Mississippi State Auditor releases government waste study. How much and where can MS cut?

A new study commissioned by State Auditor Shad White has found more than $335 million throughout various state agencies’ recurring budgets that he identifies as government waste.

The study, dubbed Project Momentum, makes several recommendations for major procurement policy changes, guidance on government goods and services across all state agencies and advocates for the removal of several state programs and what some would describe as a luxury travel option for state leaders.

“We identify everything from contracts for overpriced TV monitors, to unused state office space, to too many cars in agencies, and everything in between, down to the penny,” White said last week in a post to X, formerly Twitter. “A lot of waste happens in government because someone powerful benefits from that waste… Sometimes it works like this: a lobbyist walks in the door and convinces an agency head they need to buy a new thing… The money gets appropriated, the agency head buys the thing, and everyone is happy — except the taxpayer, who had no idea this was happening.”

Of the many recommendations made in the 69-page report, the most notable suggestions were to overhaul the state’s goods and services procurement process, to move several agencies' application, eligibility verification and record keeping online and to replace the state’s private jet with a charter or commercial service. Those suggestions combined would result in tens of millions of dollars in long-term savings alone.

The report details recommendations for only 13 of Mississippi’s state agencies. Those included are the Mississippi Department of Revenue, the Department of Finance and Administration, Child Protection Services, the Mississippi Department of Human Services, Mississippi Emergency Management Agency and the Mississippi Department of Environmental quality, among others.

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“Project Momentum is a roadmap to improving Mississippi Government’s efficiency by eliminating unneeded services, expanding the capabilities of state employees, and capitalizing on our state’s progress by providing clear value to taxpayers,” the report reads.

Notable exclusions from the final report are the Mississippi Governor’s Office, the Mississippi Secretary of State’s Office, White’s Auditor office, the Attorney General’s Office, the Mississippi State Department of Health and the Mississippi Department of Transportation. However, some of the recommendations made in the report would also impact these agencies and offices as well.

White said those agencies and others were left out because he wanted the report to mostly focus on offices with governor-appointed leaders to ensure they would be more receptive to the report's suggestions. He also noted the agencies in the report spend the lion's share of state funds.

"The reason that we looked at these agencies is because these agencies are the ones that spend a lot of the money," White said during a press conference Monday morning at the Mississippi Trade Mart.

The study was provided to White’s office by Boston Consulting Group, which was contracted in late 2023 and paid $2 million to review state office budgets, expenses and staffs to then make recommendations on what should change. White's office cannot implement any of the change suggested in the report. That is the job of the Mississippi Legislature.

When news of the report broke in July, Jacob Walters, the Auditor’s Office communications director, said the report was being finalized and reviewed before being made public, and that it would be released “soon."

The Clarion Ledger submitted a public records request to review the unaltered BCG report, but the auditor’s office declined to release it, citing state statutes protecting certain work product from being public records.

State Auditor Shad White released a report in 2020 detailing inappropriate and questionable federal welfare money spending in Mississippi. On Monday, the auditor's office released a report provided by Boston Consulting Group that Identifies more than $335 million in government waste.
State Auditor Shad White released a report in 2020 detailing inappropriate and questionable federal welfare money spending in Mississippi. On Monday, the auditor's office released a report provided by Boston Consulting Group that Identifies more than $335 million in government waste.

Read report announcement: MS Auditor Shad White to release study identifying $250 million in state government waste

Here is a deeper look at the recommendations made for all agencies, as well as waste identified in the 13 state agencies.

Policies that would effect all state agencies:

In the report released Monday, it recommends taking most of the state's manual and paper record keeping to an online platform in order to streamline processes and create less burden for state employees.

The report also asks lawmakers to consider changing procurement laws in Mississippi. Of them, the most notable was to reduce the number of "emergency contracts" that have been abused by vendors and agencies in order to skip the long process of procurement for recurring services, which could otherwise take up to 18 months in some cases.

Emergency contracts were implemented to allow agencies to issue contracts in times of crisis, but today they make up about 30% of all active state contracts. There has also been a 428% increase in the issuance of this type of contract in recent years, the report said.

Procurement changes would also allow for more than one agency to negotiate with a vendor for the same contract on items such as computer equipment, office supplies, software and even vehicles, to name a few.

The report also proposed the elimination of aspects of procurement appeals, which is the process for a vendor who bid on a project or contract to appeal a decision by the agency because most appeals end with a lawsuit.

White addressed the fact that some of the suggested procurement reforms could lead to negative outcomes for vendors without an appeals process, but that every suggestion would have setbacks.

"There's always tradeoffs in these policy recommendations," White said.

The total dollar figure White's procurement suggestions would be worth $80 million to $150 million.

How much did White find to cut in state agencies?

  • Mississippi Department of Revenue: The state could save $4 million by digitizing records and requiring small businesses to e-file.

  • Mississippi Development Authority: MDA could cut almost $9 million from its budget by closing four "underperforming" welcome centers, which are funded through MDA, and it could eliminate several programs that don't make returns, such as subsidies for Mississippi's film industry.

  • Department of Finance and Administration: DFA could save more than $20 million by adopting new state property insurance policies, upgrading state buildings with more cost-effective utilities infrastructure and by reviewing and possibly cutting state-owned office spaces and leased properties.

  • Travel budget: The state could save up to $1 million per year by no longer using its Beechcraft King Air 350 jet, which is more than double the cost to charter plane service for a year or fly commercially.

  • Child Protection Services: The agency could establish long term savings by funding more child custody-prevention programs that will hopefully keep children out of the state system, as well as to digitize eligibility verification processes.

  • Mississippi Department of Human Services: The agency could save nearly $9 million by streamlining eligibility verification processes, consolidating some of the 82 county administration offices and by sharing data with the Mississippi Division of Medicaid on beneficiaries to reduce paperwork.

  • Mississippi Division of Medicaid: The agency could save up to $55 million by providing more long-term homecare options to patients, removing some of the state's Pharmacy Benefit Manager contracts, automating applications and eligibility verifications, which are mostly done manually and monitoring for fraud and abuse. This report does not mention the cost saving associated with federal funds provided to states to expand Medicaid services in Mississippi.

White said he did not include Medicaid expansion as a cost-saving measure because he feels the program will end up costing the state more than it would receive in federal aid.

"We did not consider looking at (Medicaid expansion)," White said. "One of the reasons is, you look across the country, and Arkansas is a good example. They had cost estimates of what Medicaid expansion would cost, and those were wildly, they were wildly high."

  • Mississippi Department of Public Safety: Could save about $17 million by creating internal and external digital records instead of paper ones, combine or eliminate duplicative inspection teams and reduce commercial vehicle inspection staff.

  • Mississippi Department of Corrections: The state prison system could save up to $5 million long term by increasing inmate programs that decrease rate of repeat offenders once they are released from prison.

  • Mississippi Department of Education: MDE could save more than $50 million per year for the moving of funds away from school district administration and to the classroom, more thorough procurement processes and building upgrades ensure cost savings on utilities.

  • Mississippi Department of Employment Security: Does not identify any exact savings, but the report recommends the agency have more oversight over other employment related offices.

  • Mississippi Emergency Management Agency: The report suggests investing $900,000 annually in disaster resilience projects and mitigation to save the state about $5 million in post-disaster spending.

  • Mississippi Department of Environmental Quality: The agency could save $2 million by updating its permitting processes, which will save time and effort from staff.

  • Mississippi Department of Wildlife, Fisheries, and Parks: The state could save up to $1.9 million by removing the agency's television station and magazine, closing the state's golf courses and look into how the state makes money on its cabins. The report also recommends adopting a YouTube channel.

Grant McLaughlin covers state government for the Clarion Ledger. He can be reached at gmclaughlin@gannett.com or 972-571-2335.

This article originally appeared on Mississippi Clarion Ledger: MS government waste study identifies millions in waste, ways to save