources away from other government services.

The same basic set of advantages and concerns discussed in the previous blog are here too.  So be thoughtful about when and how to use these and what other resources can be made available to reach more citizens.  Next month I will be blogging about how to reach a captive audience and share information with them!

The first step in citizen engagement: Information Sharing

The first step, in my opinion, in productive citizen engagement is providing information and helping educate citizens about government and budgeting.  This is because government is just a black box to most people.  They sort of understand some of the most basic functions of government, but may not have any idea of which level of government does it.  Who pays for libraries? Roads? Do I have police and a sheriff?  What about fire service?  What does the state even do?  These are not unrealistic questions.

Therefore, it should not be surprising the primary way the local governments engage with citizens is to push information out to them.  This phase of engagement can be characterized as a one way relationship between government and citizens where government is delivering information.

Have you heard about transparency, open government, or open data?  Of course you have.  These efforts are all a part of this initial phase.  They involve governments (local and other) making documents and information public and accessible to citizens.  The goal is that citizens will learn about government and hold government accountable.  So in the past that may have meant that the budget was available at the local library, now it is available online and searchable!  For example, want to see know how much Charlotte’s Aviation department spent on postage?  Sure!  They were appropriated $40,000 in FY2016.  Of course, there is no context for that and it may seem outrageous to many.  That is a problem with just posting everything online.  A lot of people do not know what they are looking for or how to interpret what they are seeing.  I always think about this as one of those scenes in a legal drama where the defense requests a file and what they get is a room full of file boxes and papers to sort through.

Is that really transparency and engagement?  I think it can be done better, but making it all public is important and valuable, I just think we can do better.  Websites make a lot of this information push a lot easier.  While that is great and I applaud the efforts, government needs to be mindful of how easy it is to navigate.  There is evidence that having little videos that explain some of the terminology and how to navigate and find what you are looking for helps citizens a lot.  This may be something you want to consider.  You can also be innovative about how you present data in the first place.  A great example of this is what Asheville is doing.  They had originally had something similar that was done through a Code for Asheville group, but now they are hosting something pretty similar on their own website.

What I like about it is that it presents the different areas of expenditures and visually presents them based on their size.  This is more effective in helping people understand the scope of expenditures and the differences in the level of program spending.  It also allows the user to click on the box and dive deeper into the spending in that area.  For example, above is a visualization two clicks in from the full budget.  I first clicked enterprise and then water.  This is a simple way to present some of this information in a digestible way.  One thing that may have made it even better would be having definitions involved for those residents that do not know what enterprises are, for example.  You could also link to the website of these departments or that section of the budget.

I will admit I like their old one slightly more, see a screen shot of it here:

That is because I prefer being able to quickly see how it has changed over time and by how much.  However, both are good and better than what you find in most jurisdictions.

Another example of information sharing is the taxpayer receipt.  The basic idea here is that you get a receipt for everything else you spend your money on; why not get one for your taxes.  While I am a big believer in not treating citizens like customers, I think that this is an effective tool for making the numbers meaningful.  In fact, I wrote a bulletin on the taxpayer receipt that lays out some of the arguments for it and how you could create one yourself.  I show you how to create one that is static; i.e., one that you could mail to people or leave in the library or town hall.  There are also dynamic ones where you can input your actual tax burdens and see what your numbers look like.  Rather than having to create one yourself there are companies that will do it for you like Balancing Act (and yes that is my paper they link to).

Charlotte has taken them on and created their own tool, though they have used it as a simulation to balance the budget.  Depending on how they choose to use that information Charlotte’s tool may be closer to the second phase of engagement: consultation.  Which we will get to in a future blog!

Of course, there are more traditional ways of reaching out to citizens to provide information such as public access channel videos (or online videos) and budget fact sheets.  Tune in next time for a quick overview of those more traditional ways of sharing budget information (and you do not even have to wait a full month—consider it a bonus!).

Final thoughts: Benefits of these information sharing tools is that they are pretty efficient.  Governments can reach a lot of people and make a lot of information available.  Those strategies are also relatively low cost and do not require too much effort or burden on the budget office or IT.  You could just get an amazing intern to work on some of it, may I recommend a Carolina MPA student?  Some problems with these strategies is that they rely on citizens actively seeking out information.  You will likely not reach passive citizens, and they may represent the vast majority of citizens.

 

Citizen Engagement in the Budgeting Process

There has been a lot of interest in how to tighten up the relationships between citizens and their local governments.  At the local level there is a lot more opportunity to work with and get feedback from citizens. This is accomplished by many communities and in various ways.  I believe, and I know this will be shocking, that the budget is the single best place to engage citizens.  The budget is the encyclopedia of government.  The budget reflects what government does and reflects priorities based on spending decisions, as well as changes in the community as reflected in changes in the budget from year to year.

***I love this quote from a VP debate in 2012. 1) It is true. 2) It is hilarious because we are living in a time of continuing resolutions rather than budgets at the federal level, so I guess we prioritize not making hard decisions and not working together.***

I also believe that some of you are groaning because citizens can make the process more difficult and complicated, the concern for the squeaky wheel gets the grease comes to mind, and that the citizen input we get may not be well informed, representative, or even reasonable.  I get all that, but still… there are ways we can engage with citizens in a meaningful way.

In North Carolina, for example, not only will we post our budgets online we also are legally required to have a budget hearing.  Of course, the budget is often adopted immediately (or shortly) after that hearing.  This suggests that the citizen input may not have shaped the budget too much. While this sounds like I am coming after you all I want to be clear, your concerns are fair and often the reality.  It is true that at town halls and budget hearings we may get primarily the citizens that are upset about one thing like a pothole or property taxes and they may not understand the scope of government and may not be well informed—and almost always they are mostly concerned with things that directly affect them and may not be thinking of the entire community.  Does that mean we abandon the the notion of citizen input?  Are there ways beyond the typical budget hearing and town hall that we can engage with citizens that may lead to better results?

Well let’s back up and get on the same page.  What even is citizen engagement?  I think a reasonable way to think about it is to say that citizens and communities are engaged when there are a series of connections between citizens and their governments on policies, programs, and service issues and decisions.  These connections can be in the form of information sharing, consultation, and in some cases active roles in decision-making.  Of course, it also depends who you ask.  There is evidence that on one end of the spectrum elected officials consider their election and lack of complaining as a sign engagement and satisfaction in contrast to the other end of the spectrum to citizens who view engagement to be a two-way communication where they can be involved in the process.  Right in the middle are practitioners who often see educating citizens about government so that they can be community advocates and help explain to their fellow citizens the tough choices government has to make.

All of these are reasonable definitions and reflect that citizen engagement can mean many different things.  I am going to tackle citizen engagement and present it from a framework of three different phases: information, consultation, and active participation.  I will give examples of all of these from here in North Carolina and around the country in some cases.

However, before we get into the fun stuff (or at least the meat of the issue) I want to offer some words of wisdom about citizen engagement.

First, you need to be thoughtful about your community and the diversity in your community.  Most governments that are interested in citizen engagement will implement multiple strategies because not all citizens are the same.  So for example, if you are doing town halls you need to think about transportation issues.  Do you the majority of your residents have a way to attend the meeting?  How about the timing of the meeting, are you excluding a large population because they have family responsibilities or second jobs perhaps?

Oh, so maybe an internet or phone survey is a better way to go! Well… do you live in a community with a large non-English speaking population?  If you are thinking about a survey, you will need to copies available in other languages.  What population of people has landlines these days?  Not the younger population for sure, so that will skew your results.  On the flipside, what about the people without computers at home or who are uncomfortable with the technology?

This is why it is advisable to have multiple outlets for engagement and feedback.  Also, try and be aware if you are not hearing from certain parts of your community.  One strategy could be to reach out to community leaders and ask them how to better reach them or see if there is a meeting or function, you could attend to better integrate those populations.  Sounds like a lot of work doesn’t it… it can be.

This is why you want to make sure that you are being thoughtful about where and how you engage.  You NEVER want to get feedback from citizens that you do not plan on using.  It is a waste of your time and of their time.  Instead of building bridges and strengthening your community it will leave people more frustrated and distrustful.  This is going to be an especially important lesson for the second two phases: consultation and active participation.  Providing information and helping citizens better understand government, the budget, and taxes is not as challenging in this regard (and it can help prevent fiscal illusion!).

Citizen engagement may seem like an uphill battle but there are many great resources out there about how to do it, so do not loose heart!  Ultimately, it is about strengthening your community and as public servants, that is a pretty great ambition!

Come back soon for the next installment on citizen engagement!

Introducing the 2017-2018 Finance Calendar of Duties

The UNC School of Government has just posted its most recent Local Finance Bulletin, the 2017-2018 Finance Calendar of Duties for City and County Officials, prepared by Gregory S. Allison.  This annual publication is a monthly guide for finance and budgeting officials on all statutory and regulatory reporting and administrative responsibilities.  The finance calendar has been a publication of the School of Government for decades and is an online, free resource for finance officers, budget officers, clerks, and other administrative officials.

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North Carolina’s County and Municipal Fiscal Analysis Tool: Research Review

Have you ever used the County and Municipal Fiscal Analysis tool that is housed on Treasurer’s website?  It allows municipalities and counties in the state to see how they are doing with regard to financial condition and compare their performance to peers.  It has recently become the focus of new research coming from colleagues at the University of South Dakota and Indiana University.  Ed Gerrish and Luke Spreen presented their research on our benchmarking tool earlier this month at the Public Management Research Conference and it is forthcoming at the Journal of Public Administration Research and Theory.  In this Research Review I am going to discuss their research and pull a few findings that are especially notable for those of you that work in budgeting and finance.

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Communicating and Sharing Information

As this year’s North Carolina Association of Assessing Officers (NCAAO) President, I’ve tried to make good communication one of my priorities. Across North Carolina, we have received appeals from common taxpayers. There are a lot of them. We can call them multi-jurisdiction taxpayers and define them as individual taxpayers with real and personal property in more than one jurisdiction. It only makes sense for that taxpayer to keep track of how each of us responds to appeals. Which of us concede easily? Which of us have accurate data and can defend our values? Are there any counties that do not have the financial or other resources available to defend values?

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Appraisal and Reappraisal. Just Do It?

In late 2014, just after joining the SOG, the NCDOR included me in the initial discussions among assessors about North Carolina’s reappraisal standards. This blog post includes some of the thoughts and questions that I shared with the group at that time. Please keep in mind that this post is written informally, from my perspective during late 2014. I was discussing with the committee, mainly through emails, whether the assessment system our taxpayers deserve was being delivered. On the other side of an inadequate reappraisal, I wasn’t sure our lawmakers in Raleigh would accept an excuse of, “We weren’t given the needed resources”.  I’ll refer again back to this related blog post on ways to request what is needed.

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Crowdsourcing for Local Governments: Research Review

Research Review is a place for me to bring you academic research that I think might be of interest or relevant to you all.  It is not necessarily the Cliff notes of the paper, but it will present some key findings or insights from the paper.

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Are you a Tax Administrator or a Tax Supervisor? Of course you aren’t

Try this online exercise. Go to Chapter 105 of the North Carolina General Statutes. Here’s a link. Once there, most browsers will allow a search feature. A common way to search in many software applications is to press the <Ctrl> key +F. Now search all of Chapter 105 for “tax administrator”. It doesn’t exist. But there are lots of tax administrators in North Carolina, right? Now search all of Chapter 105 for “tax supervisor”. The tax supervisor is referenced 9 times in the Machinery Act. And if you read the context of those references, there are a few important roles involved there. How many counties have a tax supervisor to fulfill these roles?

 

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There are two sides to every coin: Or is there Common Sense about Cost Accounting in Government?

In the 1990s there was a wave of euphoria about cost accounting and particularly Activity Based Costing (ABC).  One book in particular stands out in my mind as particularly euphoric: Common Cents: The ABC Performance Breakthrough by Stephen Turney.  While it had a clever title, few people remember this book now, but many people remember ABC.  Many finance and budget managers do not recall ABC with fondness.  In fact, when government budget and finance managers are asked about the use of ABC in their organizations now, most will say that they are not using it.  However, when asked if they are doing some form of cost accounting, the measure is much higher.  In this post, I explore why budget and finance managers are willing to say that they are doing cost accounting and not ABC.  I further explore (and mix) the metaphor of common sense/cents about cost accounting by thinking of its uses as two sides of the same coin.

Some background on cost accounting…

Cost accounting is the measurement and use of both direct and indirect cost information for an organizational purpose like rate setting, grant overhead recovery, performance measurement or cost management. For private businesses, cost accounting is essential for pricing goods and services.  In government, cost accounting has many uses as well.  It can be used to price goods as businesses do, to collect overhead for grants, and to improve performance measurement systems.  These are all beneficial uses that are broadly supported by most organizations. The other side of the coin is that cost accounting can be used for intensive cost management purposes, but these uses may generate resistance in organizations. Intensive cost management such as contracting out services and service cutbacks or eliminations can generate resistance from employees.  It is important for managers and budget officers that are looking to use cost accounting for the first time, or more intensively, to consider both sides of the coin and plan accordingly.


The easy side of the cost accounting coin

– Collecting grant overhead

– Accurately price goods or services

– Improve performance management systems

In my research and as described in my forthcoming edited book, cost accounting has many acknowledged uses in government.  The oldest use of cost accounting was to collect grant overhead costs from the federal government as described in the A-87 circular.  The benefit of A-87 cost accounting is that when local governments provide federal services that they should be able to charge indirect costs like HR, IT, and Accounting costs to the grant so that the local government does not have to subsidize services that are most appropriately paid for by the federal government.

Cost accounting also has an important place in accurately pricing goods and services that government “sells” to consumers.  Like federal grants, services that are sold to private consumers need to have indirect costs added into them so that the general tax is not unintentionally subsidizing the service.  Finally, cost accounting is important for performance management systems.  The work of the North Carolina Benchmarking Program most directly speaks to this issue.  Without cost accounting, we cannot be sure if performance differences come from differences in processes that we can learn from or whether they come from simple differences in resources.  Generally, few people inside an organization object to these purposes and may readily assist if they believe that it can be used to generate new revenues for their programs.

The difficult side of the cost accounting coin

– Contracting out services

– Service cutbacks and eliminations

– Overhead cost management

 

Cost accounting also has some more difficult uses.  I suggest that these are difficult only because they are difficult for people in the organization.  Analysts and managers have told me that people believe that when the government starts collecting data on the “full” cost of services they think that sweet Ms. Betty in Animal Licenses is going to lose her job.  They believe this because cost accounting allows governments to more accurately estimate the benefit associated with contracting or eliminating services.  If we only look at the budgeted costs of a services like animal licensing, we leave out important indirect costs or the budgeted cost is aggregated at such a level that it obscures the individual cost of services.  So, cost accounting can be used to both combine direct and indirect costs and track expenses at a more granular level, which becomes very beneficial for contracting and service analysis.

Cost accounting also often shows that building space, which is an often untracked overhead expense in the budget, is an important cost of services.  If the cost of building space is added into the cost estimate, the service managers often have to justify the high cost of the space for things like storage.  This is something that managers do not want to have to justify and defend.

The improved ability to evaluate contracting, service elimination, and overhead cost management are all important and appropriate uses of cost accounting from the budget officer’s perspective. However, this side of the coin may appear negative from the employee and service manager’s perspective, and organizational resistance may ensue.  Often this resistance is seen in the form of service managers focusing on the excessive time and data requirements of cost accounting.

 

My common sense suggestions about both sides of the cost accounting coin

The previous discussion of the “other” side of the coin that generates resistance in the organization has suggested why cost accounting (and ABC in particular) has been limited in government.  If the resistance hypothesis is correct, then the next question is what can be done about it? In my forthcoming edited book and in my dissertation (found here: see chapter 3 in particular), I note that the cost accounting used in practice by local governments is not completely an ABC cost accounting system, which may help this problem of resistance and minimize the time and data requirements.  I call this development “hybrid” cost accounting.  These hybrid cost accounting systems are neither very basic or exactly like ABC.  They have a mix of basic and specific cost drivers, the level of cost is passed down to some broad programs and some very specific activities, and that the “fullness” of the system is mixed.  In other words, the systems that are developed and used by cities over time are not purebred ABC systems.  The system is more basic in areas where it is not as important to have a specific activity cost and in areas that generate the most resistance.

Additionally, many cities have found that they have multiple cost accounting systems for different purposes like A-87 cost accounting plans for federal grants and then “full” cost accounting for purposes of setting rates and evaluating the cost of services.  All of this points to the new understanding that there needs to be multiple estimates of cost for the multiple purposes of government.

In conclusion, cost accounting has many significant benefits for government, but we have to use some common sense about our expectations for cost accounting and how it will be received by the organization.  In other words, we need to consider both sides of the coin and especially from the perspective of the service managers and employees. By using hybrid cost accounting systems and multiple cost systems, we may be able to minimize the resistance from the organization and maximize benefits.

Zach Mohr is an Assistant Professor at UNC Charlotte.  He has a forthcoming, edited book on cost accounting titled Cost Accounting in Government: Theory and Applications.  It will be published by Routledge in May 2017.  Links to actual local government cost accounting documents and other useful cost accounting resources can be found on his faculty website.

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