Jurisdictions: Government Accounting Office; Dept. of Health and Human Services; Michigan;
By Rita Kidd
Current congressional and administrative activities to convert uncapped funding of welfare and social services programs to block grants for states has brought about an essential turning point for these programs. Severe dangers lie ahead if we are unable to overcome traditional preconceptions about how to administer and deliver public social services. On the other hand, limitless opportunity lies ahead if forward-thinking administrators and managers who understand the value of acting swiftly, giving up turf, integrating programs, changing basic business practices, sharing information, and using advanced technical solutions are willing to take informed, well-planned business risks.
A Government Accounting Office (GAO) report on welfare and social services programs released in 1993 noted that it is virtually impossible to develop an accurate picture of the cost of administering the full range of social services programs at the state and federal levels. In 16 states in which social services programs are state supervised and county administered, this picture becomes even bleaker.
While public and political attention has focused on the direct cost of programs and services for the disadvantaged populace, little attention has been paid to factors contributing to the rising cost of administering these programs. This is the area where the greatest danger or opportunity rests.
Under the current federal initiative to control costs and turn more control of programs over to states, one can assume that the inordinate cost of supporting massive information infrastructures built over the past two decades will not be funded separately, but will have to be met from block grants. These systems were built to support entrenched, labor-intensive stovepipe service delivery structures which drive public assistance, food stamps, child welfare, Medicaid and child support enforcement.
Yet federal agencies are complicit in having created this monster. In an era of government dogging the tracks of "dead beat dads," it is interesting to watch possible federal abandonment of its own, out-of-control brainchildren:
- FAMIS system transfers urged on states without regard for the on-going capacity demands or cost of day-to-day maintenance
- Child welfare system enhanced funding that has had states scrambling to develop anything for 75 percent of the money (often with systems that do not improve the way in which government performs)
- Mandated development of child support systems to beat an imposed deadline.
AUTHORIZED WAIVERS
In a desperate effort to reform welfare programs at the state level, the Department of Health and Human Services has authorized waivers to federal regulation for more than 20 states to test differing programmatic schemes, according to the January 16, 1995, U. S. News and World Report article on welfare reform titled: "Welfare, The Myth of Reform." The article states "Michigan Gov. John Engler, a champion of giving the states more responsibility for welfare, says that in his state "welfare reform means work." The article further cites a consultant's evaluation of Engler's 1992 reforms, finding that three years later the number of AFDC adults participating in work programs had increased by 1.7 percentage points, and had reduced the welfare rolls by one percentage point.
Although unintentionally, a February, 1995 article by Peter Drucker in The Atlantic Monthly, entitled "Really Reinventing Government" makes observations more than a little appropriate to the federal and state social services agencies' experiences. His article states, "These able people are getting nowhere fast because their basic approach is wrong. They are trying to patch and to spot-weld, here, there, and yonder - and that never accomplishes anything. There will be no results unless there is a radical change in the way the federal government and its agencies are managed and paid."
Public administrators feel powerless as they face the political realities of changing or reforming programs. On the other hand, changing the way in which the programs are delivered is an area in which public administrators have absolute control, if thinking is shifted. Without this shift in thinking, however, the self-perpetuating needs of individual programmatic functions and program funding agencies clearly will interfere with block grant, community-based social services. Administrators and workers must, by design, focus on process.
Completion of a long-term business plan and a vision of how business functions should be modified will set a course for the most cost-effective social service delivery system. In order for states to survive block grant funding for social services programs, strong leadership will be required to eliminate duplication and redundancy caused by today's stovepipe regulatory and service delivery systems.
THE BUSINESS PLAN
The long term business plan is dependent upon how independently states can manage programs under block grant funding. There are numerous questions one might ask about the future of current federal relations. From the questions posed below, one can see that this industry is ripe for change. Specifically, how will block grant funding - when the debates end - approach the simplest of issues, such as:
- Waivers to deviate from federal and state rules. Waiver application processes can take months or even years for review and approval, and they often require complex, costly monitoring processes to "prove" concepts. What hoops will state and local agencies have to jump through if they deem a requirement outmoded, error prone and ineffective?
- If the cost/value ratio of a program shows it takes incredible resources to correct past social ills or inherent error proneness, and has very limited effectiveness, will states still need to have this component? For instance, one could wonder if the funding that has been put into welfare-based JOBS programs over the last decade had instead been invested in alternative secondary trade, service, and technical schools would there be more employable people prepared for the jobs of the next century?
- Whether via cash out, WIC vouchers or food stamps, a question must be raised as to the continued viability of food programs. Should this program be folded into the block grant without leaving the existing control agencies intact, the federal savings will be enormous. But it is likely that the impact socially and economically will be unnoticeable.
- Today, congressional and administratively mandated programmatic policy and implementation deadlines are crippling to the normal functioning of direct service delivery agencies. A significant portion of the enormous cost of maintaining complex social services systems comes from trying to stay current with the "last best idea," meeting deadlines that required implementation yesterday, and trying to program disparate rules that impact multiple service delivery systems. Is it the federal intent to eliminate federal promulgation of social services policy with block grant funding?
- Will it still be necessary for multiple levels of government to perform quality reviews and mandated matches? Who will decide that the cost/value ratio of the process may not meet the test of "good business" criteria? It would seem that block grant funding caps - and the potential for running out of money if programs are ineffectively managed - has the greatest preventative value.
- Statistical reporting and claiming. This is an opportunity to develop new standards for mandated statistical reporting, with a requirement for electronic collection of data from field office operations, with cumulative reporting at the state level, then with electronic filing of only the most critical reports to the federal collection source. Information generated from field or state office operations should never see a piece of paper. Rapid decision making which may be needed to meet business demands can not be effected when the base information is this delayed. With electronic reporting this information should be available to policy setters within a day or two.
- Systems Approvals. Does block grant funding presuppose that current federal requirements for pre-approval of technology expenditures will be wiped out? It is not the competitive procurement process that ties state and local government hands. It can take years to wade through the unrewarding federal system development processes and administrative trivia associated with bringing a technology project online. Today, federal regulation demands review, approval, and oversight by federal funding agencies in state planning, development, implementation, reimbursement claiming, and finally certification that the resultant system meets each agencies' expectations. Will states be able to determine their own information requirements, and build flexible new systems that they can afford under block grant funding?
NO STRINGS ATTACHED
If block grants come without existing federal regulatory strings, a vastly different business plan can emerge. As block grant funding is decided there will be some difficult organizational and system issues to resolve. Strong business leadership is going to be needed to evaluate the viability of states altering established organizational structures and programs in which there is so much invested in very specialized automated systems. On the other hand, we know that the year-to-year cost of maintaining these same specialized systems (which for the most part have not been built to support lower-cost, advanced technology solutions) is devouring funds that could be used to deliver redesigned services much more effectively.
Certainly if block grant funding to states for social services programs is not used as a catalyst by the federal and state agencies for real change, this will continue to be the case. If, however, federal and state agencies use this crisis to hack away at all the non-value added components created by each "last best" bureaucratic idea, then the potential tax dollar savings will be extraordinary.
