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• W354006144 abstract "Staying within tax revenues and providing essential services while downsizing government spending is a challenge facing many states, cities, other local government entities and even the federal government. Choices among cost reduction options are tough, and none are truly painless. Two of the least painful options include improving efficiency and reducing the cost of quality-of trying to attain good quality and eliminate quality failure. Performance auditors can play a helpful and influential role in the downsizing process because looking for opportunities to improve operations and reduce costs has been their stock in trade for several decades. By virtue of their experience, expertise and objectivity, auditors can provide useful and nonpartisan professional analyses that are credible. Those auditors who measure and compare performance among organizations and with other benchmarks to identify opportunities for improvement will be in position to make the greatest contribution in influencing positive changes in government operations. OPTIONS FOR REDUCING COSTS A number of options exist for reducing government spending. Many involve reductions in services, facilities maintenance and compensation. Some concern increasing efficiency and reducing quality costs. Major options are shown in Table 1. TABLE 1 OPTIONS FOR REDUCING GOVERNMENT COSTS 1. Discontinue programs and services. 2. Limit eligibility thereby reducing the number of persons who qualify to receive program and service benefits. 3. Reduce the benefit amount and level of service. This strategy would apply to programs like food stamps and to services such as police, fire and the military. 4. Guarantee loans provided by the private sector rather than make direct loans to beneficiaries. 5. Charge consumers for services, where practicable. 6. Forestall or curtail new projects, particularly for construction of infrastructure and acquisition of new equipment, systems and weapons. 7. Lease rather than buy capital assets. 8. Reduce spending for maintenance, repair and protection of physical assets. 9. Make across the board cuts and layoff staff. 10. Reduce staff salaries and benefits, and the price paid for other resources if possible. 11. Introduce choice or competition wherein services could be provided by the government or operated by the private sector. 12. Improve efficiency, and reduce efforts to achieve good quality and reduce the costs associated with poor quality. The downside to most cost reduction options is the difficulty in reaching agreement to carry them out. Government officials find it difficult to discontinue programs, limit eligibility, reduce service levels (like police protection), cancel new systems and cut salaries, for example. Moreover, options such as leasing instead of buying and deferring maintenance and repair can be more expensive in the long run. Performance auditors can help identify downsizing options with audits that focus on efficiency and quality and use performance measurement and benchmarking as audit techniques. It's true that savings from eliminating programs and projects and reducing service levels and benefits, and the like, will be larger than the potential savings from improving efficiency and reducing quality costs. However, savings from increasing efficiency and reducing quality costs can be substantial. Books and articles on productivity and quality suggest that quality costs in services can be as high as 40 percent of total operating costs. In GAO efficiency audits we have found improvement potential ranging up to 50 percent of operating costs. As a specific example of the potential cost savings for one federal program, reported program operating costs were $2.5 billion and reported benefit overpayments were $1 billion. Together, these brought operating and quality costs to $3. …" @default.
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• W354006144 title "Measurement Based Performance Audits: A Tool for Downsizing Government" @default.
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