October 20, 2014

Working for the Gummint. A Great Life for Some?

The Washington Examiner's Susan Ferrechio reported today, "Government has paid millions for workers to stay home." Her reporting is based on this U.S. General Accountability Office (GAO) report published on Friday, October 17.

In the report's highlights, GAO explained their reasons for doing the audit:

"Federal agencies have the discretion to grant paid administrative leave for a variety of reasons, such as weather closures and blood donations. While paid administrative leave costs taxpayers, it has not been reviewed or reported on extensively.

"GAO was asked to examine the use of paid administrative leave. This report (1) describes paid administrative leave policies at selected federal agencies; (2) reviews practices in recording and reporting paid administrative leave and describes the number of federal employees granted such leave, and the amount and associated salary costs of such leave; and (3) describes categories for which large amounts of paid administrative leave have been charged by individual employees at selected federal agencies.

"To determine the total amount of paid administrative leave, GAO analyzed fiscal year 2011 through 2013 payroll data from OPM's Enterprise Human Resources Integration system. To review agency policies and reasons for using large amounts of administrative leave, GAO selected five agencies based in part on the percentage of employees with higher-than-average amounts of such leave."

Here is how Ms. Ferrechio begins her report:

"The federal government has shelled out more than $700 million in paid leave to more than 57,000 employees who were home from work for time periods stretching from one month to three years, a Government Accountability Office report has found.

"In a 62-page report published Monday, the GAO analyzed why so many federal employees were home and getting paid for such long periods of time and they discovered a variety of reasons.

"In many cases, employees were home awaiting the outcome of investigations into alleged misconduct and criminal actions. Some racked up paid leave for “physical fitness activities,” and others were away from work seeking professional development. Employees also took paid leave for “recuperation” from overseas work.

"Hundreds of federal employees remained at home, collecting a paycheck, for years.

"The report found that during a three-year period beginning in 2011, 263 employees remained on paid leave for one to three years at a cost of $31 million.

"In some cases, about five percent of the time, the federal government couldn’t come up with a reason why some employees were home on paid leave.

"Overall, paid leave for federal government workers, excluding holidays, cost billions of dollars from 2011 to 2013, the GAO report found, but comprised less than one percent of all federal government salaries paid during that time period.

"The vast majority of the 1.2 million federal employees analyzed in the report — about 97 percent — took fewer than 20 paid leave days, excluding holidays. More than 940,000 employees took two to five paid leave days outside of holiday breaks, the report found."

According to Ms. Ferrechio, the report was requested by Sen. Charles Grassley (R-Iowa); she wrote:

"Sen Chuck Grassley, R-Iowa, said he asked for the GAO probe after his own investigators uncovered unusual instances of paid leave. In one case, Grassley said, Inspector General of the National Archives and Records Administration, Paul Brachfeld, was put on paid leave "against his will for nearly two years" before retiring."

As Ms. Ferrechio pointed out, 97% of employees were granted fewer than 20 days of paid administrative leave. The following chart from the GAO report shows the number of employees who charged paid administrative leave, government-wide, for fiscal years 2011-2013:

Readers of Growls who are concerned that paid administrative leave is being abused are urged to contact their members of Congress. Contact information is available at Thomas (use left-hand column). Readers living in Virginia's Arlington County, should contact:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Jim Moran (D) -- write to him or call (202) 225-4376

And, tell them ACTA sent you.

UPDATE (10/21/14): HT to Guy Benson at Townhall.com for reminding us "about the state of our 'not-a-cent-to-spare' federal government," and pointing us to coverage by the Washington Post's Lisa Rein's coverage of this latest abuse of America's taxpayers. She provides this additional background:

"The extensive use of administrative leave continues despite government personnel rules that limit paid leave for employees facing discipline to “rare circumstances” in which the employee is considered a threat. The long-standing rules were written in an effort to curb waste and deal quickly with workers accused of misconduct.

"And the comptroller general, the top federal official responsible for auditing government finances and practices, has repeatedly ruled that federal workers should not be sidelined for long periods for any reason."

October 19, 2014

Deficits, Debt and Ticking Time Bombs

A week ago, the New York Times' published an economics op-ed by Justin Wolfers, senior fellow for the Peterson Institute for International Economics who claimed "the federal budget deficit is back to normal," and threw the following sop to those who are just as concerned with the level of the national debt, writing:

"For those who are concerned about government debt, smaller deficits are surely a good thing. And indeed, because deficits are expected to remain relatively small, total public debt as a share of the economy’s total output is projected to be roughly stable over the next decade. It is only over subsequent decades that the debt is projected to rise, although any economic forecast made decades in advance comes with a sufficiently wide margin of error that there’s also a good chance that it also may fall."

On Wednesday, the Missourian published an editorial, which looked at the national debt, noting the nation "has owed money since the Revolutionary War. They also suggest it is doubtful the country will ever get out of debt although there are occasional efforts to reduce the debt every "now and then." Here's a portion of the Missourian editorial:

"In case anybody is interested, as of Monday, the national debt was $17,868,497,104,334.61. It’s higher when you are reading this since it continues to increase by an average of $2.43 billion every day since Sept. 30, 2012. Yes, that’s $2.43 billion!

"Each citizen’s share is $55,978.73. That’s based on a population of 319,201,559.

"Is anybody concerned? There is a group called the Concord Coalition, a grassroots movement to eliminate the deficit and bring entitlements down to a level that’s fair to all generations. Talk about a challenge!

"The U.S. Department of the Treasury provides daily, monthly and annual figures on the debt — to the penny.

"At the end of FY 2015, the total government debt in the United States, including federal, state and local, is expected to be $21.897 trillion; the total state debt is expected to be $1.228 trillion; and local total debt is expected to be $1.956 trillion."

Unfortunately, as the Committee for a Responsible Federal Budget (CFRFB) wrote in a paper published this week, "the recent fall in deficits is not a sign of fiscal sustainability." Following is the paper's executive summary:

"The FY2014 budget deficit totaled $483 billion, according to today’s statement from the Treasury Department. Although this is nearly 30 percent below the FY2013 deficit and 66 percent below its 2009 peak, the country remains on an unsustainable fiscal path.

"In this paper, we show:

  • Annual deficits have fallen substantially over the past five years, largely due to rapid increases in revenue (mostly from the economic recovery),  the reversal of one-time spending during the financial crisis, small decreases in defense spending, and slow growth in other areas.
  • Simply citing the 66 percent fall in deficits over the past five years without context is misleading, since it follows an almost 800 percent increase that brought deficits to record-high levels.
  • Even as deficits have fallen, debt has continued to rise, more than doubling as a percent of GDP since 2007 to record levels not seen other than during a brief period around World War II.
  • Both deficits and debt are projected to rise over the next decade and beyond, with trillion-dollar deficits returning by 2025 and debt exceeding the size of the economy before 2040, and as soon as 2030.

"Unfortunately, the recent fall in deficits is not a sign of fiscal sustainability."

The following chart show how the deficit increased from 2007 to 2011, and how they are expected to increase again beginning in 2015:

Take another look at the fourth bullet above, and especially note the expectation that trillion-dollar deficits are expected to return by 2025 and that debt will exceed the size of the economy before 2040.

The CFRFB concludes the paper with this warning:

"The fact that deficits have fallen from their trillion-plus dollar levels is an encouraging sign that the economy continues to recover. Unfortunately, Washington’s myopic focus on short-term deficits has likely slowed the recovery by cutting deficits somewhat too fast in the short term while leaving substantial imbalances in place over the long term.

"While the deficit has indeed dropped significantly, this drop followed a massive increase, was largely expected, and does not suggest the country is on a sustainable fiscal path. Currently, debt levels are at historic highs and projected to grow unsustainably over the long run.

"In only a decade, deficits are projected to again exceed $1 trillion, and within 15 to 25 years debt is projected to exceed the entire size of the economy.

"Policymakers must work together on serious tax and entitlement reforms to put debt on a clear downward path relative to the economy, not declare false victories and sweep the debt issue under the rug."

In an op-ed, posted October 8, 2014 at Investor's Business Daily, Jed Graham warns that "while the fiscal storm that struck six years ago has subsided, the apparent calm is deceptive."

Terry Jeffrey in a commentary piece for CNS News, dated October 15, 2014, frames the numbers in a more personal manner, asking, "Which will be greater: the burden of student debt on Americans who went off this fall to their first year of college, or the amount of federal debt per full-time private-sector worker when these students earn their degrees and start looking for jobs?" His answer:

"There is no doubt: It will be the amount of federal debt per full-time private-sector worker.

"As of last Friday, the total debt of the federal government was $17,858,480,029,490.28, according to the U.S. Treasury. That equaled $200,258.81 for each of the 89,177,000 full-time private-sector workers that, according to the Census Bureau, were in the United States in 2013.

"(There were a total of 105,862,000 full-time workers in the United States in 2013, according to the Census Bureau. However, 16,685,000 of these full-time workers worked for government, getting paid with tax dollars or from government borrowing. That left only 89,177,000 who were self-employed or worked for private-sector employers.)

"Federal debt per full-time private-sector worker has escalated rapidly. At the end of 2007, the total federal debt was $9,229,172,659,218.31, which equaled $101,158.25 for each of the 91,235,000 full-time private-sector workers in the United States that year. In 2000, the total federal debt was $5,662,216,013,697.37, which equaled $66,553.23 for each of the 85,078,000 full-time private-sector workers that year.

"Since 2000, federal debt per full-time private-sector worker has more than tripled."

Readers of Growls who are concerned about the country's national debate in particular, or fiscal policy in general, are urged to contact their members of Congress. Contact information is available at Thomas (use left-hand column). Readers living in Virginia's Arlington County, should contact:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Jim Moran (D) -- write to him or call (202) 225-4376

And, tell them ACTA sent you.

October 18, 2014

Will there be a 'Second ObamaCare Election'?

In a  "must read" article to be published in the October 27, 2014 issue of the Weekly Standard, Jeffrey H. Anderson makes the case that the November 4, 2014 election will be a "second ObamaCare election."

Following are the first several paragraphs of the article by Anderson, a senior fellow in health care studies at the Pacific Research Institute:

"A Gallup survey earlier this month showing that Americans oppose Obamacare by a margin of 53 to 41 percent was  the 150th poll listed by Real Clear Politics during President Obama’s second term to find Obamacare unpopular. The number that found it to be popular was zero.

"The mainstream media, meanwhile, seemingly operating in an alternative universe, think that Obamacare is here to stay. Politico writes, “Deep down, Republicans who know health care know the truth: Obamacare isn’t about to be repealed. .  .  . [T]hink of the last time a major social program was repealed after three enrollment seasons, with millions of people getting benefits. That’s right—it hasn’t happened.”

"But to conclude that the track record of major social programs indicates that Obamacare cannot be repealed requires historical cluelessness. Social Security passed the House with 92 percent of the vote (365 in favor, 30 opposed). Medicare and Medicaid (which were voted on together) passed the House with 73 percent of the vote (307 in favor, 116 opposed). Obamacare passed the House with 50.8 percent of the vote (219 in favor, 212 opposed). Moreover, support for Social Security, Medicare, and Medicaid was bipartisan. House Republicans backed Social Security by 81 to 15. House Republicans backed Medicare and Medicaid by 70 to 68. House Republicans opposed Obamacare by 178 to 0.

"There’s a big difference between major social programs that passed the House with majority support from both parties and majority support from the citizenry and a major social program passed by the House over the unanimous opposition of one of the two parties and the clear opposition of a majority of the citizenry—opposition that (at least in the case of the citizenry) remains every bit as strong an Olympiad later."

And below is Anderson's conclusion. I've left out a wealth of information-rich material that explains why Anderson believes the election on November 4, 2014 will give American voters a second opportunity to tell America's political class just what they want done with the Patient Protection and Affordable Care Act, aka ObamaCare.

"Obama and his Democratic allies said Obamacare would be good for the economy. But the 62 months since Obama launched the Obamacare debate in earnest (with his speech to the American Medical Association in June 2009) have been the 62 worst months in the past 30 years in terms of the percentage of eligible Americans who are working. That’s according to the Bureau of Labor Statistics’ own numbers for the employment-population ratio.

And that’s without even mentioning Obamacare’s unprecedented individual mandate—long its most unpopular provision—which compels private American citizens, for the first time in U.S. history, to buy a product or service of the federal government’s choosing. It’s without mentioning the Independent Payment Advisory Board, Obamacare’s unelected, quasi-legislative, largely unaccountable, and blatantly unconstitutional Medicare rationing arm. And it’s without mentioning Obamacare’s $700 billion raid on Medicare, its war on religious charities, or the dangerous presidential lawlessness it has spawned.

"What the American people have wanted for more than four years is to repeal Obamacare and replace it with a conservative alternative. That’s what they’ll tell Washington once again this November 4."

You can read the entire Weekly Standard article here.

Readers of Growls who are concerned about ObamaCare, or, if you prefer, the Patient Protection and Affordable Care Act are urged to vote on November 4, 2014 (the deadline to register to vote ended October 14, 2014). In addition, readers are urged to contact their member of Congress. Contact information is available at Thomas (use left-hand column). Readers living in Virginia's Arlington County, should contact:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Jim Moran (D) -- write to him or call (202) 225-4376

And, tell them ACTA sent you.

October 17, 2014

And How Much Will ObamaCare Cost? More Than Expected!

Earlier this month, the Washington Post's Anna Gorman and Julie Appleby reported the states are getting set for the second enrollment period, set to start in mid-November.

With the national debt now expected to reach $18 trillion according to CNS News, it's worth asking what the Affordable Care Act (aka ObamaCare) is expected to cost.

In a timely article, posted today at Reason magazine, Jason Keisling and Nick Gillespie try to answer that question. The provide a series of efforts at estimating the cost. Their bottom line is that it will cost more than expected. According to Keiesling and Gillespie:

"As the nation prepares for the second enrollment period under The Affordable Care Act in November, there is officially no way of figuring out what Obamacare is going to do to federal deficits compared to the estimates used to push the program through Congress.

"Back in 2009, it was really important to President Obama that people understand he would not "sign a plan that adds one dime to our deficits—either now or in the future. Period." He sold the plan as costing about $938 billion in its first decade of operation (2010 through 2019) but saving about $143 billion overall because of the various taxes and other revenue it raised. A 2012 Congressional Budget Office (CBO) report figured that Obamacare would shave $109 billion off the deficit between 2013 and 2022.

"This past June, however, the CBO said it will no longer try to estimate the law's effects on the deficit. There have been too many delays, postponements, modifications, you name it, to the original bill. "Isolating the incremental effects of those provisions on previously existing programs and revenues four years after enactment of the Affordable Care Act is not possible," the CBO concluded.

"So what's going on? The deficit for fiscal year 2014, which ended on September 30, came in at "just" $483 billion and 2.8 percent of GDP, the lowest figures in years. President Obama was quick to say it was because of his signature health-care reform plan. "Healthcare has long been the single biggest driver of America’s future deficits," reports The Hill. "Healthcare is now the single biggest factor driving those deficits down."

"At the same time, the CBO (and everyone else) expects deficits to start growing again in fiscal 2016, so it's a bit premature to break out the bubbly just yet. Senate Republicans have just released a report based on CBO data claiming that Obamacare will end up adding $300 billion to federal deficits between 2015 and 2024."

About that Senate Republicans report, they write (see also separate Reason article):

"The Republican report is ultimately a political document, so its methods and conclusions deserve to be taken with more than a few grains of salt. But if past experience with massive government-run health care programs is any indicator, the odds are high that Obamacare will end up costing way more than it was supposed to.

"Indeed, all signs suggest that overall health-care spending, including the government's already-large share, will keep growing over the next decade."

Keisling and Gillespie point out the the NY Times has reported "that by 2023, all spending on health care will equal 19.3 percent of GDP, which is 'two percentage points more than last year.'" So, according to the two Reason reporters, "whether it's through taxes, increased premiums, or out-of-pocket costs, we'll be paying more for health care in the coming years."

They conclude, saying, "Government-run health-care programs have a track record of costing more than advertised." In addition, they provide three examples of how the cost of three health care programs ballooned from their initial estimates:

  • RomneyCare in Massachusetts. "Initial cost estimates came in at $472 million while actual costs were closer to $628 million for an error ratio of 1.2:1."
  • Medicare. "In 1967, Congress estimated that the nation's single-payer system for the elderly, Medicare, would cost $12 billion in 1990. The actual price tag was $110 billion, for an error ratio on 9.17:1."
  • Medicaid. "1987, Congress figured DSH payments would be less than $1 billion in 1991. Instead, they totaled $17 billion, creating an error ratio of 17:1."

Readers of Growls who are concerned about the ill effects (pun intended) of the passage and implementation of the so-called Affordable Care Act, i.e, ObamaCare, are urged to contact their members of Congress. Contact information is available at Thomas (use left-hand column). Readers living in Virginia's Arlington County, should contact:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Jim Moran (D) -- write to him or call (202) 225-4376

And, tell them ACTA sent you.

UPDATE (10/18/14): We growled on June 11, 2014 in response to the CBO giving up on projecting the long-term cost of Obamacare.

October 16, 2014

The Tax Burden on Your Cell Phone

Looking at your cell phone bill is no fun, but it would be a lot worse if you lived in the State of Washington. And 91% of Americans have a cell phone.

The Tax Foundation's Scott Mackey and Joseph Henchman published a study of cell phone taxation in 2014 (Fiscal Fact No. 441, October 8, 2014). Here's a brief excerpt from the study's executive summary:

"Cell phones are increasingly the sole means of communication and connectivity for many Americans, particularly those struggling to overcome poverty. At the end of 2013, according to surveys by the Centers for Disease Control, over 56 percent of all poor adults had only wireless service, and nearly 40 percent of all adults were wireless only.[1] Excessive taxes and fees, especially the regressive per line taxes like those imposed in Chicago and Baltimore, impose a disproportionate burden on low-income consumers.

"In September 2014, Chicago increased its 911 fee from $2.50 per month per line to $3.90 per month per line. The stated purpose of this tax increase, according to published reports, is to avoid the need for a property tax increase. Fixed per-line charges have a disproportionate impact on so-called “family share” plans, where multiple lines are billed on a single account. For example, the Chicago fee hike will increase the effective rate for consumers on some four-line plans to over 35 percent. Chicago joins Baltimore, Omaha, and New York City as cities with effective tax rates in excess of 25 percent of the customer bill.

"Congress is currently considering legislation to extend the federal moratorium on state and local taxes on Internet access. The taxes described in this report are, for the most part, imposed on wireless voice and other taxable services, not wireless Internet access. Should the moratorium not be extended by Congress, the excessive wireless taxes discussed in this report could be imposed on wireless Internet access. This could add significantly to the tax burden on wireless consumers."

Here are the key findings from their study:

  • Americans pay an average of 17.05 percent in combined federal, state, and local tax and fees on wireless service. This is comprised of a 5.82 percent federal rate and an average 11.23 percent state-local tax rate. (emphasis added)
    The five states with the highest state-local rates are: Washington State (18.6 percent), Nebraska (18.48 percent), New York (17.74 percent), Florida (16.55 percent), and Illinois (15.81 percent).
  • The five states with the lowest state-local rates are: Oregon (1.76 percent), Nevada (1.86 percent), Idaho (2.62 percent), Montana (6.00 percent), and West Virginia (6.15 percent).
  • Four cities—Chicago, Baltimore, Omaha, and New York City—have effective tax rates in excess of 25 percent of the customer bill.
  • The average rates of taxes and fees on wireless telephone services are more than two times higher than the average sales tax rates that apply to most other taxable goods and services.
  • Excessive taxes on wireless consumers disproportionately impacts poorer families.

Virginia ranks #44 on taxing cell phones with the Commonwealth having a combined rate of 11.97% (state/local - 6.54%; federal - 5.82%). Washington State ranks #1 with a combined rate of 24.42% while its neighbor Oregon ranks last -- adding on a state-local rate of 1,76% to the 5.82% federal rate.

The following chart compares cell phone tax rates to sale tax rates.

At the National Taxpayers Union blog on Friday, October 10, Government Bytes, Lee Schalk adds:

"Once again, the Tax Foundation has created an immensely helpful resource that illustrates just how lawmakers are able to tax us – sometimes without our knowledge. At NTU, we won’t stop beating the drum for lower tax rates across the board, including these stealthy wireless taxes. Be sure to share with your friends – this certainly isn’t a tax issue that Americans are very familiar with. We need to spread the word!"

Readers of Growls who are concerned about the tax burden imposed by government are urged to contact their members of Congress. Contact information is available at Thomas (use left-hand column). Readers living in Virginia's Arlington County, should contact:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Jim Moran (D) -- write to him or call (202) 225-4376

And, tell them ACTA sent you. And thanks to the Tax Foundation's Mr. Scott and Mr. Henchman.

October 15, 2014

More on Arlington County's Per Capita Spending

On Wednesday of last week, we growled about a single number from the Virginia Auditor of Public Accounts' (VAPA) most recent comparative report of revenues and expenditures, which was the maintenance and operations expenditures that appears in Exhibit A, pages 1-9, and looked at how Arlington County compared to it's Northern Virginia neighbors.

That number is a "summary total of expenditures for the operation of general government, e.g., the courts, public safety, public works, health and welfare, education, parks and recreation, and community development. In first place was Falls Church with a total of 5,535.98 for maintenance and operations. Arlington County ranked second with 4,622.86 followed by Fairfax County 4,031.68. The state average of all counties for FY 2013, incidentally, was $3,025.44.

Today, we'll drill down into that summary number, and take a look at several departments (numbers come from exhibit C, pages 38-45 of the print edition). For example:

  • Public Safety, which includes the police and fire departments. For FY 2013, which ended June 30, 2013, Arlington’s per capita spending was $851.33 (191.93% of the state average for counties). Arlington’s spending was exceeded by both Alexandria ($893.88) and Falls Church ($854.68). Alexandria’s per capita spending was 152.57% of the average for all Virginia cities. Among it’s Northern Virginia neighboring counties, the next highest average was Fairfax County’s of $546.41 (123.19% of all Virginia counties).
  • Public Works. Includes sanitation, waste removal, and maintenance of general buildings and grounds. Arlington County’s per capita spending was $345.42 (294.06% of all Virginia counties), but it was exceed by Falls Church’s per capita spending of $480.04 (182.00% of Virginia’s cities). Among Northern Virginia counties, the next highest to Arlington was Fairfax County with a per capita spending of $156.45 (133.18% of all Virginia cities).
  • Health and Welfare. Arlington County’s per capita spending far exceeded all of its neighbors in Northern Virginia with per capita spending of $706.38 (219.06% of all Virginia counties). Alexandria’s per capita spending was $652.03 (182.19% of all Virginia cities) while the next highest county is Fairfax County -- $472.85 (146.64%).
  • Parks and Recreation. Includes parks, recreation, cultural enrichment and libraries. Arlington County significantly trailed Falls Church in per capita spending, which spent $358.86 (252.73% of all Virginia cities) although Arlington County’s per capita spending of $$259.77 (316.35% of all Virginia counties) significantly exceeded the next county, i.e., Loudoun County, which spent $138.20 per capita (168.30%).

If you believe, as we do, that a top priority of the Arlington County Board should be to spend tax dollars in an efficient and economical manner, the Board should use the numbers from the VAPA's comparative report as a base to look at the efficiency and economy of each and every county operation or program. We understand there are factors that may justify increased spending, e.g., the county's higher daytime population. Likewise, the county's population density may result in a higher per capita spending for parks and recreation.

However, many of the per capita spending figures for individual departments within Arlington County's government suggest there is significant opportunity for reducing the tax burden on Arlington County taxpayers. Growls readers who are concerned that Arlington County spending may be far too high are urged to e-mail the Arlington County Board by clicking-on the following hotlinks, or just call them:

  • Call the Board office at (703) 228-3130

And tell them ACTA sent you!

October 14, 2014

The Klieg Light Effect of Those Audits

As we've growled recently -- on October 10, October 11, and October 13, 2014 -- an active and independent audit function can act as  a powerful disinfectant when the auditor's klieg lights are turned on inefficient, uneconomical, or ineffective government.

Now comes news from the Virginia Bureau of Watchdog.org that shows the value of an independent audit function. As reported today by Katie Watson:

"At least one of Virginia’s 23 community colleges has some serious shaping up to do, a recent state audit revealed.

"Northern Virginia Community College paid $1.3 million in hourly rates of up to $290 to a firm it didn’t even hold accountable to make good on its contracts, an audit from the state’s Auditor of Public Accounts on the community college system reveals.

"“We did have a couple of findings this year that actually led us to potential waste where funds maybe could have been spent in a better manner,” said Zachary Borgerding, audit director over reporting and standards. (emphasis added)

"Northern Virginia Community College, which has multiple campuses throughout the suburbs of Washington, D.C., entered into seven contracts totaling $1.3 million to the major consulting firm ARCADIS for architectural and engineering consulting, but used the firm to manage noncapital projects in a way the audit said went beyond the parameters of community college policy. Specifically, the college paid ARCADIS’ water division, Malcolm Pirnie, which was a separate company until ARCADIS acquired it in 2009, according to Borgerding.

"The school didn’t bat an eye at paying ARCADIS hourly rates ranging $133 to $290 an hour at one point, “significantly higher than benchmark firms performing similar work at NVCC,” the audit said. NVCC didn’t assign an administrator to review contracts, and invoices were approved for payment without any review as to whether the firm had actually made good on its contract.

"On top of that, Arcadis was supposed to submit weekly reports summarizing activity for the week, but didn’t — for at least two years."

You can read the remainder of Ms. Watson's report.

Arlington County taxpayers have a direct, though small, interest in the results of the audit of Virginia's community colleges since the Arlington County Board appropriated over $30,000 to Northern Virginia Community College when they approved both the FY 2014 and FY 2015 adopted budgets. According to the FY 2015 adopted budget, more than half of the amount is a "contribution to NVCC" and "supports maintenance and operational costs not financed by General Assembly appropriations." There are also "funds (to) support scholarships and tuition assistance for part-time students."

Good work, Katie Watson!

October 2014
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Items in Growls are written by individual ACTA members and do not necessarily represent the views of the Arlington County Taxpayers Association, Inc. Please send comments about Growls to The Growl Meister