Social Service Privatization

Since 1993, 11 of 42 state child support enforcement directors who left their government jobs accepted managerial positions with contractors providing child support enforcement services, and 10 of 41 high-level mangers of Temporary Assistance for Needy Family programs who left state service accepted positions with social service contractors. Officials in Arkansas, Maryland, Massachusetts, and Texas, the four states GAO examined, experienced short-term problems training staff to fill managerial vacancies, but ultimately the staff were able to do the work. Of 59 contract proposals in the four states, 34 listed former state employees as key contract personnel and 25 did not; slightly under two-thirds of the proposals in each group resulted in awards. The American Bar Association (ABA) and other organizations have recommended key ethics provisions prohibiting certain postemployment activities and conflicts of interest that most states have adopted in policies designed to help ensure open and fair contracting. However, more than one-third of the states lack one or more of these provisions, and enforcement approaches to help ensure compliance differ widely in the four states GAO examined. Model laws prepared by ABA and others and the Medicaid statute offer possible frameworks for strengthening state ethics policies. Although several states assess contractors' progress toward achieving program results, many others rely on basic accountability measures, such as audits, that focus on compliance with program rules. Assessing program results enables states to determine whether they have received the services they paid contractors for. The Government Performance and Results Act and results-oriented initiatives in some states have helped establish frameworks with which they can hold contractors accountable for program results. The states could take additional measures.

GAO noted that: (1) since 1993, 11 of 42 state child support enforcement directors who left their government positions accepted managerial positions with contractors providing child support enforcement services, according to federal and state program officials; (2) similarly, since 1993, federal and state officials indicated that 10 of the 41 high-level Temporary Assistance for Needy Families (TANF) managers who left state services accepted positions with social service contractors; (3) when the four states GAO examined lost child support enforcement and TANF managers and other staff, officials indicated that they experienced short-term difficulties because they were required to train staff selected to fill the managerial vacancies; (4) although, nationwide, these 21 directors and managers left the government to accept positions with social service contractors, GAO's review of 59 contract proposals in four states found that proposals listing former state employees as key personnel did not result in contract awards any more frequently than did proposals not listing such employees; (5) this was the case for both the child support enforcement and TANF-related programs; (6) GAO's analysis also showed that proposals listing former employees from the same state in which the bidding took place resulted in contracts about as frequently as did proposals not listing such employees; (7) most states have established some ethics policies designed to help ensure open and fair contracting by adopting provisions determined by the American Bar Association (ABA) and other organizations to be critical in prohibiting certain postemployment practices and conflicts of interest; (8) however, more than one-third of the states have ethics policies that lack one or more of these provisions; (9) among the four states GAO examined, enforcement approaches to help ensure compliance with applicable ethics provisions differed widely; (10) to address these inconsistencies, model laws prepared by ABA and others offer possible frameworks for strengthening state ethics policies; (11) once contracts have been awarded, several states have instituted mechanisms aimed at holding contractors accountable for program results; (12) these mechanisms include measures states apply when they assess contractor performance; and (13) while these states have established practices to assess contractor progress toward achieving program results, many others generally rely on basic accountability measures that focus on compliance with program rules rather than on results.