September 20, 2008

Addressing systemic causes of government waste in Nevada

NPRI frequently reports on waste throughout the State of Nevada; some of the reports detail specific examples of waste, but addressing a given example of waste does not solve the underlying causes allowing for that waste to occur. State-level legislation is needed to bring more discipline to the system.

What kind of waste are we talking about? Billions are spent each year by Nevada's state and local governments on private contracts. Some of these contracts are necessary and beneficial, but others are completely frivolous. NPRI previously reported on waste in state and larger county spending such as thousands of taxpayer dollars spent on cat leashes and artificial turf for dog parks. However, further open records requests have found similar government waste in Nevada's rural areas as well.

For example, Mineral County spent $1,750 for a magician and allocated another $600 to a rock band. Lander County logged $5,088 for a “loss on a junked asset" and paid $920 for credit card fees. White Pine County spent $9,000 in taxpayer funds on a bull-riding contest.

So how do we address the waste? The answer is not to pass a simple law or two stating that the government should not be allowed to buy cat leashes. Rather, broader changes in government are needed.

First, greater transparency in spending will help in the battle against government waste. NPRI built the Transparent Nevada website to bring this transparency to government contracting as well as public lobbying expenses and public employee salaries. However, as you will see by browsing the data, some of the contract purchases made by the state and local governments are labeled so vaguely that it is impossible to determine the nature of the spending. Thus, legislation is needed mandating that all government spending be reported in a clear and simple method distinguishable to taxpayers.

Second, the government should do a better job protecting whistleblowers who may be too fearful to expose government waste. A content analysis was completed of legislation protecting public sector whistleblowers, and little was found to help these people. At the county and local level, internet searches of legislation did not even turn up the word 'whistleblower' one time, thus no protections are evident. At the state level, the only legislation protecting whistleblowers was a few sentences mandating that state employees serving as whistleblowers have only ten days to file a complaint against unfair treatment, which is a very narrow window of time. Thus, a comprehensive bill stating specific protections for these people is needed.

Third, timeframes should apply to government reporting, and the state should use carrots and sticks to ensure that the counties have the resources and the motivation to comply. Some counties are as much as two years behind on completing their accounting of public spending, and transparency in government finance cannot be achieved if financial reports go unfinished for so long, especially because politicians and bureaucrats leave public employment within two years--an official could take office, allocate public money inappropriately, then leave office only for the next official to place blame on the former administration. Thus, more frequent reporting requirements are needed combined with the funding to hire enough personnel to complete the necessary accounting in a timely manner.

Fourth and similarly, the state should mandate a quicker turnaround on open records requests made regarding contract and other spending. Currently, the State of Nevada mandates that all residents can send in a form asking for more information on government spending, but some government entities take several months to report this spending, if they report it at all. While some agencies and local governments have provisions mandating a five or ten day turnaround, others have no such time clause, allowing them to greatly delay reporting. Legislation should be passed requiring that open records requests sent to any level of government be fulfilled within ten business days so long as the requests do not require a substantial amount of research.

Fifth, reforming state and local bidding processes could also save thousands. As mentioned in a previous commentary, Nevada's threshold for formal contract bidding is $50,000 whereas in other states it is $1,000-- there is no reason why Nevada's threshold should be fifty times higher than other states' threshold. And once a contract is granted, Nevada performs little oversight over the work performed or the contract renewal process. For example, an audit found that the Nevada National Guard did not properly find or record competitive bids for 6 out of its 20 contracts at a cost of $27,365. It would not take a government official much time to run a periodic search to ensure that the mandated compliance bonds have been purchased or that the proper number of bids for a given contract are on file. These are just a few areas for reform in the contract bidding process--a major overhaul is in order.

The State of Nevada is facing a giant budget shortfall and already has a very large amount of public debt. Given the economic slowdown, the fiscal situation facing all levels of government in Nevada is likely to get worse before it gets better, thus major changes to diminish the wasteful spending should be a priority for the state.