Today’s fiscal reality demands that every taxpayer dollar be stretched as far as possible to achieve the maximum results. Three important elements of CPAT’s charge are to better manage federal grants; provide leadership in program integrity efforts across state government; and use economic and caseload forecasting to better assess impacts on the state’s finances.
The Federal Grants Management Office (FGMO) in CPAT was created after the state government’s successful coordination of $7.5 B in additional funding through the America Recovery and Reinvestment Act (ARRA). In managing ARRA funds, real-time information was used to track usage and outcomes. This ensured ARRA funds were spent in a timely manner to create and retain jobs and support economic recovery.
Learning from ARRA has enabled the Commonwealth to improve its management of the $16 B in annual state revenue that comes from the federal government. This includes identifying information gaps in how well federal grant funds are managed and spent. While spending from federal sources is accounted for, it was found that grant awards could be better coordinated and used more effectively. Additionally, better management of federal grants could enable deeper analysis of the effects of federal budget policies on state finances. To play this critical oversight function and lay the foundation for more effective grants management, the FGMO has:
- Taken an All-Funds Budgeting Approach – for the first time ever, detailed spending plans for the 118 largest federal grants were developed alongside the operating budget, an “all-funds” approach to better managing state resources that will be continued;
- Commenced Development of an Enterprise-Wide Grants Management System – the need for an automated IT system to support state government in maximizing federal funding was identified as part of a collaborative review with representatives from all Secretariats; and
- Completed Impact Analysis of Potential Federal Grant Reductions – a detailed impact of federal budget sequestration and potential grant reductions was completed and has informed both short-term budget development and long-term fiscal policy planning scenarios.
Going forward, the unit will continue to work to maximize federal awards, ensure federal funding is aligned with Administration priorities and that it supports the goals the Administration is working to achieve.
Regardless of the source of funding, state government has an obligation to root out fraud, waste and abuse. CPAT’s Program Integrity Unit has led efforts to share best practices across state government and enhance internal controls, including:
- Worked to Standardize, Streamline and Strengthen Program Integrity Programs – CPAT hired the state’s first government-wide program integrity director to make permanent the efforts started by the Lt. Governor’s Task Force on fraud, waste and abuse;
- Created a Statewide Network of Program Integrity Professionals to Share Information – the unit started the first Secretariat Program Integrity Steering Committee to bring program integrity professionals from all Secretariats together to collaborate and share best practices for preventing fraud, waste and abuse; and
- Improved How State Government Tracks and Responds to Audit and Investigative Findings – led efforts to improve collaboration between the executive and oversight offices including the State Auditor, the Inspector General and the Attorney General. A standardized tool is in development that will allow agencies and oversight offices to track oversight findings and agency responses, which will be piloted and implemented in 2013. This is a critical step forward in improving accountability and making government more effective and will allow state government to spot opportunities to enhance internal controls.
These efforts will support continued improvement and learning in preventing and detecting fraud, waste and abuse throughout state agencies.
To be more accountable and effective, state government must have a long-term outlook, particularly regarding its finances. CPAT’s Economic and Caseload Forecasting Unit is helping state government develop that perspective by:
- Setting Long-Term Fiscal Policy – in May 2012, the unit published the state’s first Long-Term Fiscal Policy Framework, which includes five-year tax revenue forecasts developed in consultation with outside economists. This framework is being updated regularly to account for economic and fiscal changes; and
- Forecasting and Reporting Benefit Caseloads – three caseload forecasting reports have been provided to the Legislature and include caseload forecasts for state-subsidized services. Collaboration with MassHealth, which administers Medicaid, has helped them update their forecasting methodology. The unit has also supported the Department of Transitional Assistance in revising its caseload reporting to include an analysis of the accuracy of previous forecasts. The most recent caseload report, provided to the legislature in March of this year, extends this analysis to MassHealth and the Department of Early Education and Care.
The Economic and Caseload Forecasting Unit will work to expand the Long-Term Fiscal Policy Framework, including estimating the impact of further federal deficit reduction policies and Affordable Care Act implementation. The unit also is taking on responsibilities related to the health care cost containment legislation in forecasting economic growth.