annual report - michigan€¦ · office of internal audit services (oias) formed, consolidating...

ANNUAL REPORT Fiscal Year 2017

Building Performance Excellence

In Our First Year

Michigan.gov/OPT • Facebook.com/MichiganOPT • [email protected]

Office of Performanceand Transformation 111 S. Capitol Avenue, 8th Floor • Lansing, Michigan • www.michigan.gov/OPT

Jeffrey S. BankowskiChief Performance Officer

OPT Executive Director

Honorable Rick Snyder:

Thank you for the opportunity to serve as the Executive Director of the Office of Performance and Transformation (OPT). It is truly an honor to work with the employees of OPT. I have witnessed their hard work, exceptional service, and strong discipline firsthand. They demonstrate strong accountability and fact-based decision making as they implement statewide programs such as Lean Process Improvement, Leadership Development, Employee Engagement, and Regulatory Reinvention.

OPT had been in place for six months at the beginning of FY17. In that short amount of time, we took a group of disparate organizations – the Office of Internal Audit Services and the Office of Good Government from the Department of Technology, Management and Budget (DTMB), and the Office of Regulatory Reinvention and the Office of Reinventing Performance in Michigan from the Department of Licensing and Regulatory Affairs (LARA) – and formed one cohesive team.

During FY17, these offices collaborated on a number of statewide initiatives such as Mission Flint, the Enterprise Risk and Control Committee (ERCC), and the Performance Excellence Framework. We created an entirely new Reinventing Performance in Michigan (RPM) Center of Excellence to provide coaching, mentoring, and oversight for all state and department lean transformation initiatives.

In FY18, we are looking forward to capitalizing on the foundation laid in FY17. We will be focused on launching A Path Toward Our Future Dashboard, supporting the Strategic Pathways Project, improving enterprise risk management, administering the fifth Employee Engagement Survey, and making Lean Process Improvement an integral part of the culture of state government.

We are fortunate to have an incredible OPT team to enable a culture of continuous improvement for better services and outcomes for Michigan. We welcome the opportunity to provide this annual report. I look forward to working with you and the leaders of the executive branch this year as we continue to reinvent Michigan.

Respectfully submitted,

Jeffrey S. Bankowski December 5, 2017

OPT FY17 Annual Report

The Office of Performance and Transformation (OPT) shall be responsible

for continuous and systematic review and coordination of the state’s regulatory,

business, and customer service environments and processes as well as coordination and

implementation of performance management service process optimization efforts, employee

engagement programs and protocols, and change management and leadership

education and training.

-Executive Order 2016-4

Table of Contents

Partners in Performance Excellence .................................................................................... 2

OPT Overview

Mission, Vision, Values ..................................................................................................... 4

Employees ........................................................................................................................... 4

Mission Driven Organizations ...................................................................................... 5

OPT Leadership ................................................................................................................. 5

Accomplishments ...................................................................................................................... 6

Sharing Michigan's Reinvention ......................................................................................... 10

FY18 Recommendations ........................................................................................................ 11

OPT FY17 Annual Report Page 1


Partners in Performance Excellence

Lean Process Improvement Teams

Office of Organizational Performance Management

Office of Organizational Innovation

Performance Reengineering Optimization

Workforce Engagement andTransformation Section

Effective Process Improvement and Communication Section

Continuous Improvement and Engagement Division

Performance Excellence Services Section

Performance Excellence Officer (PEO)The PEO is responsible for coordinating performance excellence responsibilities within each department and for serving as a liaison to OPT.

Regulatory Affairs Officer (RAO)The RAO is responsible for coordinating department rulemaking activities and serves as the regulatory affairs liaison between the department and the Office of Regulatory Reinvention (ORR).

Employee Engagement Champion (EEC)The EEC is responsible for coordinating department employee survey and action plan activities.

Internal Control Officer (ICO)The ICO is responsible for coordinating department-wide efforts to design, implement, conduct, and assess internal control activities in conformance with the state’s General Framework and System of Reporting.

OPT is privileged to be aligned with people from throughout the executive branch to achieve our shared goal of performance excellence. Some of the key roles that work with OPT are described below.

Certain departments have established dedicated teams that provide Lean Process Improvement (LPI) services within the department and that collaborate with the OPT to provide coaching, mentoring, and oversight for statewide LPI projects and initiatives.

DEPARTMENT PEO RAO ICO EEC

Civil Service Commission Matt Fedorchuk Matt Fedorchuk Matt Fedorchuk Arnold Pulliam

Department of Agriculture & Rural Development Ken McFarlane Brad Deacon Maria Tyszkiewicz Ken McFarlane

Department of Attorney General N/A Dan LevyMarcelina Trevino-Savala Joe Bengel N/A

Department of Civil Rights Carol Viventi Dan Levy Marcelina Trevino-Savala Carol Viventi Lori Vinson

Department of Corrections Cheryl Groves Kathy Warner Kyle Kaminski Jeri-Ann Sherry

Kathy Keiffer Cheryl Groves Kathy Warner

Department of Education Stephen Best Ross Fort Mary Fielding Ann Dennis Ross Fort

Sean Hennika

Department of Environmental Quality Dave Fiedler Dave Fiedler Amy Epkey Dave Fiedler

Department of Health & Human Services Geralyn Lasher Mary Brennan Pam Myers Shelly Murrell

Department of Insurance & Financial Services Zack Dillinger Sarah Wohlford Penny Wright Zack Dillinger

Department of Licensing & Regulatory Affairs Al Pohl Liz Arasim Al Pohl Karen Towne

Department of Military & Veterans Affairs Col. Berri K. Meyers (Ret.) Col. Russ Gullett (Ret.)

Jackie Fessenden Al Christian Col. Berri K. Meyers (Ret.)

Department of Natural Resources Brad Pagratis Kirk Lapham Amy Henderson Brad Pagratis

Department of State Rose Jarois Doug Novak Mike Senyko Rose Jarois

Department of State Police Lt. Col. Gary Gorski Steve Beatty Jackie Reese Chelsea Deckler

Department of Talent & Economic Development Brian Carpenter Jeremy Hendges Allen Williams Jennifer Wood

Department of Technology, Management & Budget Kelly Manning Craig Brunet Michael Gilliland Trish McKenna-Ley

Department of Transportation Laura Mester Matt DeLong Troy Hagon Laura Mester Kelly Travelbee

Department of Treasury Sally Durfee Margaret Patterson Bruce Hanses R. Cole Bouck

Partners in Performance Excellence

Michigan Gaming Control Board Robert Simon Robert Simon Robert Simon Melissa Hamp

Michigan State Lottery Natalia Tiemann Natalia Tiemann Brian Neill Natalia Tiemann

Michigan Veterans Affairs Agency Lindell Holm Lindell Holm Lindell Holm Jason Wilkinson

Office of the State Employer Cheryl Schmittdiel Cheryl Schmittdiel Cheryl Schmittdiel Valerie Hill

State Budget Office Ryan Doll Ryan Doll Kyle Jen Kurt Weiss



OPT Overview

...A History

Office of Internal Audit Services (OIAS) formed,

consolidating internal audit functions Office of Regulatory

Reinvention (ORR)created

Office of Good Government (OGG)

createdReinventing Performance

in Michigan (RPM)created

2007 2011

History of the

Office ofPerformance

and Transformation

MissionOPT is a trusted advisor to state government that enables a culture of continuous improvement for better services and outcomes for Michigan.

VisionWe foster an open and transparent statewide culture built on trust where:

Every leader is a coach;Every employee is a problem solver;Every challenge is addressed without fear or blame; andEvery day continuous improvement is achieved for all people of Michigan.

ValuesLEADERSHIP: Developing coaches of today and tomorrow.

EXCELLENCE: Doing the best work possible.

TEAMWORK: Collaborating, respecting, and engaging colleagues; supporting decisions and working as one team.

INTEGRITY: Doing the right thing.

INCLUSION: Seeking others’ ideas and participation, individually or collectively, to make things better.

RESULTS-ORIENTED: Focusing on real results for real people. Ensuring follow-through and focusing on continuous improvement.

Employees

OPT has 64 employees as of September 30, 2017. Our team includes 13 certified public accountants, 9 Lean Process Improvement certified facilitators, and 2 attorneys.

True North

First Employee Engagement survey

First monthlyGood Government

Newsletter

RPM wins international ProcessExcellence (PEX) Network Award

for “Best Process ImprovementProject Under 90 Days”

OPT created, merging OIAS, OGG, ORR, and RPM

2012 2015 20162013

Recognition Coinsintroduced

Mission Driven OrganizationsOffice of Good Government

The mission of the Office of Good Government (OGG) is to drive continuous improvement of Michigan’s services and outcomes by communicating priorities, encouraging employee engagement, developing leaders, and promoting performance accountability and transparency.

Office of Internal Audit ServicesThe mission of the Office of Internal Audit Services (OIAS) is to enhance and protect organizational value by providing executive branch departments of the State of Michigan with risk-based, objective and reliable assurance, advice, and insight.

Reinventing Performance in MichiganThe mission of the Office of Reinventing Performance in Michigan (RPM) is to provide ongoing support for enterprise, lean and transformation changes. RPM uses Lean techniques to help State of Michigan employees improve their work to ensure continued improvement of citizens’ experience with the state.

Office of Regulatory Reinvention The mission of the Office of Regulatory Reinvention (ORR) is to simplify Michigan’s regulatory environment by reducing obsolete, unnecessary, and burdensome rules that are limiting economic growth.

Jeffrey Bankowski

Executive Director, Office of Performanceand Transformation

John Fitzpatrick

Director, Office of Good Government

Rick Lowe

Director, Office of Internal Audit Services

Holly Grandy-Miller

Director, Reinventing Performance in Michigan

Office of Regulatory Reinvention

OPT Leadership



Accomplishments2017 Employee Survey The most recent employee survey conducted in February 2017 indicated, for the first time, that Michigan’s employee engagement exceeded a high performing benchmark representing leading organizations in their respective industries. Employee participation in the survey was at an all-time high at 76 percent – up by almost 20 percentage points since the start of the survey in 2012.

Enterprise Risk and Control Committee (ERCC) Established in 2015, the ERCC provides oversight intended to improve the adequacy and effectiveness of risk management, control, and governance processes within the executive branch. Chaired by the State

Budget Director, the ERCC meets quarterly and is composed of select Cabinet members with relevant financial and operational risk expertise. The ERCC also includes two independent members selected by the Governor's Office.

Talking Reinvention (tR3)OPT hosts a quarterly talk to foster learning, inspire relentless positive action, and provoke innovation and conversation that matters. During FY17, tR3 events featured Kentaro Toyama, Associate Professor at the University of Michigan; Robert Tate of PricewaterhouseCoopers (PwC); Bob Lavigna, Governing magazine’s “Public Official of the Year;” Kim Cameron, co-founder of the Center for Positive Organizations; and Jeff Downs of Franklin Covey.

OPT Strategic Plan Representatives from each office within OPT developed the first-ever five-year Strategic Plan, outlining OPT’s mission, vision, values, goals, objectives, and roadmap for the future.

Good Government Newsletter

On a monthly basis, the newsletter features

employees who excelled, a spotlight on a director, news from various departments, and a “Day in the Life” article. Metrics show that the

newsletter is one of the most read emails in

state government.

Performance Excellence Framework and Performance Excellence Plan (PEP)

The State of Michigan’s performance excellence framework is intended to foster

a culture of citizen-focused performance excellence across the executive branch.

A key element of the framework is the annual PEP. A PEP includes

each performance excellence initiative a department expects

to process during the next fiscal year.

Recognition Coins Program OGG distributed approximately 1,600 Excellence, Teamwork, Leadership, and Customer Service Recognition Coins in FY17 to departments. The coins are designed to recognize state employees who go above and beyond normal expectations in the spirit of reinvention.

“The Employee

Surveys help develop strategic plans, develop best practices, recognize

accomplishments, provide additional training and discover more effective ways to communicate.”

- Lt. Gov. Brian Calley

“I really enjoy the smiles and pride

we see when handing out employee recognition coins. I’m most proud of

this because it shows that we care, value, and respect each

other and the work we do each day.”

- Brian Whiston, State Superintendent

Accomplishments


Transparency and AccountabilityOPT continued to enhance Open Michigan (michigan.gov/openmichigan) in FY17. Open Michigan includes performance management information consisting of nine dashboards, department scorecards, and the Open Data Portal.

Leadership Development By the end of FY17, more than 1,700 current and emerging leaders completed the Fit Leader Program, which

offers leadership training, mentoring, and networking. In partnership with the Civil Service Commission, OPT also promoted the Manager Development Program, targeting managers in state government with less than two years of experience. Approximately 1,000 new managers and seasoned leaders have participated in this program.

Internal Control Evaluation (ICE) ProgramOIAS led a comprehensive evaluation of the state’s ICE practices, including identifying leading practices in private and public sector organizations. The goal of the improved ICE process is to

create greater risk management capability through identification of key processes, risks and controls, and aligning evaluation results with key departmental outcomes and strategies.

Flint Action Tracker Transparency Website OGG helped develop a performance dashboard that provides a quick assessment of key performance areas for the City of Flint and the State of Michigan.

Flint Integrity Oversight Monitoring OIAS assumed a greater role in the state’s overall controls and monitoring activities associated with state support of the City of

Flint’s remediation of water problems. OIAS helps ensure a

proactive review of state and city activities to ensure

prevention and detection of fraud, waste and abuse related to funds dedicated to

the remediation program.

Engagements in Support of the State’s CAFR

OIAS completed several engagements in support of the state’s financial

year-end closing and publication of the Comprehensive Annual Financial Report

(CAFR). Engagements involved key financial year-end closing transactions associated with the Department of Treasury, Department of Health and Human Services

(DHHS), and DTMB. The transaction groups involved tax accruals, child support program accruals, and several of the state’s pension funds/financial statements. These efforts have helped the state receive the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association for 30 consecutive years.

“I’ve been to a lot

of management classes and Fit

Leader was, by far, the best one I’ve been to.”

- Eric Allen, MIOSHA Safety

Manager

“I would wholeheartedly recommend the

Manager Development Program to both new and

‘seasoned’ leaders. The time and money spent can pay

huge dividends."

- Julie Manson, DNR Property Manager

Accomplishments


Supporting Veterans Homes OIAS provided assistance to Michigan Veterans Affairs Agency (MVAA) management to address significant deficiencies by improving internal controls. RPM facilitated reviews of the admittance process for veterans and the staff's use of the electronic medical records system.

Material Internal Control Weaknesses Remediation and Accountability Program (MICWRAP)OIAS focused resources and expertise toward working with DTMB and other state departments to implement leading practices to remediate common information technology (IT) control deficiencies within the state’s IT processes and high value application systems. Many of the control improvements help to support the state’s cybersecurity and related control objectives. OIAS helped lead implementation, monitoring and oversight, and reported to the ERCC. Key roles of OIAS are to facilitate identification of leading control practices and verify that corrective actions effectively mitigate risks to a sufficient level.

Material Weaknesses Oversight and Accountability

OIAS focused resources toward working with departments to implement effective measures to remediate internal control deficiencies. In FY17, state departments left fewer deficiencies unfixed than in FY16 - the first time in four years there's been an improvement.

Lean Process Improvement TrainingRPM trained 833 people in Lean during FY17, including 345 people who took the online Lean 101 series. At the end of FY17, 37 people from 13 departments were going through the Lean Process Improvement (LPI) certification program.

Fifty-two LPI projects have launched as a result of the LPI certification program.

Notable LPI Projects The annual RPM awards recognize the great accomplishments of LPI

projects across state government. For FY17, five RPM awards were

given:

PACE Award

DTMB received this award for setting the pace for LPI in state government. During FY17, DTMB set performance expectations for all employees to learn the basics of LPI and continued to invest in certified LPI facilitator staff members who support DTMB internal process improvement efforts and support other departments as LPI mentors and facilitators. DTMB also partnered with the State Budget Office (SBO) to incorporate LPI as a statewide strategy to improve readiness for IT investments.

“Because of the LPI we were

able to cut 8 weeks off our core processes and reduced

program operational costs. We were able to present the work on

the LPI to the legislature which was the basis for receiving legislative

and administrative approval for sustainable funding for the

program.”

- Rich Harlow, MDARD Program Manager Farmland and

Forestry

“Gov. Rick Snyder

has launched an unprecedented, statewide 'risk

assessment' process to fix what's broken in state government."

- Lansing State Journal

Accomplishments


RPM 500 Award

LARA's Construction Licensing and Automation Team was recognized for the best process improvement achieved in more than 90 days. Impacting over 59,000 licenses each year, their project achieved a 97% reduction in time to renew licenses and a 94% reduction in time for new licenses.

TURBO Award

The Department of Treasury’s Third Party Garnishments Team was recognized for the best process improvement achieved in less than 90 days. Without using new technology, the team reduced manual effort by

25%, eliminated the need for overtime, reduced standard processing time by four weeks, and reduced processing time for incomplete customer submittals by six months.

Formula 1 Award

LARA's Prescription Drug and Opioid Abuse Tracking Team was recognized for the best process improvement engineered with the use of metrics. This project achieved a 99% reduction in time to notify practitioners

of material issues and reduced prescriptions of the most highly abused and diverted controlled substances by 10% -20%, depending on prescription type.

People’s Choice Award

Voted the best process improvement by state government employees, DHHS' Streamlining Transportation Services for the Elderly and Disabled achieved a 99% reduction in authorization time, a 169% increase in customers making it to their medical appointments on time, a 204% increase in customer satisfaction, and a 156% increase in customer perceived quality of service.

Michigan Administrative Rule ReviewORR reviewed 87 complete rule sets for departments, which included approximately 701 rules in the 2017 calendar year. In 2017, 194 rules were rescinded. Since 2011, 2,149 rules have been rescinded.

100% Annual Regulatory Plan ReportingORR has achieved a 100% response rate on its 2017 Annual Regulatory Plan (ARP). ARPs outline a department's regulatory

improvement goals and objectives for the next year.

Emergency Rule Promulgation ORR, in collaboration with departments, was successful in using the emergency rulemaking

process to better serve the safety and health of Michigan citizens. Emergency rules impact

immediate public safety, such as rules for Dioxin levels in waterways and rules to help with the

Opioid abuse epidemic.

Rulemaking Lean Process Improvement RPM facilitated a

rulemaking LPI project for the Department of

Environmental Quality (DEQ), DHHS, LARA, and ORR.

Recommendations to simplify the rulemaking process are underway.

Rescission of Executive OrdersCleaning up obsolete and outdated executive orders eliminates confusion and removes waste for those who rely on and are protected by executive order requirements. ORR conducted a review of obsolete executive orders and submitted a recommendation to the Governor's Office. This resulted in the issuance of Executive Order 2017-11, "Clean-up of Obsolete and Outdated Boards, Commissions, and Councils," which rescinded 24 executive orders.

“Information technology is a critical

issue for Treasury, as it is with all agencies, and the

LPI efforts we have made in that arena have been game

changers.”

- Cindy Peruchietti, Department of Treasury

Budget Director

“I have been blown

away by the way lean engagements

empower staff.”

- Brom Stibitz, DTMB Chief Deputy

Director


Sharing Michigan's ReinventionOPT represented Michigan as a participant in the National Governors Association’s Innovations in the Use of Data in Policymaking from May through October 2016 along with Arizona, Maryland, North Carolina, Rhode Island, and Virginia.

OPT was selected to present at an Association of Government Accountants-sponsored webinar on Performance Management for State and Local Governments.

OPT presented at the March 2017 Socrata Connect Conference in Washington D.C. to highlight Michigan's transparency websites.

OPT presented to members of the National Conference of State Liquor Administrators at their 2016 fall conference. OPT reviewed how the state is streamlining Michigan’s regulatory environment by removing burdensome rules that inhibit business growth and job creation.

OPT participated in a panel discussion on Social Media in Government at the Department of Treasury's 2017 Local Finance Summit.

OPT participated in a panel discussion on How to Make Government Cool Again at Governing Magazine’s sixth annual Michigan Leadership Forum in East Lansing.

OIAS holds leadership positions on the Board of Western Michigan Information Systems Audit and Control Association and on the program committee for the annual spring conference. More than 400 professionals participated in the 2017 spring conference.

OIAS partnered with the Institute of Internal Auditors (IIA) to share and leverage leading internal audit and governance practices and to develop professional education opportunities. OPT holds a seat on the board of the Detroit and Lansing chapters of the IIA. At a Detroit IIA chapter meeting, OIAS participated on the Chief Audit Executive

(CAE) panel that included CAEs from General Motors, Blue Cross/

Blue Shield, Wayne State University, and Detroit

casinos.

OPT partnered with the Michigan Lean Consortium (MLC) to spread lean principles

and tools throughout the state to make Michigan

the best place in the country to live, learn, and earn. In

addition, the OPT holds a seat on the MLC Board of Directors.

RPM spoke at the Maryland World Class Consortia's 2017 Mid-Atlantic Lean Conference, where states throughout the east coast learn leading practices in process improvement.

OPT presented at Allegan County's strategy session, providing guidance on what has worked well in state government.

To support Michigan State University’s Visiting International Professional Program, OPT presented to a delegation from China, sharing efforts that the state is taking to reinvent Michigan.

OPT is a member of the University of Michigan’s Positive Organizations Consortium, learning from private and public sector executives how to practice and implement positive business principles.

“The State of Michigan is a

leader among states on employee engagement. In fact, the model used in the

State of Michigan to measure and improve employee

engagement is considered a best practice model.”

- Bob Lavigna, Institute for Public Sector Employee

Engagement

FY18 Recommendations


Enact Bi-Partisan Government Performance StatuteOPT encourages the State of Michigan to consolidate and formalize its performance activities in a statute that provides the framework for a citizen-focused approach to the delivery of government goods and services. Such a statute should include the following requirements: • Department Strategic Plans and Annual

Performance Excellence Plans • Enterprise Risk and Control Committee • Performance Reporting and Evaluations• Citizen Experience • Employee Engagement • Lean Process Improvement • Regulatory Reform

Continue Commitment to Employee EngagementDuring FY18, OPT will administer the fifth employee survey since 2012. Michigan’s employee engagement strategy is recognized as a leading practice among state governments and has been successful in driving a culture of innovation, data-driven decision making, and continuous improvement at every level. Michigan’s continued commitment to employee engagement will deliver results for citizens and enhance organizational culture for years to come.

Expand Focus on Citizen ExperienceDuring FY18, OPT will conduct customer survey pilot projects with the Department of Agriculture and Rural Development and with the Department of Treasury. One of the key purposes of these pilots is to establish a customer survey framework for the executive branch of state government. OPT’s goal is for Michigan to become a recognized leader in citizen experience among state governments.

Continue Commitment to Lean Process ImprovementAs a result of the formation of OPT’s Office of Reinventing Performance in Michigan, the state made significant progress during FY17 in building capacity and delivering results through LPI. During FY18, the state should strive to train at least 3% of all executive branch employees in LPI techniques and tools.

Support Culture Shift in Information Technology InvestmentsProcess improvement is now becoming part of our state’s management process and culture. One of the most significant shifts in this regard is evidenced by the collaboration between RPM, DTMB, and SBO. Through this collaboration, we are setting an expectation that departments will use process improvement techniques to streamline their workflow prior to requesting funding for IT solutions. While this may seem like an obvious course of action, it is a significant cultural shift in the way departments are approaching the use of IT to improve outcomes for citizens and stakeholders.

Enhance Enterprise Risk Management During FY18, OPT will continue implementation of MICWRAP to support increased enterprise-wide application security controls to mitigate data security, privacy, and cybersecurity risks. In addition, OPT will begin implementation of a reengineered ICE methodology that will include an enterprise-wide risk assessment process in addition to current department risk assessment processes.

Michigan.gov/OPT • Facebook.com/MichiganOPT • [email protected]

OPT Strategic Plan Goals and Values

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