Time to consolidate backroom functions in government

Imagine running your own company. Would you want each division of your company to have its own human resources person? And its own employee to handle payroll? And its own procurement officer? And its own budget manager? That would mean one set of administrative employees for the sales team, one for the customer service team, one for the shipping and distribution team, and one for any other division you might have. It wouldn’t make much sense and would hurt your bottom line.

Yet that’s exactly what we have in state government. And, of course, taxpayers foot the bill.

According to the Secretary of State’s office, Mississippi has 204 government agencies, boards, and commissions, and many of these house their own accounting departments, human resource services, information technology departments, payroll and travel services, and a host of other “backroom” subdivisions. The problem is that it can be inefficient for many of these entities to have their own independent, backroom offices.

More than that, all these backroom divisions mean we are more vulnerable to theft and fraud, especially when all of those vital functions are handled by one or two people.

It’s time for Mississippi to (again) consider consolidating some of these backroom functions under a single Office of Shared Services.

In a shared services arrangement, these backroom subdivisions are combined into a single, separate entity, freeing up the individual agencies, boards, or commissions to focus on their essential functions. There are a few reasons we feel shared services for select boards and commissions is a good idea:

First, sharing administrative services will reduce administrative costs and save you money. It only makes sense that when you have one central hub, you no longer have the costs of multiple offices and employees. Furthermore, this system will foster more collaboration and increase information sharing, which can speed up the rate at which the work of government gets done. A centralized administrative office can use the full power of state government to get the best deals when government needs to buy from a vendor and can use the best technology to make its functions as efficient as possible.

Second, an office of shared services will make life better for our agencies. Highly trained administrative employees in a central office will be better suited to offer the best HR or procurement guidance to Mississippi’s agencies.

Third, sharing services will improve oversight, lowering the likelihood of theft and fraud. One trend we continue to see is that it is usually not the large, well-staffed agency or commission where theft occurs, but the smaller, less regulated one. It’s the ones with less oversight and procedural safeguards, with fewer eyeballs watching the money. When fraud happens, entities with less than 100 employees have a median loss of $200,000, while entities with more than 100 employees have a median loss of $104,000.

So smaller, separated offices scattered around the state mean more fraud potential. Implementing a shared services arrangement would mean added oversight for these smaller boards since their administrative functions would all be housed under the same roof. Instead of monitoring 80 different boards or commissions, we might now only need to monitor 20.

We want to make it clear we are not calling for the elimination of the independent administrative functions of every single agency. The beauty of a shared services arrangement is that it can be flexible, providing exemptions for certain agencies whose backroom independence is necessary. In fact, last year a bill was introduced to create the Office of Shared Services, and one of their tasks would have been to determine which agencies were subject to this sharing process.

Also, consolidating backroom functions is not an attempt to shut down key boards and commissions. Mississippi will still need to license professionals, respond to disasters, keep law and order, and perform all the critical functions of state government. You simply may not need an HR person at every licensing board in order to perform that function.

When you pay your taxes, you are entrusting your government to not only use your money appropriately but to also use that money efficiently. Having an Office of Shared Services will help our government run more smoothly, save money, and help safeguard your tax dollars. It’s just the smart business thing to do.

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Shad White is the 42nd State Auditor of Mississippi. Laura Jackson is the executive director of the Mississippi Department of Finance and Administration.