Accountable Strategies blog

A blog about accountability issues in the public, private, and nonprofit sectors

Posts Tagged ‘New Public Management’

Are we letting our government watchdogs become toothless hounds?

Posted by David Kassel on August 4, 2008

Continual downsizing in the federal government since the 1990s may have saved us money in federal salaries, but it has apparently also impaired our ability to track the taxpayer dollars feeding our military contractors.

Consider a July 2008 Government Accountability Office report about another key government watchdog agency, the Defense Contract Audit Agency , which has failed to do its job properly in auditing Defense Department contracts, apparently partly due to downsizing.  According to the detailed GAO report, downsizing has affected not only the DOD’s ability to manage its own growing universe of contractors, but audit staffing within the DCAA itself has been sharply cut in recent years. 

In its report to key members of Congress, the GAO noted that Department of Defense contract management continues to be vulnerable to fraud, waste, abuse, and mismanagement.  The report stated that downsizing of DOD contract oversight staff in the 1990s coupled with hundreds of billions of dollars in increased contract spending since 2000 “has exacerbated the risks associated with DOD contract management.”

The DCAA has a critical oversight mission regarding DOD contracting.  Despite that, auditing staff at DCAA dropped from almost 6,000 in 1989 to 3,500 in 2007, according to the GAO.  That is a 42 percent decline.   DCAA’s 3,500 auditors annually perform about 40,000 audits of approximately 10,000 contractors.

In one office, two DCAA supervisors, who approved and signed 62 of 113 audit reports, said they did not always have time to review audit working papers.  In 18 of those 62 cases, they assigned trainees  to complex forward pricing audits as their first assignments.  

DCAA contract audits are intended to be a key control to help assure that prices paid by the government for needed goods and services are fair and reasonable and that contractors are charging the government in accordance with applicable laws, regulations, and contract terms.   In performing its audits, DCAA states that it follows generally accepted government auditing standards (GAGAS).

GAO opened its investigation after receiving hotline complaints that DCAA was failing to comply with GAGAS on 14 agency audits.  The GAO found that in an audit involving a major areospace company, DCAA management threatened the senior auditor with personnel action if he did not delete findings from the report.  In addition, the management made an up-front agreement with the contractor to limit the scope of work and basis for the audit opinion. 

In another case involving a contractor that produces and supports military satellite sytems, a draft audit report identified six significant deficiencies, one of which led the contactor to overbill the government by $246,000 and another which may have led to $3.5 million in overbillings.  According to the GAO report, two auditors who wrote the draft report were replaced by other auditors who dropped the findings and changed the draft audit opinion from “inadequate,” to “adequate.”  In addition, DCAA managers took actions against staff at two locations, attempting to intimidate auditors, prevent them from speaking with investigators, and creating a generally abusive work environment.  Downsizing alone may not fully explain these issues at DCAA, but it may have been a necessary precondition for them.

The sad fact is that while the Bush adminstration may have hastened the downsizing process, it isn’t solely responsible for it.  One comment on the the Project on Government Oversight blog noted that much of the DOD’s contract management workforce downsizing took place during the Clinton Administration.  In a compelling paper in 2005, Larry Terry at the University of Texas at Dallas  linked government downsizing to the New Public Management (NPM)–a global public-sector reform movement that was embraced by the Clinton administration and implemented by then Vice President Al Gore.  The NPM’s zeal for downsizing was matched only by its enthusiasm for privatization and deregulation.  Terry argued that:

…NPM philosophy and practices have contributed to an increasingly hollow state with thinning administrative institutions.  …thin administrative institutions are fragile.  Fragile institutions lack the integrity and, in turn, the capacity to effectively serve the public good.

It shouldn’t be a surprise that we’ve now arrived at a state of affairs in which we can no longer adequately control the contractors who are increasingly running our government.

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The Bush contradiction in government

Posted by David Kassel on December 17, 2007

Two articles in the November/December issue of Public Administration Review highlight what seems to be a fundamental contradiction in American government—a contradiction that has become full blown under the current Bush administration.

The contradiction is basically this:  George W. Bush, perhaps more than any president before him, has sought to strengthen the authority of the presidency under the “unitary executive theory” of presidential power.  Yet, at the same time, Bush has actively promoted a trend that began in the Reagan years of downsizing government.

Why would Bush fight to increase his power and authority over the federal government, and yet work, at the same time, to make that government smaller and internally weaker?

I’m not saying I have an answer to this riddle, but it does seem that the roots of this contradiction extend back to the 1930s, when the Brownlow Committee was wrestling with the limits of presidential power and the relationship of the presidency to the rest of government.

The November/December issue of PAR contains a symposium on the 70th anniversary of the Brownlow Report, which the journal refers to as the first major reconceptualization of the American presidency since the office was created in 1789.

In separate articles, both Herbert Kaufman and Peri Arnold write that a stregthened presidency was a key outcome of the Brownlow Committees report.  Arnold noted that  Congress ultimately provided the president with greater authority over executive organization.  The Brownlow Committee, he said:

promoted a managerially strengthened presidency and an efficient, effective, and modern government.

Kaufman noted that the Brownlow Committee focused on a lack of coordination throughout government as its most presssing problem, and proposed a hierarchy of governmental authority, culminating in enhanced presidential authority, as the best way to deal with it.  The Committee also recommended the expansion of the career civil service as a way to increase expertise and experience.

However, much in government has changed since the 1930s.  Today, Kaufman pointed out, the Brownlow Committee’s views on hierarchical organization and civil service, in particular, have come under increasing attack.  Beginning in the 1990s, advocates of New Public Management or the “reinventing government” movement called for privatization of governmental functions, the introduction of market conditions in government, and the reassignment of many functions from the federal government to the states.  Civil service came under increasing attack as well.

The result has been a federal government that has been radically downsized in many areas, with departments that are increasingly staffed by political appointees.  At the same time, Kaufman argues, many of the problems that the Brownlow Committee identified, particularly the problem of a lack of coordination, have only grown worse over the decades.  He cites malfunctions in the intelligence community and responses to Hurricane Katrina in New Orleans as examples.

Thus, it seems that while modern presidents, including George W. Bush, have been beneficiaries of the Brownlow Committee’s call for a stronger presidency, Bush has at the same time seized on the downsizing aspects of New Public Management and negated some of those benefits.

Interestingly, a third article in the same issue of PAR, contends that movements have started within governments in the U.S. and a number of other countries to counter some of the “fragmentation of the public sector” that has been caused by New Public Management and to improve coordination within government.  The so-called Whole-of-Government approach is intended to restore “a strong and unified sense of values, trust, value-based management, and collaboration…, according to the article by Tom Christensen and Per Laegreid.

It does seem to be true that a sense of values, trust, and collaboration appear to be lacking today.  Whether the Whole-of-Government approach represents a return to those values and will undo the Bush contradiction remains to be seen.

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