Why We’re in This Mess

March 1, 2013

The NYS Comptroller revealed today that New York State overpaid Medicaid $26 million due to flaws in the computer system built to process claims. We should be pleased that the Comptroller’s auditors found the problem and that the NYS Dept. of Health is implementing the OSC recommendations. Unfortunately, however, this is another case of shutting the barn door after the entire herd escaped.

What the Comptroller’s press release does NOT tell us is why the mistake was made? Who developed the computer system? Was it a private contractor or an in-house system? Was political favoritism involved either in choosing the winner of a bid or deciding against letting a contract for the system? Why did it take so long to discover the problem? Will any heads roll as a result?

In a nutshell this is the problem with modern government––federal and state. No one takes responsibility or pays the price either for success or failure.

Andrew Mason, Groupon CEO, lost his job today. It probably should have happened in November of last year. He did a lousy job and he had to go.

In the public sector, you have to commit a crime to lose your job and, if you’re a teacher in the NYC school system, even that’s not assured.

In the public sector, no one pays the price when $26 million dollars are pissed away, just like no one is rewarded beyond their regular salary if they save the taxpayers money or exceed expected results.

That is why so many government run programs either fail or produce mediocre results. We rely on the good will of the public sector employee to care about the results. That’s nice when it works, but what about when it doesn’t work? What about when a person has been promoted above their level of competency? What about when someone consistenly makes bad decisions? What about the lack of oversight coming from the Executive Chamber and the White House?

Management in the public sector suffers because our elected officials seem to spend 99% of their time campaigning. Even Barack Obama spends most of his time campaigning and he can’t run again.

Who’s minding the store?

Sampling other recent audits from the Comptroller’s office we learn that many localities fail to employ proper procedures for monitoring expenditures. A few examples:

• Payments were made to the clerk-treasurer of the village of Richmondville without board approval.
• In the village of Forestville, “the clerk-treasurer’s records for the water fund were inaccurate and misrepresented the fund’s financial condition.”
• The Town of Finley board “did not develop and adopt accurate budgets…based on realistic estimates of revenues and expenditures.”
• The Village of Parish’ board “did not ensure that all claims were audited prior to payment…”
• There are significant weaknesses with the timeliness and accuracy of how the town of Livingston’s tax collector recorded, supported, deposited, disbursed and reported tax payments.
• Internal controls over cash receipts and disbursements were not appropriately designed or operating effectively for the Niagara County Soil and Water Conservation District.

In a year’s time, the Comptroller’s office finds dozens of examples of mismanagement and poor controls. They also find fraud and theft, which lead to criminal prosecution and conviction. But keep in mind that what is discovered is only the tip of the iceberg and all of the problems are discovered AFTER THE FACT.

All of the above explain why so few Americans––other than the ones who are going to be furloughed––are upset about sequester. Americans know in too many instances their local, state and federal governments are not being managed properly. They know too much of their money is being wasted. They know too many of those who should be benefiting from government programs are being short-changed.

That’s the part of the story some people don’t want to hear. It’s not because the public hates government or doesn’t think it’s needed. What we hate is mismanagement and waste––not the public sector employee. We hate that system doesn’t include the possibility that a bad job is punished and a good job is rewarded. We hate thinking this is the best there is. AND, we hate those who make excuses and blame the messenger. It’s time the apologists for mediocrity and failure took some responsibility or get out of the way. Let’s clean up this mess now.