Government Executive - Authors - Dave Mader

The Next Phase in the Improper Payments Battle: Prevention

Dave Mader and Monte Zaben — Mon, 01 Oct 2018 13:25:09 -0400

Of the roughly $4 trillion spent by the government in fiscal 2017, an estimated $141 billion was spent improperly, meaning it was paid out in the wrong amount or to the wrong recipient or it was not properly justified. Some of that was the result of fraud, some simply paperwork errors.

Improper payments are a critical and significant problem, not only because they siphon money from programs serving important national needs, but because, ultimately, they can erode the public’s trust in government.

A positive step toward addressing this problem was taken with the release in March 2018 of the president’s management agenda, which includes “getting payments right” as one of the Trump administration’s cross-agency priority goals. CAP Goal No. 9 takes two approaches to the problem that are sorely needed.

First, it aims to shift agencies’ focus toward prevention so there are fewer improper payments that need to be recovered. Recovering an improper payment is laborious and often inefficient and agencies typically recover only 47 cents of every overpaid dollar, so shifting more toward a prevention posture should yield better overall results.

Secondly, the CAP goal promotes greater partnerships between federal and state agencies. For example, states today can access federal databases administered by the Treasury Department’s Do Not Pay program, which provides data matching and data analytics services to government agencies to prevent and detect systemic improper payments. But there is little, if any, actual data sharing occurring between states and Do Not Pay. The CAP goal tries to accomplish this by encouraging the Do Not Pay program to identify potential state agency partners with which it can share data for screening and verifying recipients of federally funded programs before they are paid. Because states are largely responsible for determining eligibility for federally-funded benefit programs, the CAP goal recognizes that their active involvement will be critical to any success in preventing improper payments.

There have been examples of how focusing on prevention can work using low-cost, high-impact approaches. In New Mexico, for example, managers of the Department of Workforce Solutions realized they were receiving many unemployment insurance claims containing inaccurate information that inflated the benefits they were paying out. They identified three questions in the online application process that elicited the most inaccurate responses. Then they installed simple, low-cost revisions to those portions of the online application process, employing behavioral science techniques and “nudge theory” to encourage more accurate responses. With DWS’s solution in place, claimants were twice as likely to report new earnings, half as likely to commit fraud, and up to 20 percent more likely to find work within the next few months. Other states have experimented with similar tactics to improve accuracy in other types of benefits programs, such as child care and the Supplemental Nutrition Assistance Program.

There is also progress at the federal level in preventing improper payments. The Centers for Medicare & Medicaid Services, for example, employs a data analytics system—the fraud prevention system—that analyzes claims to identify health care providers with suspect billing patterns. Besides identifying targets for fraud investigations, the system also uses automated controls that identify payments associated with potential fraud to deny claims that violate Medicare rules or policies before the claims are paid. As of May 2017, CMS reported that the system denied nearly 324,000 claims, saving more than $20 million in fiscal 2016.

These examples illustrate several key points. First, there is great value in attacking the problem prior to the point of payment. Second, to prevent an improper payment, agencies do not necessarily have to focus on the payment itself—tweaking the claims process or interacting more with beneficiaries, for example, can also lead to measurable results. Third, solutions can take many forms and sizes, so program managers should be imaginative and size the solution appropriately.

The long battle to reduce improper payments is approaching an inflection point, and we hope the coming months and years will see the focus shift to its rightful place: on their prevention.

Dave Mader is the civil government chief strategy officer for Deloitte’s Government and Public Services practice and is a former controller of the Office of Management and Budget. Monte Zaben is a principal at Deloitte & Touche LLP and the leader of Program Integrity services within Deloitte’s Government and Public Services practice.

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Why the President’s Management Agenda Is Different From Previous Plans

Dave Mader — Thu, 31 May 2018 15:12:40 -0400

Many Americans have long held that their government can and should operate more smartly and responsively at less cost. With this in mind, administrations of both political parties in recent decades have rolled out a flurry of government reform plans.

I’ve helped plan and execute many of these reform plans over my 40-plus year career, either as a federal government executive or private sector management consultant. Some, though not all, of these initiatives have produced tangible improvements in government operations that continue today. But I believe the most recent of these reform initiatives—President Trump’s management agenda and its corresponding cross-agency priority goals unveiled last month—has greater potential to offer lasting and dramatic positive change. On paper, the management agenda is a very well-thought-out and ambitious government reform effort. But its execution will ultimately determine its legacy.

I don’t view this (or previous reform efforts) through a political lens. I served in every administration from Lyndon Johnson to Barack Obama and have worked on both Democratic and Republican reform initiatives. I firmly believe the drive to improve government efficiency, effectiveness and citizen responsiveness should and does hold wide bipartisan appeal.

The reasons I think this latest initiative holds more promise than previous reform efforts are because:

It is focused on execution. The management agenda’s 14 broad-based cross-agency priority goals are not novel. They echo familiar goals, such as getting payments right, applying results-oriented accountability for grants, sharing back-office services, transitioning to procurements that are managed by category across agencies, and reducing repetitive or obsolete administrative tasks and reporting requirements, among others. As Office of Management and Budget Deputy Director for Management Margaret Weichert said at its unveiling in Kansas City, “We’re not inventing something wholly new. But what we are doing is focusing on getting 'er done, we’re focusing on execution.”

The management agenda places high emphasis on the role that data, accountability, and transparency will place in driving results. Each of the 14 CAP Goals, which target areas where multiple agencies must collaborate to effect change, have quarterly objectives, and progress will be reported for all to see. Leaders and teams responsible for achieving those objectives are identified by name. For each CAP goal, the management agenda outlines implementing strategies to achieve the stated objectives, defines what success will look like, and even defines key performance indicators that will help gauge success.

It takes the long view. The agenda embraces the notion that a vision for government modernization should be multi-generational and that focusing on short-term fixes alone could fall short of what is needed. Meaningful transformation takes time and any modernization plan should consider factoring in both long- and short-term goals and allow for adjustments along the way.

It retains and aims to improve upon past approaches that work. The agenda doubles down on the goal-focused, data-informed management approaches of the last administration. It also continues a central reliance upon CAP goals—a valuable concept for dealing with the complex, multi-dimensional challenges that the government and the nation confront.

It is supported by interlocking and foundational policies and tools. The management agenda does not exist in isolation. For example, the administration is establishing centers of excellence that will assist agencies with tools and best practices to advance their competence in critical practice areas, such as cloud adoption, customer experience, IT infrastructure optimization, contact centers, and service delivery analytics. Attaining fluency and competency in these areas over the long term will be critical for agencies as they modernize their operations in pursuit of the plan’s objectives.

Similarly, the new Modernizing Government Technology Act provides agencies an important mechanism with which to finance many of the IT modernization components that will be so critical to accomplishing the administration’s goals.

Also, the president’s proposed fiscal 2018 and fiscal 2019 budget submissions articulate compelling business cases for agencies to build upon past reform initiatives by developing robust technology and data infrastructures and organizational cultures centered around evidence- and evaluation-based decision-making, continuous improvement, and improved customer experience. These budget proposals encourage agencies to create “portfolios of evidence”—in essence, a range of evidence types and analytical and management tools—to learn what works, what does not, under what circumstances, and how to improve results. They promote “learning agendas” in which agencies collaboratively identify critical questions that, when answered, help programs to be more effective. And they encourage agencies to integrate their mission-focused communities with data science communities to create “evidence infrastructures" that can deliver a better understanding of program effectiveness. These will be important enabling endeavors for agencies as they execute the management agenda’s goals.

Finally, the agenda sets in motion a number of modernization efforts that dovetail well with parallel efforts underway to reconsider agency organizations, structures, and mission overlap, as called for in Executive Order 13781. These efforts, if executed well, could position agencies to be far more agile, resilient, technically savvy, and effective in addressing a future that is likely to be considerably more dynamic and complex.

Dave Mader is chief strategy officer for the civilian federal government practice at Deloitte Consulting LLP. He formerly served as Office of Management and Budget controller and assistant deputy commissioner at the IRS.

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7 Requirements for Successfully Managing Government Reform

Dave Mader — Thu, 15 Mar 2018 16:12:47 -0400

The Trump administration is expected to unveil a plan in the coming weeks to reorganize governmental functions and eliminate unnecessary agencies. The goal, as expressed in a memorandum to agencies from Office of Management and Budget Director Mick Mulvaney in April 2017, is to create a leaner, more accountable, and more efficient government.

As a result of this and other recent reform initiatives, many federal managers are fundamentally rethinking how to meet their missions. There is much room for reform, and many of today’s legacy approaches for delivering government services and executing missions should be reconsidered in the face of new operating models and innovative technologies that are transforming service delivery in the commercial sector.

While I am hopeful we will see some promising reform plans emerge in the coming weeks, I’m not as optimistic about their chances of sustained success. Despite people’s best efforts and intentions, many reform efforts fall short of their goals. In my experience as a long-time government leader and private sector consultant, I have found that public sector transformation initiatives can be successful if pursued the right way. There is a methodology to transformation that significantly increases the likelihood that reforms will be successful and sustained over time.

That said, government transformation is not an exact science. Not all reform initiatives are alike, nor do all organizations respond similarly to change. But, to be successful, certain transformation imperatives must be properly addressed. These include:

A clear and compelling vision. Leadership must articulate why change is necessary, define a future state that delivers improved customer experience and mission performance, and win buy-in from affected stakeholders.

Organizational shifts. To define what organizational changes are required to meet the stated vision, planners must think broadly and look at their organization from multiple perspectives. They should look “outside in” to better understand their constituents’ needs and how to better serve them; and look “inside out” to better understand the internal changes needed to navigate shifting external trends and forces.

Integrated initiatives to achieve those shifts. Implementation initiatives should focus on moving the needle toward the desired organizational shifts and articulated vision. These initiatives should be approached with an integrated mindset, considering people, culture, processes, and technology; and they should be plotted against defined measures of success.

Prepared leadership. Executives and managers throughout the organization must be engaged from the outset so they are prepared for, aligned with, and comfortable with the coming changes and their roles in making those changes successful.

Engaged stakeholders. Both internal and external stakeholders have important roles to play. Their buy-in (or conversely, their opposition) can often be critical to an initiative’s success or failure. But they should also be viewed as important resources whose perspectives can help validate and refine the strategy to be more effective.

Informed, prepared, equipped staff. Success or failure ultimately rides on the shoulders of the people executing and sustaining the change. Leaders must commit to informing, preparing, supporting and empowering staff through a strong change management plan, uninhibited two-way communications, and incentives for success. Effective tools and training for affected staff are also critical.

Targeted oversight. Leadership must empower a dedicated office to drive the reform effort by managing risk, process, and governance policies. This office should be responsible synchronizing and integrating schedules, tracking milestones, and enhancing transparency in the process.

Managing these seven imperatives well is critical for any large government reform effort, but it is also important to understand that not every effort demands the same tactics or approaches. Each situation is unique, and leaders must carefully calibrate their approaches accordingly.

A final caution: Leaders can sometimes place too much emphasis on point solutions, such as redrawing an organization chart or deploying a new IT system when attempting to fix problems or address pressing requirements. Employing focused solutions that solve a narrowly defined problem in this way is like pulling on a snag without considering the rest of the fabric. Meaningful change often requires making adjustments across the board—in operations, the workforce, and constituent engagement.

Dave Mader is chief strategy officer for the civilian sector in Deloitte Consulting LLP’s federal government practice and is the former Office of Management and Budget Controller and Assistant Deputy Commissioner at the IRS.

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Shared Services Help Pinch Pennies

Dave Mader and Kristine Rohls, Booz Allen White Logo — Wed, 21 Mar 2012 00:00:00 -0400

The idea that federal agencies should be run more like businesses has been around for a long time. Like lots of management principles it goes in and out of vogue. It’s back in, but this time along with a looming $14.3 trillion national debt and imminent budget cuts across government.

The specifics of managing down the national debt will continue to be the subject of vociferous debate, but one thing nearly everyone can agree on—regardless of political stripe—is that agencies are going to face substantial budget cuts.

If past is prologue, then the concept of optimizing costs through various sourcing models such as shared services will be an important part of the prescription. The reasoning is it’s more cost-effective when another agency under the departmental umbrella provides services such as financial, human resources and information technology management, or
when outside government entities serve as third-party providers.

Is the shared-services model really doable, or is it merely a theoretical pursuit that has little relevance in the real world? It can work—and it gets agencies closer to the long-vaunted commercial model—but only if the entities involved recognize critical differences between public and private sector operations, and how those differences affect outcomes.

Agencies and Congress not only must be cognizant of these differences, but they also must have a strategy for managing them. It’s not so much a matter of government’s unique objectives, processes or expected results, but rather the context. Sometimes this complexity presents challenges, but it also can be positive.

The cost-savings opportunity, for example, is orders of magnitude larger than even the largest corporations could achieve. The federal government spends about $80 billion on IT, and the estimated outlay for federal administrative services is at least that large. Cost savings from financial management and HR systems consolidation projects alone is estimated at $5 billion over 10 years.

Another material difference between the public and private sectors is the constituencies they serve. Both sectors are called on to maximize value while minimizing costs, but for commercial enterprises the path is more straightforward and far less mired in consensus building. Government initiatives are subject to the vagaries of election cycles and shifting political agendas. Federal officials are obliged to appease many masters—legislators, regulators, industry and the electorate—all of whom have some control over the purse strings and many of whom advance contradictory agendas.

The parameters imposed on sourcing decisions are far stricter in the public sector than in the commercial sector.
Offshoring, for example, is simply not an option for government.

In addition, in industry there are incentives for hitting revenue targets and fulfilling terms of service agreements. But considerably less latitude is available in designing such incentive schemes in government, although some models are emerging. A more realistic approach would be to modify the annual performance assessment review process to measure competencies that align with the objectives of shared-services initiatives. To put it plainly, this would mean structuring the review process to reward executives for budget reductions and shedding functions that can be managed more effectively elsewhere. The status quo, although not intended, rewards empire building, which in a larger head count and broader portfolio of functions often equates to career advancement.

Understanding the differences between government and industry is only a start. Sourcing decisions require getting the mechanics right.

Agencies identified as centers of excellence act as fee-for-service providers to other agencies. Together, the customer agency and the service provider agency draw up an agreement or memorandum of understanding specifying the services to be delivered, the requirements and parameters, the unit cost and total cost, the cost assessment methodology, and the time frame for delivery.

Federal agencies have not typically used traditional chargeback mechanisms, which measure actual spending, to develop budgets and to pay service providers, instead relying on demand management. Executives and managers across government, however, are seeking more effective and accurate methodologies for managing service relationships and costs in a way that drives measurable standards. Service-level agreements, for example, are a fine thing, but are enforceable only when pre-defined financial incentives and penalties are in place.

Once the ink is dry on a new business relationship with the provider agency or commercial firm, the real work of implementing the agreement and monitoring progress begins. Successful agreements start at the top and remain a priority for senior leaders.

Performance indicators must be identified, tracked and communicated, and benchmarks and best practices monitored routinely. The notion of measuring the cost of specific services is relatively new to federal agencies, but it is essential in determining whether the organization is best served by insourcing or outsourcing.

There is no doubt that government is starting down the road to optimizing administrative services from a difficult position. Agencies are rife with nonstandardized and manual processes supported by a patchwork of legacy IT applications in multiple locations. Many are decentralized, where bureaus and offices operate as separate businesses with their own budgets.

But an immense prize awaits these agencies, and by extension their tax-paying constituents, if they take the necessary steps to set out on the right path.

Kristine Rohls and Dave Mader are leads at Booz Allen Hamilton who work with federal agencies to streamline technology and administrative operations.

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Share Tactics

Dave Mader and Kristine Rohls — Thu, 01 Mar 2012 00:00:00 -0500

The parameters imposed on sourcing decisions are far stricter in the public sector than in the commercial sector.
Offshoring, for example, is simply not an option for government.

Understanding the differences between government and industry is only a start. Sourcing decisions require getting the mechanics right.

But an immense prize awaits these agencies, and by extension their tax-paying constituents, if they take the necessary steps to set out on the right path.

Kristine Rohls and Dave Mader are leads at Booz Allen Hamilton who work with federal agencies to streamline technology and administrative operations.

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Turn Styles

Dave Mader, Jeff Myers, and Steve Kelman — Wed, 30 Sep 2009 00:00:00 -0400

The broad, sometimes little-defined concept of change-especially as it relates to improving government management-was a central theme of the 2008 presidential election. Now our new president is faced with having to make good on the promise of change during one of the most challenging economic environments the nation has seen since the Great Depression.

The question is which management and leader- ship techniques deliver effective, meaningful change-and which do not. If there is a recipe for successful government reform, what are its core ingredients? Is there anything similar about the leaders who have been the most successful-or was it even skill, or just chance? Did those who failed make avoidable mistakes, or did they encounter an obstacle that no one could have overcome?

Although change is inevitably complex, the prescriptive measures are often most effective when they are simple and intuitive.

A recent study, "What It Takes to Change Government," by the consulting firm Booz Allen Hamilton found similarities in the methods used by public leaders who succeed. The study examined successes and failures of 12 federal agency leaders in the two most recent administrations.

Based on the experience of successful former agency chiefs such as David M. Walker of the Government Accountability Office, Charles Rossotti of the Internal Revenue Service and James Loy of the Coast Guard and compared with less successful ones, 10 key considerations emerged as a roadmap for political appointees and career executives alike.

1. Get a Running Start

Use the time between nomination and confirmation to meet with Congress and key stakeholders. Successful agency heads are twice as likely as less successful ones to use this period to interact with stakeholders and start to develop their strategy.

2. Fewer Goals, Greater Success

The successful leaders generally focus on three, or fewer, goals. Those who failed often had four or more. But it's not as simple as trimming back. Goals should be outcome-oriented, such as improved results for customers in an observable way. Unsuccessful leaders most typically set tactical, action-based goals, such as: We need a new computer network. We need a new payroll system. We need a new building. Moreover, the goals of successful leaders are intuitive, free of jargon and communicated consistently across audiences.

3. Collaborate With Employees

Resist the knee-jerk temptation to focus on political appointees. Nearly every successful leader emphasized a collaborative style of developing and implementing change, compared with those who did not attempt ambitious change. Also of interest, the successful cases typically had a smaller percentage of political appointees than federal agencies on average.

4. Manage Within

Don't focus only on the outside world. Successful leaders said they spent nearly half their time on efforts inside the agency, versus with Congress, media and interest groups. They spent internal time building capability, providing vision and guidance, and holding people accountable. Unsuccessful leaders spent just one-quarter of their time internally.

5. Use Performance Measures

Most successful agency leaders use performance measures to advance their agenda, while most unsuccessful leaders do not. Where they use measures, the failures most often evaluate only cost and production, while successes more often add measures of customer satisfaction and quality. A few successful leaders chose to rely on measures developed for their industry by outside organizations-something akin to Ford Motor Co. executives paying attention to JD Power and Associates' quality ratings rather than internal staff reports on the quality of the cars they make.

6. Be Ready to Reorganize

A sizable majority of successful leaders re- organize their agencies-not because they want to, but because they believe the organization's structure will hinder achievement of their goals. Unsuccessful leaders rarely attempt to reorganize their agencies.

7. Focus on Customers

Don't focus on the White House. Many leaders assume the president's bully pulpit is a strong tool for changing strategy. In reality, most agencies and leaders make their case to their customers, employees and Congress without seeking active support from the White House.

8. Don't Be in Such a Hurry

Don't be so anxious to set strategy that you neglect to gather the data needed to inform your judgment and the right perspectives to vet the choices you make. A common feature of unsuccessful leaders is they set strategy quickly (and not always by choice), often without good data on customer needs, stakeholder expectations or employee ideas. A poor process, or no process, for setting strategy almost always ends in failure.

9. Don't Think Spending More Time Produces Better Results

Successful leaders actually reported spending about 10 percent less time on the job than unsuccessful ones, but they spend their time more effectively. They work proactively with Congress and stakeholders to set the agenda, and present and justify their strategy. Leaders who deal with Congress primarily and stakeholders reactively, such as defending budgets and preparing extensively for investigative hearings, require more time.

10. Don't Focus So Much on Change

Too much emphasis on reforms could mean you're neglecting to manage performance. Both successful and unsuccessful leaders focus on building employee support for change, such as appealing to their public service motivation. Where unsuccessful leaders fail, successful ones concentrate on improving the enterprise in general through performance measures, strategic planning, re-organization and a focus on just a few goals.

For more information on "What It Takes to Change Government," visit www.boozallen.com/what-it-takes-to-change-government.

Dave Mader is a vice president at Booz Allen Hamilton and a former IRS assistant deputy commissioner; Jeff Myers is a consultant with Booz Allen Hamilton; Steven Kelman is Weatherhead professor of public management at Harvard University and a former administrator of the Office of Federal Procurement Policy.

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