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Social Service Privatization: Ethics and Accountability Challenges in State Contracting

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Report Type Reports and Testimonies
Report Date April 5, 1999
Report No. HEHS-99-41
Subject
Summary:

Since 1993, 11 of 42 state child support enforcement directors who left their government jobs accepted managerial positions with contractors providing child support enforcement services, and 10 of 41 high-level mangers of Temporary Assistance for Needy Family programs who left state service accepted positions with social service contractors. Officials in Arkansas, Maryland, Massachusetts, and Texas, the four states GAO examined, experienced short-term problems training staff to fill managerial vacancies, but ultimately the staff were able to do the work. Of 59 contract proposals in the four states, 34 listed former state employees as key contract personnel and 25 did not; slightly under two-thirds of the proposals in each group resulted in awards. The American Bar Association (ABA) and other organizations have recommended key ethics provisions prohibiting certain postemployment activities and conflicts of interest that most states have adopted in policies designed to help ensure open and fair contracting. However, more than one-third of the states lack one or more of these provisions, and enforcement approaches to help ensure compliance differ widely in the four states GAO examined. Model laws prepared by ABA and others and the Medicaid statute offer possible frameworks for strengthening state ethics policies. Although several states assess contractors' progress toward achieving program results, many others rely on basic accountability measures, such as audits, that focus on compliance with program rules. Assessing program results enables states to determine whether they have received the services they paid contractors for. The Government Performance and Results Act and results-oriented initiatives in some states have helped establish frameworks with which they can hold contractors accountable for program results. The states could take additional measures.

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