New N.C. department makes sense for IT, not for veterans affairs

April 14, 2015

Click here to view and here to listen to Sarah Curry discussing this Spotlight report.

RALEIGH — Gov. Pat McCrory’s proposal to establish a new state government department for information technology makes sense. But lawmakers should revisit a similar proposal for a department targeting veterans affairs. Those are two key findings from a new John Locke Foundation Spotlight report.

“A new Department of Information Technology would address the root cause of North Carolina’s IT challenges by defining one source of accountability and authority to accelerate change, reduce costs, and more effectively manage IT resources,” said report author Sarah Curry, JLF Director of Fiscal Policy Studies. “On the other hand, it’s not clear that the benefits of creating a new Department of Military and Veterans Affairs would outweigh the costs.”

McCrory included both new departments in his recommended N.C. budget for 2015-17. As Curry develops her own state budget proposals for release later this spring, she has focused attention on the merits of these two proposed cabinet-level changes.

“Whenever a government official suggests creating a new department or agency, one must weigh the cost of creating the department, including the addition of new bureaucracies, with the potential benefits,” she said. “Some areas may need to be consolidated into a department for budgetary savings or government efficiency, while others may benefit from minor organizational changes.”

The case for an IT department is strong, Curry said. “Efforts to consolidate or coordinate the state’s information processing resources have been discussed since 1983, when the first state Computer Commission was created.”

Restructuring state IT services now should improve citizen satisfaction, increase efficiency, reduce complexity, and improve the state’s ability to attract, retain, and reward IT talent, Curry said.

“A coordinated and centralized effort might also save the state money,” she said. “It has been estimated that states that move to a unified structure have saved an estimated 10 percent to 20 percent of their initial operating budget over five years.”

A unified department would create aggregate buying power for contracts, identify ideas that can work across agencies, and improve IT security statewide, Curry said. “There would be no need for a major shift in state government employees or a new work location,” she added. “All current cabinet agency IT professionals would work for the new department, with minimal reductions in staff levels possible through attrition and re-evaluation of open positions.”

In contrast, Curry recommends that legislators not create a new department targeting the military and veterans. Instead, a new Division of Military and Veterans Affairs within the existing Department of Public Safety should achieve the same goals as a new department, she said.

“Veterans programs have been housed within the Department of Administration for nearly the last half-century,” Curry said. “There have been few systemic problems with the core functions or mission of the many programs that serve North Carolina’s veterans and their families. While it has been documented that the state can achieve efficiencies through some of the veterans’ programs, there is no compelling reason to create the new agency.”

The new division could consolidate the programs identified in the governor’s budget proposal, including existing Veterans Affairs services, the State Veterans Home Program, Joint Land Use Study, and Base Relocation and Closure programs. “That division ought to be housed within Public Safety, where it would be closer to the National Guard and a Veterans Specialty Court pilot project,” Curry said.

Curry recommends establishing a branch within the new division to track and improve services for veterans and their families.

“Of 23 existing state-sponsored or -supported programs targeting veterans, at a cost of more than $157 million, few track outcomes for veterans,” Curry said. “By implementing performance measures and tracking outcome data, the state can better determine the extent to which these programs improve the lives of veterans and their families. It also would be easier to determine if any programs need to be reformed or consolidated.”

The report also spells out an expanded role for the General Assembly. “Establish the Joint Legislative Military and Veterans Affairs Oversight Committee,” Curry said. “Even with a new division, some programs targeting veterans would continue to be housed in other parts of state government. The new oversight committee would monitor measured outcomes from veterans programs and serve as the enforcing entity to hold agencies accountable. This committee also could explore the possibility of moving more of the state’s veterans’ programs into the new division.”

Lawmakers should approach creation of any new cabinet-level state department with caution, Curry said. “Each new department comes with administrative costs, such as executive management positions from the cabinet secretary to a chief operating officer, chief finance officer, legislative liaison, public information officer, and human resources director,” she said. “If the benefits of creating that new department outweigh those costs, lawmakers should proceed with the proposal. If not, they should consider alternatives.”

Sarah Curry’s Spotlight report, “Two New Departments? A closer look at the state’s IT and veterans programs and the governor’s proposal for a new department for each,” is available at the JLF website. For more information, please contact Curry at (919) 828-3876 or [email protected]. To arrange an interview, contact Mitch Kokai at (919) 306-8736 or [email protected].