The Augean Stable of state government

The Agency of Human Services comes in for a lot of green-eyeshade scrutiny when budget time rolls around. With good reason; thanks to outmoded software and management, I’m sure AHS could do a better job than it does. And thanks to our jobless, middle-class-killing “recovery”, it’s coping with ever-increasing demand.

Mr. Hoffer detects an unpleasant odor. (Not exactly as illustrated.)

Mr. Hoffer detects an unpleasant odor. (Not exactly as illustrated.)

But pound-for-pound, I doubt that any part of state government can top the Agency of Commerce and Community Development for waste, futility, and inside deals.

In the latter category, we had the backroom agreement last spring that landed Lake Champlain Region Chamber of Commerce a $100,000 no-bid grant for developing business with Quebec. And now, in the second category, we have a rather devastating memo about the inadequate structure of the Vermont Training Program, which provides grants to businesses for employee training.

In his memo*, Auditor Doug Hoffer is far too politic to use the most appropriate term — “clusterf*ck.” But that’s the message. As I was reading the memo, my thought was, “Maybe we should just burn down the whole place and start from scratch.” His bullet-point highlights:

*As of this writing, not available online. But check the Auditor’s website; it should be posted soon.

— The VTP has no effective internal controls to ensure that applicants meet the various eligibility requirements or that grant funds are only used for supplemental, rather than replacement, training.

— The wage increases reported for trainees may not accurately reflect changes in hourly wages and may reflect other factors not related to VTP training.

— A substantial portion of VTP’s total resources are directed to a few large corporations year after year.

Yeesh.

The details are even worse. VTP staffers, he says, make “no effort to substantiate the information provided” by applicants, and “none of the grantees have ever been audited.”

By contrast, the State’s application forms for public assistance through the Department for Children & Families (DCF) ask for detailed information and documentation about financial resources such as income, bank accounts, retirement resources, and unearned income, as well as assets such as home, vehicles, life insurance, and so forth. In addition, DCF periodically reviews selected applications and seeks additional supporting documentation.

Yeah, we can’t waste a single dollar on a possibly undeserving DCF client, but let’s leave the cash drawer open for our private sector “partners.”

Hoffer notes that VTP is supposed to “supplement training efforts,” but it makes no effort to verify that. Instead, businesses are free to use the money to subsidize training they would do even without the funding. And he says there’s a huge loophole in enforcement of the “livable wage” provision: employers are not required to provide health insurance, but the state’s livable wage methodology assumes “a very generous employer contribution for health insurance.”

And, in case there was any doubt about the cronyistic nature of the enterprise:

Over 260 businesses have received direct training grants from VTP since FY 2005, but the top 20 received almost half of all business grant funds (more than $5 million). This group includes some of the largest firms in Vermont, including Keurig Green Mountain, Dealer.com, IBM, Mylan, Plasan, Tivoly, Husky, Mack Molding, Dynapower and General Electric.

In other words, it’s not a matter of who can best use the VTP funds; it’s the biggest and squeakiest wheels that get the grease.

Some of VTP’s troubles stem from flaws in enabling legislation, but some are a matter of how ACCD chooses to implement the program. This often seems the case with ACCD programs: let’s leave the barn door unlocked. And if the horse is stolen, well hey, why lock the barn door now?

This ought to be a thoroughly nonpartisan concern. Liberals, struggling to fully fund their initiatives, shouldn’t be letting any money be misspent. Conservatives should be interested in eliminating wasteful spending, even for the benefit of their private sector buddies. And everyone should want our economic-development dollars to be spent in the most effective way possible.

We seem to have a long way to go on that score. And it doesn’t seem to be a priority for anyone other than, well, Doug Hoffer.

His memo was addressed to the chairs of key legislative committees. Let’s see what, if anything, they do with it.

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4 thoughts on “The Augean Stable of state government

  1. Walter Carpenter

    Good one on what Hoffer has dug up so far. I am glad Doug is doing it. As usual, the rich are getting richer and the poor, well, they have to do more paperwork.

    Reply
  2. Faith King

    This State is crying out for someone to do real, smart, thoughtful economic development. We need that. Vermont’s economy is weak, growth prospects are poor – and we’re giving Keurig Green Mtn a grant? The same Keurig who’s eliminating, what, 200 jobs in Waterbury? I realize this sad scenario has been played out in many other states. They woo big name companies with perks and treats – only to see plant closure, job loss and cost-shifting back to the State (who now has to backstop some of these unemployed workers) down the road. The question is – why isn’t Vermont figuring out a different approach?

    Reply

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