Report Takes State to Task on Consultant Spending

Dayton Daily News - April 24, 2002

Bill goes from $200M to $609M in 10 years
by Laura A. Bischoff

Dayton Daily News

COLUMBUS | State government spending on
consultants has skyrocketed during the past 10
years with inadequate oversight to make sure
Ohio is getting what it s paying for, according to
a Cleveland think-tank report.

The purchase of “personal services,” such as
management advice and computer consulting,
grew from $200 million in fiscal year 1991 to
$609 million in fiscal year 2001, according to a
report released this week by Policy Matters
Ohio, a liberal, nonprofit policy research
organization. The group was founded in January
2000, and is funded primarily by the George
Gund Foundation.

The report criticizes state officials for giving
little guidance on when to use outside
contractors and doing little analysis of the
services it purchases.

Policy Matters Ohio found:
The Department of Job and Family Services
recently awarded a contract to American
Management Systems Inc., even though it was
the seventh lowest bidder based just on cost.

Last year, the company was criticized for a
problem-plagued child support tracking system
it helped design.

The Department of Education paid a Columbus
marketing firm $30,000 to ghost write six
newspaper opinion columns for state
Superintendent Susan Tave Zelman.

The Department of Rehabilitation and
Corrections spent almost $28 million on two
companies running private prisons, $34 million
on medical services and more than $7 million on
temporary employees last year.

Gov. Bob Taft told state officials this month to
review outside contractors as a way to save
money during the budget crunch. Policy Matters
said this is a good first step, but more needs to
be done.

It recommended comparing costs between
outside contractors and having state employees
do the work, writing contracts that contain
concrete results and timetables that vendors
must meet before getting paid, and hiring more
computer staff so that work can be done inhouse.

Job and Family Services Director Tom Hayes
last year began firing contractors and hiring inhouse
computer experts. The department
estimates it can save $100,000 a year for each
information technology contractor it replaces
with a state employee. In July, the department
had 613 information technology contractors and
298 state information technology staff. Hayes
goal is to reverse that ratio.

Job and Family Services spokesman Jon Allen
said Policy Matters study represents a snapshot
in time, but since then the department has
moved to decrease its reliance on outside

He also said some information was misleading.
For example, the $36.7 million contract with
Bank One to process child support checks was
mandated by the federal government a few
years ago. It is work that wasn t done by the
state 10 years ago, he said.

Also, a $19.1 million contract with Citicorp to
handle electronic food stamps, which increases
efficiency and reduces fraud, is another new
program that didn’t exist 10 years ago.

“My first response is you only have to look at
the list of the directors (of Policy Matters) to
find out it s a labor and left-leaning group,” said
Mary Anne Sharkey, Taft s communications
director. “Clearly, their objective is for the state
to hire more union employees.

Zach Schiller, the report’s author, said attacking
the people behind the report shows the
administration isn’t focused on its content.

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