VACostCutting

Friday, January 20, 2006

Agency Consolidations Or Shared Services

One method of cutting costs and increasing efficiency is to wisely consolidate state agencies with similar functions.

One example that comes to mind is the Department of Minority Business Enterprise. Efforts have been made in the past to combine it with the Department of Business Assistance. Two recent items in the news might indicate that there might be room to move DMBE and potentially make it more efficient and effective.

Daily Press columnist Wil LaViest suggested that DMBE might move to the Administration Secretariat. It is currently under Commerce and Trade. Since the vast majority of DMBE's work is now related to state procurement for Small, Women and Minority-owned (SWAM) businessees, it would be sensible to consider just consolidating it into the Department of General Services, where procurement responsibility resides.

Pamela Stallsmith of the Richmond Times-Dispatch reported that the Legislative Black Caucus would like an office for small business advocacy established within the Department of Business Assistance (DBA). DBA could establish such an office with existing personnel. It's already something they do, but they do it tentatively because they have no clear legislative authorization.

Perhaps the previous resistance to consolidating DMBE into another agency could be overcome by the establishment of this advocacy office. I suspect it could both save money and improve services. There are probably other examples of agencies that could be consolidated if aspects of their mission are preserved.

If agencies aren't consolidated, an idea worth studying is the sharing of administrative services among smaller agencies--instead of each agency having an HR or accounting department, for example, those staff functions would be provided by a larger agency. Making administrative services departments of large agencies "entrepreneurial," allowing them to seek out additional opportunities, might be a cost saving measure. Perhaps this is happening somewhere, but I've not seen it and would be interested in any feedback on where it's been tried.

4 Comments:

  • There is a section of DOA (the Payroll Service Bureau) that does payroll and hr for 32 agenices. I think DMV also does several agency duties.

    Corrections administrative duties mostly fall under one roof as well as VDOT, don't they?

    Are these the functions you are referring to?

    By Anonymous Anonymous, at 1/20/2006 12:59 PM  

  • Large agencies have an economy of scale for HR, payroll, purchasing, etc.

    Smaller agencies do not. If an agency has less than 50 people, should it have the full complement of administrative specialists? My small agency has four divisions. The second largest is administration. Plenty of larger agencies are within walking distance.

    By Blogger Will Vehrs, at 1/20/2006 1:17 PM  

  • Will, Can you name one Virginia blog where you haven't been a contributor?

    NJH

    By Anonymous Not Jack Herrity, at 1/20/2006 6:11 PM  

  • I think quite a few of the finance agencies share administrative duties. One may do the purchasing, reconciliation, etc. for several others and then another agency takes care of the personnel, payroll, etc. I'm not sure about the other secretariat areas.

    By Anonymous Anonymous, at 1/20/2006 10:07 PM  

Post a Comment

Links to this post:

Create a Link

<< Home