Texas Comptroller of Public Accounts

Texas Comptroller of Public Accounts, Glenn Hegar

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Texas Comptroller Susan Combs
“Open Book Texas” Press Conference

LBJ State Office Building
Austin, Texas
Wednesday, Dec. 3, 2008

As Texans tighten their belts in this uncertain economic climate, the transparency initiatives we are discussing will allow the state to do the same. Families are cutting their expenses and looking for ways to save, and state government must follow their example.

At the Comptroller’s office, we have been doing our part. As a public servant, openness and efficiency in government have always been very important to me. Some of you may remember that by my fourth day in office, we published all of our agency expenditures online down to the pencil level. We were the very first agency to do so.

After publishing these detailed expenditures online, I asked 23 other agencies, who are responsible for 80 percent of the state’s spending, to do the same. The result: government that operates in the clear light of day. By June 2007, our online searchable database included spending information for all state agencies. This “Where the Money Goes” Web site allows Texans to view all of our available expenditures, which range from the small to the large… but they are all there for you to see.

By Oct. 1, 2007, just a short nine months after the start of this initiative, a virtual check register went up on the Web, and every check, every agency and every recipient can be seen online.

I made this push for spending transparency when the economy was percolating and growing, knowing that the day would come when we would need to tighten our belt and stretch tax dollars further.

That time has come. While I am not ready to provide the biennial revenue estimate just yet — I will announce that on Jan. 12 — it is clear that we have entered an era of great economic uncertainty, and government must make the most of every dollar, just like millions of working families. Prudence and restraint are going to be essential as we go forward.

I’ve labeled this overall effort “Open Book Texas,” and I now present three different initiatives designed to promote open government and smart spending, not only at the my office, but throughout government in Texas: They are: Texas Smart Buy, the Texas Transparency Check-Up and the Single Set of Books Initiative.

Some of these initiatives are already in their first phase and have yielded savings. And we have expectations for additional benefits for Texans.

But besides the public having access to information, we discovered our emphasis on transparency had internal benefits in that it made our own operations transparent to us. This provided access to such detailed, centralized and easily navigable information about our budget and expenditures, which allowed us to identify redundancies, inefficiencies and other areas for improvement with a clarity that was simply not possible before.

As a result, we have already identified $8.7 million of efficiencies and savings since I took office — and that number is still growing. Of these savings, $4.8 million have already been realized, with an additional $3.8 million in the coming year. Here are just a couple of examples:

  • Toner: A closer look at our contracts for toner cartridges revealed a simpler and smarter way to consolidate purchases through one contract, rather than through multiple vendors. Getting a discount for volume saved us more than 20 percent, for a total of $73,000 on that one item.
  • P.O. Boxes: The mail sorter machine used by our agency needed to be replaced after many years of use. Rather than spending around $328,000 on a new in-coming mail sorter, including maintenance, we decided to purchase additional P.O. Boxes for less than $10,000 and let the existing automated machines at the Postal Service do the sorting for us.

The bottom line is because of transparency, we were better able to see where and how we spend money and where and how to save it.

Now we are moving forward to apply some of those same transparency and “buying smart” strategies that have been successful at our office to take an unprecedented look at Texas government spending as a whole.

The 80th Legislature transferred the procurement function from another agency to this office, a transition which took effect September 2007.

It goes without saying that the state of Texas buys a lot of things. We have begun the intricate process of digging through the $1.2 billion the state spends per year through this division. In Phase One of our efforts, we looked at five spending categories to see if we could get a better deal for the state. We expect to save $28 million in Phase One of this smart buying initiative. The projected cost avoidance and savings represent on average more than 8 percent of state spending in those categories, with some categories having much higher rates of savings.

So far, we’ve just scratched the surface of what we can accomplish — there are 175 classes of items yet to go through that this division purchases. But let me share with you some specific examples of what we’ve done and how.

  • Road Asphalt: When the Texas Department of Transportation needed road aggregate or asphalt for projects, the state used to solicit hundreds of bids per year for that material. But this month, my division will finalize a contract with about 100 vendors across the state that TxDOT can use at anytime during the year. By negotiating and locking-in prices, we expect to avoid about $9 million throughout the year in additional costs. Also, of course, the administrative staff that would have been needed to process the hundreds of bids can now work on projects to save money elsewhere.
  • State Fleet Vehicles: Contract negotiations on state fleet vehicles will allow the state to save about $5.7 million. Also, for the first time, we will calculate the comparative price of vehicles to include 100,000 miles of fuel costs. This means we’re looking at how much it will cost the state to operate a vehicle over its lifetime, rather than just how much it will cost to drive it off the lot. In these days of fluctuating gas prices, calculating vehicle purchases in this way ultimately increases the state’s savings. This also enhances the competitiveness of fuel efficient vehicles by accounting for their lower operating costs. This is exactly what families do when they’re shopping for cars — what does it costs today and what it will cost me each month to fill it up and drive it. Our requirement to make state agencies compute the cost of filling the tank is the first time this has been required. We think this is very important.

These examples reflect the fact that we’re buying smart and looking for the best value possible. We have a team of experts constantly comparing prices and creating strategies to guarantee that we buy smart in Texas.

The state of Texas is one of the largest purchasing entities in the country, and we need to make that leverage work for us. We should always try to negotiate a better deal and never be afraid to ask for a better price. It’s just common sense. For years, families have bought in bulk to save money. State government should have the option to do the same.

In a few weeks, we will be launching a new online shopping cart available not only to statewide agencies, but also school districts, river authorities, cities and counties to name just a few governmental entities. The name of our new online ordering system is TexasSmartBuy, and it will be operating just like online shopping at the best known e-commerce sites. Just as you go online to buy books, local governments will be able to go online and buy supplies and equipment, saving them time and money. TexasSmartBuy will allow agencies, public universities and local entities to search for goods and services, compare prices and specifications, and then order directly from the site — all with “point-and-click” convenience.

Now, for government to be accountable with your money, it must be open. Transparency leads to efficiency. When government operates in the sunshine, agencies have to justify their priorities and expenditures. To ensure that their government is watching their dollars and cents, taxpayers in Texas should be able to review spending at all levels of government.

This week, on Dec. 1, as part of this effort, we launched the “Texas Transparency Check-Up.”

We put ourselves in the shoes of a typical taxpayer and went online to see how Texas local governments were providing financial transparency on the Web. Our new Web site offers a listing of what we found for the top 50 cities, all Texas counties, school districts and other entities.

The Texas Transparency Check-Up offers local governments step-by-step advice for posting information online and presenting it in a way that is accessible and understandable to the public. Additionally, we’re highlighting local government success stories, one being Collin County. Collin County has posted all significant categories of information online. At some point in the next few months, we will issue a report card grading local governments on making their financial information transparent and accessible.

The state of Texas, through the virtual check register and the Where the Money Goes Web site, shows how about $450 million is being spent of your money every day. In the age of the Internet, there is seldom a good reason why government can’t keep citizens informed about how tax dollars are spent. In fact, the Transparency Check-Up has a quick and easy e-mail subscription option so visitors can sign up to receive instant notices when new information is added.

This emphasis on transparency isn’t just about making local government more accountable to citizens; it is equally about making local governments stronger and better. As our own experience shows, if you know what you are spending, you know how to spend better. We are committed to seeing that philosophy spread at every level of government.

Last but not least, we have a third initiative in our Open Book Texas effort. Last session, the Legislature asked us to create an advisory council with other agencies to examine uniform financial accounting in state government.

I like to call this approach having a “single set of books” for the state. We will be presenting this report to the Legislature in a few weeks for their review, and we believe it’s crucial for state agencies to “speak the same language” when comparing data for financial transactions.

You can actually think of the “single set of books” as similar to but even better than your ATM. If you go to your ATM, it will tell you how much cash is in your bank account. That is great, but it will not tell you what checks are still outstanding but have not yet hit your bank account. This government system would go that one better, letting policymakers find out the balance in any state agency’s “bank account,” as well as how much is yet to be debited. That would be enormously helpful… and when every dollar counts, even down to the penny, especially when we need to tighten our belts… more information is better.

We must get away from the current way of doing things where each agency may have its own way of bookkeeping. Unfortunately today, we have multiple sets of books across our state agencies, which is a recipe for duplication that can make it difficult to get a true picture of financial standing.

A simple example is when one agency buys pencils; they might code it as “office supplies.” Somebody else might code it as “pencils.” So, because they’re coded differently, it can be hard, in some cases, to leverage the state’s purchasing power without a consistent set of data.

And, by the way, most families operate with a consistent set of data— you know what you have in your bank account, what checks you have written and therefore how much you have to spend, and where, of course, you need to be looking for the best value as you make your purchasing decisions.

In summing up: transparency is important because, in the end, there is no such thing as government money… it is only taxpayer money in government hands. Making government more transparent, efficient and responsive to citizens remains one of my chief goals as your Comptroller.

With the three areas of our Open Book Texas effort — Texas Smart Buy, Texas Transparency Check-Up and the Single Set of Books Initiative — we hope to find additional ways to save Texans money while delivering the high quality of government they have the right to expect.

I am pursuing these transparency initiatives because Texans not only deserve financial accountability, but fiscal restraint. We simply do not know the full extent of our nation’s economic situation, and even though Texas is better positioned to weather this financial crisis, our state will not go untouched. Many Texas families are now facing economic uncertainty as job losses, credit defaults and home foreclosures mount across the nation, which may ripple through our state.

We need to be sure we’re showing the same common sense, resourcefulness and prudence when spending money as the hardworking citizens of the Lone Star State.

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