The State of Delaware's government like all of them purchases many different things from a variety of vendors. These range from paper, IT services to power. The News Journal newspaper decided to take a look at how the state manages these payments and the costs related to them. Delaware is also running a deficit like most other states and the Federal Government this year. The state's is only a reasonable $800 million but still the newspaper identifies some areas that could be cut.
The most obvious example is that the state pays $50 to process a check used to pay a company for a product or service. In one of the most egregious cases the state was paying the local power company hundreds of checks a year when they would happily have offered a consolidated bill. UPS was another company that received checks from all parts of the state government rather then establishing a central account. For every twenty thousand checks written it costs the state $1 million to process and on average the states cuts a half million a year according to the story at a cost estimated at $25 million.
The state also issues credit cards for these kind of purchases that have high fees to use and have led to some businesses, including local governments, to refuse them. There also seems to be little oversight of how the money is being used to the point where the state will implement a new accounting system next year.
When there are no issues with available funds governments tend to lose sight of what they are spending on . Now for the last few years money is getting tight you see major reviews of how the tax dollars are being spent and for what for. In Massachusetts they have suddenly realized that there is a great deal of money being spent on pensions for state workers and legislators. There is not a lot of will to change that by elected officials.
In England it is the amount of money that Members of Parliament receive to support their second homes they use when Parliament is in session. Unlike U.S. Congressmen and Senators who receive no per diem or allowances the British elected representatives do. Now it turns out that many were abusing the privilege and there was little or no accountability of the spending. To the point as the Reuters reports "Britain's 646 legislators receive an annual salary of almost 65,000 pounds and claimed 93 million pounds in expenses last year, an average of 144,000 pounds each." National opinion has completely turned against all elected representatives even those who did not abuse the system.
If the current trend in massive deficit spending at the national and state level continues there will be more demands of spending reform and reducing benefits to government employees and beneficiaries. A good example is a program in Massachusetts that provides cars to those on welfare in order for them to get to job. While this is a noble idea and probably benefits those who receive them there are times when the government can do too much. In a time when hundreds of people are being laid off or forced to cut back their own spending there a things that sound like luxuries for a government to be doing.
This discussion will continue for the next several months until America;s and the world's economy gets back on its feet.