[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]
INNOVATIONS IN AMERICAN GOVERNMENT: ARE THERE LESSONS TO BE LEARNED
=======================================================================
HEARING
before the
SUBCOMMITTEE ON GOVERNMENT MANAGEMENT,
INFORMATION, AND TECHNOLOGY
of the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
SECOND SESSION
__________
SEPTEMBER 6, 2000
__________
Serial No. 106-254
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpo.gov/congress/house
http://www.house.gov/reform
__________
U.S. GOVERNMENT PRINTING OFFICE
74-332 WASHINGTON : 2001
_______________________________________________________________________
For sale by the Superintendent of Documents, U.S. Government Printing
Office
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Mail: Stop SSOP, Washington, DC 20402-0001
COMMITTEE ON GOVERNMENT REFORM
DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut ROBERT E. WISE, Jr., West Virginia
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
STEPHEN HORN, California PAUL E. KANJORSKI, Pennsylvania
JOHN L. MICA, Florida PATSY T. MINK, Hawaii
THOMAS M. DAVIS, Virginia CAROLYN B. MALONEY, New York
DAVID M. McINTOSH, Indiana ELEANOR HOLMES NORTON, Washington,
MARK E. SOUDER, Indiana DC
JOE SCARBOROUGH, Florida CHAKA FATTAH, Pennsylvania
STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland
MARSHALL ``MARK'' SANFORD, South DENNIS J. KUCINICH, Ohio
Carolina ROD R. BLAGOJEVICH, Illinois
BOB BARR, Georgia DANNY K. DAVIS, Illinois
DAN MILLER, Florida JOHN F. TIERNEY, Massachusetts
ASA HUTCHINSON, Arkansas JIM TURNER, Texas
LEE TERRY, Nebraska THOMAS H. ALLEN, Maine
JUDY BIGGERT, Illinois HAROLD E. FORD, Jr., Tennessee
GREG WALDEN, Oregon JANICE D. SCHAKOWSKY, Illinois
DOUG OSE, California ------
PAUL RYAN, Wisconsin BERNARD SANDERS, Vermont
HELEN CHENOWETH-HAGE, Idaho (Independent)
DAVID VITTER, Louisiana
Kevin Binger, Staff Director
Daniel R. Moll, Deputy Staff Director
James C. Wilson, Chief Counsel
Robert A. Briggs, Clerk
Phil Schiliro, Minority Staff Director
------
Subcommittee on Government Management, Information, and Technology
STEPHEN HORN, California, Chairman
JUDY BIGGERT, Illinois JIM TURNER, Texas
THOMAS M. DAVIS, Virginia PAUL E. KANJORSKI, Pennsylvania
GREG WALDEN, Oregon MAJOR R. OWENS, New York
DOUG OSE, California PATSY T. MINK, Hawaii
PAUL RYAN, Wisconsin CAROLYN B. MALONEY, New York
Ex Officio
DAN BURTON, Indiana HENRY A. WAXMAN, California
J. Russell George, Staff Director and Chief Counsel
Earl Pierce, Professional Staff Member
Bryan Sisk, Clerk
Michelle Ash, Minority Counsel
C O N T E N T S
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Page
Hearing held on September 6, 2000................................ 1
Statement of:
Gaberman, Barry, senior vice president, Ford Foundation; Gail
Christopher, executive director, Innovations in American
Government Awards Program, Kennedy School of Government,
Harvard University; and Patricia McGinnis, president and
CEO, Council for Excellence in Government.................. 7
Sharbaugh, Antony, director, Office of Human Resources,
Gainsharing Program of Baltimore County, MD; Allan Klein,
administrative law judge, Government Innovations and
Cooperation Board of the State of Minnesota; and Jess
McDonald, director, Illinois Department of Children and
Family Services............................................ 39
Letters, statements, etc., submitted for the record by:
Christopher, Gail, executive director, Innovations in
American Government Awards Program, Kennedy School of
Government, Harvard University, prepared statement of...... 18
Gaberman, Barry, senior vice president, Ford Foundation,
prepared statement of...................................... 9
Horn, Hon. Stephen, a Representative in Congress from the
State of California:
Information concerning pre-admission screening and
schools................................................ 91
Prepared statement of.................................... 3
Klein, Allan, administrative law judge, Government
Innovations and Cooperation Board of the State of
Minnesota, prepared statement of........................... 51
McDonald, Jess, director, Illinois Department of Children and
Family Services, prepared statement of..................... 82
McGinnis, Patricia, president and CEO, Council for Excellence
in Government, prepared statement of....................... 29
Sharbaugh, Antony, director, Office of Human Resources,
Gainsharing Program of Baltimore County, MD, prepared
statement of............................................... 42
Turner, Hon. Jim, a Representative in Congress from the State
of Texas, prepared statement of............................ 5
INNOVATIONS IN AMERICAN GOVERNMENT: ARE THERE LESSONS TO BE LEARNED
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WEDNESDAY, SEPTEMBER 6, 2000
House of Representatives,
Subcommittee on Government Management, Information,
and Technology,
Committee on Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 10 a.m., in
room 2154, Rayburn House Office Building, Hon. Stephen Horn
(chairman of the subcommittee) presiding.
Present: Representatives Horn, Biggert, and Turner.
Staff present: J. Russell George, staff director/chief
counsel; Earl Pierce, professional staff member; Bonnie Heald,
director of communications/professional staff member; Bryan
Sisk, clerk; Elizabeth Seong, staff assistant; George Fraser,
intern; Michelle Ash and Trey Henderson, minority counsels; and
Jean Gosa, minority assistant clerk.
Mr. Horn. A quorum being present, the hearing of the
Subcommittee on Government Management, Information, and
Technology will come to order. One of the continuing goals of
this subcommittee is to encourage reforms that will make the
Federal Government more efficient and effective. Today, we will
examine three State and local programs that have been honored
for being uniquely successful at both of these objectives.
These programs are among 25 semifinalists selected by the
Innovations in American Government Awards program. This grant-
issuing program is funded by the Ford Foundation and
administered by the Harvard University Kennedy School of
Government, and the Council for Excellence in Government.
The 25 semifinalists are now competing for the program's 10
top awards, which include $100,000 grants to each winner. Each
of the remaining 15 semifinalists will receive grants of
$20,000. The selection will be made next month.
The semifinalists were selected from 1,500 applications
submitted by Federal, State, and local government agencies. All
of those selected have demonstrated originality and
effectiveness in providing important public services.
Today, we will examine the factors that led to the success
of these programs and whether those factors might be applied to
similar Federal programs.
We welcome each of our witnesses, and look forward to your
testimony.
I now turn for an opening statement to the ranking member,
the ranking Democrat, Mr. Turner, the gentleman from Texas.
[The prepared statement of Hon. Stephen Horn follows:]
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Mr. Turner. Thank you, Mr. Chairman. It is good to have our
witnesses here this morning.
There is no doubt that the Innovations in American
Government Awards program is an outstanding effort jointly
sponsored by the Ford Foundation and the Harvard University
Kennedy School of Government, and the Council for Excellence in
Government.
This effort is the kind of thing that we need more of
today. I have always believed that government can be as
efficient and as effective as the private sector if we are
willing to take the necessary steps to make that possible.
This program, as I understand it, awards funds to various
governmental entities where there has been shown to be a
positive improvement in government management or government
innovation.
We all know that we live in a day when we have to make
government smaller and more effective in order to not only save
taxpayers' dollars, but to create the kind of government that
the American people deserve.
This program attempts to encourage government to make the
right choices in terms of priorities, to encourage greater
involvement by employees of government, to improve management
policy, and to focus more on results. These are things that our
committee, under Chairman Horn's leadership, has attempted to
accomplish over the past year, and we hope that we can continue
to be a part of the effort to bring greater efficiency to
government. So we appreciate the witnesses coming today.
I wish all of the awardees could be here to share with us
their programs. But we are very pleased to have these
outstanding examples brought to us in the three witnesses
before us.
So thank you, Mr. Chairman. I look forward to hearing from
each our witnesses.
[The prepared statement of Hon. Jim Turner follows:]
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Mr. Horn. Thank you very much. And we will now have panel
one begin. And you probably know from previous presentations
before this subcommittee, we are an investigative subcommittee,
so we do swear in all witnesses even though they bear good
deeds. So if you will stand and raise your right hands.
[Witnesses sworn.]
Mr. Horn. The clerk will note all three witnesses have
affirmed the oath.
And we begin with Mr. Gaberman. Barry Gaberman is senior
vice president of the Ford Foundation.
Mr. Gaberman.
STATEMENTS OF BARRY GABERMAN, SENIOR VICE PRESIDENT, FORD
FOUNDATION; GAIL CHRISTOPHER, EXECUTIVE DIRECTOR, INNOVATIONS
IN AMERICAN GOVERNMENT AWARDS PROGRAM, KENNEDY SCHOOL OF
GOVERNMENT, HARVARD UNIVERSITY; AND PATRICIA McGINNIS,
PRESIDENT AND CEO, COUNCIL FOR EXCELLENCE IN GOVERNMENT
Mr. Gaberman. Thank you, it is a pleasure to be here with
you today. What I'm going to try to do is trace very briefly
the history of the Innovation in American Government program,
and in doing so, highlight four objectives of the program under
the categories of recognition, replication, learning and
visibility.
In the early 1980's, it was common to hear increasing
expressions of doubt in the United States about the ability of
government at all levels, as well as those in government to
perform. As a foundation, we could have chosen to support those
studying and analyzing this failure to perform and thereby
perhaps add to our understanding of the problem.
However, we knew that there was much that was productive
going on in government, but the accomplishments remained
hidden, not only from the American people, but also from the
broad number of public managers who would benefit from knowing
about them. What we decided to do instead was not to study and
analyze failure, but to highlight and recognize success.
Staff from the Ford Foundation began working with the
Kennedy School to design an awards program. The first objective
of that awards program was recognition of innovative
achievements in State and local government. We in the Kennedy
School established a national selection committee to select the
award winners. The program made its first awards in 1986. Each
carried a grant of $100,000. As the program matured, we add
$20,000 awards for the 15 finalists each year who did not
become winners.
In 1995, the program was expanded to include Federal
agencies. To date, the program has recognized 225 innovative
programs. They have received $15.9 million in Ford Foundation
grants. And still, after 14 years, the submissions to the
program each year average over 1,500 applications.
While the awards provide recognition, it is important to
note that they also target replication as an objective. Each of
the $100,000 grants are to be used by leaders of the winning
programs for replication and getting the word out about the
innovations and their results.
That this is working can be seen from the fact that fully
85 percent of the models represented by Innovation Awards
winners have indeed been replicated.
The committee may find it interesting to know that this
approach to supporting innovation and promoting excellence is
working elsewhere in the world. In fact, in 1988--1998, the
Foundation began support of an awards program honoring
contributions in the governance of American Indian Nations.
This is administered by the Harvard Project on American Indian
Economic Development.
The third objective of the awards program was to promote
learning about innovation. To capture the lessons of best
practices in government innovations, the Foundation has funded
the Kennedy School's work, developing case studies and
classroom materials for public managers. And to spread those
lessons throughout the country, we have sponsored conferences
on innovation throughout the country. As a result, in some
places, the formal teaching of public management has shifted
from teaching based on failure to teaching from positive
examples.
The fourth objective of the innovation program is
visibility. This is important to help convince the public that
government is capable of responding to critical, emerging
social and human problems. The program has done precisely that
for 14 years, discovering a wealth of productive innovation
that has exceeded our expectations and strengthened our
commitment to the program. But while we have sought to
publicize what is being achieved, word has not yet reached the
broadest American audience.
To call public attention and enhance visibility more
directly to accomplishments, the Foundation, working with the
Council for Excellence in Government, formed in 1997 a
coalition of 34 prominent business and civic organizations
whose leaders share our concerns. It is called the Partnership
for Trust in Government. The partnership includes corporations
like IBM and Tenneco, independent groups like the Girl Scouts
and the League of Women Voters and media organizations like
Discovery Communications and Good Housekeeping Magazine.
Partners have agreed to use their own communication and
other resources in a sustained program to put before their
members, customers, employees, and stakeholders stories and
examples of good government. By doing so, they will help to
restore the balance between healthy criticism and trust.
A final word about the Ford Foundation's commitment to
these programs. We know that the quality of government matters
a great deal. Government sets standards, protects the weak,
provides services, and projects a vision for us all. At a time
when it is often fashionable to see not-for-profit and for-
profit organizations as alternatives to government, it is
important to show that government can work effectively and
efficiently on its own and in creative partnerships with the
other two sectors of society.
Thank you very much.
Mr. Horn. Thank you.
[The prepared statement of Mr. Gaberman follows:]
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Mr. Horn. And we now move to the second presenter, Ms. Gail
Christopher, the executive director, Innovations in American
Government Awards Program, Kennedy School of Government,
Harvard University.
Ms. Christopher.
Ms. Christopher. Good morning. I would like to thank
Chairman Horn and the members of the subcommittee for inviting
me to testify. It is indeed a pleasure and an honor.
In my testimony, I'll briefly elaborate on the selection
process: how we come to select these outstanding programs; what
are some of the themes that we found, those themes which
resonate throughout the winners this year; and some of the
important lessons that may be of valuable insight to this
community.
The selection process involves whittling down the 1,500
applications to 100 semifinalists. That process engages 30 to
40 teams of faculty and public sector leaders from Harvard
University and other universities.
After that first round of evaluations, there is a second
round. The second round also consists of teams of leaders who
evaluate the applications. Those that make it through the
second round produce our slate of 25 finalists.
Finalists are then subjected to an intensive site visit. An
extensive report is prepared on the site visit, and as you
heard earlier, the 25 finalists are then allowed to make
presentations at an event here at the National Press Club in
Washington in October. From that group, 10 winners are
selected.
The 10 winners receive the $100,000 prizes, and as you
know, the 25 finalists all receive $20,000 grants.
We are excited by the fact that each year we continue to
get a high number of applications. In the last year, we
introduced the capacity to apply electronically, or on-line,
and we are noting that over half of our applications are
submitted electronically.
We found--and this was expressed in a prior hearing;
Professor Alan Altschuler, who was then the faculty director
for the Innovations Program, has found that there are some
themes that seem to permeate the winners. What are they?
The first and perhaps most important and relevant is
accountability for outcomes--not just a focus on process, but
on results and outcomes. Responsiveness to citizen input is
another key theme; competitiveness as a stimulus for
performance improvement; and in terms of regulatory agencies,
new roles for those agencies so that they work in partnership
seeking voluntary compliance, but not giving up their role of
oversight and regulation and enforcement.
Those themes were noted in 1997 and here, 3 years later,
they still resonate with the programs for the year 2000.
I find it interesting to note that those are also themes
that we find in this performance-based era of governance. And
there may be some interesting lessons to look for at the
intersection between the performance-based governance movement
and innovation: How important is innovation to the success of
that process?
But we can also find that there's organizational change,
that government agencies, the outstanding programs, are finding
new ways to engage employees, frontline employees; new ways to
hold contractors and consultants accountable, not just forever
process, but for outcomes. And the programs that you will hear
about in the next panel will illustrate that very clearly.
We've asked ourselves, what is the challenge that we face
in terms of the Innovations Program itself? And I think we are
concluding that our biggest challenge now is to be more
creative in using today's technology to monitor and assess the
overall impact of the Innovations Programs. To find ways to be
more supportive of innovators in the second phase of their
process, if you will, after they are recognized as winners; how
do we bring them together as communities of innovators so that
they can have a greater influence on others around the country
who are struggling with the same issues?
We are very pleased to partner with the Council for
Excellence in Government, which plays a key role in supporting
the dissemination of the ideas and the replication of the
programs throughout country.
Thank you.
Mr. Horn. Well, we thank you.
[The prepared statement of Ms. Christopher follows:]
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Mr. Horn. And next is Patricia McGinnis, the president of
the Council for Excellence in Government.
Ms. McGinnis. Thank you, Mr. Chairman, and thank you Mr.
Turner.
We at the Council for Excellence in Government very much
appreciate the commitment of this subcommittee and committee to
improving government performance and focusing, as you said, not
only on getting better results, but also on having a government
that connects more directly with the citizens that it serves.
The Council for Excellence in Government is a nonprofit,
nonpartisan organization whose members are business leaders who
have served in government and are committed to improving its
performance and also increasing public understanding,
involvement and confidence in government.
Because innovation is such a key element of excellence in
government, we are delighted to partner with the Ford
Foundation and the Kennedy School in this award program. Our
role began in 1995 when the Federal winners were added.
I'd like to just take a moment to thank and commend the
Ford Foundation for its sustained commitment to fostering
innovation in government, not only in this country but around
the world. Barry did not mention the various programs that have
been initiated, particularly in developing countries around the
world, which have had so much impact. And to say what a
pleasure it is for us at the Council to work with Gail
Christopher and her very creative colleagues at the Kennedy
School to analyze and find these trends in innovation.
The Council's role is to work with the winners and
finalists in their effort to promote replication of the
innovations and to help communicate these success stories to
the American public. We do that by helping to organize
conferences, working to publish books, writing case studies,
creating Web sites; and also, as Barry Gaberman said, we've
worked with the Ford Foundation to organize a coalition of 34
businesses and civic organizations that use their
communications mechanisms to try to get the word out about
these innovators and other successes in government, and they
range from IBM to MTV, so you can imagine what a pleasure it is
to work with this diverse coalition.
I want to mention two books that have come out of the
Innovations Program, in particular, which the Council has
copublished with Brookings, that talk about the value of
innovation. The first one is called ``Making Washington Work.''
It was edited by Jack Donahue, who is a professor at the
Kennedy School, and it includes 14 case stories of Federal
innovations winners. And when Alan Altschuler was the faculty
director of the Innovations Program, he and I put together the
forward to this book and we tried to think about what the
innovators had in common. What it is about these teams of
people that make them so successful? And I just want to read
you a passage.
The designers and managers of these programs started with
profound commitment to a mission anchored by clear conceptions
of purpose. They were flexible and ingenious about the means of
accomplishing their goals. They stretched their minds and
resources to use whatever tactics--interagency and public-
private partnerships, new information technologies which we are
seeing more and more of, performance measurement, market
incentives, employee and citizen participation, whatever
appeared likely to yield better results. They displayed habits
observed among innovators everywhere, in the private no less
than the public sector.
They were committed, they were willing to take risks in the
service of their mission, they were courageous and their
stories are likely to prove fascinating not only to those who
are currently charged with public responsibilities, but for
those who are preparing for careers in public service.
A second book that we also copublished with Brookings and
was written by Kennedy School Professor Malcolm Sparrow has
just been published in the last few months, called ``The
Regulatory Craft,'' has also drawn on Innovations winners to
analyze what's likely to work best in the regulatory arena. So
I will leave you copies of these books.
Innovative government programs such as the ones you're
going to hear from this morning are helping to reverse a tide
of public cynicism. As you know, for several years now, the
Council has worked with pollsters Peter Hart and Bob Teeter to
analyze attitudes toward government. Our 1999 poll shows that
30 percent of the American people trust the Federal Government
to do the right thing all or most of the time, substantially
above the low point of 21 percent in 1994, but we've got a long
way to go to achieve the 74 percent which was the high point in
the 1960's.
I would settle for something around or above 50 percent.
That seems like a good balance between skepticism and trust to
me.
I want to mention a finding in the poll that interests us
and I think will interest you, and that is about the attitudes
of young Americans. Young people are less connected; they feel
less connected to government than their elders, but at the same
time, they seek the potential of government in a much more
positive way. They see the role of government as more important
in the future.
And this may surprise you, we've seen trends over the years
that more and more young people in the 18 to 29 age group are
interested in government service. Our 1999 poll found that 43
percent said they would be very likely or fairly likely to
consider a government job sometime in their careers. This was
up from 40 percent in 1997 and 36 percent in 1995. But the
challenge for government here is to recruit young people in a
more creative way and to offer them jobs in which they can
innovate and make a difference, like the three innovators
you're about to hear from.
So I want to thank you again for your outstanding and
longstanding leadership in this area. There's clearly a lot to
be done. We appreciate very much your ``Dear Colleague''
letters to bring these programs to the attention of others, the
hearings you have held; and we look forward to working with you
to acquaint the other authorizing and appropriations committees
with these examples of excellence in government.
Thank you, Mr. Chairman.
[The prepared statement of Ms. McGinnis follows:]
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Mr. Horn. Well, we thank you for all the fine work you're
doing. Are those soft covers or are there any hard covers on
those books?
Ms. McGinnis. They're all soft.
Mr. Horn. I would suggest that you give the ranking member
a set. The staff on their side, the staff on our side and thank
you for presenting them to us. If anybody is going to do that
around here and use them, it's going to be this team here, on a
bipartisan basis.
Let me ask now, have any Federal programs won awards? I saw
where HUD was involved. And if so, which ones are Federal in
this round? Do we know yet?
Ms. McGinnis. Actually we can provide you with a list of
the 25 public programs, and it includes five Federal finalists.
Mr. Horn. It includes five, OK. What I want from this panel
and from the next panel, which are living some of these
problems, this subcommittee is very concerned about the
qualitative and the quantitative measurements that an agency
can utilize in order to know if they're on the right course.
Are they implementing this properly? Are those who are the
clientele gaining benefits in an effective way? What can you
tell us from all of these experiences now, the three of you
that have gone through a lot of these? What can you tell us
about quantitative and qualitative measurements, and what's
your best success story, particularly at the Federal level?
Ms. McGinnis. Well, let me start while Gail is--Gail is the
new executive director of this program, and let me start with
the last part of your question.
I actually think in terms of quantitative measures one of
the greatest success stories at the Federal level has been the
Food and Drug Administration's work to accelerate the drug
approval process. They were able to cut in half the average
time that it takes to approve new drugs and cut down
substantially more than that the time it takes to approve drugs
for cancer and AIDS and other more emergency-oriented drugs.
And they did this with the help of the Congress, naturally.
Mr. Horn. I was going to say that the Congress beat them
over the head, I think, on this one.
Ms. McGinnis. The Congress beat them over the head. The
industry beat them over the head and legislation was passed,
but what they were able to do went beyond that. They
reengineered this entire process to produce gains that would
have exceeded expectations given the additional funding that
was provided through the PDUFA program; and actually that case
is described in ``Making Washington Work,'' so you can take a
look at it.
Mr. Horn. Great, look forward to seeing it.
Any other thoughts at this point on the Federal programs,
quantitative and qualitative, and what works? And if not, tell
me what works on the local level that the Federal Government
ought to apply.
Ms. Christopher. It is a blend of both--we recently
convened over 250 past winners in the area of health care
innovation and the Bureau of Primary Health Care was a partner
in that process. Many of those who gave their stories, the
local and the Federal examples, talked about the quantitative
reductions in hospitalizations for things like diabetes
complications as a result of giving more preventive and primary
care and engaging physicians in a volunteer capacity to
increase access to health care.
As I spoke earlier, our challenge is to work more on the
back end to monitor the long-term impact of these efforts so
that we have more quantifiable data to report. It is clearly a
challenge that we face. The focus on results, however, is an
important factor in the evaluation process and all those
programs that do win, they show us some quantitative
indications of effect or results in the process.
Mr. Horn. Any other comments?
Mr. Gaberman. Well, I think one way you can think about
this is in terms of the replications themselves. The premise is
that if in fact it's an effective program, it does get picked
up and get replicated. And I think we all have favorites of one
kind or another. I like, just for the common sense and
simplicity of it all, a program that was a winner in 1993, and
it was the Police Homeowners Loan Program in Columbia, SC. And
the nature of that program was to provide loans to police
officers to renovate and purchase homes in inner-city
communities as a way of stabilizing those communities.
Well, that's been picked up and has now been replicated by
over 70 municipalities and agencies throughout the country. So
that's one indication of a benchmark that shows some success.
Mr. Horn. One last point on the books you have and the Plum
book caught my eye. Mr. Turner and I and the committee have
moved legislation through the House, now in the Senate and
about to go to the President, in terms of transitions in the
Presidency. So I assume that book would help us a lot.
Ms. McGinnis. Yes, the Plum book actually has drawn on
these innovations cases as well. What we've looked at is what
it takes to succeed in the top appointed jobs in Washington and
we commend your legislation. We very much hope that it passes
and that it provides the opportunity for a more thoughtful and
organized transition and some orientation of new appointees.
Mr. Horn. Well, we'll sure make good use of your books,
I'll tell you that, because if the President's appointing
various Cabinet positions, independent office positions, our
basic idea has been, say, go see the budget examiner, go see
the GAO relevant person, go see the Inspector General, etc. And
if you can put that in a context, why we would be very
appreciative of that.
I now yield to the gentleman from Texas, Mr. Turner.
Mr. Turner. Thank you, Mr. Chairman. I've had an interest,
along with the chairman, in trying to move the Federal
Government into a greater utilization of information
technology, our belief being that the private sector is moving
faster than the public sector and, in particular, that the
Federal Government has lagged. I even have introduced a bill
trying to put a greater emphasis on information technology by
urging the creation of a Federal chief information officer with
the power to do cross-agency initiatives in the area of
information technology.
I'd really like to hear each of your views on the need for
the greater use of information technology in the Federal
Government, and particularly whether or not you view that there
exists a need to emphasize that to a greater degree than
perhaps the Federal Government has in the past.
Ms. McGinnis, do you have any thoughts on that?
Ms. McGinnis. Absolutely. As you may know, this is a very
high priority for the Council for Excellence in Government. And
we have seen in the Innovations winners over the years a
growing trend in the use of information technology to achieve
results.
I think in terms of looking at excellence and what it takes
to improve performance, that information technology offers in
some ways the greatest potential to leap ahead and accelerate
change. Obviously it's going to require leadership, but this,
as a leadership and management tool, I think is unparalleled.
And we can see examples in the private sector of amazing cost
savings, of improvements in efficiency, and improvements in
communication and interaction.
So this has the potential not only to improve performance
and results, but I think very importantly to improve the way
government interacts with and relates to the people it serves.
We have actually just completed another survey with Peter Hart
and Bob Teeter on the potential of e-government which we are
going to be releasing in just a couple of weeks, and I'll be
glad to share those results with you. They are very interesting
in terms of the way people see the potential, and we've also
surveyed government leaders and institutional customers as
well. So I look forward to sharing that with you, and I agree
with you that this has tremendous potential for innovation and
improvement performance.
Mr. Turner. From your own personal knowledge, do you have
any examples of perhaps States that have been a leader in using
information technology? Some time I get the impression that
some of our States have done a much better job moving forward
than the Federal Government has.
Ms. McGinnis. Yes, I think in States and localities, there
have been substantial leaps forward, in part because the nature
of the work, the services they provide, is more direct and
more, in some ways, like the private sector. The role of the
Federal Government in many ways is more complex and varied.
But I'll give--a couple of examples come to mind right here
close to home. The State of Virginia has done a wonderful job
in terms, for example, of offering the renewal of driver's
licenses on-line. We had a conference on government performance
just a couple of months ago, and when the budget director from
Virginia described this process, the whole room broke out in
applause because there are people all around the country who
can see the benefit to them in terms of time and savings to
being able to conduct these transactions on-line. And there are
other States which are working similarly to provide those
direct services.
Mr. Turner. Ms. Christopher.
Ms. Christopher. Yes, I couldn't agree more with Ms.
McGinnis. This is an important aspect of reform or change in
governance. One of our five Federal finalists this year is the
Occupational Safety and Health Association, and their program
is interactive software assessors. It's interesting that as we
did our work to find out about this program, the industry, the
private sector, is one of its greatest supporters. It provides
24-hour access to the regulations and the information that
businesses need to be in compliance. And so this is one example
of increasing customer satisfaction and also overcoming some of
the barriers that exist between sectors by providing more
access using information technology.
We hope to see more applicants from both the Federal and
the State level. We changed one of our categories on the new
application from technology to E-governance to be consistent
with where things are going. One State that has been recognized
nationally is the State of Washington for its innovations in
terms of E-governance. The newest directions in the technology,
the application of portals I think holds a lot of promise,
particularly for the Federal Government in that it provides the
opportunity to move beyond the categorical and sort of ``silo''
approach to government. It provides opportunities to cross over
barriers and promote more communication and interaction between
agencies around outcomes and problems that will require
partnerships and multiple agency applications.
I think E-governance is clearly the greatest challenge that
we face, and I strongly commend and support your efforts to
push for an acceleration of our pace in reaching that goal to
become a truly technological advanced government.
Mr. Turner. Mr. Doberman.
Mr. Gaberman. Well, you know, one of the things that's a
problem for people is the entry costs in terms of technology,
and not being absolutely certain in terms of what they're going
to get for benefits. And one of the award winners in the State
of New York in 1995 under the Center for Technology in
Government actually provided a way that local agencies and
State agencies could try various applications in a university-
based setting to see what, in fact, seems to work for them,
before they had to make the actual up-front investment. That
struck me as a pretty creative and innovative way of going
about it.
I think this applies not just to the Federal Government, to
local governments, it applies to the not-for-profit sector as
well. And just as a brief aside, in 1979, before the major
revolution in the workplace, the Ford Foundation had something
in the neighborhood of 800 staff to put out some $100 million
in a budget. In 1999, the Ford Foundation had about 600 staff
to put $800 million out. And I think it's that revolution in
the workplace in terms of the technology that allows us to be
so much more efficient, so much less costly in terms of our
overhead and so much more of the money to get out to our
grantees.
Mr. Turner. Thank you. Thank you, Mr. Chairman.
Mr. Horn. We thank you. Let me just close on this panel
with a couple of questions. One of the things we find when the
Federal Government often has a grant program, let's take COPS
as an example, that the first few years, everything is going
great. The Federal Government is paying the bills. What happens
the third, fourth year? What can you tell us? Has that been
also a problem for the Ford Foundation? That it doesn't--it
doesn't stay and move and they just give it up after that time?
What's your experience been?
Mr. Gaberman. I could quickly say that this program in
particular, which would be fair to call a signature program for
us, has two very important lessons. Lesson No. 1 is right on
the point you're making, and that's the value of sticking with
a project over time. It has been 14 years now, and if you
listened a little bit to the description, this program has
evolved. It started out with largely an awards program at State
and local government. It's added the Federal component. It's
added recognizing not just the $100,000 winners, and it's added
a component with the Council on Excellence in Government into
trying to get the message out.
So we've learned over time and we would not have learned
had we not been willing to stick with it. So there's a real
value there.
The second thing I might add that's a particularly helpful
lesson for us is about the strategy of programming. Very often
when conventional wisdom pushes you in one direction, it's
useful to ask what the contrary intuitive part of that might
be. And when this program started, conventional wisdom would
have had you study failure. It would have had you write another
book, commission another study, and you would have learned
something, and it might have been quite good work.
But the fact was that all over the country there were
terrific examples of success. And the counterintuitive part was
to say let's not highlight the failure, let's highlight the
success. And I think that's at the heart of this. And it has
been a technique that we've been able to apply to other
programs, to look at that counterintuitive aspect of
programming strategy.
Ms. Christopher. What we found, particularly in this year's
programs but also in prior years, is that the focus is on not
just the particular isolated programmatic approach, but it's on
a new way of thinking about solving a problem. And we are
finding that it's probably easier to sustain and promote this
change in thinking, this change in practice, it's probably
easier to do that than to support isolated programs.
So we are excited about what we are seeing that these
programs are now not just saying we can solve a problem, but we
can also introduce a new concept or a new way of thinking about
how a problem should be addressed.
Welfare reform, for instance, or the capacity to move
people from welfare dependency to employment, one of our
earliest winners in the State of Illinois, suggested that the
approach needed to be comprehensive. It was a new way of
thinking. That was almost 10 years ago, and today we find that
this kind of thinking is present in many of the innovations in
terms of welfare reform.
This year's program that deals with a new approach to
foster care placement, supporting accountability for outcomes,
reducing the amount of time that the children spend in the
system, this is a new way of thinking about what foster care
should be held accountable for and it is this kind of
innovation for systems change that is emerging as result of
these innovations, and these are the kind of things that we
want to promote and foster nationally.
Ms. McGinnis. There is no question that innovation has to
be continuous. And by focussing on some of the systemic issues
that you have chosen to focus on today, that is, measuring
performance, focusing on results, I think that enables you to
look at how these programs are doing. And if one programmatic
approach is not working, others could be substituted as long as
the accountability is there.
A particular design of a particular program shouldn't go on
forever. I mean, there is the introduction of information
technology and new approaches should be welcomed. So we would
like to see more flexibility in the way programs are managed
and administered. But a stronger focus on accountability for
specific results. And that's the message of the innovators over
the years.
Mr. Horn. Let me ask you, have you had a chance, either at
the Kennedy School or with your council, Ms. McGinnis, on terms
of looking at your programs and looking at the performance and
results law of the Federal Government and what we are doing
annually with Federal agencies, is there something you can give
to us at the Federal level based on your experience that maybe
we aren't doing right, being Congress not doing it or the
executive branch not doing it? Or have you had a chance to make
those comparisons or has somebody gotten their doctoral
dissertation and put them out on that for a year or so? I know
the Ford Foundation would be very willing to help them. Anyhow,
have we learned something that we can use that we are missing?
Ms. Christopher. I will draw from my experience with the
innovations programs, but also with my experience with the
National Academy of Public Administration and the Alliance for
Redesigning Government. I think there needs to be more emphasis
on genuine stakeholder input in the planning process. We
observed at the Academy, and I think this is reflected also in
the Innovations winners, that the grass-roots or frontline
workers must feel ownership and involvement and total
engagement in the new vision, in the mission that's created.
And when somehow the process of the strategic planning and the
performance planning becomes a paper process that doesn't
engage and thoroughly involve all of the stakeholders, or at
least the employee stakeholder, it is less effective.
What we have found is that many of the innovations programs
are able to provide incentives, be they monetary or recognition
or other creative strategies, that will engage employees with a
real sense of pride and ownership in the process. And I think
if there is a lesson to be learned at this early stage of the
implementation of the Results Act is that we do need to be more
assertive and aggressive in the outreach and the documentation
that the engagement has particularly taken place, that it has
not been sort of a paper exercise.
Mr. Horn. Well, that is very helpful. Any other thoughts?
Ms. McGinnis. Mr. Chairman, we at the Council have looked
at the strategic plans of many agencies, and this year we
actually conducted sessions with 10 agency leaders, and some of
our principals who are from the private sector, to talk about
their strategic plans in an interactive way. One thing that
I've noticed about the plans is--and I think this is a problem,
both within the executive branch and in the Congress--the goals
and objectives and priorities among the many goals and
objectives are not clear in many plans. There are very few that
have taken this step.
And in the executive branch, a problem that we see is that
often this process of setting goals and objectives and doing
the planning and reporting is not as central to the strategic
planning and management of the whole agency as it could be and
should be.
This is--in the Department of Transportation, on the other
hand, which we have seen as one of the best plans focussing on
priorities and measurable objectives and really using the
Government Results Act process as a way of managing and
bringing together the various transportation modes within the
Department, we would like to see that approach used more
broadly in the Federal Government.
In the case of the Congress, I think the Results Act, which
is a very logical management tool, needs to inspire
congressional committees to be more clear in their own goals
and objectives in writing legislation. There is a lot of
confusion and conflict, when you look at the statutes, that
those in the executive branches or the executive branch are
working with. So there's a need for clarity on this side as
well.
The other thing that we see is that this as a management
tool needs to be used more actively by the authorizing
committees when they're actually designing legislation, and by
the appropriating committees when they're deciding which
programs to fund and how.
So it is a terrific tool which is not yet being used as
fully either in the Congress or the executive branch as I think
we would all like to see.
Mr. Horn. Well, thank you for that, because we certainly
agree with you and we've urged our authorizing colleagues and
our appropriating colleagues to meet their counterparts,
Presidential appointees. Don't let's have staff do it; let's
sit down and eyeball each one of these things. Otherwise, we're
not taking it seriously.
Ms. McGinnis. That's a great idea.
Mr. Horn. We thank you very much and we will now move to
the second panel, and that's Mr. Antony Sharbaugh, the
director, office of human resources, gainsharing program of
Baltimore County, MD; the Honorable Allan Klein, administrative
law judge, government innovations and cooperation board of the
State of Minnesota; and Mrs. Biggert the vice chairman will
come and introduce Mr. Jess McDonald, director Illinois
Department of Children and Family Services.
If you will stand and raise your right hand.
[Witnesses sworn.]
Mr. Horn. The clerk will note that all three witnesses have
affirmed. And we will begin in the order that we have put it in
the agenda. And that will mean Mr. Sharbaugh, the director,
Office of Human Resources, Gainsharing Program of Baltimore
County, MD.
STATEMENTS OF ANTONY SHARBAUGH, DIRECTOR, OFFICE OF HUMAN
RESOURCES, GAINSHARING PROGRAM OF BALTIMORE COUNTY, MD; ALLAN
KLEIN, ADMINISTRATIVE LAW JUDGE, GOVERNMENT INNOVATIONS AND
COOPERATION BOARD OF THE STATE OF MINNESOTA; AND JESS McDONALD,
DIRECTOR, ILLINOIS DEPARTMENT OF CHILDREN AND FAMILY SERVICES
Mr. Sharbaugh. Mr. Chairman, Mr. Turner, I come here as the
director of the Office of Human Resources for Baltimore County.
I have been charged by our county executive, Dutch
Ruppersberger, with ensuring the success of the Gainsharing
Program. I would like to thank the committee, the Ford
Foundation, the Kennedy School of Government, and the Council
for Excellence in Government for the opportunity to make some
brief remarks about our program.
Gainsharing can be defined succinctly. Empowered frontline
employees streamline bureaucracy to improve productivity. Some
examples: A street lighting crew in Baltimore County leads 10
other local jurisdictions to challenge a Maryland power
company. The company proposes a tariff that would virtually
eliminate competition in the area of street lighting and cost
our local government an additional million and a half dollars
per year.
Building custodians solicit help from a recycling staff to
promote the cost savings and environmental benefits of hand
dryers over paper towels.
A team of tradespersons research and identify the
inefficient use of high priced drywall and recommend a cost-
effective solution.
Gainsharing helps employees to realize that their efforts
can make a difference. It encourages them to become proactive;
to not only identify problems, but to offer solutions. Without
gainsharing, the examples cited would not have occurred. The
program is more than an alternative pay for performance system.
It is a catalyst for a culture change, a change toward
participatory management.
A variety of factors led us to develop this program. With a
population approaching 800,000 and flattening tax revenues, we
were faced with an increasing demand for services and limited
resources to meet them. Compounding this dilemma, many
employees had been laid off, the morale of those who remained
was low. Some of the best and brightest were jumping ship. Most
employees believed that they had no control over their jobs,
their careers, or their future.
We looked for a strategy that could potentially reduce
government costs, raise competence, promote efficiency and
independent thinking, and please taxpayers with the potential
of improved service.
Our program recruits frontline employees to save money,
improve customer service, and boost morale. The strategy calls
for workers to voluntarily participate in management and accept
responsibility for major reforms. In exchange for crossing
management's line, employees split any generated savings with
our county. For the first time in a major suburban government,
managers share power with frontline workers to improve the
system.
The program starts by retraining supervisors and
administrators. Once they understand our focus, small teams of
employees are selected by their peers. These teams are
supported by the facilitators, generally frontline workers
themselves, steering the teams to maximize their potential. The
teams work independently with few restrictions to the scope of
their ideas. They have the authority to enlist management's
assistance when needed. They research cost savings proposals,
evaluate them, determine feasibility and package proposals
persuasively for presentation to top county administrators.
The team goal is to save money by bringing its knowledge,
insight and experience to bear on problems. Whatever a team
saves is divided equally with the administration for 2 years.
Moreover, the teams exercise authority over the payouts
determining who should be rewarded or excluded, and assume
discretionary power normally reserved for management.
Many benefit from gainsharing. The citizens receive better
service. In the short run, employees receive cash when their
proposals are proven. In the long run, they profit from the
process, learning team skills and experience autonomy over
their jobs. Management wins from this alliance, as the
organizational impetus moves from an authoritarian to a
cooperative principle. Employees now create solutions, not
problems. They become shareholders, understanding how waste and
poor quality directly affect their security and income.
Our program has been well received, and its by-product has
been a positive press with mention in the Wall Street Journal,
the Washington Post, and inquiries from State and local
governments across North American. The Gainsharing Program can
confidently be duplicated in any jurisdiction. Many of its
guiding principles adopted wholly or in part from Total Quality
Management, have a proven track record of adaptability. Team
problem solving has been successfully exported to private and
public institutions across our country.
The program overcomes many budget limitations. While there
are startup investments, it pays its own way producing long-
term savings that are initially shared with the employees, but
then continue unencumbered. Gainsharing has a built-in
mechanism to diffuse employee resistance often encountered in
experimental strategies. It does not force employees to change.
The program is voluntary. It builds on the enthusiasm of a few
and grows naturally in its success.
There are obstacles, of course. The program demands
commitment from both the political administration and
management. It requires that genuine leverage be ceded to
participating workers. They must be given access to
organizationally knowledgeable managers who are often reticent
to share authority. These managers may feel threatened. Care
must be taken to show them that they still add value to the
organization; however, their roles have changed from simply
telling the employees what to do to guiding and encouraging
each employee to develop their potential. Unions can be won
over by involving them early in the process and seeking their
input throughout the program, especially in a review capacity.
Our Gainsharing Program builds on the successes of many
existing practices by combining them into a unique package. It
is not TQM or Group Dynamics tripped out in new clothes, but
rather a major innovation applied to a large county government.
It is an effort that calls on the skills and commitments of
hundreds of employees and makes demands on administrators as
well as frontline workers and is redefining the scope of
everyone's position in the new organization. Thank you.
Mr. Horn. Thank you very much.
[The prepared statement of Mr. Sharbaugh follows:]
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Mr. Horn. We now move to the Honorable Allan Klein,
administrative law judge, Government Innovations and
Cooperation, Board of the State of Minnesota.
I found that a rather fascinating operation. Are there
similar offices in other States than Minnesota?
Judge Klein. Not that I'm aware of.
Mr. Horn. It is a very unique operation.
Judge Klein. Thank you. It is a joint executive-legislative
operation which has some members from the legislature and some
from the executive branch, and I'll describe in a moment what
it does. But, Mr. Chairman, members of the committee, my name
is Allan Klein, and I am here not because I'm the best
representative of our group perhaps, but because I'm the sole
remaining member of the original board that first met back in
1993. And as you know, seniority has its benefits.
When I was listening to the first panel speaking, I
realized that the easiest way to understand the Minnesota board
is to view it as a miniature version of the Innovations
program. Barry Gaberman talked about four objectives being
recognition, replication, learning and visibility. And I
realized that those were the objectives of the Minnesota board
as well because we fund projects and then we publicize them to
encourage replication. The similarities between the two
programs are striking.
The Minnesota board of Government Innovation and
Cooperation is designed to enable and empower local government
units such as counties, cities, towns, school districts,
special purpose districts, etc., to overcome barriers to
innovation. And the overall goal is to promote the mindset,
much as Ms. McGinnis spoke of early on, promote the mindset
that government can try new things, and that the State does
encourage them to try new ways and, indeed, will help them
legally and finally to try new ways.
The barriers to innovation are well-known. There are laws
and rules that often mandate what must be done and how it must
be done. Often they prevent any other way of doing things.
Second, there are risks with innovation. There are startup
costs. Where is the money going to come from? And there are
political risks as well. Will your opponent remind you of the
failures during your administration? And the easiest way to
avoid these risks is just do things the same old way as they
have been done in the past. You know it works, and you can't be
criticized for spending money on something that doesn't work.
There are three ways in which our board attempts to
overcome these obstacles. First of all, we offer financial
grants to local units of government to help them plan and
execute innovative ideas. These work like seed money, or as
some now say, ``Ventura capital'' investments, so that the
locals can have the money for the startup costs. A good example
of this is a joint State-county and city vehicle repair
facility which is described more fully in my written statement.
Second, the board is empowered to grant waivers to State
statutes and rules that are obstructing local governments from
trying new ideas. Often we have statutes and rules that not
only tell locals what to do, but also tell them how to do it.
We all know of cases where government officials have told us
that they could have achieved the same outcome so much more
cheaply or so much more effectively if they could have used a
different method to get there. And we offer flexibility by
granting waivers to statutes and rules to let the locals test
their ideas on a pilot project basis.
If we find that their plan does work better than the old
one, then we go to the legislature and encourage the
legislature to change the statute, or we go to the agency and
encourage the agency to change the rule to allow for the better
method. That's the second tool that we use to encourage
innovation.
The third and final method is a traditional one, it's to
encourage and help fund the actual merger of cities and towns
or school districts or other units of government. Now merging
two cities or towns is a complex undertaking. I don't have to
tell you it's complex politically. But I can also tell you that
it is complex financially and complex legally. Just studying
and presenting all the various questions and answers before the
decision is made is a task that stops many mergers in their
tracks. The board helps fund consultants, for example, to
identify issues and propose solutions even before the decision
has been made. And if the merger does proceed, then the board
will help fund the myriad costs actually incurred by the two
local units of government as they undertake actual
implementation.
So those are the three methods that we use to encourage
innovations. We make startup money available through grants, we
help work around statutes and rules by granting waivers, and we
encourage and help fund mergers.
And the point of all of this is to get across the idea that
it's OK to try new ways, and it's the goal of the State to help
local units of government find better ways to deliver those
services.
The Minnesota board would be happy to explain any of these
programs more fully to persons from other States or the Federal
Government who might want to consider them. And I think at that
point I'll close. There are some examples in my written
statement of all the various types of things we've done.
One thing I might just mention, Representative Turner asked
earlier about information technology. And there's an example in
my written statement of a waiver which we granted to Hennepin
and Ramsey Counties. Now those are the two largest counties in
the State, the cities of Minneapolis and Saint Paul. They are
the counties that have the most significant populations of
undereducated persons. And as you may know, the Federal
Government mandates that every 6 months, medical assistance
recipients verify the fact that they are still eligible for
medical assistance in terms of their income.
And prior to our waiver, roughly 25 percent of the medical
assistance recipients in those two counties temporarily lost
their benefits because they failed to return their forms. We
would send them out a form, they should fill it out and they
should return it. But as high as 25 percent of the people did
not return it. They lost their benefits. This caused not only
problems for them when they needed medical services, but it
also caused problems when they had to reapply and get
requalified.
And somebody in Hennepin County came up with an idea. They
realized through their experience that most of these people
were on fixed incomes, and most of them got their only money
from Social Security. They did not have outside investments or
anything like that. Wouldn't it be possible to somehow
electronically verify the amount of their Social Security
payments, compare it with the limits for medical assistance,
and the vast majority of them were still going to qualify, and
thereby we could eliminate the problem of this every 6 months
sending out the form but not sending it back in?
And so we granted them a waiver from a State rule that said
you had to use the form, and instead allowed an electronic
verification of their Social Security benefits. It worked out
to be tremendously successful, avoided all of these people
losing their benefits every 6 months, and now the legislature
has authorized any county in the State to try this system. So
there is an example of where information technology was put to
work to solve a really basically human problem of simply not
getting the forms returned on time. But with that, I'm going to
stop. Thank you.
[The prepared statement of Judge Klein follows:]
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Mr. Horn. Well, we thank you. That's a very interesting
approach. A group of freshmen approached us last year and said
once HHS, let's say, makes a waiver for one State, why
shouldn't they make it for all States? Now, you made waivers in
certain conditions. Should you make a waiver across the State?
Judge Klein. If it's successful. The whole point of these
is pilot projects, to see if this new system works. If it does
work, yes, then the agency should change the rule that says you
must send in a form every 6 months and say you can either send
in a form or use this alternative method. What we want to do is
fund pilot projects, essentially, or make waivers for pilot
projects and see if they work first.
Mr. Horn. Our Vice Chair, Mrs. Biggert, the gentlewoman
from Illinois, is here, and I know she would like to introduce
Jess McDonald, the director of the Illinois Department of
Children and Family Services. The gentlewoman from Illinois.
Mrs. Biggert. Thank you, Mr. Chairman. It is really a
pleasure to see the director of the Department of Children and
Family Services, Jess McDonald, who I had an opportunity to
work with for 6 years while I was in the State legislature, and
can attest to the changes and the improvement of DCFS that he
has made, not only in the adoption and child care issue, but
the whole agency, and taking an agency that had some real
problems and really making it one of the finest, I think, in
the country.
And prior to DCFS, serving as the director of the Mental
Health and Disabilities Agency, and then moving into DCFS. So I
am excited to hear what he has to say, and having worked with
him, I think, with him on the legislation that really
established the best interest of the children. I think that was
the starting point from which a lot of this went forward. And
rather than the parents, but really what should be decided is
the best interest of the children and moving to this. And then
to your initiative on the permanency has really done so much
for the State of Illinois. And a State that the agency is huge
in comparison to other States. And it's like a microcosm all of
its own. And what you have been able to do I really applaud you
for, and welcome you here today.
Mr. McDonald. Thank you. Mr. Chairman and members of the
committee, I'm Jess McDonald, director of the Department of
Children and Family Services in Illinois. We have an
expression: Illinois' child welfare system has gone from worst
to first. And the lesson that we generally say to everyone else
is: Don't go where we've gone.
There is no pleasure in having dramatic success if it comes
at the expense of having years and years of not having the
performance. The Illinois general assembly consistently was
asking the questions how do you get better performance?
How do we get children cared for safely? How do we get the
right decisions and right outcomes with regard to
investigations around abuse, negligence; and how do we get kids
into permanent safe homes as quickly as possible?
In the last 4 years because of the Illinois Permanency
Initiative and supported by the Adoption and Safe Families Act
and major reforms in Illinois, court reforms seeking
accreditation for the entire system, lowering caseloads, we've
managed to achieve over 21,000 adoptions from foster care; in
addition another 5,000 guardianships. Our caseloads have
dropped over 40 percent in just 3 years due to improvements at
the front end and the adoption successes. But performance
contracting was the engine behind--that led the change here.
We really need to introduce into everyone in the system
that we had to focus on outcomes, we had to have clear
strategies to achieve them, and those outcomes had to be the
best interest of the children.
How do you get children into permanent settings? All the
financial incentives at the Federal and State level would
appear to keep children in care, to keep children in foster
care and allow them to languish there. We had to figure out
what were the obstacles. Performance contracting first had to
sit around the table and look at the information around the
system. Technology helped us look at the data on the system,
the data on the agencies. We set aggressive goals for
performance by agencies, public and private, and said the only
thing that mattered is whether or not an agency could meet the
goals on behalf of children. It wasn't public or private. It
was performance that mattered.
We knew we had to invest in capacity. There had to be lower
caseloads. There had to be assistance in adoptions. There had
to be resources for unifications. And we put the investments in
up front with the recognition that there would be savings
within the same fiscal year. We had to align financial
incentives so that agencies had an absolute incentive to move a
kid to adoption or return them home safely, rather than to keep
a child in care. And it made a huge difference in how agencies
performed. Agencies that had no adoptions in 1 year had a 25
percent adoption and permanency rate the following year because
they saw that they would not go out of business by getting
children placed safely into adoption or reunification.
The performance contracting issues and initiative allowed
us to make--to realize the promise of permanency legislation,
of court reforms and of general improvements in case work
process, but unless the incentives were aligned at all levels
and that all managers in the public and private sector focused
on performance, we were not going to get performance. People
had to understand exactly where their agencies were.
The result actually was quite dramatic. In 2 years we saved
over $40 million directly attributable to the performance
contracting. The changes that were initiated years before when
Mrs. Biggert and others were looking at reforming the child
welfare system had resulted over a period of 5 years of around
almost a half a billion dollars in savings and cost avoidance.
But performance contracting was the engine for the change, and
what we learned was that until you get people sitting around
the table looking at the focus on outcomes, and looking at the
obstacles, and building capacity to get results, and aligning
incentives to get outcomes, and encouraging reinvestments to
get even lower caseloads, you are not going to get the kind of
results that I think every legislative body in every Governor's
office demands out of the child welfare system.
More importantly, the children in this system and the
families that are served by it need to make sure the system has
the ability to deliver on the promises that have been put in
place in statute.
Innovation in child welfare is not only possible, it is
absolutely vital, and the Federal and State focus on outcomes
demands new ways of doing business at all levels. That means at
the Federal level we are going to have to look at why it is
that our Federal financing, in fact, encourages long-term
foster care; that, in fact, we do not encourage innovation
because we limit the number of waivers, and we do not allow
successful waivers to be replicated in other States. It is
absolutely vital that at every level of government, especially
in child welfare and human services, that innovation be
encouraged. Thank you.
[The prepared statement of Mr. McDonald follows:]
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Mr. Horn. The gentlewoman from Illinois would like to begin
the questioning. Let's say 5 minutes for each of us, and we'll
make a round until we get it done.
Mrs. Biggert. Thank you, Mr. Chairman.
Mr. McDonald, certainly it's such a laudable program. I
just wondered if there's any unintended consequences resulting
from your program? And second of all, are there any more
improvements that need to be done to the program, and is that--
is there still any impediment from the general assembly or from
the Federal Government or whatever?
Mr. McDonald. Well, the greatest risk that people feared
with performance contracting is that it would be--it would have
the HMO look. In fact, the whole approach was designed to meet
the requirements of children, and when you have a juvenile
court that makes judgments about whether or not adoption is
appropriate, it is virtually every case plan, every case
decision was signed off on by the juvenile courts.
Our rate of disruption, which is one measure of performance
in adoptions, is low, has remained low. When you consider that
we had a median length of stay of 5 years, we had kids that
were sitting in foster care waiting for someone to ask the
question, you know, do you want to adopt this child, do you
want to be a family forever? So we have not found--and we are
routinely researching the effects of our guardianship waiver
and our permanency program generally, and we're finding no ill
effects at all. As a matter of fact, we now have more kids in
active adoption and guardianship cases than all of the foster
care and residential care. And we've had growing support for
our postadoption services.
There will be challenges in the child welfare system in the
future to build appropriate postadoption services, but we have
found that performance contracting and all the other reforms,
including requiring the State system to be an accredited
system, and our agency is now accredited, means that you have
higher quality, but alongside higher quality you have to insist
on better improvements in performance.
Mrs. Biggert. Thank you. As I recall, when we were doing
the reform and the agency was at its worst, that there were
kids falling through the cracks or being left in homes that
were abused. Has there been a change in the case workers? Are
they better trained, or is their outlook better? It seemed to
be there was this negative feeling, or they were really down as
far as what their jobs were about.
Mr. McDonald. Actually the philosophy at the time was the
beatings will continue until performance improves. It doesn't
lead to improved performance. Accreditation required us to
change our ranks of supervision so that we had professionals in
supervision. It provided for a major change in our quality
improvement approach so that we would find problems quickly and
make dramatic changes if necessary. Training was improved
significantly. As a result, if you check with our staff now,
you can ask the union, you can ask the private agencies, the
work is more difficult than it's ever been, but the conditions
are the best they've ever been.
The expectations in child welfare continue to increase.
They are not diminishing because of, I think, necessary and
appropriate public scrutiny, but I think we're getting our
safety results because the risk assessment program that the
Illinois General Assembly put in place when you were there has
resulted in a 60 percent reduction in subsequent reports of
abuse, so seeing kids treated in a way in which they are
allowed to stay at home without the risk--without a safety
risk.
Mrs. Biggert. And how about with the relatives that have
become the foster parents? Have there been any cases where--
going back to the original parents?
Mr. McDonald. Well, actually the kinship care is an
interesting problem. It is, in fact, the backbone of the
Illinois foster care system. Illinois law gives absolute
preference to relatives, and we provide the relatives--we
encourage them to be licensed. Most of them are. Fifty-seven
percent of our adoptions are to relatives and our Illinois law
does not permit someone to just make a private arrangement in
order to get increased resources. This is where we truly take
protective custody and need to find homes.
We have found that the adoptions that are consummated
through--and guardianships--through kinship care are stronger
through regular foster care. There may, in fact, be an open
adoption with regard to the parent, but we have not found any
examples so far where the guardianship was--where they actually
returned the child themselves to the parent.
Mrs. Biggert. I think that was always a concern that there
might be that arrangement that would not be known where they
were really going back to the original parents. So that's good
to hear.
I think then, Mr. Klein, how can the Federal Government
support programs such as yours? What can the Federal Government
do?
Judge Klein. Well, this is a huge topic, but sometimes
State programs are limited substantially by Federal rules and
regulations, no question about it. And to the extent the
Federal Government could offer some sort of a method to try
pilot projects--a method that provided some sort of review of a
waiver request that was perhaps independent and separate from
the agency itself, that might be of some help.
In other words, EPA is one that I have some particular
knowledge of just because I do much of my work in the
environmental field, and they have some fairly strict rules
that all States are required to follow, and there's very good
reason for those rules. I'm not saying there isn't. But if you
want to get a waiver from those rules, how can you do it? If
you go to EPA, maybe you're going to run into some resistance,
but if you had an independent place where you could go, like
the Minnesota Board, for example, that doesn't have any sort of
ownership of that rule, you might be able to foster more
innovation.
Mrs. Biggert. Thank you.
Thank you, Mr. Chairman.
Mr. Horn. We thank you. And now turn to the ranking member,
Mr. Turner, the gentleman from Texas; 5 minutes, 6 minutes.
Mr. Turner. Thank you, Mr. Chairman.
Judge, just to followup on what you just said. I've served
in both the State legislature in Texas and now here in
Congress, and I'm always struck by the stark differences in
what you can do in a legislature versus here in the Congress.
And we have a strong executive form of government in the
Federal Government. The executive branch, whoever is in power,
jealously guards it. And in the legislatures you more often see
the possibility of doing the kind of thing that you apparently
have successfully done in Minnesota.
I notice in looking at your board and its 11 members, 6 of
the members of the board are legislators. I doubt you could
ever pass anything like that--you can pass it through the
Congress, but I doubt you can get it past a White House, no
matter who is in charge over there, so we have a little more
difficulty. And I can see how it was fairly easy to pass such
an initiative with the legislators being the majority of the
board.
But it does offer, I think, some challenge to us to figure
out a way to do exactly what you mentioned a minute ago, and
that is how do we allow waivers. I mean, the agencies at the
Federal level can grant a waiver. In my experience, it might
take you a year or 2 to get one.
I was curious when a local entity asked for a waiver from
your board, what would be the average time it would take for
you to review it, and what would you require in order to make a
decision that you would grant the local agency a waiver?
Judge Klein. In response to the time period, it's about 90
days. When we get a waiver request, we immediately send it off
to the agency whose rule is sought to be waived and say, we
would like to have your input on this, and we would like to
have that within 30 days. If they agree with the waiver, or if
they negotiate something with the city or town, that may be the
end of it. If they disagree with the waiver, we then set the
matter on for a minihearing. I don't want to make that sound
too formal, but essentially we get the board together, and we
get the applicant and the agency to appear before us, and we
give them about 20, 30 minutes, something like that, each, and
then we ask questions, and we decide. And that's about it.
So I would say 90 days is approximately the time. That's
for a contested one. Many of these things end up being
negotiated. And I think there's something to be learned here.
The mere existence of somebody who can grant this waiver over
the objection of the agency causes the agency, I think, to be a
little bit more flexible. Maybe the agency doesn't want us to
grant a waiver, and so before we even get a chance to vote on
it, the agency--has negotiated something with the party that
preserves the agency's real concerns plus gives the party
something of what they want. It's sort of a mediated settlement
without any participation by us. But I think the mere presence
of having somebody there who can do this causes the agency to
be a little more flexible.
Mr. Turner. Now, you have the authority to grant a waiver
to one local governmental entity?
Judge Klein. Correct.
Mr. Turner. You don't have the authority to grant it
statewide or to a multitude of entities?
Judge Klein. No, because, again, getting back to the
chairman's initial question, these are designed to be pilot
projects essentially. And, in fact, what has happened sometimes
is that we will grant a waiver--in 1996, let's say, we grant a
waiver, and the word gets around to cities and towns that, hey,
finally somebody found a way around that problem. They come in
the next year, in 1997, and we might have five applicants for
the same waiver. And we will often say ``no.'' We want to let
this first one have some time to run, see whether it works or
not, and then the solution is not to have us granting waivers
to every city and town around, but instead to get the agency to
change the rule.
And part of the benefit of having those six legislators on
the board is that those six legislators know how to get the
agency to change its rule, and if the agency doesn't do it,
they'll do it for them.
So we try very hard not to grant repetitive waivers of the
same thing. The idea is do it as a pilot project, and if it
works, then change the underlying rule or statute.
Mr. Turner. I notice not only do you have the authority to
waive an agency rule, but I believe I read that you have the
authority to waive a procedural law. Give us an example of what
kind of law that means you can actually overrule? Have you done
that? It seems like that is certainly an additional and unusual
power for a State board to have.
Judge Klein. It is unusual, and as you can imagine, the
legislature has put strict limits around how it is exercised.
First of all, it has to be a procedural statute. It has to say
something about how something is done rather than what gets
done. Substance, we cannot waive. And, in fact, we have turned
down a number of waiver requests because we perceive that what
they're really asking for is a waiver from the substance of the
statute, and we can't do that. We can do procedural waivers.
And there are other limitations, the most interesting one
of which is that the statute specifies that the waiver must
expire at the end of the next legislative session after it is
granted unless the legislature chooses to extend it. And so
what happens is we have every year a bill that we put before
the legislature saying here are the waivers we have granted.
Here are the ones which would still like to continue because
the pilot project isn't done, and we either recommend that you
do approve the continuation, or we don't recommend that you
approve the continuation. But the control is always with the
legislature, and if, in fact, the legislature doesn't act on
that bill for whatever reason, the waivers terminate.
And I'm sorry to say that I can't off the top of my head
give you a good example of a statutory waiver. I know there
have been some. I just can't think of one off the top of my
head.
Mr. Turner. Thank you, Judge.
Thank you, Mr. Chairman.
Mr. Horn. You're welcome. And if you think of that, just
write us a letter, and we'll put that in the record at this
point.
[The information referred to follows:]
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Mr. Horn. I just have a few questions that you heard of the
first panel.
What can you tell us about the qualitative and quantitative
implementation of various programs? What's your experience? And
did that seem to please the legislature? And I would be
curious, Mr. McDonald, also the degree to which you changed the
compensation that your staff had. And if so, how far down did
you go in terms of managers and executives under your
direction? Can you give us a feel for that?
Mr. McDonald. On the first part, the general assembly and
the Governor's Office have been very pleased with the results
in that we controlled a budget that was experiencing, you know,
20 to 30 percent annual rates of growth. We've been in
essentially for the last 4 years a flat budget, but we've been
able to make reinvestments from savings into improving work
conditions. Agencies that operate in--public and private
agencies--are able to reinvest the savings we give to them into
better working conditions, and if they choose, they can
increase salaries. So we give them a great deal of discretion.
Our own employees are governed by the State civil service
system and payroll, but we tend to pay pretty well in terms of
how are staff--how staff are recognized for compensation
purposes in child welfare.
Generally speaking, on the issue of quality, one of the
things we found from performance contracting is that the
quality of services to children improve not just in terms of
outcomes, but also in terms of--one of the issues is how often
do foster children move. The myth was--not the myth. The
reality was they were moved many, many times during the course
of the year. That means they generally fail in school, and they
have other problems. Stability issues in foster care improve
dramatically. The movement was cut in half in the first several
years of contracting, as agencies had the incentive to do the
work right with every child if they were going to achieve the
right outcomes.
Mr. Horn. Did you have major problems with the professional
welfare workers who, as you say, the goal seemed to be just put
them someplace?
Mr. McDonald. Well, we actually--we had some interesting
discussions with the union. We explained that performance
requirements were going to apply to everyone in the business.
That included our own employees. And agencies that did not meet
the performance bar would lose their contracts. And we said
that would apply to our own staff. Caseloads would leave our
own offices. That means we would actually downsize some of our
own operations. We had--about a year and a half ago, we
downsized teams, which is over 100 employees, in one of our
offices because they didn't perform as well as other folks on
behalf of children. The union that came in, instead of arguing
about whether we could do that, they said, what do we have to
do to perform better, because they understood the terms of the
contract. And a number of agencies have lost their contracts
because they did not perform well. The focus has been on
performance on behalf of children.
Mr. Horn. Well, that makes a lot of sense.
Now, for your own administrators, did you sort of put them
on a 6-month goal-setting or a 1-year goal-setting and relate
the compensation to their achievement of that?
Mr. McDonald. Unfortunately we have very narrow frameworks
with which we can do that, but to the extent we have a range of
between zero increases and perhaps even career counseling to 5
or 6 percent increases, we've taken advantage of that. Where
managers--not just managers, but supervisors and middle
managers have contributed to good outcomes, we've used every
existing leverage piece we have to reward them.
Mr. Horn. Have other States come to you and said, how did
you do it? We would like to do it.
Mr. McDonald. Yes, we do get rather frequent calls about
it. And I am going to be honest about this. We say, first of
all, we had a long period of time of building a large problem.
We say, the first thing is don't go there. Don't let your
system slide into a serious state of disrepair. A lot of large
urban systems are there and are going there, but they're also
making recoveries. Nick Scarpetta in New York City is doing a
marvelous job. In Cook County we've done a great job with the
cooperation of courts and private providers. But we're saying
every State is different in terms of the mix of laws, the mix
of providers and so on, but the one thing that is common is
that the expectation is now around performance and results, and
that much of what we've been through is, in fact, an
appropriate lesson for other settings.
Mr. Horn. Is the Governor trying to those similar
procedures and outcomes in terms of performance and results?
Mr. McDonald. The Governor's Office has an Office of
Performance Management, and that all State agencies are going
through essentially performance reviews required to establish
performance and outcome measures for their own organization.
And it's no surprise that most of what government does is
measured by process and activities and inputs as opposed to
outcomes. This is changing the way that all State agencies are
looking at doing business.
Mr. Horn. To your knowledge, is the State doing any of this
in relation to the educational structures of State level and
local level?
Mr. McDonald. Education is not under the Governor, but the
general assembly and the Governor and the appointed State board
of education has had a performance approach to education for
quite some time. In Illinois, just like in many States, where
people are looking at report cards and such, I think--and here
I'm totally out of my league except that we represent 20
percent of the kids in the Chicago school system, and we know
that unless there are improvements at a local level, they don't
do well. And I'm held accountable for how well they do in
education. So it takes some fairly creative approaches in
education to deal with some of these problems.
Mr. Horn. I might add to some of the first panel, if you
have anything to comment on that, just join us and take a
microphone because I'm particularly interested in the education
bureaucracies. They're overwhelming, and they have wrecked more
school systems than I can think of in America. So I would just
hope that some of your very fine grants that sort of hold a
carrot out there would be applied to the public education
system. I think the mayor of Chicago now in Cook County does
have an office of education and certainly worked toward--he's
willing to take responsibility. It sounds like a good idea.
Mr. McDonald. Mr. Chairman, they've made dramatic
improvements in the last 5 years in the city of Chicago, and
since the general assembly gave the mayor more authority over
the school system and its leadership, there has been dramatic
turnarounds.
Mr. Horn. What is the standard they apply to your foster
care people, their attendance at school or what?
Mr. McDonald. Attendance is an issue, whether or not
children read at grade level, whether or not their math is at
grade level. And we routinely evaluate with the Chicago schools
those issues. We have joint attendance initiatives because
attendance is a huge issue with kids in foster care because of
health reasons. We have about 35 initiatives with the Chicago
public schools that deal with what is a huge problem in the
schools as well as in the child welfare system.
Mr. Horn. How about the Federal Government? Is there any
part of the HSS and Federal welfare that held you back from
doing this?
Mr. McDonald. Well, I would say that one of the things that
the committee may want to take a look at is the extent to which
current Federal funding streams encourage innovation. In fact,
in child welfare, 4(e), the Social Security title that funds
adoption and foster care, tends to have disincentives to the
right outcomes. It's really structured to keep kids in care.
The waiver program that was put in place has restrictions of
only 10 per year.
We have two 4(e) waivers for demonstrations. The first one
is the guardianship waiver; has been highly successful, and
almost no other State is able to replicate it. Frankly, they
should permit replication because you would see dramatic
improvements in other systems that are interested.
We submitted a third waiver, and we've been told we are the
only applicant for a waiver in this last year, and we're in
discussions that may go on for a while. But the fact of the
matter is that there is a history of waivers working in welfare
reform and in Medicaid reform, and I think they should be in
all areas. The committee may want to look at what's been the
story on innovation through waivers and how can you encourage a
more flexible and speedier response by the Federal Government
for requests by States to innovate.
Mr. Horn. It sounds like they've been supportive of that.
Mr. McDonald. They have been. They have been supportive of
us, but we're not the only State with a child welfare system in
trouble. If we've declared the foster care system in the Nation
to be in trouble, then it would seem to me that there should be
a sense of urgency around innovation.
Mr. Horn. Anybody want to add to this since I did open up
education?
Ms. Christopher. I would just like to say that the State of
Kentucky was a winner of the awards program for its
comprehensive reform focused on outcomes and results. And some
of the factors that contributed to their success was the
stakeholder engagement and a strong legislative and political
base that allowed the reform to have longevity; that no matter
who came into elected office, there was a strong partnership
and stakeholder support for this reform process. And teachers
and schools and parents were all engaged around accountability
for results in terms of student improvement.
This year one of our finalists is the Minnesota charter
school legislation, and I'll note that the focus is on the
legislation that enabled the charter school process. Again, it
picks up one of those themes I mentioned of introducing
competition into the system. Now, of course, this is a hotly
debated question, but the fact is that when the competition is
there, it sometimes stimulates more creativity within the
system itself, and that's what we've found as we've looked at
the charter school replication around the country. It's not
only offering alternatives, but it's also stimulating better
outcomes within the public school system itself.
Mr. Horn. That's very helpful. I'm glad we asked the
question and you responded.
Does the gentlemen from Texas have any further questions?
If not, let me thank the staff on both sides that helped
with this very interesting topic: J. Russell George, staff
director and chief counsel; Earl Pierce, to my left, a staff
member with responsibility for this hearing; Bonnie Heald,
director of communications; Brian Sisk, clerk; Elizabeth Seong,
staff assistant; George Fraser, intern, minority staff; Trey
Henderson, counsel; and Jean Gosa, minority clerk; and our two
faithful court reporters, Joe Strickland and Colleen Lynch.
We thank you very much. And with that we are adjourned.
[Whereupon, at 11:36 a.m., the subcommittee was adjourned.]