13 November 2009

Privatize Federal Fund Management Now

Look, I'm still celebrating MY BIRTHDAY!!, it's Friday the 13th and I have The Sports Guys' The Book of Basketball to get back to, so here's the skinny:

Let's privatize Federal fund management in Puerto Rico. Now.

No, it can be done, And I submit it has to be.

Outside of retirement, pension and Medicare payments--that are almost exclusively handled by the Federal government--Puerto Rico receives some $6.7 billion a year in other federal transfers, monies that go (or are supposed to go) to education, housing, social services and the like.

But Let's take Education as an example, specifically the Federal Affairs Office. Aside from formerly having a convicted drug dealer as its pinhead, the Office itself has about 230 employees. (Keep that in mind.) Despite receiving over $380 million a year (with a local budget of about $1.1 billion) and receiving additional grants averaging about $260 million a year for the past 9 nine years, the (Lackwit)Department of (Mis)Education has over $1 billion in unassigned federal funds.

That's right: the local excuse for a Tweedledeefective/Tweedledummy Convention has monies in hand, stagnant, equal to its own annual budget.

And yet the Federal Affairs Office has 230 employees. California has about 6,252,000 students enrolled in its public school system; Puerto Rico has about 597,000, or about 9% of The Governator's demesne. By that ratio, California should have about 2,630 government employees to manage federal education funds, right?  

It has about 770.

---Puerto Rico: 230 employees to serve 597,000 students "moving" about $1.6 billion in State/Federal funds. That's 2,596 students/$6.96 million per employee.

---California: 770 employees to serve 6,252,000 students moving about $64 billion in State/Federal funds. That's 8,119 students/$83.12 million per employee.

Multiply that level of inefficiency shown above by a couple of dozen agencies at the State and Municipal levels and there is no rational argument against privatizing Federal fund management in Puerto Rico.

Here's the short list of benefits:

1) Reduced costs: I asked several highly-experienced people--in Education and even the Federal Affairs Office itself-- how many employees it would take to run the operation effectively and they all concurred it would take between 24 and 44. That's about 10-15% of the actual employee count. Say We need 60, to cover contingencies and new approaches; We'd still be saving the salary/wage packages of 170 or so dimwads. That's a start. Multiply that by all other agencies, using integration rather than job-cramming and you have major savings.

2) Enhanced focus: In March of 2009, I asked a long-time employee of the Federal Affairs Office how many people were assigned to identifying opportunities for new Education programs, i.e., locating grant programs and creating proposal plans to enhance local education. Out of 230 employees? None. Let Me repeat thet: n-o-n-e. And they only had 2 grantwriters whose total output over the previous 18 months was 10 proposals, n-o-n-e of which received funding. Note that these are not assigned funds, these are competitive funds, funds that can launch new programs or exploit opportunities. Not only was there no one "on watch," We have Little Leaguers where We need at least Double-A level. With a privatized agency, the more money coming in, the more it can do, unlike these feebs for whom more money is akin to contracting swine flu.

3) Effective fund disbursement: The reason Education has a backlog of funds and non-profits wait months for Municipalities to release federal funds (that they cannot use at all, but keep anyway) is because there is no incentive in government to release monies. The end result, to the government, is not a consideration. But as non-profits and private companies know, end results are everything, and fund disbursement under a privatized agency would work on the principle of "Money out = Results/Data in," the kind of feedback system the Federal government demands and seldom gets from the Our government.

4) Solutions-oriented mindset: Related to point #3, the backlog in Education, Housing and other departments is due to no one caring enough to tackle the issue of finding solutions, plans or methods to use the monies, and no one having enough responsibility to do so. When 230 are "in charge" of this, no one is really in charge. 

5) Transparency: A private agency, starting from scratch, would be developed to match Federal disbursement, management and reporting standards to a T. Now for those of you who think that this means "catering or kowtowing to gringos," let Me remind you of one basic, undeniable Truth: It's their money so it's their rules. We take their money, We play by their rules, but whereas Our government plays "keepaway" with the funds, We can have an agency that plays "straight up." I don't care if you think that's "catering," but I bet you're willing to take the benefit of gringo money if it came cheaper, faster and more directly to your pocket. 

Right? Of course you would. And they'd be happier, too. That's called a win-win situation, something We have to learn to stop paying (hypocritical) lip service to and make it a regular tool in Our mental toolbox.

And before you ask, how big do I think the private fund management agency would be and who would work in it? I see a 90-120 employee office staffed with fully bilingual personnel, of which 30% are accountants, auditors and lawyers (27-36), 10% are agency management (9-12 "executives") and the rest are split between Fund Managers, people whose job it is to match available funds to qualified recipients as quickly as possible, and Fund Finders, people who match needs to federal fund programs and do so by writing the required proposals. 

This means that employees are clearly and directly responsible for the funds they are assigned to manage or the needs they are assigned to act upon. This allows effectiveness to be measured simply and quickly and We know that what gets measured gets done and improves.

And would the agency hire any of the substituted employees dumped from the government? Only if they pass a written test on English and Spanish skills and can explain in 5 minutes or less how any specific fund program can be implemented and improved within local conditions. Yes, I'm saying they have to be tested, otherwise the agency would be hiring the very problem it is trying to replace.

And how would the agency be funded? Easy: from the savings on the government side and from funds received through grant proposals. If it isn't self-sufficient after Year One, it isn't privatized. And if it isn't effective by the end of Year Two, it gets dismantled over time to let agencies and the government take over.

But that wouldn't happen because when it comes to handling government money, the government is the worst manager possible.

The Jenius Has Spoken.


Alfredo Rafael Habersham-Pabón said...

It is stated on this post from November 2009 that PR Department of Education receive "over $380 million a year" in federal funds, within a total federal budget of "about $1.1 billion". Where can I find this data current to 2011, for a research project?

GCSchmidt said...

Try these sources, understanding that there are several different categories and classifications for federal funds:

Federal Funds for the Government of Puerto Rico: http://www.google.com.pr/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&cad=rja&ved=0CDgQFjAC&url=http%3A%2F%2Fwww2.pr.gov%2Fpresupuestos%2FBUDGET20112012%2FTables%2520Of%2520Summary%2FPFP000XR-FF.pdf&ei=KcuFUMWPH4qu8QS2_ICQAw&usg=AFQjCNHU7fT9JdZCYl8iRwZ0tUA66yn9Sw&sig2=e9NEAu3BCXUXJHPdeT_jyg

Federal Education Budget: http://febp.newamerica.net/k12/PR

P.R. Budget Analysis: http://www.google.com.pr/url?sa=t&rct=j&q=&esrc=s&source=web&cd=24&cad=rja&ved=0CD4QFjADOBQ&url=http%3A%2F%2Fgrupocne.org%2Fwp-content%2Fuploads%2F2012%2F06%2FBudget-Analysis-2012-2013.pdf&ei=dcyFUIPPC5Km8ATfr4DgBg&usg=AFQjCNFIyL-Fj5e-Pmq9pdfuRWw3VYOp4Q&sig2=YMDpebQ4gI0BIPXf22t42g

Check the U.S Dept. of Education website for funds granted to State Education Agencies (SEA), as Puerto Rico has no Local Education Agencies (it's all centralized.)

Don't forget to look at ARRA funds spent in Education and that the local Dept. of Education has lost millions of dollars from incomplete or failed programs.

You'll do well in this.

Alfredo Rafael Habersham-Pabón said...