Wednesday, November 29, 2006

Daniels Ignores Warnings; FSSA Privatization Full Speed Ahead

The Star's Tim Evans describes Governor Daniels' $1.16 billion decision to privatize Indiana's welfare system as "bold", but I can think of several, more apt descriptions. "Ill-advised", "reckless" and "rushed" are all better adjectives in my mind. The governor claims his plan will save Indiana taxpayers nearly $500 million in administrative expenses over the next 10 years. How does he know this? FSSA refused to conduct a cost-benefit analysis of privatization before undertaking this process, which could be referenced for substantiating such claims. As far as I'm concerned, he's making the $500 million claim up out of thin air.

The governor also carefully orchestrated today's announcement by putting IBM front and center while pretending the other elephant in the room, ACS, doesn't exist. Everyone familiar with this process understands that ACS will, in many instances, be performing a more critical role in this effort than IBM. ACS, of course, is FSSA Secretary Mitch Roob's immediate, former employer before joining the administration. While Gov. Daniels may choose to ignore ACS, the public should not. WISH-TV noted in a report today some serious problems with this company:

I-Team 8 took a deeper look into the companies vying for a piece of the billion dollar contract to help the state determine welfare eligibility. One company bears singling out: Affiliated Computer Services, Inc. or ACS.

Just this week, the company's top two executives resigned. An investigation into stock option prices found the two violated the company's ethics code. This summer, ACS lost a multi-million dollar contract with North Carolina to create a new Medicaid billing system. Two years into a five year contract, the state blamed ACS for missed deadlines and increased costs.

The company has also had a string of security problems. This month, a computer was stolen with sensitive information of 500,000 people who pay or receive child-support. In February, it was a stolen data tape with credit card numbers used at an airport and in August personal information of 32,000 student loan recipients was exposed on a federal website.

Throughout Daniels' press conference today, he was extremely critical of FSSA's past performance in delivering welfare services. "Fraud", "rip-off", and "errors" were often used by the governor to describe FSSA's performance. Yet, his own administration has been in charge of the agency for nearly two years. What has it done to improve the situation? Is privatizing or handing the problems over to an outsider the only viable solution to cleaning up the "mess" he sees at FSSA? Did the governor consider the alleged "fraud" the top two leaders of ACS are accused of committing on its own company's shareholders? Did he consider the company's string of security problems over the past year? Did he consider the company's ability to perform the work as evidenced by its performance in other states?

It just seems to me to be somewhat hypocritical of the governor to speak so dismissively of FSSA workers while handing the keys to the office over to a company with a checkered past itself. And at the same time, he assures these workers that none of them will be permanently displaced by the massive outsourcing project. Perhaps I'm being too harsh, but I just don't get it. I think privatization makes a lot of sense in some areas of government. FSSA has for years outsourced Medicaid claims processing to EDS. This made a lot of sense and has been good for taxpayers, clients and providers. The governor complains that the agency's welfare-to-work achievements are unacceptable. Yet, the agency relied on private contractors for years to deliver these services.

When a change this big is made, it is incumbent upon our government leaders to explain their rationale for the change and make their case through a give-and-take public process. This hasn't been done by the Daniels' administration at all in this process. The administration will put on one public hearing next week to tell us what it long ago decided it was going to do. Why bother? The administration clearly thinks it knows what's best for all of us, so lets just sit back and enjoy the ride--wherever it takes us.


Jeff Newman said...

I've been a Daniels supporter since he took office, but it seems lately he's taken an "I'm-in-charge-you're- with-us-or-you're-with-the-terrorists" attitude doesn't it?

Slow down, Mitch, damn.

Anonymous said...

Bless you, Gary.

And Amen, Jeff.

We only need to look in Gov. Mitch's resume to find out where he got the holier-than-thou condescending, me/terrorist
attitude. He served in the Reagan White House political office.

Reagan did it with a smile as he played golf with Tip. But pound for pound, he was one of the most divisive presidents in history. Remember "I paid for this microphone" ?

W just continues it, without the smile, and much more hatefully. Mitch worked for him, too. Cutting budgets. Hmmmmm.

The Governor is attempting to villify the entire agency. Knock it down so low that any improvement looks good. Hell, switching from paper to computerized data entry, will by itself make things more efficient.

AAbout a third of those employees he's bashing now, will remain, under this proposal. Right now, none of them would spit on him if he were on fire. How smart is it to demoralize a workforce that, for all Mitch's pronouncements otherwise, did not wake up this morning with a "eff them all" attitude? They want to help their clients. The system is broken. Trashing the incumbent system is not a way to build a new one.

Watch for short-term productivity gains, and many, many more people in need going without.

Mitch may turn into a Grinch that Stole Christmas.

Anonymous said...

*sigh* I can understand if Gov. Daniels doesn't want to serve another term. Just don't f**k this up so badly people will be willing to do a repeat of Bayh/O'Bannon/ Kernan. Leave some room for the next GOP candidate to run for Guv. The masses may wonder about his political leadership but I know if I were on a board of a company he'd be #1 on my short list of CEO candidates. Like Saturn is "not your typical car company" Gov. Daniels is "not your typical politician". Would you agree Jeff?

8:20 - I don't see it as "Holier than Thou" - it's more like "it would take took long to explain it and confuse everyone." Like the BMV conversion. Needed to be done yes, and everyone had to hold their breath and dive in. Some people forgot their noseplugs.

Jeff Newman said...

I do agree with your assessment of Daniels, Hailstone--he's not your typical politician, and I don't think he gives a damn about getting re-elected. I have found that to be refreshing, and I've admired him because of it.

But politics is not business, and Daniels is not the CEO of Indiana--he's our governor. He doesn't trump everyone like a CEO can if he or she so chooses.

Perhaps he is more suited for the business world than political office.

Anonymous said...

I think you all are missing the point: The FSSA system, from top to bottom, is broken, horribly inefficient, and unacceptably ineffective. The typical political approach of incremental, safe (Evan Bayh), unimaginative (Frank O'Bannon) solutions have been tried and have failed. Who is being failed? First, all of us who pay enormous proportions of our taxes to fund FSSA, and, most importantly, the most vulnerable, marginalized citizens of the state. This may not be the magic bullet, but it cannot be worse than the status quo, and the great thing about this Governor (and I'm NOT a Republican) is that he acts boldly and decisively to fix what is broken. Maybe, just maybe, Indiana's long, painful slide into "third world" status might be reversed. If not, at least the man ACTED!!!

Anonymous said...

11:22, I'd buy our argument if it were entirely true. It's not.

Indiana, under Gov. Bayh, won national accalim for its Welfare-to-Work statistics.

The momentum was treendous, but it could not be sustained. We've slid back because that momentum took incredible record-keeping, to sustain. That record-keeping was and is expensive and time-consuming.

Welfare reform is two steps forward, three steps back, two forward, one back. It's slow and incremental. Difficult.

This is not the way to do it. Not even close.

Sure, I've seen the well-dressed woman, driving a nice big car, with all kinds of bling, buying groceries with food stamps or vouchers. It angers me.

But I'm guessing that's getting more and more rare. And if my choice is some of that waste versus IBM profits, guess where I'm putting my marbles?

I don't want ANY waste, of course. Nobody does.

But the governor's solution is over the top and will produce hardship where it should not.

Try to get a wheelchair for a 44-year-old diabetic whose legs have been amputated, who has no job because of it, and who would do anything to be productive again. Try to get him transportation to retraining or a job.

The system is failing those folks, and we need to fix it with employees who are accountable to elected officials. Period.

If the current system is reformed form the inside, and doesn't work, we have someone to hold accountable.

I doubt IBM would welcome me at their next Board meeting to discuss failures or shortfalls in the new system.

Gary R. Welsh said...

I've heard it mention time and time again that part of the problem at FSSA is that they have outdated, antiquated computer systems to administer these welfare programs. Is it fair to blame the employees for everything that's wrong with the agency when they aren't given adequate resources to get the job done--not to mention the ridiculously low wages many of them are paid for their work?

Anonymous said...

11:47, you are correct that accountability is the key. It is, however, almost impossible to hold a bureaucracy accountable for anything. It is equally difficult to fire a public employee. It is not, however, difficult to hold a contractor accountable, especially when performance measurements are built in to the contract. Bureaucracies eventually come to have one purpose: self-preservation. This requires insulation from accountability. Private sector bureaucracies are not different EXCEPT that market forces/the profit motive usually and eventually override the self-preservation motive. That USUALLLY happens in the private sector, but it NEVER happens in government. I'm curious: to whom would you go in the current FSSA structure to demand accountability, since you cannot go to the board of IBM in the proposed reform? Your state legislator? How many thousands of us who deal with FSSA have done that, to no avail. The Governor? I personally can't get an appointment with him. Perhaps you can. An FSSA bureaucrat? Good luck!!

Anonymous said...

"I've heard it mention time and time again that part of the problem at FSSA is that they have outdated, antiquated computer systems to administer these welfare programs. Is it fair to blame the employees for everything that's wrong with the agency when they aren't given adequate resources to get the job done--not to mention the ridiculously low wages many of them are paid for their work?"

Exactly. The problem with government is that the political hacks in charge and the sycophants they appoint do not let the rank and file employees do their jobs, because that would interfere with their personal agendas. Almost any good public employee (there are some really bad ones, but the political hacks make it hard to fire them, because firing them makes it hard to justify keeping worth their relatives and friends on the payroll) can revile you with stories about how their work has been impaired by similar privitization schemes and other so-called "solutions." But many of these schemes don't even get one drop of ink, yet they happen every day.

Anonymous said...

Speaking of accountability...
The best way to help the needy is through voluntary giving.
I have no choice but to give my money to FSSA - the governemnt forces me to do it. I have an opportunity once every few years to try to hold FSSA accountable via my one lonely vote.
If the charities I support fail to meet my expectations, I can stop giving - immediately. I don't have to wait for an election. Immediate accountability.
Government provided welfare should be ended altogether. But, if we do not have the courage to do that, then I say privatize at least the administration of the program. Inefficiency and fraud would then be immediately punished through equity market reactions.

Pat said...

Past filed improper tax returns of the deceased: why bother?

The answer to this problem lies in the expectation of society in the ability to cheat and steal, sometimes with attorney, trustee, or accountant's knowledge, then cover it up by death.

Since no one can be properly held accountable, the tendency is to let sleeping dogs lie. But if that tendency becomes the norm, an incentive is created to steal and cover, thereby using the probate process as the means of escape, not a reconciliation of debts and taxes.

Are there attorneys, CPA's and business owners engaged in this most effective of theft schemes? Most probably, since no one yet has ever invented a more superior system of escape. Without a person to charge, why bother?

It should be a growth industry to exceed all others, and may well flow from the attitudes of many historic Congresses, to steal the money and run, leaving future Congresses to clean up the mess.