Better Budgeting Is Not Gloom and Doom

Special Guests: Daniel Innis, Carolyn Arcand, Rebecca Shea

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This week on Facing the Future, Bob examined how we can better engage young people in the federal budget process. Joining him were two University of New Hampshire professors, Daniel Innis – also a New Hampshire state senator – and Dr. Carolyn Arcand. Later, Rebecca Shea of the Government Accountability Office (GAO) joined the program to revisit GAO’s new report on government-wide fraud.

On April 11th, Innis and Arcand partnered with The Concord Coalition for a panel entitled “Fiscal Challenges Facing the Next Administration.” Hosted at the University of New Hampshire’s Peter T. Paul College of Business, the panel looked ahead at the nation’s unsustainable long-term fiscal future and rising national debt, while considering Social Security, Medicare, Medicaid, taxes, general government spending, and more.

“I think it’s incumbent on us as faculty members and leaders to bring this to our students,” Innis said from his experience teaching about budget issues. “So I open most of my business classes with a discussion of the day’s Wall Street Journal headlines to bring to their attention what’s happening and help them to understand. But I think a lot of them just don’t see a way out. They don’t feel as secure as they once did. They’re watching wars around the world. It’s an unstable time.”

“But you go back just to the sixties and seventies, and it was tumultuous. Giving them perspective and helping them understand there are ways to solve the budget problem is important.” Innis continued, “They feel they can’t have an impact. I think it’s important that we drive home the fact that they can. You can have that impact by voting. You can have that impact by reaching out to your elected officials. They do listen. And I think that’s the message we have to get across.”

Dr. Arcand shared her experience of creating solutions with students. “There’s this larger policy landscape that we need to think about when reducing costs and increasing revenues. One of the things I think about in terms of decreasing costs is creating efficiencies. We talk about that a lot in my classes: ‘How did these programs run? They tend to be pretty administratively dense. How can we streamline those processes? Then in terms of increasing revenues, how do we create?’ When we had our forum on campus, we saw this chart that showed the driver of revenue is the federal income tax. How do we think about ways in which we increase those tax revenues?” 

“Thinking about the policies that can feed into efficiencies and creating revenues is a big piece of this puzzle. Understanding that there’s opportunity here is an important part of teaching on the topic,” Arcand concluded.

In the second half of the program, Concord Coalition Chief Economist Steve Robinson joined the conversation with Rebecca Shea, Director of Forensic Audits and Investigative Service at the GAO. Shea co-authored GAO’s latest, first of its kind report on government fraud. Based on data from fiscal years 2018-2022, the report estimates the federal government could lose anywhere from $233 to $521 billion annually due to fraud.

“That’s a significant amount of money in many ways,” Shea observed, about even the lower end of the report’s estimate. “We want this to be a wake up call. When we do our audits, agencies will say ‘Oh, we don’t have fraud.’ Every single program, every operation is at risk for fraud. This should be managed, and it should be managed appropriately. That’s a bit of a wake up call.”

Shea wants data collection to be another takeaway from the report. “Once we have this measure of the scope of the problem, we can begin to benchmark against that. We think it’s a good starting place for measuring all the fraud prevention activities and the return on investment from those.”

“There will be individuals who are always going to try and take gain where they can in a fraudulent way,” Shea acknowledged. “What the agencies and the program managers need to do is assess the specific risks of their programs. Part of that assessment is to set a tolerance for fraud risk, and you want to make sure that you’re looking at the likelihood and the impact of all of your fraud risk and the controls that you have to address it. You don’t want the $100 control to address a $1 fraud. You have to set risk tolerance appropriately where you have higher likelihood of fraud, and focus your internal controls to manage that risk appropriately. That is how we recommend agencies manage their risk.”

Hear more on Facing the Future. Concord Coalition Executive Director Bob Bixby hosts the program each week on WKXL in Concord N.H., and it is also available via podcast. Join us as the Concord Coalition team discusses issues relating to national fiscal policy with budget experts, industry leaders, and elected officials. Past broadcasts are available here. You can subscribe to the podcast on Spotify, Pandora, iTunes, Google Podcasts, Stitcher, or with an RSS feed. Follow Facing the Future on Facebook, and watch videos from past episodes on The Concord Coalition YouTube channel.

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