Tragedy and Farce at the Statehouse

Lincoln -- The sad stories of two Nebraska state agencies suggest that, as the old saying goes, history repeats itself... first as tragedy, then as farce.

The continuing troubles at the Department of Corrections are the tragedy. Nebraska's correctional institutions are not safe for either guards or inmates. The farce is newly uncovered mismanagement at the Nebraska Tourism Commission, in the form of nepotism, cost overruns, exorbitant speaker fees, and wildly excessive employee moving expenses, all being done under the noses of oblivious tourism commissioners.

Two governors, immediate past and present, were quick to call for the firing of the director of the Tourism Commission, as if she were the cause of all the trouble, not the gubernatorially appointed commissioners. Could be. Others around the statehouse suggested the independent Tourism Commission should execute a contract with the state's Department of Administrative Services (DAS) to help it with financial management. Others said the Tourism Commission should be placed back under the Department of Economic Development, where it was until made an independent state agency by the Nebraska legislature in 2012.

A deep breath and a little history are in order.

None of this should have happened at the Tourism Commission in the first place had state government been functioning properly. Long ago, to his credit, Governor Tiemann led an effort to modernize Nebraska state government by creating clear lines of budget and accounting authority from the governor on down. The idea was to give the governor executive budget authority to make spending recommendations to the legislature for all agencies and to centralize in one department, under the governor, responsibility for executing the legislature's ultimate budget and accounting for the state's expenditures under that budget. In this way, all state agencies, whether directly under the control of the governor, independent as created by the legislature, or separately created by the state constitution, would be under the same general rules for budget preparation, execution, and accounting.

Under the Tiemann-led effort, the Department of Administrative Services was created to provide these functions, its director to be appointed by and responsible to the governor. Within DAS, a budget division was created with a small staff of budget analysts to work with all agencies to help train their personnel in fiscal administration, keep track of their spending to make sure it was authorized by law, and generally to monitor the agencies to keep them focused on their missions and out of trouble. When troubles came up, as they always do, it was the responsibility of the DAS budget analysts to recommend solutions to the governor and to the legislature. Sometimes that entailed agency cutbacks; sometimes the analysts would recommend, through the governor, supplemental appropriations as the best solution. Likewise, a DAS accounting division was created to handle the actual mechanics of central bill-paying and financial reporting. These DAS divisions were created to serve all of state government.

Under Tiemann's successor, Governor Exon, this system was put to test by the State Department of Education, an agency with a constitutionally established, independently elected board. Although the legislature in 1973 created a new program to assist in the education of handicapped children, the Education Department wanted to distribute the millions in new funds the same way it always had without regard to the new legislation. The DAS budget division, monitoring the situation, consulted with the attorney general's office, which agreed that the Education Department's distribution plan would violate the law. The Education Department persisted, citing its independent, constitutional status. Governor Exon personally went before a special session of the State Board of Education and persuaded it to direct its staff to follow the law. The system worked; the misappropriation of funds was caught in time; the program director at the Education Department who caused the dust-up soon moved on to other employment.

(Sidebar: Governor Exon's appearance before the State Board of Education was facilitated by its chairman, Gerald Whelan of Hastings. Exon and Whelan met at the Cornhusker Hotel for coffee before the meeting to go over the issues. For the next election, Exon chose Whelan as his lieutenant governor running mate.)

All of which raises the question of how the current Tourism Commission got so far off track. Yes, perhaps its director was not up to the management challenges; yes, perhaps the tourism commissioners were not paying attention. But these kinds of problems should be anticipated and even expected. Nebraska governors have long since been given the tools to train agency personnel and to monitor agency fiscal performance, even in cases where the governor does not have policy control.

Governor Ricketts came into office touting his business acumen. But in his rush to re-organize the top levels of state government, creating offices and titles to match up with his private business experience (only to quickly disestablish or by-pass them), Govenor Ricketts seems not to have familiarized himself with the existing structure and tools at his disposal to stop state government from making a farce of itself. Which is not to say that his ideas for reorganization might not have had merit or that the old ways of doing things were perfect. But his finger-pointing is a little too much, unless he also is willing to point occasionally in the mirror.

It strikes me as a bad, bad idea to have an agency "contract" with DAS. All agencies should be working with DAS already. DAS should be reaching out to train personnel and to understand the issues, large and small, that all agencies confront, to help them with solutions and to bring major problems to the attention of elected officials early enough to prevent both tragedies and farces.