THE MISSISSIPPI LEGISLATURE

Introduction

Mississippi's growth in full-time state government employment paralleled the national growth trend between FY 1985 and FY 1991, when state government employment (other than education) per 10,000 population grew by 11.26%, while the national growth rate was 11.91%. Although Mississippi's non-education state government employee to population ratio exceeds the national ratio, Mississippi has a higher proportion of state workers engaged in service delivery than forty-three other states. Thus the role of the State Personnel Board, its director, and staff in administering the personnel administration system for state agencies becomes increasingly important and more complex.

The PEER Committee reviewed how the State Personnel Board (SPB) performs its primary functions of recruitment and selection, classification and compensation, and training. The Committee evaluated the State Personnel Board's administration and controls over its revenues and expenses and trends in the outlay of funds for FY 1989 through FY 1993. The Committee also audited a sample of the board's expenses for the most complete fiscal year, FY 1993, and the first six months of FY 1994.

While PEER's 1994 review of the State Personnel Board was not designed to be a follow-up of the Committee's 1987 review, some areas of weaknesses noted in 1987 continue.

Findings

Internal Evaluation (page 17)

The State Personnel Board has not defined its statutory mission in measurable terms and thus does not know if it effectively fulfills its mission.

The only type of data that the State Personnel Board collects and reports related to its performance is information noting the frequency with which it performs activities (e.g., number of tests scheduled, number of job applications screened and evaluated). SPB has not devised outcome measures-which measure accomplishments or results because of services provided-to relate its activities to its statutory mission (e.g., personal service expenditure changes by year and by type as a result of new hires). SPB needs a system of outcome measures to track its progress and direct its resources toward their best use.

Recruitment and Selection

Testing (page 20)

One method the State Personnel Board uses to determine a job applicant's eligibility for a position is competitive testing. These tests are designed to assess whether applicants have sufficient knowledge, skills, and abilities to perform the jobs for which they are applying. SPB contracts with individuals to oversee administration of proficiency tests for typing skills and written tests for technical knowledge and skills.

The State Personnel Board does not train its test monitors or check their compliance with testing procedures.

SPB provides test monitors with a Monitor's Manual, but does not conduct training sessions for test monitors. Neither does SPB periodically assess test monitors' compliance with the board's testing procedures.

Application Evaluators (page 22)

For jobs that do not require competitive testing, SPB application evaluators rate applicants on the quantity and quality of their education and experience.

The State Personnel Board does not ensure that its staff evaluates all applications in the same manner.

For those state service positions not requiring a test, the nature of the job application process allows some evaluator subjectivity. SPB's evaluation policies and procedures do not include controls to determine whether ratings assigned by one evaluator are comparable to those of other raters and the ratings assigned by experts.

Verification (page 24)

Although state law makes the State Personnel Board responsible for recruiting qualified applicants, SPB has delegated to agencies the task of verifying the correctness of applicants' experience and training.

State law requires the State Personnel Board "to recruit, select and advance employees on the basis of their relative ability, knowledge and skills, including open consideration of qualified applicants for initial appointment [emphasis added]." This implies that applicants which SPB certifies as eligible should possess the educational and training experiences stated on their employment applications and should possess the minimum qualifications of the positions for which they are applying.

However, SPB evaluators do not verify applicants' educational records and work histories on a routine basis. SPB verifies such information only when an evaluator suspects that an applicant may have submitted false information. In this way, SPB has chosen to limit processing time by delegating verification to hiring agencies, but has no policy which requires its staff to post-audit agencies' verification of applicants' training and experience.

Timeliness (page 26)

All state agencies which SPB regulates must interact with SPB to fill positions. Some agency personnel and job applicants have complained of delays in the hiring process caused by SPB's alleged failure to carry out its responsibilities promptly. To assess how quickly SPB responds to agencies' needs throughout the hiring process, PEER reviewed a sample of files on agency requests to SPB during FY 1994.

On average, SPB responded to agencies' requests for lists of qualified applicants in about six days.

SPB is responsible for a relatively small share of the time agencies spend in selecting new employees. On average, SPB activity accounted for approximately 9% of the time agencies spent in the hiring process in FY 1994 (an average of six days out of seventy-two). Activities of the hiring agencies themselves accounted for the remaining 91% of the time in the hiring process. SPB's response to agency requests for lists of qualified applicants took fewer than thirty days for all cases in PEER's representative sample, and for all FY 1994 correctional officer requests (an area of particular concern).

On average, SPB took about three days to evaluate job applications.

Within PEER's sample of 306 applications, SPB took from one to thirty-five days to evaluate each application. For 52% of these applications, SPB completed its evaluation within one day of receiving it. The average application processing time was 2.5 days.

SPB does not monitor its timeliness in responding to agencies' requests or in evaluating applications.

SPB's system for responding to agency requests for certificates of eligibles and evaluating applications contained no major points of delay. However, such a system potentially could be more responsive to agencies' and applicants' needs. As of May 1994, SPB had not established goals for its own timeliness and had not evaluated its own performance in relation to internally developed standards.

Classification and Compensation

Variable Compensation Plan (page 38)

Mississippi's Variable Compensation Plan, which the state adopted in FY 1982, is a method of paying state employees on the basis of their job worth and performance. To determine "job worth," the State Personnel Board identifies the relevant labor market and collects salary survey data from these markets for 300 of the state's 2,056 job classes. In developing its salary recommendations, the board averages the survey results for each of the job classes surveyed.

SPB does not appropriately identify the relevant labor market for all job classes, resulting in inappropriate salary recommendations for some job classes relative to their true market worth.

Accurate identification of the relevant labor market is SPB's lingering deficiency in the area of administering the Variable Compensation Plan. While the State Personnel Board has improved its efforts by including respondents other than public sector agencies from the four surrounding states in its survey, its current survey procedures do not ensure proper identification of the relevant labor market for each job class. Using salary information which is not relevant distorts SPB's salary realignment recommendations.

Contracts (page 42)

State law requires the State Personnel Director to approve agencies' personal services contracts. However, the law limits this review to verifying whether the requesting agency has a state service position which can perform the contractor's function, and does not require agencies to justify their use of contractual services or obtain these services through a competitive process.

Although state law requires the State Personnel Director to approve all contracts for personal and professional services (with certain exceptions), the law does not specify the criteria the State Personnel Director is to use when deciding whether to approve or disapprove a request. MISS. CODE ANN. Section 25-9-107 only requires the director to disapprove the request if the services "could reasonably be performed by an employee in an authorized employment position." The law does not specify a process for governmental entities to use when contracting for personal services.

Training (page 45)

Although the State Personnel Board has increased the number of its training courses since PEER's 1987 review, the agency has no formal method of assessing state agencies' training needs.

The State Personnel Board has not conducted a comprehensive needs assessment since 1991 and cannot address critical questions regarding state agencies' training needs-i.e., who should be trained and when and how training should be offered.

Fiscal Management

Revenues (page 49)

As an internal service activity, the State Personnel Board should serve agencies on a cost-reimbursement basis. However, SPB has billed agencies amounts above actual service costs, causing revenues to exceed that needed to fund operations and accumulating large cash balances.

As defined by the Governmental Accounting Standards Board and supported by state law, the State Personnel Board is an internal service organization and should serve agencies on a cost-reimbursement basis. There should be no profit motive or fund accumulation at the expense of other agencies.

However, because state law authorizes SPB to fund operations by assessing state agencies per authorized agency position rather than taking into account actual amount time spent or actual number of transactions in servicing agencies, state agencies do not pay their actual proportionate share of costs. Thus SPB has accumulated large cash balances, portions of which agencies could use to fulfill their operational missions.

The U. S. Department of Health and Human Services, as the federal agency responsible for oversight of states' plans for claiming indirect costs, reviews SPB's billings. If the State Personnel Board continues its current assessment process and accumulation of cash balances, DHHS may take action against SPB (or the state) if it identifies overbilling of federal funds.

Expenses (page 56)

The State Personnel Board does not consistently maintain records of the dates of inspection and approval of purchases as required by state law.

PEER reviewed a random sample of sixty-six SPB transactions for which payment vouchers were issued between July 1, 1992, and December 31, 1993. SPB complied with state purchasing laws and regulations relative to the obtaining of bids, Department of Finance and Administration approval, and Central Data Processing Authority approval.

However, in four of the sixty-six transactions reviewed, State Personnel Board personnel did not prepare purchase orders until after they had received a vendor's invoice (six percent of tested transactions). In nineteen transactions (twenty-nine percent of the items sampled) SPB personnel did not obtain signatures on invoices to signify that goods and services had been received as ordered.

Conclusion

As it has with other statutory agencies, the Legislature has the option of dismantling the State Personnel Board and redistributing its functions. However, no assurance exists that any functions transferred to other agencies would be performed better than they are now and a review of Mississippi's history with respect to personnel administration suggests otherwise. The more prudent approach to solving problems in state personnel management would be for the State Personnel Board to correct its deficiencies by adopting PEER's recommendations. SPB should also strive to maximize agency flexibility with respect to the recruitment, selection, and retention of the best persons without sacrificing the objectives of fairness, uniformity, and accountability.

Recommendations (page 60)

Internal Evaluation

1. By July 1, 1995, the State Personnel Board should develop a system of outcome measures which could be used to evaluate the agency's effectiveness in accomplishing its statutory mission. These outcome measures should be used to assess progress toward specific goals contained within an agency-wide strategic plan which is periodically updated.

SPB should operationalize each concept stated in its statutory mission (see MISS. CODE ANN. Section 25-9-101) and determine what indicators would best demonstrate progress toward accomplishing fulfillment of that portion of its mission. Then SPB should determine what data it should collect to measure its success in that area. Recruitment and Selection

2. The State Personnel Director should direct the board's Testing Branch staff to establish a training schedule which would ensure that all test administrators/monitors are properly trained on SPB test administration guidelines and procedures. The Testing Branch should maintain records which provide evidence of SPB's training of test administrators/monitors.

3. The SPB Testing Branch staff should inspect test sites periodically to ensure that test monitors and applicants comply with SPB testing policies and procedures. Testing Branch staff should conduct at least one unannounced inspection of each testing site each year to determine whether examinations are being administered in accordance with SPB policies and procedures.

4. The State Personnel Director should require the board's Education Branch chief to implement quality controls which ensure the consistent application of selection criteria.

5. The State Personnel Board should direct its staff to develop and implement measures to improve verification of applicants' educational record and work history. If the board chooses to continue delegating verification of applicants' educational records and work histories to hiring agencies, the State Personnel Board should require its staff to post-audit a purposeful sample of applicants employed by hiring agencies and devise procedures which inform agencies of the files they must keep.

6. SPB staff should establish internal timeliness standards for responding to agency requests for certificates of eligibles and for processing applications. If certain types of requests or applications require substantially more processing time than others, SPB should establish separate standards for these requests.

7. SPB staff should monitor its timeliness in responding to requests for certificates of eligibles by aging requests and reporting the status of each active request in relation to SPB's standard. SPB should also establish internal standards for evaluating job applications and for performing other processing tasks. SPB should monitor its timeliness in performing these tasks through reports similar to those described above.

Classification and Compensation

8. To obtain a more precise definition of the relevant labor market, the State Personnel Board should promulgate a rule requiring all agencies hiring state service personnel to conduct exit interviews with employees who voluntarily terminate their state service (other than retirees). The primary purpose of such exit interviews would be to determine whether salary was the reason for the employees' departure. The State Personnel Board should require hiring agencies to transmit exit interview information relative to salary levels to SPB staff on a monthly basis.

Exit interview information can be used by SPB staff to refine its concept of relevant labor market for its salary survey process and to validate its benchmarking efforts.

9. The Legislature should consider amending MISS. CODE ANN. Section 25-9-107 by deleting the statutory requirement for the State Personnel Director to approve personal services contract requests. State law should provide state agencies with authority to employ personal services contractors in compliance with statutory guidelines.

Training

10. The State Personnel Board should devise a needs assessment system which identifies specific training needs and courses which would assist hiring agencies in achieving their statutory and program objectives. SPB's needs assessment system could consist of focus groups with agency managers and employees to discuss missions and objectives as well as areas in which training could directly impact the agency's achievement of its objectives.

Fiscal Management

11. The Legislature should consider amending MISS. CODE ANN. Section 25-9-141 to require the State Personnel Board to bill hiring agencies based on the agencies' proportionate costs of the board's operations rather than a set fee assessment.

12. Regardless of whether the Legislature amends the State Personnel Board's fee assessment authority, SPB staff should immediately develop and implement a revenue billing and accounting system to meet the federal requirements described in this report and provide an equitable system to bill state agencies for actual direct costs and fair shares of indirect costs of the personnel system. (For specific details on such a system, see page 63 of this report.)

13. As required by DHHS regulations, SPB staff should adjust annual differences (over or under recoveries) between its billings to state agencies and its actual costs (direct and indirect) within the state agencies' billings. SPB must adjust future years' billing rates or directly credit the differences to the state agencies/programs in direct proportion to its actual charges.

14. The State Personnel Director should implement measures to ensure that appropriate agency personnel always sign and date invoices as verification that goods and services have been received as ordered. Also, SPB staff should develop internal written procedures for verification of receipt of goods and services and for any other agency-specific accounting and purchasing procedures and should distribute the procedures to all affected personnel.

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