essays and articles by david g allen


Running Government As A Business

April 1, 2005

Bob Graham, Executive Director of the Wyoming County Council on Aging, made headlines last year when his lucrative compensation package was revealed.  The snorts of moral indignation could be heard everywhere and echoes are still bouncing off the hills.  And the question still being asked is how could Bob Graham earn nearly $500,000 in a poor little place like Wyoming County ?

The answer to that question is simple—he had an employment contract.  It was spelled out—in English.

What is amazing, to me at least, is that Bob Graham could manage all of the programs under his control with such economy that he could pay himself in Enron dollars instead of West Virginia dollars.  From what I have read, Mr. Graham earned $460,000 in 2003 and the agencies under his control took in combined revenues of $5.3 million.  His compensation package, then, was close to 9% of gross revenue.  $4.3 million of that revenue came from Medicaid.  Yet we repeatedly hear from health care experts that Medicaid reimbursements don’t cover the cost of service.  Go figure.

Wyoming County ’s revelation leads me to believe that there are some significant efficiencies yet to be discovered in running senior centers and home health programs.  Even if Mr. Graham had been paid $100,000, then that still leaves almost 7% of gross revenue which could have been shaved from the budget.  Applying a 7% reduction to senior programs in all 55 counties would certainly add up to a big savings.  And our seniors in the other 54 counties would be able to lounge in hot tubs just like Wyoming County seniors do!

If I were dictator of this state, I’d hire Bob Graham as a consultant.  He can milk cows better than the Amish.  (As talented as he is, though, he should not have milked sacred cows outside of Hindu territory.)

I’d pay Bombay Bob $1 million a year and give him 20% of all the money he’d save the state during years one and two of his contract.  I’d bet that he could save the taxpayers tenfold or more over what he charged.

 As your dictator, I’d also consider hiring former Randolph County Clerk Rose Lloyd as a consultant.  Ms. Lloyd recently resigned her office over accounting irregularities.  She’s agreed to make restitution to the county in the amount of $48,000 over five years.

 Given her years of experience in county government, I think Ms. Lloyd could make a valuable investigator with the State Tax Department.  Ms. Lloyd would not be relegated to adding columns of numbers.  Her contribution would be in recommending tighter financial and accounting controls.  She knows how the system works and where the weaknesses are.  In that regard, her experience, although tainted, is invaluable.

 What I have just suggested might sound like heresy.  It is.  But on Scout’s honor, I promise that I would be a benevolent dictator!

 All kidding aside, the rerouting of public money by Mr. Graham and Ms. Lloyd is nothing new.  These two culprits just happen to be the names in the news right now. 

 Government financial systems are ripe for finagling.  Across the state, there are thousands upon thousands of accounts and funds which receive and disburse tax money and few of them ever get as much as a cursory audit.  Using the case of the Randolph County Clerk’s office as an example, the state’s auditor discovered some $13,000 missing over a three-month period.  The $48,000 settlement to which Ms. Lloyd agreed was a number pulled out of thin air.  Auditors have not thoroughly examined Randolph County financial records to determine the actual embezzlement.  For all we know, ten million dollars could be missing.

 Each government grant is supposed to be accounted for as well.  But as we recently learned in Hampshire County , education grant money was misdirected—deliberately, no less.

 Gov. Joe Manchin has taken the first step toward improving financial accounting in West Virginia .  He deserves a commendation for his initiatives to modernize the State Tax Department’s computer system.  But this first step, as big as it is, is not going to solve all of the problems.

 Whether it’s county governments, boards of education, councils on aging, or the myriad of other entities that receive and spend taxpayer money, the state needs to rein in their ability to operate as personal fiefdoms.  Giving a checkbook to every Tom, Dick, and Boss Hogg is what causes these problems in the first place.

 Gov. Manchin is doing his best to apply good business practices to running state government.  That said, we should consider requiring each and every government spending unit to provide us, the shareholders, with audited financial statements.  And along the lines of the Sarbanes-Oxley Act, we should get serious about holding the chefs who cook the books liable for their acts.

David G. Allen, Clarksburg , WV

"Running Government As A Business" appeared in the April 1, 2005 issue of the West Virginia State Journal.

 

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Copyright 1990-2005  David G. Allen