Using Program Evaluation Using Program Evaluation to Find Savingsto Find Savings

Texas Sunset Commissionwww.sunset.state.tx.us

January 2009

Times Are HardTimes Are Hard

States with Projected Budget ShortfallsFY 2009

1513

5 5

3% or Less 3% to 7% 7% to 10% More than 10%

Budget Shortfall as a Percent of General Fund

Sources: Wall Street Journal , NCSL, Texas Sunset Staff

The budget outlook for many states is bleak:The budget outlook for many states is bleak:– At least 38 project a budget shortfall in FY 2009At least 38 project a budget shortfall in FY 2009– Shortfalls range from 0.2% for Nebraska to 15.3% for New Shortfalls range from 0.2% for Nebraska to 15.3% for New

HampshireHampshire

How Can Program How Can Program Evaluation Help?Evaluation Help?

Make a conscious decision to focus on Make a conscious decision to focus on savingssavings

Have a strategy for where to look for Have a strategy for where to look for savingssavings

Combine or Eliminate FunctionsCombine or Eliminate FunctionsLook for:Look for:– Similar functions in other agenciesSimilar functions in other agencies– Functions that can be performed centrallyFunctions that can be performed centrally

ExamplesExamples Annual SavingsAnnual SavingsTransfer functions of the Texas Transfer functions of the Texas Workers Compensation Commission Workers Compensation Commission to the Texas Department of to the Texas Department of InsuranceInsurance

$900,000$900,000

Move administrative hearings of the Move administrative hearings of the Tx. Dept. of Health to the State Office Tx. Dept. of Health to the State Office of Administrative Hearingsof Administrative Hearings

39% cheaper39% cheaper

Find Out-of-Date ProcessesFind Out-of-Date ProcessesLook forLook for– Processes no longer necessaryProcesses no longer necessary– Better ways now available for accomplishing tasksBetter ways now available for accomplishing tasks

ExamplesExamples Annual SavingsAnnual SavingsEliminate unnecessary reports Eliminate unnecessary reports comparing health plans in different comparing health plans in different systemssystems

$125,000$125,000

Eliminate requirement to advertise Eliminate requirement to advertise highway construction contracts in highway construction contracts in newspapersnewspapers

$1 million$1 million

Be Aware of Best PracticesBe Aware of Best Practices

Look for best practices that save moneyLook for best practices that save money

ExampleExample Annual SavingsAnnual SavingsChange the criminal justice system’s Change the criminal justice system’s brick and mortar strategy to less costly brick and mortar strategy to less costly diversions, treatment programsdiversions, treatment programs

$33.5 million$33.5 million

Streamline Agency OperationsStreamline Agency OperationsLook for:Look for:– Duplicated administrative processesDuplicated administrative processes– Programs with too many stepsPrograms with too many steps– Overstaffing or oversized boardsOverstaffing or oversized boards

ExampleExample Annual SavingsAnnual SavingsRequire Tx. Dept. of Health to integrate 37 Require Tx. Dept. of Health to integrate 37 Medicaid and non-Medicaid programs with Medicaid and non-Medicaid programs with siloed administrative processessiloed administrative processes

$2.2 million$2.2 million

Eliminate the state-run medical benefits appeal Eliminate the state-run medical benefits appeal process for injured workers, allowing direct process for injured workers, allowing direct appeal to district courtappeal to district court

$1.2 million$1.2 million

Reduce the size of the State Emergency Reduce the size of the State Emergency Communications Board from 16 to 9Communications Board from 16 to 9

$1,500$1,500

Make the Most of All Funding SourcesMake the Most of All Funding SourcesLook for:Look for:– Multiple funding streams to fund a serviceMultiple funding streams to fund a service– Cost-sharing possibilitiesCost-sharing possibilities– Uncollected fundsUncollected funds

ExampleExample Annual SavingsAnnual Savings

Require Council on Early Childhood Intervention to Require Council on Early Childhood Intervention to ensure funding from federal sources is fully used ensure funding from federal sources is fully used before using state fundsbefore using state funds

$8 million$8 million

Require participants in the Substance Abuse Felony Require participants in the Substance Abuse Felony Punishment program to share program costPunishment program to share program cost

$1.4 million$1.4 million

Require Texas' natural resources agency to Require Texas' natural resources agency to systematically collect fees, some of which were not systematically collect fees, some of which were not being accounted for properlybeing accounted for properly

$660,000$660,000

Use the Private Sector WiselyUse the Private Sector Wisely

Look for:Look for:– Peaks and valleys in workload Peaks and valleys in workload – Services acquired without sufficient competitionServices acquired without sufficient competition

ExampleExample Annual SavingsAnnual Savings

Require the Tx. Rehabilitation Commission to select Require the Tx. Rehabilitation Commission to select providers of services competitively, rather than providers of services competitively, rather than simply putting providers on a list simply putting providers on a list

Cannot Cannot DetermineDetermine

Summary and Final ThoughtsSummary and Final ThoughtsKeep the possibility of cost savings in mindKeep the possibility of cost savings in mindUse these categories, as well as others you think of, as a checklistUse these categories, as well as others you think of, as a checklist– Combining or eliminating functionsCombining or eliminating functions– Eliminating old, outdated processesEliminating old, outdated processes– Incorporating cost-saving best practicesIncorporating cost-saving best practices– Streamlining operationsStreamlining operations– Maximizing funding sourcesMaximizing funding sources– Using the private sector wiselyUsing the private sector wisely

Expect resistanceExpect resistanceBe fairBe fair

Contact Information:Karl Spock

Senior ManagerTexas Sunset Commission

karl.spock@sunset.state.tx.us