I only watched from 8:28 on … these tactics are classic high pressure sales tactics. While I find it hard to believe that it works, it must actually work otherwise the tactics wouldn’t be employed. I’d like to see more of these kind of reports, so long as their veracity can be documented … we don’t need more ACORN “undercover” shenanigans.

On the other hand, I wonder how much fraud is occurring at the private/state universities and colleges?

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Aug 02, 2010

local heroes?

The US Department of Defense can’t account for $8.7 billion out of the $9.1 billion intended to help rebuild Iraq. Bell, California city officials were forced to cut their salaries by 90% because they were found out (the worst offenders were the city manager ($787,000/yr) + assistant city manager ($376,000) + chief of police ($457,000/yr) were all forced to resign).

Also in California, while spending for K-12 education rose 22% over five years (from $45.6 to $55.6 billion), actual classroom spending fell from 59% to 57.8% of the budget, and 38,000 school teachers have lost their jobs; California has a $20 billion deficit. Where is the money going?

There is profound inefficiency in the American education system – California alone has over 1,000 school districts. First – why are so many districts required? Surely one is enough? With 1,000 separate district organizations (each of which has an average $55m budget), surely there is waste, fraud and excess staffing? With 1,000 districts, surely a percentage of them have leaders that are abusing the system, and siphoning money away from students and teachers? With 1,000 districts, surely there would have been a way to fire 38,000 bureaucrats, retain 38,000 teachers, and give tens of thousands of students a better education?

“They” say that we should keep the Federal government small, and leave as much work as possible to the states and below. Most politicians will argue that this is the key to success, but where’s the proof?

While local government is theoretically more in tune with local needs, the price you pay is significant. By definition, a decentralized model with redundancy at every level is actually more government not less. Look around the world today and you see a dearth of great leaders and great managers. The more distributed government is the more leaders and managers and honest people it needs; and let’s face it, there just aren’t enough of those to go around. The result – bad management, shortsighted thinking, poor budgeting, massive inefficiencies, wasted money, wasted time, wasted lives, wasted air…

When the system is this fragmented, it is also impossible to ensure accountability – imagine how big, how pervasive and how resistant to “influence” the oversight organization would have to be to police the whole country’s fiefdoms? The theory that local elections serve as the “cops” is laughable – just look at the “wonderful people” that keep getting reelected in local and regional (and federal I suppose) elections).

It’s too easy to hide, and people are too disengaged to pay attention. In the end, elections are not the best way to do anything other than win a popularity or fear-based contest.

The 8.7 billion dollar throwaway by the DOD means this isn’t just a local problem; there are massive failures at the Federal level as well (this is but one).

Is there a way to prevent fraud and abuse and just plain stupidity? No – being unscrupulous is part of human nature (or better said, trying to get away with something you know to be wrong is human nature); and you only have to look at the Darwin awards to know that there are a whole lot of less-than-bright people that grace this planet, and many of those seem to be drawn to politics.

The arguments against federalizing everything are many – too much distance from people and local issues, too much bureaucracy, too much excess spending, and my favorite with budgets that big, any screw-up is sure to just as gigantic (at least locally it’s only hundreds of thousands of dollars or millions, and not billions).

I don’t buy that. Saying that this alternative sucks less so let’s do it is not the way government should work, and it’s certainly not the way citizens should be served.

My first instinct was to say we should accredit government workers – they must be trained and pass an exam to be judged “Competent to Spend the People’s Money” (or CSPM ). But that’s a non-starter – just look at the fact that 90+% of politicians are lawyers (who had to graduate from university and pass the Bar), and how incompetent they are.

I wrote something a few months ago that I think might have merit – I was talking about how we incent or mandate a balanced budget:

Quid pro quo. If we’re punishing Congress for excessive spending, we should also reward them for good behavior. Every year that there is a budget surplus, all Federal employees will receive a bonus of X% (1 or 2%?) of the total surplus, divided equally (same percentage of salary). When they’ve also retired the gross deficit, the percentage should double. There should be no cap on this – the better they do, the better they do.

But how do we prevent fraud? Two things –

first, if everyone’s pay is dependent on a more efficient system, maybe that creates an incentive to play better. Second, if the number of agencies is reduced profoundly (reducing the 14,866 school districts to 50 + 1 (for Washington DC) for example), then maybe it’s possible for the GAO to police all of them? And what if the GAO is also similarly incented to find bad behavior and eliminate it? For example – one incentive I might consider for the GAO is they’re penalized if a behavior is reported in one year, and remains just as bad in the next, and they’re rewarded if it improves (their bonus pool could increase by a percentage of the improvement).

It should be noted that there are a ton of federal organizations that do have a local presence, and are able to tune their efforts according to local needs – it’s just a matter of policy.

The three steps to reduce bad behavior – consolidate so that fewer more qualified people are doing the work; create a pay structure that rewards fiscal responsibility and improved service for the citizens; and motivate the oversight organization so that it wins if the citizens win.

Sadly – the easier way to do it – trust the citizens to vote well – hasn’t worked…

Posted at 19:30 in Accountability, Community, Economics, Education, Leadership, Management, Politics | Permalink

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Thought provoking piece …