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A Door of Perception on Waste

Monday March 21st, 2016   •   Posted by K. Lloyd Billingsley at 9:52am PDT   •  

CU_Screw_MLWith newspapers in decline, stories about government waste, fraud and abuse tend to get short shrift. One notable exception is Jon Ortiz of the Sacramento Bee, whose “State Worker” columns demonstrate how waste works. For example, California’s Board of Equalization, a tax agency, wanted to replace a door. The initial cost for that simple task was $3,000, a figure that may strike taxpayers as far too high. On the other hand, state project management, plan review, inspection and such bumped the cost by $14,000 to a grand total of $17,000. As Ortiz explains, “Those figures highlight how California’s state bureaucracy pumps up the cost of even the most simple projects,” and delivers “sub-par results.”

Ortiz finds that story in a new report by State Auditor Elaine Howle. She notes that the hourly rate for design, project management and construction management, “is much higher than the rates of private sector firms conducting similar work for the State.” For example, the Real Estate Services unit within the larger Department of General Services charges $182 per hour, a full $46 more than the $136 per hour average of private firms conducting similar work. As the report notes, the reasons for the difference remain unexplained.

State agencies prepared cost estimates for only 19 of the 25 projects the report reviewed and of those, “12 exceeded the division’s initial cost estimate.” The largest difference was on a veterans home in West Los Angeles, where project management spent “roughly $115 million more than its initial estimate of $118 million.” The report also charts time delays, such as nine years to restore the State Library and Courts building, nearly twice as long as the initial projection.

Ortiz found that Board of Equalization opted to forego the $17,000 door because of the high costs. So all the time state bureaucrats spent on the project, in effect, amounts to waste. As a general rule, when government is involved, projects cost more, take longer, and usually render sub-par results.

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March 2016