Promotes efficiency and performance management in state agencies
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The Senate last Thursday unanimously passed a conference committee report on bipartisan legislation that makes fundamental changes in the operations of state government, updating antiquated finance laws and implementing performance measurement requirements for all government agencies and programs to improve efficiency, transparency and accountability.

“I am very pleased with the new standards that this bill has created,” said Senator Sal DiDomenico. “I believe these changes will greatly improve the performance and effectiveness of our state agencies. Performance management systems are a necessary modernization of state government and implementation of this legislation will provide updates that are imperative for a well-informed public. This bill will allow us to build a better budget in years to come.”

“This legislation is a major sea-change for the Commonwealth,” Senate President Therese Murray (D-Plymouth) said. “It fundamentally reforms how state government works. It requires all state agencies and programs to start measuring performance and outcomes. Through data-driven evaluations, we can provide real transparency and accountability, and build budgets on what really works.”

“This is a strong bill that will increase the transparency and efficiency in our State Government,” said Senator Stephen M. Brewer (D-Barre), Chair of the Senate Committee on Ways and Means. “As we move forward with technology, we are able to make more information more readily available.  This bill will improve the performance of our budgeted agencies and allow us to make decisions with the most accurate information possible. Furthermore, I believe that cities and towns are going to welcome the opportunity to receive local aid payments on a monthly basis rather than a quarterly basis.”

For the first time, each agency will be required to have a performance management system in place and develop a strategic plan for measuring performance that can be evaluated publicly and by the Legislature and Governor.

The bill modernizes state government by pushing agencies toward more efficient electronic accounting and reporting systems with the elimination of outdated paper-based methods, and it also makes the following updates:

•  Requires quarterly cash flow reports to compare actual results with prior estimates on spending and revenue and analyze the reasons for any discrepancies to improve future budget forecasts;

•  Sets the state’s debt limit at $17.07 billion starting the first day of fiscal year 2012 and changes the arbitrary index rate to make it more responsive to true economic conditions, helping to control the state’s debt limit and further improve the state’s bond rating;

•  Requires an independent debt affordability study to be performed before the Governor sets a bond cap and issues bonds for a particular fiscal year, and requires that report to be publicly available online;

•  Requires improved reporting of spending on capital projects; and

•  Requires monthly distribution of unrestricted local aid instead of quarterly distribution beginning in fiscal year 2014 to help cities and towns better identify their available cash flow and reduce the state’s reliance on short-term borrowing to support cash flow.

The government and finance reform legislation, when filed by Murray on April 28, 2011, received high praise from business groups, including the Associated Industries of Massachusetts, which called the plan “a significant and constructive contribution toward reshaping state government to meet the challenges of our times,” and the Massachusetts Competitive Partnership, which applauded the Senate President for bringing “this level of accountability” and said the legislation “will help make our Commonwealth much more effective and efficient in the future.”

The conference report must now be taken up by the House of Representatives. Final action to send the bill to the Governor is expected next week.