Delayed Conversation

The feds don't spend much time hashing out mutual problems with states and localities. It's time they started.
November 1, 2007 AT 3:00 AM
By Jonathan Walters  |  Senior Editor
A Senior Editor of Governing, Jonathan has been covering state and local public policy and administration for more than 30 years.

What do you call it when eight federal officials and eight state and local leaders convene voluntarily to discuss intergovernmental fiscal affairs? Well, if you've watched the downward trajectory that has characterized intergovernmentalism in Washington over the past decade or so, you might call it a minor miracle.

But last month, that's just what happened. A 16-member panel whose leaders included Danny Werfel, acting director of the U.S. Office of Management and Budget, and Martin Benison, the Massachusetts state controller, sat down to develop plans for a new standing group that will focus on how the three levels of government might work more rationally through the broad range of intergovernmental fiscal issues that leave state and local officials alternatively exasperated, confused and, on some days, entertaining notions of open rebellion.

The effort, which is being called the "Partnership for Intergovernmental Management and Accountability," is being jointly sponsored by the Association of Government Accountants and the Chief Financial Officers Council, a group made up of the top fiscal officials from the 24 largest federal agencies.

The partnership has a wide range of issues and activities it might tackle, from serving as a forum for sharing best practices in fiscal management to working through proposed rules and regulations for specific federal grants and transfer programs.

Money may be the most important topic, but it won't be the only one. "Our guiding principles," says Werfel, "are sound financial management practices and also program integrity -- we want the programmatic perspective, too."

Among the federal players are Roberto Salazar, administrator of the Food and Nutrition Service at the Agriculture Department, and Cheryl Atkinson, administrator of the Office of Workforce Security Employment and Training at the Department of Labor. On the state and local side, the participants range from Stephen Gordon, head of procurement for the city of Alexandria, Virginia, to Kim Wallin, the Nevada state comptroller.

The partnership emerged out of what might seem an unlikely issue: the Bush administration's concern about "improper payments" that the feds might have made to states and localities. Relmond Van Daniker, the executive director of the Association of Government Accountants, didn't think the prospect of federal liens against states and localities due to perceived overpayments was a very practical investment of federal time or energy. "That just wasn't going to work," says Van Daniker. "What we really need is to get states, locals and feds talking to one another again."

So AGA and its current president, New Jersey state auditor Richard Fair, took the lead in suggesting a broader conversation on the general subject of the federal relationship with states and localities. In the past, such talk has proved intermittent and not very productive. There have been a few efforts since the demise of the Advisory Commission on Intergovernmental Relations in 1996 to rekindle interest in some organization that might pick up the ACIR mantle. But they have not gotten very far.

AGA, for its part, has put $200,000 on the table for the new partnership, and is providing all the administrative support for the group and its work. The Chief Financial Officers are tossing in $30,000. That's not a lot of money, but given that the Bush administration hasn't evinced much interest in a meaningful standing conversation with states and localities, it's arguably an important gesture.

One big question facing the partnership, of course, is what will happen to it under new White House leadership in 2009. Werfel says he's not as worried about that as he is about a loss of focus and momentum. "These efforts tend to peter out," he warns, "if you don't have a well-defined agenda and some early successes."

The partnership does have one important thing going for it: Those who are represented by AGA and the CFO Council clearly are getting tired of all the confusion and conflict when it comes to intergovernmental fiscal affairs. This potentially powerful source of grassroots and high-level discontent just might hold the new partnership together.