One of the big arguments given for “Lean Government” efforts are the cost savings that are generated by various Lean projects at local, state, or federal levels.
I’ve heard stories and rumors from people who have done Lean Government work… complaints that so-called “cost savings” never lead to budget reductions because one’s power is pretty proportional to the size of one’s budget. The “use it or lose” it mindset kicks in and all sorts of stupid spending occurs at the end of the year.
The Washington Post solicited stories and has a report that documents this dynamic: “As Congress fights over the budget, agencies go on their ‘use it or lose it’ shopping sprees.”
From the article:
This past week, the Department of Veterans Affairs bought $562,000 worth of artwork.
And, in a single purchase, the Coast Guard spent $178,000 on “Cubicle Furniture Rehab.”
I’ve heard rumors of a department buying tons of toner/printer cartridges that sat in a room… while another part of the organization bought lots of printers with “use it or lose it” funds… and the toner was compatible with said printers.
People are just irresponsibly wasting our tax dollars. This is shameful.
It’s clearly a systems problem, rather than a “bad individuals” problem, as described:
“The way we budget [money] sets it up,” said Sen. Tom Coburn (R-Okla.). “Because instead of being praised for not spending all your money, you get cut for not spending all your money. And so we’ve got a perverse incentive in there.” But, Coburn said, “nobody’s talking about it but me and you.”
The end of fiscal year spending is clearly shown in the spending data:
In 2012, for instance, the government spent $45 billion on contracts in the last week of September, according to calculations by the fiscal-conservative group Public Notice. That was more than any other week â€” 9 percent of the year’s contract spending money, spent in 2 percent of the year.
Some federal employees suggested changes to the budgeting system through a federal online suggestion box system… but that suggestion box was plagued by the problems that usually occur with a suggestion box — VERY FEW ideas were actually implemented (see “The 86,000 budget-cutting ideas that got away“).
So, until this changes, I’m going to scream “B.S.!” when I hear of “cost savings” in Lean Government projects. I’m going to ask, “Where is the budget reduction?”
I *do* think Lean Government should be focused on reducing cycle times and providing better service to citizens, including:
- Faster passport processing times
- Faster processing of military disability claims (something that’s STILL a seriously embarrassing problem a few years later)
I think better service is the best we can expect – not lower government spending.
About LeanBlog.org: Mark Graban is a consultant, author, and speaker in the “lean healthcare” methodology. Mark is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. Mark is also the VP of Customer Success for the technology company KaiNexus.