Forensic Science Policy and Management, 1: 32–42, 2009
Copyright
C
Taylor & Francis Group, LLC
ISSN: 1940-9044 print / 1940-9036 online
DOI: 10.1080/19409040802624075
Key Performance Indicators and Managerial Analysis
for Forensic Laboratories
Paul J. Speaker
West Virginia University, College of Business and Economics, P.O. Box 6025,
Morgantown, WV 26506-6025, USA
Abstract Forensic laboratories generate a great deal of data from casework activities across inves-
tigative areas, personnel and budget allocations, and corresponding expenditures. This paper investigates
ways in which laboratories can make data-driven managerial decisions through the regular extraction of
key performance indicators from commonly available data sources. A laboratory’s performance indicators
can then be compared to peer laboratory performance to search for best practices, determine in-house
trends, manage scarce resources, and provide quantitative support for the justification of additional
resources.
Keywords Economics, finance, forensic labs, quality issues, management
Introduction
Forensic laboratories face the classic economic problem—
how to allocate limited resources with increasing demand
for services while maintaining high-quality standards.
Questions abound with respect to performance of the lab-
oratory, given budgeted resources (Dale and Becker, 2004;
Koussiafes, 2004). How does the laboratory director know:
If resources are appropriately allocated?
If the laboratory performance is efficient?
Whether alternative practices might result in im-
proved, high-quality services?
Whether sufficient safeguards are in place to assure
the quality of analysis?
Whether there is adequate investment for equip-
ment, training, and development to enhance future
analytical technique?
Whether the laboratory is optimizing the return on
investment for its constituency?
Similar questions face every organization, whether it
is a manufacturing plant choosing the optimal level of
production, a hospital deciding upon its level of emer-
Received 11 November 2008; accepted 13 November 2008.
Address correspondence to Paul J. Speaker, PhD, WVU, College of
Business and Economics, Finance, College of B&E, P.O. Box 6025, Mor-
gency care, or a county government selecting which roads
to repair. All organizations must address the economic
problem and determine how to allocate scarce resources.
And once a strategy has been implemented, how does the
organization know whether its choices are appropriate?
That is, how does the laboratory measure and monitor
its attempts to make optimal decisions in meeting the
mandates of its mission?
Fortunately, other industries have examined this
economic problem (Kaskinen, 2007; Love et al., 2008;
Smith, 2007). The answers in other industries to similar
questions have left us with some powerful tools that can
be applied to forensic laboratories (Bielski, 2007; Brooks,
2007; Petaschnick, 2008; Reilly, 1997). From accounting
we learn that common-size financial statements can
transform the financial statements of individual entities
into size-adjusted analysis tools that can be easily com-
pared against industry standards. From business finance
we learn that transforming absolute dollar-performance
measures into size-adjusted ratio measures permits any
business to evaluate its allocation of resources into
measures of liquidity, efficiency, risk, return, and market
assessment.
In the sections that follow, these lessons are applied
to forensic laboratories. In the first section, the tech-
nique of common-size statements is introduced for the
budget allocations of laboratories. A common-size budget
statement will permit a laboratory to consider the alloca-
tion of resources as a percentage of the total budget and
32
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Key Performance Indicators & Managerial Analysis 33
compare to the industry average or to a select group of
the most successful laboratories for signs of improvement.
The third section addresses issues of language and mea-
surement standards across the forensic laboratory indus-
try. Unfortunately, there is no universally accepted termi-
nology for forensic laboratories. The common language
adopted in the European Quadrupol and U.S. Foresight
studies is presented as the standard by which the remain-
ing measures will be defined. In the fourth section, key
performance indicators are developed that address issues
in several areas of concern for forensic laboratories: return
on investment, efficiency, risk/quality assurance, analyti-
cal process, and measures of market condition. Conclud-
ing comments follow with some warnings signs regarding
data-driven management.
Common-Size Statements
Within any industry we find organizations of varying size,
and forensic laboratories are no different. How do we com-
pare a statewide forensic laboratory with a smaller county
forensic laboratory, or a large metropolitan forensic labo-
ratory with a forensic laboratory with a nationwide man-
date? In the financial-services industry, a similar problem
exists: the method in which we compare the community
bank to the regional bank to the international bank; in
healthcare, the need to compare the community health
center to the regional hospital to the major teaching hos-
pital; in food service, comparing the neighborhood restau-
rant to the national chain restaurant. How do you com-
pare the performance of two organizations with similar
missions, but unequal size?
To compare the decisions and performances of
different-sized organizations, accountants introduced the
concept of common-size statements. As applied to foren-
sic laboratories, consider the allocation of funding within
a forensic laboratory. With a common-size budget, the
funds allocated to each budget category are divided by
the total budget, and each line-item budgeted area is ex-
pressed as a percentage of the total, thus enabling compar-
ison across laboratories or across time for a specific labo-
ratory. When the common-size budget reveals significant
differences in the allocation of funding across expense ar-
eas, it raises a red flag for the laboratory manager to look
more closely at that area to see if practices and policies are
moving the laboratory into the desired strategic direction.
Consider Tables 1 and 2, examples of two forensic labo-
ratories of different size. Laboratory Small has total fund-
ing and expenditures of less than $10 million annually,
while Laboratory Large has total funding in excess of $50
million annually. Small spends $5.7 million for salaries
while Large spends $26.5 million for the same expense
category. Is Small spending too much on personnel (all
else being equal), or perhaps, not enough? What about
Ta b l e 1 . Dollar Budgets for L aboratory Small and Laboratory
Large
Funding Laboratory Small Laboratory Large
Budget - Jurisdiction $7,700,000 $52,700,000
Grants $2,050,000 $0
Other funding sources
(including revenue)
$50,000 $3,800,000
Total Funding $9,385,500 $56,500,000
Personnel costs
Direct salaries $5,725,000 $26,500,000
Overtime & Temps $605,000 $285,000
Benefits $1,850,000 $9,200,000
Personnel development
& training
$65,000 $805,000
Total Personnel $8,245,000 $36,790,000
Running operational
costs
Chemicals, reagents,
consumables, gases
$530,000 $3,450,000
Travel $4,000 $310,000
Subcontracting $25,000 $1,525,000
Leasing $290,000 $940,000
Service of Instruments $455,000 $810,000
Repairs & maintenance $35,000 $750,000
Utilities $47,500 $610,000
Telecommunications $24,000 $305,000
Other operational costs $12,500 $2,250,000
Total Operational Cost $1,423,000 $10,950,000
Capital Expenditures
(Investment costs)
DNA Laboratory
instruments/
equipment
$0 $2,525,000
Non-DNA Laboratory in-
struments/equipment
$0 $1,100,000
Furniture $15,000 $275,000
Information technology $17,500 $1,400,000
Facilities > $10,000 $0 $99,900
Vehicles $0 $127,500
Total Investment $30,000 $5,527,400
Surplus (Deficit) $102,000 $3,232,600
the personnel expense allocation of Large? Is it too much,
too little, or just right? And what about the other expense
categories or the source of funds—are there concerns that
jump out?
Table 1 illustrates the dollar budgets for Laboratory
Small and Laboratory Large. As presented, it would take a
very experienced laboratory director to immediately draw
some perspective about these two scenarios. Laboratory
Large is nearly six times the size of Laboratory Small; its
personnel expenses are roughly 4.5 times that of Small,
while operational costs are more than 7.5 times the size.
Large invests over $5.5 million in capital expenditures
while Small only invests $30,000; and Large boasts a year-
end surplus that is nearly one third the size of Small’s
entire budget. The direct comparison of the dollar funding
and expenditures is very difficult to critically assess.
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34 Speaker
Ta b l e 2 . Common-Size Budgets for Laboratory Small and Laboratory Large
Laboratory Laboratory
Small common Large common Average Forensic
Funding Size Budget Size Budget Laboratory
Budget – Jurisdiction 76.71% 93.25% 87.32%
Grants 21.84% 0.00% 9.92%
Other funding sources (including revenue) 1.44% 6.75% 2.76%
Total Funding 100% 100% 100%
Personnel expenses
Direct salaries 56.74% 47.07% 58.08%
Overtime & Temps 6.45% 0.51% 2.68%
Benefits 19.71% 16.34% 17.37%
Personnel development & training 0.69% 1.43% 0.92%
Total Personnel 83.59% 65.35% 79.05%
Running operational expenses
Chemicals, reagents, consumables, gases 5.65% 6.13% 6.12%
Travel 0.04% 0.55% 0.38%
Subcontracting 0.27% 2.71% 4.39%
Leasing 3.09% 1.67% 4.83%
Service of Instruments 4.85% 1.44% 1.59%
Repairs & maintenance 0.37% 1.33% 0.71%
Utilities 0.51% 1.08% 1.34%
Telecommunications 0.26% 0.54% 0.46%
Other operational costs 0.13% 4.00% 0.97%
Total Operational Cost 15.16% 19.45% 20.79%
Capital Expenditures (Investment expenses)
DNA Laboratory instruments/ equipment 0.00% 4.48% 1.47%
Non-DNA Laboratory instruments/equipment 0.94% 1.95% 1.43%
Furniture 0.16% 0.49% 0.37%
Information technology 0.19% 2.49% 0.89%
Facilities > $10,000 0.00% 0.18% 0.24%
Vehicles 0.00% 0.23% 1.04%
Total Investment 1.28% 9.82% 5.45%
Surplus (Deficit) 1.04% 5.72% 3.37%
A common-size presentation delivers that immediacy
as it converts each dollar category to a percentage of
the entire budget. To make the conversion for Labora-
tory Small, which has total funding of $9.8 million, every
line item for funding source or expense category is di-
vided by the total funding level for the entire laboratory.
Similarly for Laboratory Large, every line item is divided
by its total funding level of $56.5 million. The results are
illustrated in Table 2 for Laboratory Small and Laboratory
Large. For additional analytical value, the corresponding
percentages of funding and expense allocation for the av-
erage comparable forensic laboratory are presented. (Note
that Table 2 is fabricated for purposes of illustration and
is not the result of an industry study.)
In this cross-sectional presentation, the common-size
statement serves to wave red flags at areas that require
further investigation. If a laboratory’s budget categoriza-
tion differs significantly from the norm, laboratory man-
agement should dig further to develop an understanding
and explanation. Recognize, however, that merely being
different from the average does not indicate that a prob-
lem exists; it may be the case that the difference is ex-
pected due to the nature of the missions of the two labo-
ratories. Also, note that the industry average includes all
organizations in the industry, both the efficient and the
inefficient, and does not necessarily represent the ideal
budget splits—just an average.
Nevertheless, consider the red flags raised by Table 2.
In an examination of the source of funds, laboratories
Small and Large both differ from the average laboratory.
Small has a very high percentage of its funding (relative to
the average laboratory funding) that comes from grants,
while Large lacks the grants but has a relatively high per-
centage of funding that arises from its jurisdictional al-
lotment. What might these red flags indicate? In the case
of laboratory Large, further investigation reveals that it
is a national laboratory that is not eligible for most of
the available grant funding; from this investigation, the
difference is easily explained. For laboratory Small, there
is some concern as the jurisdictional budget (78.57%) is
smaller than the total personnel expense of 84.13% , and
may threaten long-term viability of some employment
and laboratory performance.
Looking deeper into personnel expenses, Small devotes
a much higher percentage of its budget towards direct
salaries, overload, and temporary workers. This difference
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Key Performance Indicators & Managerial Analysis 35
suggests that Small take a look at the salary levels and
distribution of its workforce to look for any possible inef-
ficient allocation of labor resources. Large, on the other
hand, has a relatively lower total expense for benefits and
may want to investigate what impact the reduced benefits
may have on its workforce.
The long-term expense for capital sends some signals
for additional investigation. In most environments, the
miniscule investment in plant and equipment by Small
would not bode well for the future. This percentage should
be compared with recent years to see if this is a trend or
merely an anomaly found in the current year. Further,
when coupled with the high percentage spent in the ser-
vice of equipment category, a red flag raises some initial
concern for the long-term health of the laboratory—the
high service expense possibly indicates older equipment.
Laboratory Large, however, is making relatively large in-
vestments in DNA laboratory equipment and information
technology, and is investing nearly twice that of the av-
erage laboratory. This may bode well for the future, but
may also signal a need to monitor the use of equipment
for efficiency versus overfunding.
Finally, note the final line category of laboratory “sur-
pluses.” Laboratory Small has little excess; Laboratory
Large has a much higher percentage of unused funds com-
pared to both Small and the industry average. Further in-
vestigation is warranted. Is Large overfunded, too big to
be run efficiently, or even too slow to operate? Could the
seemingly lower funding for personnel be masked by hav-
ing too many unfilled positions? The benefit of common-
size statements is in raising these types of red flags to help
direct the laboratory manager’s inquiries.
A Common Nomenclature
Gather together a group of forensic laboratory directors
and ask each to define what they mean by a case, a sample,
an item, a test, or a host of other terms and you will hear
as many different responses as the number of individuals
who are quizzed. Each laboratory jurisdiction has devel-
oped its own language by practice or perhaps by statute.
Unfortunately, disparate language in the same science
makes comparison and the development of industry stan-
dards difficult; as yet universally accepted industry mea-
sures for forensic laboratories are lacking. To overcome
this difficulty, the 2003 European Quadrupol study began
to put a common language in place when it studied the
national forensic laboratories of four countries. That com-
mon set of definitions and measures from Quadrupol was
adopted and enhanced in the 2006–2009 U.S. Foresight
study. In the present analysis, this language is adopted
for the key performance indicators that follow.
The complete Quadrupol/Foresight glossary may be
found in Appendix A. That glossary includes the following
definitions presented in Table 3, which will be used in the
next section.
Additionally, the European Quadrupol and U.S. Fore-
sight studies separated functions of forensic laboratories
into a series of investigative areas. Individual forensic lab-
oratories will likely have some differences in their or-
ganizational chart with the standard definitions from
these two studies. However, some separation was re-
quired to permit the detailed information that can be
learned and shared with the industry, and these inves-
tigative areas are adopted in the present paper. Appendix
B details the definitions of ‘investigation areas’ from the
Quadrupol/Foresight Projects.
Ratio Metrics
While laboratories may have similar missions, there are
differences such as populations served, geographic cover-
age, jurisdiction, legislative mandates, breadth of inves-
tigative areas, staffing, and existing facilities, that make
direct comparisons of productivity across laboratories dif-
ficult. To find meaningful metrics across the range of
forensic laboratories, it is helpful to make adjustments
for resources and responsibilities through the creation of
ratios. Similar to the common-size analysis tool discussed
above, ratios provide relative measures that make for easier
comparisons across disparate operational entities. Ratios
permit a laboratory to measure its performance over time,
against specific other laboratory operations, and against
industry (averages) standards. The ability of a laboratory
to assess performance over time permits management to
relate performance to changes in either scientific advance-
ment or managerial prowess, for example.
There is a seemingly endless array of potential met-
rics that might be devised from the data in any forensic
laboratory. Consider the various sources of data from a
laboratory, which include information on casework, bud-
gets, and personnel. In the analysis that follows, some of
the possible ratios are discussed, but the list is not exhaus-
tive. Individual laboratories will likely have other items
that are of particular interest to the management team,
the laboratory director, or to those with oversight respon-
sibilities.
For discussion purposes, the ratios are broken down
into five categories: efficiency, quality or risk manage-
ment, analytical process, market conditions, and return
on investment.
Efficiency Measures
Not all forensic laboratories are built, provisioned, or
staffed in the same manner. However, given the resources
available, we can ask the question: How was a labora-
tory or an investigative area within a forensic laboratory
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36 Speaker
Ta b l e 3 . Selective Quadrupol/Foresight Definitions
Term Definition Notation
Backlog Open cases older than 30 days as measured at the end of the year. BACK30
Case - Area Case A request for examination in one forensic investigation area. An area case is a
subset of an institute case.
CASE
Case - Institute Case A request from a forensic laboratory "customer" that includes forensic
investigations in one or more investigative areas.
ICASE
Full-Time Equivalent (FTE) The work input of a full-time employee working for one full year. FTE
Investment Expense Sum of purchases of equipment, etc., with a lifetime longer than three years and
a cost above $1,000 (alternatively capital expenses).
KEXP
Item A single object for examination submitted to the laboratory. Note: one item may
be investigated and counted in several investigation areas.
ITEM
Laboratory Area Floor area used for forensic investigation, including sample and consumable
storage rooms.
SQFT or SQ.m
Overhead Time Total FTEs in hours in the investigation area subtracted by the total hours of
casework, research & development, education & training, and support &
service given to external partners.
OVRHD
Personnel Expense Sum of direct salaries; social expenses (employer contribution to FICA, Medicare,
workers comp, and unemployment comp); retirement (employer
contribution only towards pensions, 401k plans, etc.); personnel
development and training (internal or external delivery, including travel);
and occupational health service expenses (employer contribution only).
LEXP
Report A formal statement of the results of an investigation, or of any matter on which
definite information is required, made by some person or body instructed or
required to do so.
REPORT
Sample An item of evidence or a portion of an item of evidence that generates a reported
result.
SAMPLE
Test An analytical process, including but not limited to visual examination,
instrumental analysis, presumptive evaluations, enhancement techniques,
extractions, quantization, microscopic techniques, and comparative
examinations. This does not include technical or administrative reviews.
TEST
Total Expense The sum of the direct expenses (personnel, operating, and investment) and any
administrative or other overhead expenses.
TOTEXP
Total Funding The sum of all funding sources including jurisdictional budgeting, grant awards,
bequests, and revenue sources.
TOTFUND
able to perform relative to the resources at its disposal?
Consider some ratios that provide an indication of effi-
ciency. One measure of the resources for a particular lab-
oratory is the physical size of the facility. While it is natu-
ral to expect that a larger facility will be able to process a
higher volume, we can track how well it performs relative
to its available facility and make comparisons across the
industry or across time.
Consider one such measure, CASE/SQ.m (area cases pro-
cessed/laboratory area). Although each laboratory will dif-
fer according to personnel, plant and equipment, this
measure provides a simple comparative measure across
facility space allocations. We proxy those resources via
the size of the laboratory (or the size dedicated to a
given investigative area) and consider the output: pro-
duction/analyses performed. An individual laboratory can
then compare similar investigative areas within the lab-
oratory as well as their performance compared to labo-
ratories of any size. As a rough generalization, a higher
ratio suggests some greater efficiency. When this ratio
is compared to the same measure for peer laboratories,
the measure offers the laboratory and its stakeholders an
opportunity to assess the general productivity against an
appropriately selected benchmark. For example, bench-
marks might be specifically identified laboratories with
similar missions or services, or with industry averages.
Other productivity measures of great value compare
the productivity of capital or labor. Consider the largest
single expenditure in most laboratories—investment in
personnel. The measure TEST/FTE (tests performed/full-
time equivalent employees) offers a quick measure of the
output per person in the laboratory. This is an easily cal-
culated measure that provides both comparison to peer
laboratory benchmarks and offers a regular (monthly,
quarterly, or annual) measure for trend analysis within
a laboratory.
The efficiency measures and benchmarks a forensic lab-
oratory manager should choose are a local decision to
meet the informational needs of the various stakeholders
of the laboratory. In addition to those above, consider the
following possible ratio measures:
ITEM/FTE = Items processed/FTE employees
SAMPLE/FTE = Samples processed/FTE employees
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Key Performance Indicators & Managerial Analysis 37
TEST/FTE = Tests completed/FTE employees
REPORT/FTE = Reports completed/FTE employees
CASE/SQFT = Area cases processed/laboratory square feet
area
ITEM/SQFT = Items processed/laboratory square feet area
SAMPLE/SQFT = Samples processed/laboratory square feet
area
TEST/SQFT = Tests completed/laboratory square feet area
REPORT/SQFT = Reports completed/laboratory square feet
area
ITEM/SQ.m = Items processed/laboratory square meter
area
SAMPLE/SQ.m = Samples processed/laboratory square me-
ter area
TEST/SQ.m = Tests completed/laboratory square meter
area
REPORT/SQ.m = Reports completed/laboratory square me-
ter area
FTE/FTE
BUD
= Actual FTE employees/budgeted FTE em-
ployees
Each of these measures is created from easily obtained
laboratory information. The periodic calculation of these
measures, whether annually, quarterly, or monthly, pro-
vides an immediate data-analysis tool for management.
Each investigative area within a forensic laboratory can
track ratios of interest and either compare that period’s
performance to past performance or make comparisons
to an industry average or to specific peer labs to gain a
sense of productivity.
These measures of efficiency are the type of measures
that are followed in most industries. For example, capac-
ity utilization measures are usually important to track.
Since resources are limited whereas the potential output
is unlimited, a laboratory may want to keep track of how
well it uses the resources at its disposal. How quickly does
management respond to vacancies and fill those vacan-
cies? The last of the listed measures compares the alloca-
tion of resources versus the budgeting of those resources.
Further, given each laboratory’s uniqueness, it may have
additional efficiency measures that may be followed to
track other concerns, issues, or points of emphasis.
Quality/Risk Management
The regular calculation and reporting of ratios can help
monitor the laboratory in other areas besides efficiency.
A second such category relates to measures of quality-
or risk-management measures. A laboratory faces multi-
ple problems with its processing of cases, given limited
resources. Errors may occur from either commission or
omission. The former may receive the bulk of the attention
as errors may occur from poor calibration of equipment,
human error, insufficient samples, less sophisticated tech-
niques, etc. Likewise, errors of omission may result from
delays in processing evidence. These delays may result in
contamination, recidivism, or other losses.
One quality measure is the separate testing of the accu-
racy of a laboratory’s normal output in which a random
selection of prior test results is selected and retested to
verify the accuracy of the original testing. At the conclu-
sion of the retesting of this random sample of procedures,
an error rate can then be calculated and used as a sample
measure of quality. While this independent verification
of results is a normal part of most quality-assurance pro-
grams in any forensic laboratory, it does represent a statis-
tical sample, is not a census of the entire laboratory, and
is subject to individual laboratory choices on allowable er-
ror in the sampling process. Going back to the efficiency
metrics discussed above, some labs are required to retest
every sample. Such double-testing assures high quality
but would most likely result in relatively lower return-on-
investment measures when compared across the industry.
There are proxies that address quality and do not re-
quire the collection of any additional data. Consider the
measure TEST/CASE (tests completed/cases processed). The
quality-assurance processes of the previous paragraph
would be partially revealed in this measure. That is, a
quality-assurance program within a laboratory that in-
creased the sample size for retesting would be revealed
as a higher numerator (tests completed) in this measure.
This would also be true for any case in which a greater
number of separately revealing examinations were con-
ducted. Both the test error rate and the ratio TEST/CASE
provide some monitoring of the errors of commission.
For errors of omission, a reasonable proxy would at-
tend to the number of cases not yet processed. A ratio of
BACK30/CASE (backlog cases in excess of thirty days/total
cases processed) provides a useful trend measure that can
be monitored from regularly collected data and used on
a regular basis to assess the work not being completed.
As with efficiency, there are a variety of other ratio mea-
sures that are easily constructed and may have pertinent
information content to an individual forensic laboratory.
These include the following:
ERROR/SAMPLE = Commission sample error rate
ERROR/ITEM = Commission item error rate
ERROR/CASE = Commission case error rate
TEST/ITEM = Tests completed/items processed
TEST/SAMPLE = Tests completed/samples processed
SAMPLE/CASE = Samples processed/case processed
Analytical Process (Production Function)
Over time, new scientific achievements, new instrumen-
tation, and new techniques are introduced that affect the
processes by which samples are analyzed. Not every or-
ganization will select the same equipment or the same
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38 Speaker
techniques for analysis. This is true in other industries
as well as with forensic laboratories. For other industries,
attention is placed with these choices through a look at
the allocation of resources for capital equipment, human
resources (labor), and other inputs into the production
process.
A simple comparative ratio to reflect a laboratory’s
choices is the dollar allocation of resources from the
common-size statements. If a laboratory has substituted
more equipment for personnel, then the manager’s ques-
tion becomes one of assessing whether this change has a
positive impact on the laboratory’s output. A measure
LEXP/TOTEXP (personnel [labor] expense/total expense)
will have a variety of implications that may be tracked
on a regular basis.
Other analytical process measures include a look at
the other expenditure categories as a percentage of total
expenditures, the capital expenditure to labor expense
ratio analyzed, time management measures, or even the
allocation of labor resources across investigative areas.
Dale and Becker (2004) suggest alternative hiring practices
to optimize the use of limited budgets and change the
mix of scientists versus other technical workers in the
laboratory for which these ratios offer some use.
KEXP/TOTEXP = Capital expense/total expense
OPEXP/TOTEXP = Operational expenses/total expense
KEXP/LEXP = Capital expense/labor expense
CASEWK/HRS = Casework hours/FTE hours
COURTHRS/HRS = Testimony hours/FTE hours
FTE
sup
/FTE = Support staff FTE/total staff FTE
FTE
Op
/FTE = Operational staff FTE/total staff FTE
FTE
sci
/FTE
Op
= Scientists FTE/operational staff FTE
Market Conditions
Local economic conditions may strongly influence the per-
formance of an individual forensic laboratory. A forensic
laboratory may be highly efficient, adopt the most pro-
ductive analytical procedures, and optimize quality, yet
fall short comparatively to other laboratories simply be-
cause of the local economic conditions, particularly in
the labor market. For example, low-unemployment/high-
income geographical areas may skew analytical compar-
isons to geographical areas with high-unemployment or
lower wage rates. Further, changes in socio-economic con-
ditions may affect the relative rates of forensics over
time; this may in turn affect operational efficiency. To
illustrate, consider a situation with declining economic
performance and increasing forensic rates; such a socio-
economic condition may cause the forensic laboratory to
reach its capacity, causing some operational dysfunction
that was not present when forensic rates were lower and
the forensic laboratory operated at optimal volumes. Or
across countries, there may be social/cultural choices that
have an effect on individual laboratory performance that
need to be part of operational comparisons.
The Bureau of Labor Statistics ( www.bls.gov), the Cen-
sus Bureau ( www.census.gov), state economic authorities,
and other public sources ( www.usa.gov) provide individ-
ual market data for comparison. But the data from indi-
vidual laboratories also reflect information about these
market conditions and are readily available to the foren-
sic laboratory director and managers. A combination of
data from the budgetary process and from a laboratory’s
personnel database and case volume metrics can permit
some regular monitoring of the local market effects on
performance.
Consider the average worker compensation as one such
indicator of market conditions. The ratio of LEXP/FTE (per-
sonnel expense/full-time equivalent employees) provides
the average expense across all employee compensation.
Because the cost of living will vary greatly across locations,
it will be more expensive to hire in high cost-of-living
markets as the forensic laboratory is competing with or-
ganizations in many industries for the skilled workers it
must employ. Similarly, a laboratory could track the ex-
pense attributed to other variable costs in the analytical
process, VC/CASE (non-labor operational expenses/cases
processed).
Return on Investment (ROI)
Ultimately, the questions to be answered come down to
the overall performance of the forensic laboratory.
How does the laboratory compare to its peers?
Is the forensic laboratory taking sufficient care of
the funds provided by its stakeholders?
Does management have the laboratory on a path of
continuous improvement?
To evaluate the return, we first must address what the
laboratory is attempting to accomplish in such a way that
comparisons across laboratories may yield meaningful re-
sults.
“If you don’t know where you are going, then any path
will get you there.” It becomes paramount that organi-
zations take a careful look at their mission, vision, and
values, and establish goals that are consistent with their
charge. In the case of forensic laboratories, there are some
commonalities, but the underlying goals and affiliated op-
timization decision will differ across organizations. There
are three general categories into which organizations
tend to fall, and all three categories apply to the broadly
defined industry of forensic laboratories. The categories
include for-profit, not-for-profit, and government entities.
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Key Performance Indicators & Managerial Analysis 39
When economists evaluate an organization in a for-
profit industry, the optimization problem is relatively
simple. The decisions of the business are guided by a
wealth-maximization criterion and actions become rel-
atively easy to judge based upon that standard. And, al-
though we don’t know what the highest attainable level
of wealth might actually be, we can determine whether
managerial actions have improved the performance of the
business or resulted in decline. That is, either an action
served to increase stock price (or some other appropriate
measure of wealth such as profits) or it did not.
When it comes to the not-for-profit or government en-
tity, the goals are a little more disparate. However, we
can make some generalizations that extend to the indus-
try of forensic laboratories. Each nonprofit organization
has a goal (mission) that is targeted towards some sense
of “greater good” that for-profit market solutions do not
adequately address. The nonprofit organization tries to al-
leviate as much pain and suffering or to achieve as much
of the “greater good” as it can with the resources at its dis-
posal. And, for these organizations, the resources rarely,
if ever, are adequate enough to declare, “Mission accom-
plished.” There is always more to be done. For the non-
profit organization, the optimization problem still exists
but is operationalized by maximizing resources, funding,
or revenues, and then using these funds to achieve as
much “good” as possible.
For the government entity, leadership faces a problem
similar to that of the not-for-profit organization. Its sights
are set on some “greater good” that pure for-profit market
solutions have failed to adequately address. Managerial
decisions in this environment differ from that of the non-
profit manager in that funding/resources/revenues are
predetermined by some extra-organizational (e.g., legisla-
tive) process, and the manager is left with an exogenous
budget constraint. Given a budget for funding, the opti-
mization problem for management becomes one of get-
ting the most output from the limited funds. However,
the other side of the coin is that managers, by maximiz-
ing output for a given budget, are actually minimizing
the cost per unit of output.
Summarizing, the generalization of objectives for each
type of organization:
Not-for-profits maximize revenue;
Government entities minimize cost; and
For-profit organizations maximize the difference be-
tween revenue and cost.
Because the government organization dominates the
forensic laboratory industry, the ROI measures that are
most appropriate address the mission of government
forensic laboratories. Consider then the mandate to cor-
rectly process as many cases as possible for a given bud-
get allocation. The measure CASE/TOTEXP (area cases pro-
cessed/total expenditures) is a tractable measure that has
direct comparison across laboratories or across time for
trends within an individual laboratory, and may be ap-
propriate for comparisons across investigative areas that
are similar in nature. The metric is easily computed from
existing databases within the laboratory and can be a reg-
ularly (monthly, quarterly, annually) produced measure
at the laboratory level or constructed by investigative area
within the laboratory.
Note that the inverse of this ratio, cost per case (TO-
TEXP/CASE), is also an item of interest to the laboratory
and all of its stakeholders. In fact, the prior discussion on
maximization of the cases processed for a given budget
allocation may be turned around as the problem of mini-
mizing the average cost of processing a case. Additionally,
objectives may be measured in terms of reducing backlog
as a measure of return.
There are other related ROI measures that may be com-
puted and tracked. Some of these alternatives:
ITEM/TOTEXP = Items processed/total expenditures
SAMPLE/TOTEXP = Samples processed/total expenditures
TEST/TOTEXP = Tests completed/total expenditures
REPORT/TOTEXP = Reports completed/total expenditures
BACK30/TOTEXP = Backlog cases/total expenditures
Cautions and Conclusions
Forensic laboratories routinely generate data from case-
work performance across investigative areas, personnel
and budget allocations, and corresponding expenses. This
article considers ways in which laboratories can make
data-driven managerial decisions through the regular ex-
traction of data to create key performance indicators. The
techniques borrow from the experience in other indus-
tries and are modified for the specific needs of forensic
laboratories.
From accounting we learn how common-size financial
statements can be easily created to transform the “fi-
nancial statements” of individual laboratories into size-
adjusted analytical tools that can be easily compared
against peer labs and industry standards. From busi-
ness finance we learn that transforming absolute dollar-
performance measures into size-adjusted ratios permits
an evaluation of the allocation of resources into mea-
sures of efficiency, quality/risk management, analyti-
cal process choices, market conditions, and return on
investment.
These key performance indicators can then be com-
pared to peer laboratory performance and/or be used to
determine in-house trends for the proper management of
the scarce resources at its disposal or to provide quantita-
tive support for the acquisition of additional resources.
As the leading organizations in the industry begin to
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40 Speaker
assess and adopt a common set of measures through the
determination of industry-wide standards for data col-
lection, then the stories may be told by the leaders
in the industry in an effort to identify best practices.
Dissemination of those success stories and adoption
of similar practices offers a winning opportunity for
all.
Some cautionary tales must also be borrowed from the
application of these measures in other industries. It is a
natural tendency to lose sight of the organizational goals
and begin to manage (i.e., influence) the measures. Re-
member that the ratios serve to proxy performance in the
individual areas of concern. No single ratio should be eval-
uated in isolation. There is a natural temptation to play to
the measures and lose sight of the goals. For example, with
a goal of a lower cost per case, one way for forensic labo-
ratory managers to improve the metric is to assume more
risk, for example, reducing quality-assurance activities.
But that risk may prove dangerous and even devastating
in the long run.
Implementation of the ratios into the management
process can be tremendously beneficial to laboratories,
but stakeholders must be reminded to maintain the bal-
ance between return, risk, and efficiency to achieve the
organizational goals and avoid the pitfalls that have con-
fronted other industries.
References
Bielski, L. 2007. KPI: Your metrics should tell a story. ABA Banking
J. 10: 66–68.
Brooks, M.G. 2008. Getting a handle on analytics for strategic
success. Healthcare Finan. Manag. 7: 100–104.
Dale, M.W., & W.S. Becker. 2004. A case study of forensic scientist
turnover. Forensic Sci. Commun. 6: 1–9.
Kaskinen, J. Creating a best-in-class KPI program. 2007. Strategic
Finance. 10: 29–33.
Koussiafes, P.M. 2004. Public forensic laboratory budget issues
Forensic Sci. Commun. 6: 1–7.
Love, D., L. Revere, & K. Black. 2008. A current look at the key per-
formance measures considered critical by health care leaders.
J. Health Care Finance 34: 19–33.
Petaschnick, J. 2008. Using key performance indicators wisely.
Health Care Collector, 22: 7–9.
Reilly, F.K. 1997. The impact of inflation on ROE, growth and
stock prices. Finan. Serv. Rev., 6: 1–17.
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Appendix A: Nomenclature Established by Quadrupol and U.S. Foresight Projects
Assistant/Analyst An individual carrying out general casework examinations or analytical tests under the
instruction of a reporting scientist or reporting analyst and who is able to provide
information to assist with the interpretation of the tests.
Backlog Open cases older than 30 days as measured at the end of the year.
Case - Institute Case A request from a forensic laboratory “customer” that includes forensic investigations in
one or more investigative areas.
Case - Area Case A request for examination in one forensic investigation area. An area case is a subset of an
institute case.
Casework All laboratory activities involved in examination of cases.
Casework time Total FTEs for the operational personnel in the investigation area (in hours) subtracted by
the hours of R & D and E & T, and support and service given to external partners.
Crime Perceived violation of the law that initiates a case investigation.
Direct Salary Total salary paid to employees, including overtime compensations, vacation salary,
bonuses, etc.
Examinations (Exams) The word QUADRUPOL used for “test”; see both “test” and “sample” in this glossary for the
changes adopted by U.S. Foresight.
Facility Expense Sum of rents, cleaning, and garbage collection, security, energy, water, communication,
ICT infrastructure, and facility maintenance.
Floor Area Total of all floor area including office, laboratory, and other.
Full-Time Equivalent (FTE) The work input of a full-time employee working for one full year.
Full-time Researcher A forensic scientist whose primary responsibility is research and who is not taking part in
casework.
Investigation Area Area limited by item type and methods as they are listed in the benchmarking model.
Investment Expense Sum of purchases of equipment, etc. with a lifetime longer than three years and a cost
above $1,000 (alternatively, capital expenses).
Item A single object for examination submitted to the laboratory. Note: One item may be
investigated and counted in several investigation areas.
Laboratory Area Floor area used for forensic investigation, including sample and consumable storage
rooms.
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Key Performance Indicators & Managerial Analysis 41
Non-reporting Manager An individual whose primary responsibilities are in managing and administering a
laboratory or a unit thereof and who is not taking part in casework.
Office Area Floor area of offices (square feet).
Operational Personnel Personnel in operational units providing casework, research and development (R & D),
education and training (E & T), and external support services. Non-reporting unit heads
are included.
Other Area Floor area of space not belonging to laboratories or offices, i.e., corridors, lunch corners,
meeting rooms etc. (square feet).
Overhead Time Total FTEs in hours in the investigation area subtracted by the total hours of casework, R &
D, E & T, and support and service given to external partners.
Personnel Expense Sum of direct salaries; social expenses (employer contribution to FICA, Medicare, workers
comp, and unemployment comp); retirement (employer contribution only towards
pensions, 401k plans, etc.); personnel development and training (internal or external
delivery, including travel); and occupational-health service expenses (employer
contribution only).
Report A formal statement of the results of an investigation, or of any matter on which definite
information is required, made by some person or body instructed or required to do so.
Reporting Analyst An analyst responsible in non-complicated cases (e.g., simple drugs analysis) for
performing the examination of the items submitted, interpreting the analysis results,
writing the analysis report and, if necessary, providing factual evidence for the court.
Reporting Scientist The forensic scientist responsible in a particular case for performing or directing the
examination of the items submitted, interpreting the findings, writing the report, and
providing evidence of fact and opinion for the court.
Representation Expense The costs for hosting guests: lunches, dinners, coffees offered by the lab, and presents
given to guests or during visits abroad, etc.
Running Operational Expense Others cost than investment costs, personnel costs, and facilities costs, e.g. consumables,
traveling, QA, literature, contracting, representation, service and maintenance,
information, and advertisement.
Sample An item of evidence or a portion of an item of evidence that generates a reported result.
Scientist in Training An individual with no reporting rights being trained to become a reporting scientist.
Student Hours The sum of teaching hours in a course multiplied by the number of students attending the
particular course.
Support Personnel Forensic laboratory staff providing various internal support services. Management and
administration personnel not belonging to the operational units are included.
Teaching Hours Time spent teaching in the lecture room in hours (60 minutes).
Test An analytical process, including but not limited to visual examination, instrumental
analysis, presumptive evaluations, enhancement techniques, extractions, quantifications,
microscopic techniques, and comparative examinations. This does not include technical
or administrative reviews.
Total Expense The sum of the direct expenses (personnel, operating, and investment) and any
administrative or other overhead expenses.
Total Funding The sum of all funding sources including jurisdictional budgeting, grant awards,
bequests, and revenue sources.
Total Items Includes all items to which the laboratory assigns an item or tracking number. This is
different than the number of items the laboratory receives (the laboratory may split items
up for analysis).
Workload Total time spent on all work related to job, including overtime.
Accident Investigation All non-traffic accident investigations, such as work-related accidents.
Biology (Non-DNA) The detection, collection, and non-DNA analysis of biological fluids.
Blood Alcohol The analysis of blood or breath samples to detect the presence of and quantify the amount
of alcohol.
Computer Analysis The analysis of computers, computerized consumer goods, and associated hardware for
data retrieval and sourcing.
Crime Scene Investigation The collection, analysis, and processing of locations for evidence relating to a criminal
incident.
Digital Evidence - Audio & Video The analysis of multimedia audio, video, and still-image materials, such as surveillance
recordings and video enhancement.
DNA Casework Analysis of biological evidence for DNA in criminal cases.
DNA Database Analysis and entry of DNA samples from individuals for database purposes.
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42 Speaker
Appendix B: Definition of Investigation Areas from the Quadrupol and U.S. Foresight Projects
Document Examination The analysis of legal, counterfeit, and questioned documents, excluding handwriting
analysis.
Drugs - Controlled Substances The analysis of solid dosage licit and illicit drugs, including precursor materials.
Entomology Forensic entomology is the application of the study of arthropods, including insects, to
criminal or legal cases.
Evidence Screening &
Processing
The detection, collection, and processing of physical evidence in the laboratory for
potential additional analysis.
Environmental Analysis The analysis of naturally occurring materials, such as soil or water, for foreign substances
with criminal implications.
Explosives The analysis of energetic materials in pre- and post-blast incidents.
Fingerprints The development and analysis of friction ridge patterns.
Fire Analysis The analysis of materials from suspicious fires to include ignitable liquid residue analysis.
Firearms and Ballistics The analysis of firearms and ammunition, to include distance determinations, shooting
reconstructions, NIBIN, and toolmarks.
Forensic Engineering and
Material Science
Failure and performance analysis of materials and constructions.
Forensic Pathology Forensic pathology is a branch of medicine that deals with the determination of the cause
and manner of death in cases in which death occurred under suspicious or unknown
circumstances.
Gun Shot Residue (GSR) The analysis of primer residues from discharged firearms (not distance determinations).
Hairs & Fibers The analysis of human and animal hairs (non-DNA) and textile fibers as trace evidence.
Handwriting The evaluation of handwritten materials to categorize or identify a writer.
Marks and Impressions The analysis of physical patterns received and retained through the interaction of objects
of various hardness, including shoeprints and tire tracks.
Odontology The identification of human remains through dental materials, for example by
postmortem X-rays of the teeth compared to antemortem X-rays. Some forensic
odontologists also analyze and compare bite marks.
Paint & Glass The analysis of paints—generically, coatings—and glass as trace evidence.
Road Accident Reconstruction Analysis of criminal incidents involving vehicles and accidents (hit and run, for example).
Speech & Audio The analysis of live and recorded vocalizations in criminal investigations.
Toxicology, Ante-Mortem Toxicology involves the chemical analysis of body fluids and tissues to determine if a drug
or poison is present in a living individual, to include blood alcohol analysis (BAC).
Toxicology, Post-Mortem Toxicology involves the chemical analysis of body fluids and tissues to determine if a drug
or poison is present in a deceased individual.
Trace Evidence The analysis of materials that, because of their size or texture, transfer from one location
to another and persist there for some period of time. Microscopy, either directly or as an
adjunct to another instrument, is involved.
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