Grant Reform: The Engineer’s Lament

February 27, 2012 | By Thompson Education | Post a Comment

(This post originally appeared on Title I-Derland, Thompson’s blog on federal K-12 education, and was written by Chuck Edwards, senior executive director for Thompson’s education products.) In the dramatic grants reform proposal released on Friday by the Office of Management and Budget and described here by guest blogger Jerry Ashworth, I thought one sentence aptly summarized OMB’s three core objectives  (my caps):

In order to ensure that the public receives the most value for the tax dollars spent, it is essential that these programs function as EFFECTIVELY and EFFICIENTLY as possible, and there be a HIGH LEVEL OF ACCOUNTABILITY to prevent waste, fraud and abuse.

It occurs to me that engineers have a similar trinity, with a cynical twist:

“Better, faster, cheaper — pick any two of three.”

Of course, we know that all three are indeed achievable, with enough effort and ingenuity. But, as engineers recognize, it is easy for CEOs to demand that they hit all three marks but tough to attain in practice.

Likewise in the world of grants. “Efficient” and “effective” are much easier to achieve if you don’t have to worry about reducing losses from waste, fraud and abuse. Maintaining “accountability” introduces frictional costs in the form of paperwork and oversight  that inhibit achievement of the first two objectives.

And public tolerance for losses in grant programs is much lower than in business. Retailers routinely expect  “shrinkage” of 1 percent or more. Can you imagine the reaction on Capitol Hill if the President in his annual budget acknowledged that 1 percent — $145 million — of the $14.5 billion Title I budget would be wasted?

As most people with a knowledge of human nature would admit, any enterprise involving $1 billion or more will probably involve at least some “shrinkage.”  Even though public programs are subject to a much higher level of scrutiny than the world of business, there will always be losses. And preventing losses through an increase in accountability can mean reducing efficiency and effectiveness.

It will be interesting to see if OMB’s proposals to streamline federal grants administration manage to achieve all three goals, or if the outcome will be another version of the cynical engineer’s lament.

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