Column by Fred Morgan, President & CEO of the State Chamber, published in the Journal Record on July 18, 2018
Having worked in and around state government for decades, I’ve seen little evidence of outright corruption. But waste, inefficiency and lack of accountability for taxpayers’ hard-earned money is rampant. While members of the Legislature should ensure tax revenue is used properly and efficiently, their power is limited. It becomes the responsibility of agency executives to maximize the value of the tax dollars entrusted to them.
Unfortunately, many state agency heads are bureaucrats, academics or policy experts with little business or management experience. This problem became obvious during the Department of Health’s financial fiasco. The agency’s leadership was bureaucrats with little business experience. The same was true of its board members, several of whom have admitted they were merely passionate advocates of health care, not financial watchdogs.
Another example is the Oklahoma Health Care Authority, which has a budget exceeding $5 billion. Many private service providers delivering services have endured draconian reimbursement cuts during the economic downturn. However, in 2015, the state of Oklahoma awarded a private law firm a contract to outsource collection services on a contingency basis. The law firm proposed collecting amounts owed to the state agency for a percentage of funds recovered. All costs – including personnel expenses – would be borne by the law firm and the state would not pay expenses unless a recovery resulted. Sounds like a smart business proposition, right?
The only agency requirement was to accept the proposal. Shockingly, the OHCA rejected the offer, and in typical bureaucratic fashion, suggested it simply needed to hire more state employees. Conversely, at another state agency, the Office of Management and Enterprise Services’ CEO, with years of business experience in recognizing how to save money, took advantage of the offer. Over the next two years, OMES recouped an additional $6 million in revenue due the state. This went directly to fund core state services and was triple the amount the agency recovered on its own.
Why wouldn’t a state agency seize the opportunity to recoup additional taxpayer dollars to fund the state’s Medicaid program at no cost or risk? Why wouldn’t the OHCA board demand such efficiencies? Why wouldn’t the Legislature mandate the use of such services in the interest of cost savings? The obvious answer is that government has no incentive to use the resources entrusted to it wisely nor the business acumen to do so. Change is necessary, and this is why the State Chamber supports the creation of an Office of Government and Accountability to ensure hard-earned taxpayer dollars are spent wisely.