Privatization in Practice: Case Studies of Contracting for TANF Case Management. Upholding Accountability Through Monitoring

03/01/2003

Privatizing TANF services does not relieve welfare agencies of their responsibilities to taxpayers  in addition to developing and implementing local policy, they continue to be accountable for offering high-quality and effective services, complying with program rules, and using public funds efficiently. Private contractors that provide services on behalf of a public agency must, therefore, be held to similar standards. Contracts that specify clearly providers expected performance are one important way to ensure this accountability. Monitoring contractors activities to make certain that they meet their obligations is equally important.

Independent auditors have highlighted deficiencies in the monitoring conducted by many public agencies. In a review of single audit reports, the GAO found significant problems with tracking of TANF fiscal and program activities in 15 states during 1999 and 2000 and noted potential problems in over a quarter of states (2002). State auditors in at least two study sites also exposed inadequacies in agencies monitoring of contractors. In Delaware, examiners found insufficient documentation to confirm some outcomes under a pay-for-performance contract (State of Delaware Office of Auditor of Accounts 2001). Wisconsin auditors discovered that contractors were billing for inappropriate costs (Wisconsin Legislative Audit Bureau 2001).

This chapter discusses strategies for and considerations involved in monitoring TANF contractors. Section A describes typical monitoring methods and outlines those used in the study sites. Section B addresses the division of responsibilities among the public and private agencies and other organizations involved in monitoring. The actions agencies take to correct identified problems are described in Section C. Section D examines the burdens monitoring places on both agencies and contractors.

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