Originally published: . Volume 5, No. 9. Source pages: 5.
Some Executive Positions May Be at Risk
A bill to combine the Department of Health and Hospitals with the Department of Children and Family Services, first introduced as HB 152 then substituted as HB 1256, has passed the House with a vote of 69 to 28. It proceeds to the Senate Committee on Health and Welfare.
According to the Fiscal Note for the Legislative Fiscal Office, the measure is anticipated to result in a decrease in total expenditures by an indeterminable amount in FY 15 and future fiscal years. Effective November 1, 2014, this measure combines the Department of Health and Hospitals (DHH) and the Department of Children and Family Services (DCFS) under one department – the Department of Health and Social Services (DHSS). This proposed legislation does not eliminate any programs or services provided by either department, said the Note.
The new secretary of the DHSS is to provide a reorganization report by March 1, 2015 to the Joint Legislative on the Budget (JLCB) that will require the new secretary to consider and propose merger/consolidation of functions, abolition of agencies, consolidation of offices, elimination of positions, elimination of duplication of functions, consolidation of the office of management and finance functions, and implementation of other efficiencies.
The Fiscal Note indicated that both DHH and DCFS have said that determining a fiscal impact on such a merger would be difficult to determine, but anticipate any savings would be the result of efficiencies at the executive management level. At a minimum, the Legislative Fiscal Office (LFO) assumes this measure will result in the elimination of various duplicative executive management positions and various section heads. Positions that the new secretary may eliminate due to duplication include Deputy Secretary, Undersecretary, Human Resource Director, Press Secretary, Director of Audit and Accounting, Director/Administrator of Procurement and Contracts, Director/Administrator of Budget and Planning, and Executive Counsel. The overall net savings in FY 15 will depend on the hours of termination pay for each individual eliminated, which is unknown.
The Note added that other savings may result from implementation of efficiencies and economies of scale in the operation of the new department. The secretary may review efficiencies related to eligibility determination of financially means-tested programs such as SNAP, TANF, Medicaid, and WIC. Information provided by the state CIO indicates economies of scale savings are typically generated from IT functions such as infrastructure and system co- location, pricing (discount costs by offering volume), agency IT personnel reductions, and reductions in the number of outsourced IT contracts.
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