Privatization in Practice: Case Studies of Contracting for TANF Case Management. Types and Methods of Monitoring


Public welfare agencies need to verify that contractors meet standards in three basic areas: (1) the quality and effectiveness of services, (2) compliance with program policy, and (3) proper invoicing and financial controls. Monitoring each of these areas requires different methods  including collecting performance data, reviewing case documents and sanction decisions, conducting customer satisfaction surveys, visiting contractor offices, examining supporting documentation for invoices, and performing financial audits. Table V.1 presents a summary of the methods commonly used to monitor contractors.

Table V.1.
Monitoring Types, Purposes, And Methods
Type Purpose Methods
Service quality and effectiveness To determine whether contractors fulfill program goals Automatic and manual collection of performance data
Review of case documents
Customer satisfaction surveys
Visits to contractor sites
Compliance with program policies To determine whether contractors deliver services in accordance with policy Automatic collection of case processing data
Review of case documents
Review of sanctions
Visits to contractor sites
Financial integrity To determine whether contractors bill for services accurately and manage funds adequately Review of supporting documentation for invoices
Financial audits

To some extent, the monitoring methods a public agency uses depend on the types of contracts it has with service providers. Public agencies using pure pay-for-performance contracts must give more attention to the documentation of performance outcomes (as they directly affect payment), while those relying on cost-reimbursement contracts must put more emphasis on verifying that contractors are spending funds properly. Agencies in the study sites make use of all three types of monitoring described here.

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