States Push Reforms of Federal Funds

A House subcommittee responsible for technology and procurement is considering regulatory and possible legislative reforms that would give the states more flexibility in spending federal funds earmarked for information technology projects. The changes are being proposed by the National Association of State Chief Information Officers. The group wants Congress to pass legislation that would eliminate stringent review and audit procedures that prevent the commingling of federal funds across state agencies for enterprisewide projects.The initiative has the full support of the National Governors Association, said Thom Rubel, NGA's program director for state information technology. State government officials have long complained that restrictions on how they spend federal funds inhibit their ability to coordinate related functions that cross departments or agency lines and make it difficult to provide efficient services to citizens. NASCIO representatives met with Reps. Tom Davis, R-Va., and Jim Turner, D-Texas, to discuss the matter May 23. Davis and Turner are the ranking and minority members, respectively, of the House Government Reform subcommittee on technology and procurement policy. The specific reforms are outlined in an April 23 memorandum from NASCIO to Davis. Although no legislation has yet been introduced, lawmakers have indicated they want to address the concerns of state leaders. "There's ample evidence that the federal government is putting too many hurdles in the way of state governments that are trying to move into the 21st century," said David Marin, the communications director for the subcommittee. "This is especially evident in the advanced planning process, where the federal government too often is preventing states from moving forward quickly with their IT development." Before any legislation is drafted, the staff of the subcommittee will meet with officials at the Office of Management and Budget and General Accounting Office to determine whether a legislative fix is the right solution, Marin said. A key question is whether federal officials have the expertise to question and alter plans that the states have put together. "Certainly, the states know better than we do what their IT needs are and what their e-government visions are," Marin said. While regulatory language already addresses these problems to some extent, the remedies need to be reinforced or restated in some manner, said Elizabeth Miller, NASCIO's executive director.The NASCIO memorandum contains draft amendments that would remove restrictions that require federal funds to be spent only for projects within a specific agency or agency budget, thus allowing the funds to be spent on enterprisewide projects that cut across several agencies and budgets."It is clearly in the interest of both federal and state governments to allow such commingling of funding when the system itself supports both the federal and state intent and mission," the NASCIO memorandum stated. "This will eliminate the all-too-often occurrence of two computers on a single desk, one federal funded and one state funded, working in support of the same service program."State-federal funding reform "is a tough battle, but one worth fighting," said Rishi Sood, principal analyst, Gartner Dataquest, Stamford, Conn., who said that states should have greater flexibility to use federal funds for enterprisewide projects as opposed to agency-specific projects. Funding reform is only half the battle, though, Sood said. In the culture of government, money is often associated with territory, and this leads to turf wars among agencies that can stymie innovation, he said.