Publisher's note: The author of this post is Mitch Kokai, who is senior political analyst for the Carolina Journal, John Hood Publisher.
It's hard to know how to save taxpayer money when state agencies have no clue what they're spending on basic services
She didn't use the words "garbage in, garbage out." But that popular computer science catch phrase could have summarized State Auditor Beth Wood's recent warning to N.C. lawmakers.
It's a warning that helps highlight the obstacles legislators face as they attempt to boost efficiency
within state government.
Wood's commentary followed a May 21 report from the General Assembly's Program Evaluation Division. The report focused on potential efficiency gains within the N.C. Department of Administration.
That relatively small department wasn't lawmakers' first choice for an emphasis on increased efficiency. The much larger state departments of Public Instruction and Health and Human Services initially attracted attention from Sen. John Alexander, R-Wake.
"When I mentioned that, eyeballs started rolling back in heads,"
Alexander told colleagues at a meeting of the Program Evaluation Division's oversight group. "So we said, 'Why don't we do DOA first?'"
"As we looked at this relatively small department, and we see these inefficiencies and inaccuracies, just imagine what's going on in the rest of state government."
Alexander added. "The idea behind this whole thing was, OK, let's do DOA, and let's get a template, find out problems there, and then whatever we correct there we can expand out into the rest of state government."
The administration department "acts as the business manager" for state government, according to proposed legislation emerging from the evaluators' report. DOA oversees items such as government construction, purchases, mail service, and police protection.
A draft bill calls for nearly a dozen items linked to improving department efficiency. Among them: The Department would require state agencies to secure 10 percent in annual cost savings for any contract that's extended beyond its original length. DOA also would develop office-space usage requirements for buildings state government owns and leases.
Here is where Wood enters the story. The Democrat has served as state auditor for 10 years. "Our biggest concern moving forward with this ... is the lack of data,"
she told lawmakers.
For instance, one proposal calls for a business case analysis involving sale of the Old Revenue Building. That 90-year-old structure sits near the State Capitol in the heart of the state government complex.
The legislative report says the building never has been renovated. "That's simply not true," Wood responded. She should know. Her department has worked in that building since the late 1990s.
The auditor did not blame the Program Evaluation Division for the mistake. "A lot of the data that they've had to work with has been incomplete, inaccurate, and unreliable."
For instance, the current janitorial services contract for Wood's building does not reflect what's actually taking place. Inaccuracies range from overestimates of daily vacuum work and stain removal to a provision that calls for ash trays to be emptied every day. "Every day," Wood repeated before hitting her punch line: "There hasn't been smoking allowed in government buildings for a very, very long time."
Yet program evaluators without Wood's firsthand knowledge must treat the contract language as accurate. They base their janitorial service efficiency recommendations on inaccurate inputs. It's an almost literal case of "garbage in, garbage out."
"Nobody is tracking the data that is necessary to determine what we're doing,"
Wood concluded. "We've got to establish where are we before you can establish what cost savings, cost efficiencies are going to look like."
The problem of "incomplete, inaccurate, and unreliable" data prompted a response from Sen. Andy Wells, R-Catawba. "Just as we have no data, we have no evidence that we're ever going to get our hands around the broad expanse of state government and understand exactly what's going on,"
"On top of all this, we get a report that another department [Public Safety] has lost computers, and now we're haggling back and forth with the auditor saying, 'You lost this many,' and they said, 'No, we didn't lose that many, we only lost this many,'"
he said. "That's the debate we're having in state government. This thing is so big that it's starting to feel a bit like a swamp."
"When you're out there in the real world trying to do business, without the extensive benefits - and you can't even afford to pay insurance for your employees, much less a pension plan - when you're out there fighting that battle, what we're dealing with here ... from outside it's just unbelievably frustrating,"
With Wood's warning in mind, Wells and his colleagues still voted to pursue the efficiency recommendations. The full General Assembly will need to exercise caution to avoid endorsing a plan that produces only garbage.