SADOW: The CNSI Mess As A Cautionary Tale

Just as in the case of the investigation into the alleged improprieties surrounding the state’s Medicaid processing contract, Louisiana’s Division of Administration had better be very sure its willingness to spend money to save money will work out, given the far cheaper option it has at hand.

Last spring, after spending several million dollars towards implementation costs of this contract with Client Network Services Inc., the state yanked it when it became aware of both state and federal investigations into how the contract was awarded. Allegedly, relationships between former Health and Hospitals Secretary Bruce Greenstein and other state employees with CNSI helped get it awarded the contract. While this move allowed the state the ability to recoup a performance bond and to move ahead with the previous vendor substituting in, it also brought a suit by CNSI for wrongful termination. Thus, the state better be confident the evidence presented to it by authorities about probes in CNSI are correct, or there will be pretty penny to pay in damages.

In a different and decidedly legal way and on a smaller scale, Gov. Bobby Jindal’s DOA better be sure it’s doing the right thing in its contracting out to Alvarez and Marsal, a frequently-used consultant by the state in areas such as tax policy, higher education, and health care, to find efficiencies in state government operation. For $4 million, the firm already has started in looking specifically at how the state delivers in the areas of human services, transportation, public safety and justice, revenue and debt collection, facility and assessment management, risk management and public finance, among others. It would not address policy choices, but would focus on the implementation aspects of them.

The decision already has garnered a negative review from one lawmaker, state Rep. Cameron Henry, who liked the idea but balked at spending that amount on it, and the same from a flak of state Democrats, who showed she didn’t quite get it when her suggestion, to reduce state boards and commissions (the Legislature since Jindal, who has made efforts to pare these numbers, came into office has made little headway in reducing them), strayed from this larger idea of operations savings. DOA claims much more than $4 million should be found.

It had better hope so, and also begs a question. If Henry or other legislators start getting worked up over the tab, they’re going to start throwing stones from their own glass houses as just about two years ago the Legislature was wrapping up work on its Commission for Streamlining Government, which itself caused likely a comparable sum of money to be spent in looking for operating and policy efficiencies in state government. At its conclusion the CSG reported 105 of 238 recommendations were being implemented and 56 already had been completed.

But as of then of the remainder, many had not been acted upon. Some dealt with policy issues, but others addressed procedural efficiency issues as this contract would seem to cover. And while in some cases the reason given for lack of action was budgetary constraints, in other cases descriptions read as if pure disinterest intervened. So perhaps a better action from DOA would have been to comb through the inert recommendations first and see whether budgetary conditions could change to permit meeting the short-term costs that would ensue in order to achieve the long-term savings, and then see if any compelling reason existed to explain those recommendations that appeared to elicit disinterest and if not why these should not be implemented.

At the same time, the Legislature in the past couple of years has treated the CSG conclusions like some children who get a pet a Christmas but then rapidly lose interest in caring for it. During the CSG lifespan about every recommendation that required legislation got introduced, but many pieces were rejected and after it expired hardly any were taken up again (one notable exception was state Rep. Chris Broadwater’s shepherding through the bill this past year that created the state’s Office of Debt Recovery.) While most of the failed legislation dealt with policy changes, some of it did address implementation issues and deserve to find legislative sponsors in the future.

It may well be that this contract will discover efficiencies as yet unimagined among bureaucrats and politicians that will pay for it. But that doesn’t mean the state using almost no resources can’t implement or legislate cost-saving changes already identified during the remainder of this fiscal year.

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