When Program Funds Go Awry

Plus: Improving 311 systems, the pain of conference calls, and more
by | February 5, 2009

Our file of laws and programs in which allocated funds wind up someplace screwy - or no place at all - continues to grow. Here's the latest example, from a December 2008 audit of the South Carolina Department of Disability and Special Needs:

"We estimated that DDSN has developed approximately 380 (60%) of 630 new residential beds for which it received state appropriations beginning in FY 05-06. Although 2,000 consumers are waiting for residential services, DDSN no longer plans to develop 62 of the beds.... DDSN has been slow to implement a new program for children who have been diagnosed with a pervasive developmental disorder, resulting in more than $9 million in state appropriations remaining unused or being used for different purposes."

As much as we like to look smart, we just don't understand how this kind of thing happens. If someone can explain this phenomenon to us, we'd be very grateful.


So-called 311 systems give citizens access to their local government for non-emergency issues, like potholes or stray animals. These systems have been real success stories in a number of localities. But there's a great deal that can be learned by individual entities from the experiences of others.

With that in mind, congratulations to the International City/County Management Association (ICMA) for its new report on 311 systems with many recommendations about how to make them work effectively. We were especially pleased by the fact that the study clearly states that there's no "one size fits all" route to a successful 311 effort, even as it identifies commonalities among systems that work well.


There's no question that new technologies have eased the path to better government management. But like any good medicine, the side effects can be pretty unpleasant. In the past, we've taken note of all sorts of problems with e-mail.

And now, we're thinking about conference calls - frequently used in cities and states to create virtual meetings (we often interview multiple state officials simultaneously this way). In the old days, you'll recall, telephone calls were pretty straightforward. One person called another. When the other person answered, they had a conversation. When the other person didn't, they hung up or left a message. At worst, someone was put on hold.

With conference calls, however, everyone is expected to call into a central number at a predetermined time. In our experience, often the actual call doesn't begin until 15, 20, even 30 minutes after the assigned time - because someone critical to the conversation hasn't called in yet.

And they call this progress?


While we're in carping mode, aren't you getting a little sick and tired of elected officials using individual anecdotes in lieu of far more complicated statistics that tell a fuller and fairer story?

We sure are. It feels like people running for office have developed their entire policy agenda by chatting with folks in the supermarket line, the drugstore or the barber shop. How much time do these folks have to hang around local merchants anyhow? And shouldn't these anecdotes always be backed up with solid hard numbers? Editors - at any publication of repute - require that much or their reporters. Why don't we demand it from public officials?


Across-the-board cuts - or even across the board hiring freezes - feel like some of the silliest means of saving cash in hard times. Their use is an outright denial of the notion that government should know how efficiently different agencies function or even that government is responsible for setting priorities. Consider this: A study by the Institute for Wisconsin's Future estimated that hiring 155 new tax-collection agents or auditors would pull in some $175 million in new revenues over the next two years. Over the course of time, the state has failed to replace tax agents and auditors, which leaves it with this much low-hanging fruit.


If we've heard it once, we've heard it a thousand times: "Money isn't the solution to better education." But maybe sometimes it is. Feels to us like the question isn't the amount of money, but how wisely it's spent.

Consider this from the Baltimore Sun :

"Five years after Maryland increased spending by $2 billion to provide greater academic equity, students have made remarkable gains in reading and math, according to a report given to the Maryland General Assembly yesterday by an outside consultant.... For every additional $1,000 spent per student, there was a significant increase in pass rates in both subjects. The improvement was twice as great for middle school students as for those in elementary grades.

"The report by MGT of America also confirms what most educators have intuitively believed for decades: Money invested in teachers appears to pay off. About 80 percent of additional local and state funding has been spent on the teaching staff - raising salaries, hiring more to reduce class sizes and requiring a highly qualified teacher in every classroom."


A while back, we explored all the reasons people gave for leaving their jobs in government. So when Virginia's Joint Legislative Audit and Review Commission (JLARC) studied reasons why employees leave state service, we were particularly interested.

The findings: Some 31 percent depart because of salary problems (presumably, that they're too low); 15 percent run away from "poor management," another 10 percent are unhappy because there's a lack of a career path, and 15 percent quit as a result of other work-related/compensation problems. That leaves the remaining 29 percent whose departure has nothing to do with the work or the compensation. (Presumably many of them just want to move to another part of the country, or simply need to find jobs that fit better with their lifestyles.)

And, by the way, if you're interested in government generally, we'd recommend that you look at the JLARC Web site. It's full of fascinating stuff, done by one of the best legislative evaluation units around.


Manager's Reading List: Our ongoing feature about books to read, recommended by B&G readers

This month we bring you a nice sampling of suggestions from Erik Bush, chief financial officer of Peoria County:

Without Fear or Favor, by L. Harlow: "chronicles a progressive era city manager through some down and dirty management challenges."

Tales from the Top, by Graham Alexander: "Great insight from top executives."

Contrarian's Guide to Leadership, by Steven B. Sample: "Discusses the pitfalls of approaching issues in a black-or-white sense."

A Rulebook for Arguments, by Anthony Weston: "because everyone should know how to avoid weak arguments."

Bullshit and Philosophy, by Gary Hardcastle and George Reisch: "because everyone should know the difference.

The Tao of Pooh, by Benjamin Hoff: "because everyone should understand the importance of balance."

Read the full archive of Managers Reading List suggestions.


Incentives can certainly help state and local governments accomplish desirable goals - when used properly. But sometimes there may be perverse results. The following, which comes from a couple of stories written by AP writer Jay Reeves, is probably as extreme as such things get. But it's nonetheless a lovely cautionary tale.

Apparently, Alabama encourages its sheriffs to save the state money by making sure they don't overspend on food. Based on a Depression-era law, sheriffs can actually keep the money they save. The result, according to Reeves: In testimony, "several skinny inmates...described being forced to eat meager meals of paper-thin bologna, bloody chicken and cold grits."

Worse yet, the inmates then wind up paying out-of-pocket to supplement their diets with high-priced snacks from the jail's store. And by the way, it's not like the state was providing enough cash to feed the incarcerated on lobster bisque and caviar. The state only pays sheriffs $1.75 a day to feed each prisoner in the first place.

The sheriff in question has agreed to give up any future profits and has promised to follow USDA guidelines, which require that inmates be served fruit, milk and other healthy items that prisoners in Alabama had rarely ever seen in the past. But it leaves us wondering what other incentives are being offered that lead managers of all kinds to go over the line.


The Baldrige Award is about as prestigious as you can get. Its criteria for Business/Nonprofit, Health Care and Education have just been altered a bit, and we think some of the changes are instructive. Here are a few, from a press release:

· An increased focus on customer (or patient/stakeholder or student/stakeholder) engagement. With the improved Criteria, organizations can better assess their ability to deliver relevant programs, services and products, develop a customer culture, and listen to the "voice of the customer."

· An enhanced emphasis on core competencies that stresses their importance to an organization's mission, strategy and sustainability.

· A new consideration of societal responsibilities that explores how organizations contribute to the environmental, social and economic sustainability of themselves and their community."

Research Assistant: Heather Kleba

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