Summary of Report 01-023

March 2001

Report Number 01-023

Fifty-six percent (87 of the 154) of the state agencies (agencies) and educational institutions (institutions) using contract services in 1999 reported full implementation of the "Best Practices" required by the Contract Workforce Rider [General Appropriations Act, Article IX, Sec. 9-11.18.] These entities accounted for 96 percent of all contract workforce expenditures reported in the first half of fiscal year 2000. We expect to release a report in the near future on the most recent survey of "Best Practices" implementation.

The data collection and analysis process needs some improvements to provide timely, accurate, and useful data to decision makers. Many agencies and institutions did not submit their contract workforce data by the reporting deadline, and there were some technical difficulties in the reporting system. Both of these problems delayed the preparation of this report. In addition, changes to the Uniform Statewide Accounting System (USAS) expenditure codes are needed to efficiently meet the State's contract workforce information needs.

Despite problems with data collection and analysis, we were able to draw some conclusions about the State's contract workforce use. During the first half of fiscal year 2000, over 100 agencies and institutions reported spending $689 million on a variety of contracted work to supplement, or substitute for, the efforts of regular state employees. At this rate, total contract workforce expenditures will exceed $1 billion for the year, or just over two percent of the State's $49 billion appropriated budget.

• Most "Best Practices" noncompliance reported was due to failure to routinely conduct cost benefit analyses before contracting for services or renewing contracts.
  
  
• Seventy-four percent of contract workforce spending was for outsourced services. Outsourced work is conducted and managed by non-state employees.
  
  
• The Department of Criminal Justice, the Department of Health, the Department of Human Services, and the Department of Transportation together accounted for 70 percent of all reported contract workforce spending.
  
  
• Medical services accounted for the largest share (36 percent) of reported expenditures.
  
  
• Almost one-third of all contract workforce expenditures were assigned to two USAS expenditure codes that are so broadly defined it is difficult to draw meaningful conclusions about the nature of the contracted services.
  
  
• Technical problems significantly delayed the submission and analysis of data, thereby delaying the release of this report. Most of these problems have been corrected for the 2000 reporting year.

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