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Interagency collaboration can maximize tight budgets

Aug. 21, 2011 - 06:00AM   |  
By THOMAS H. STANTON   |   Comments

(Editor's note: This is one in an occasional series of op-ed pieces addressing the theme of "transforming American governance.")

With resolution of the debt limit, at least for the moment, Congress has imposed a 10-year austerity budget on government. Congress rarely terminates programs; rather it defunds them in critical ways that often can impede cost-effective program management. Administrative overhead, salary and expenses are favorite targets of budget cutters.

Inter-agency collaboration, important before, has become essential for program managers. Agencies must begin to pool administrative resources to jointly enhance the quality of their programs.

Common portals for credit and benefit programs would be a good place to start. Give a veteran who lives in a rural area one place online to apply for a federally backed mortgage. By entering (anonymously at first) details of his qualifications for a mortgage, he could obtain information about relevant Veterans Affairs Department, Federal Housing Authority or rural housing programs. Then the portal would route him to the program that he selects. Or, to take the example further, the various federal credit programs could pool their resources to develop common applications and procedures, adapted as appropriate to each program. If the customer decides to go to another federal mortgage option, the data could accompany him.

Agencies also could improve their collaboration on the back end. With more defaulted borrowers, real estate management is an increasing problem for federal agencies. Why not pool resources to create a more effective asset management system, for preservation of real estate assets, their diversion for use by other federal programs, and sale of properties as appropriate? Now that mortgage giants Fannie Mae and Freddie Mac are in federal hands, their procedures and systems should be reviewed to see how they might be coordinated with those of the federal housing agencies.

An informal working group of current and former federal credit managers has been deliberating these issues. Some conclusions have emerged. The Office of Management and Budget must lead in encouraging this kind of interagency collaboration. What happens, for example, if one agency could spend funds and save another agency money? Only OMB can design the protocols and procedures to try to compensate the first agency for its effort to help the second.

OMB must design a process for leading interagency groups, or encouraging their leadership, to reach achievable goals within a limited time. OMB also should help agencies share promising practices.

Political scientist Harold Seidman says, "Agencies are most likely to be willing to collaborate and network when they are agreed on common objectives, operate under the same laws and regulations, and do not compete for scarce resources." OMB is ideally situated to help agencies set common objectives, engage in coordinated rule-making, and share re-sources. OMB also may be able to ask Congress for increased administrative and budgetary flexibility in return for the budget cuts that many programs face.

OMB also can enhance federal collaboration with state and local governments that assist in delivery of Medicaid, student loans, public housing and agricultural programs. Senior career OMB leaders have already brought state agency heads together with senior federal program managers to try to implement President Obama's initiative on administrative flexibility.

The core issues are easy to articulate:

If the federal government allows increased flexibility, how can states ensure they will continue to serve the program's purposes and priorities rather than diverting funds to other pressing uses?

What flexibilities should federal agencies allow immediately to remove requirements that have outlived their usefulness?

Housing and Urban Development Secretary Shaun Donovan meets regularly with Health and Human Services Secretary Kathleen Sebelius to discuss ways that the two departments can help each other.

Coming years will not be easy for federal managers. By working together and pooling ideas and resources, agencies can spread the burden while increasing effectiveness. Needed are vision and leadership from senior program managers and OMB.

Thomas H. Stanton is a fellow of the Center for the Study of American Government at Johns Hopkins University. Stanton wrote about improving agency collaboration in "Transforming American Governance," M.E. Sharpe Press, 2011, edited by Alan P. Balutis, Terry F. Buss and Dwight Ink.

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