THE MISSISSIPPI LEGISLATURE

The Joint Committee on

Performance Evaluation and Expenditure Review

Report # 515

An Accountability Assessment of the Mississippi Technology Alliance

Executive Summary

Introduction

In response to a legislative inquiry, the PEER Committee conducted an accountability assessment of the Mississippi Technology Alliance to identify the performance measures in place to monitor the efficient use of state funding and the effectiveness of programs.

Background

The Mississippi Technology Alliance, a non–profit corporation, was created as part of the state’s strategy to provide high–technology products and services for a global market, resulting in more high–paying jobs. MTA states that its mission is to:

…drive innovation and technology–based economic development for the State of Mississippi…with the end goal being wealth creation through higher paying quality jobs.

Although MTA is funded through a combination of state, federal, and private funds, 86% of MTA’s FY 2007 revenues came from state general fund appropriations ($1,202,294) and federal sources ($3,628,405). Since FY 2000, MTA has received over $12.3 million in state general funds. While the majority of MTA’s 2008 federal and private funding was expended directly for programs and services, approximately 39% of MTA’s FY 2008 expenditures from state funds were in the General and Administration category. As of July 1, 2008, MTA had twenty–one employees.

MTA’s programs and services are delivered through three programmatic centers, each with its own respective goals designed to help achieve MTA’s mission:

• The Center for Innovation and Entrepreneurship identifies and develops entrepreneurs, connects employees having technology–based experience with early–stage companies, and administers federal programs related to technology–based expertise.
• The Center for Innovation–Led Economic Development develops resources to support an entrepreneurial environment, including an annual index that provides information about how well the state is performing in key areas of innovation–related activity.
• The Center for Capital Formation connects entrepreneurs and early–stage companies with private equity investment and seed funding available through a revolving loan fund established with state bond proceeds.

Accountability for MTA Programs and Services

The Mississippi Technology Alliance has not had a data collection/reporting system in place to produce the information needed to monitor programs. While MTA reports outputs as “return on investment” for some of its programs, it does not consistently track or report the data elements and performance measures necessary to document and calculate the actual return on investment for each program. Thus a third party such as the Mississippi Development Authority, the Legislature, or the public cannot determine whether MTA expends state funds efficiently or effectively.

Any entity such as MTA that receives public funds should be held accountable for the efficient and effective use of those funds. MTA annually receives state funds, as well as federal and private funds, for administration and implementation of its programs. As stated within the Mississippi Development Authority’s FY 2009 appropriation bill that designated state funding for MTA, the purpose of this funding is:

…to strengthen the business environment in Mississippi to spur the creation and growth of high technology–based industries, thus creating many more high–paying jobs and a more diversified, competitive Mississippi economy.

MTA should be accountable for programs and services provided through annual state funding. Further, the MTA by–laws state that one goal of MTA is to:

Provide accountability to state government technology–related economic development expenditures through outcome monitoring.

PEER found that the Mississippi Technology Alliance has deficiencies in the type of data elements collected and reported for its programs that inhibit monitoring of MTA programs and services for efficiency or effectiveness.

Need for Efficiency Measures

PEER found the following issues related to the need for efficiency measures:

• Need for Accurate Reporting of Return on Investment: While the Mississippi Technology Alliance reports what it calls “return on investment” (ROI) for some programs, MTA’s use of this term reflects only outputs without considering inputs. Therefore, MTA’s reporting of ROI is not a complete, accurate measure for determining efficient use of state funds.
• Potential for Duplication of Programs and Services: The Mississippi Technology Alliance does not track information (such as referrals from other economic development entities) that permits determination of whether MTA provides a unique service that participants could not receive from other economic development or small business support organizations.

Need for Effectiveness Measures

PEER found the following issues related to the need for effectiveness measures:

• Specific Objectives Not Present for Every State–Funded Program: MTA has not established specific objectives for the state–funded programs within the strategic plan for its three programmatic centers.
• Every MTA Program Not Included within Its Strategic Planning, Accounting, and Performance Measurement Systems: Because the Mississippi Technology Alliance does not include every program within its strategic planning, accounting, and performance measurement systems, MTA cannot readily determine the efficiency and effectiveness of all of its programs and communicate this information to outside parties.
• Need for a Comprehensive Data Collection System: Mississippi Technology Alliance’s current data collection system captures and reports adequate data to monitor program outputs, but it does not have the capability to capture and maintain historical data to monitor the long–term effectiveness of programs. While the Mississippi Technology Alliance has purchased a new data system to connect all of the MTA programs and services through a single database and provide a regional overview of programs and services available to economic developers, MTA still must ensure that the necessary data elements and performance measures are clearly defined to maximize the benefit of a uniform data system.
• No Measurement of MTA’s Progress Toward Statewide Economic Development Goals: The Mississippi Technology Alliance does not measure or monitor the impact that its three major programmatic centers have on the statewide economic development goals established in MTA’s Innovation Index.
• MTA Has Not Provided an Annual Report to MDA: The Mississippi Technology Alliance does not fulfill all of the requirements established within the letter of agreement with the Mississippi Development Authority because it does not provide an annual performance report.

Recommendations

• MTA should develop performance measures and objectives for each of its programs. Continued state funding for MTA should be contingent on the establishment of these performance measures and objectives.
  
  At a minimum, MTA should develop the following measures:
  
  
  • measurable return on investment (ROI) to monitor program efficiency and to make comparisons between multiple programs or analyze trends for a specific program over a given period;
  • defined objectives and benchmarks for each program that will serve as target performance levels in relation to the desired impact for each program; and,
  • clear and specific performance measures for each program that will allow MTA to analyze the effectiveness of each program and document the impact and effectiveness of how these program outputs have produced outcomes that directly link to the MTA mission and program goals.
  
  One option for MTA to establish a standard method for reporting on each of its programs is through MDA, since MDA serves as the conduit for MTA’s state funding and MTA enters into an annual letter of agreement with MDA. MTA could develop its own reporting requirements for each program to be reviewed and accepted by MDA, or MDA could establish clear minimum reporting requirements that MTA should adhere to regarding what information should be provided on a quarterly and annual basis. Furthermore, regardless of whether minimum reporting requirements are established by MTA or MDA, MDA should define what action will be taken should MTA fail to fulfill all of the requirements provided within the letter of agreement.
  
  MTA should provide an annual report to MDA and to the Legislature, with copies available to other interested parties upon request. This annual report to MDA should serve as the means of reporting on the measures established for each program, as well as documenting MTA’s overall performance on an annual basis. This annual report should include the measurable ROI, defined objectives and benchmarks, and the performance measures for each program.
• MTA should capture the necessary data elements to document accurately the effectiveness of its programs and services in relation to the MTA mission, goals, objectives, and performance measures for each program. In addition, MTA should collect and maintain historical data in order to establish trends and relationships for each of its programs over any given time frame.
• Similar to the federally established self–assessment surveys utilized to measure the impact of the Manufacturing Extension Partnership program, MTA should develop a follow–up instrument, such as a survey, to collect data regarding the long–term impact or outcomes of its programs, such as changes in the number of employees, additional funding generated by its program participants, and participant satisfaction for its training programs.
• During its intake process for entrepreneurs and early–stage companies, MTA should document the referral source of the potential program participant and should note whether the entrepreneur was referred to another entity, such as SBA or MDA. Also, MTA should determine during intake whether funding or services for the potential participant could be fulfilled by any other economic development entity.
• Because MTA reports on the Innovation Index annually, MTA should ensure that performance measurement and reporting are in place for each of its three programmatic centers that link the impact of each of these centers to the statewide innovation indicators as defined within the index. Also, MTA should tailor its programs and services in order to provide strategic direction for the state in achieving the goals established through the index. For example, one statewide innovation indicator targets investment capital. MTA should therefore be able to document its contribution to this statewide indicator through its Center for Capital Formation and document any necessary program changes or new programs necessary to achieve the statewide investment capital goal.
• MTA should clearly define what constitutes a program versus an activity or sub–component of a program and include every program within its strategic planning, accounting, and performance measurement systems in order to determine the efficiency and effectiveness of all of its programs and communicate this information to outside parties.

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