Rebuild FSSA From Scratch

December 4, 2005

Andrea Neal column for Oct. 22, 2003
700 words

INDIANAPOLIS — Blow up the child welfare system and start over. That was an idea touted by Republican Steve Goldsmith during his unsuccessful 1996 campaign for governor.

A great idea that backfired.

Family and Social Services Administration workers took Goldsmith"s suggestion as a personal affront. Their union used it to mobiliz opposition against the Indianapolis mayor. Goldsmith was soundly defeated by Frank O" Bannon that November.

Political analysts blamed a Downtown Indy police brawl that occurred on the mayor"s watch for sabotaging his campaign.

In hindsight, Goldsmith"s idea for rebuilding a key division of the FSSA may have been just as much a turning point.

That"s because Goldsmith"s desire to "reinvent government" shook state government workers to their boots. It was viewed as a threat not only by FSSA staff, but all their colleagues across the state whose jobs seemed suddenly insecure under the specter of a Goldsmith administration.

The story ended happily for them. Democrats stayed in office and "reinventing government," which Goldsmith was known for, fell out of fashion.

Seven years later, it is clear that "reinvention" is precisely what the FSSA could have used.

It still could. Memo to Secretary Cheryl Sullivan: Close it down and start over. The FSSA is too massive an agency, with a $6.3 billion budget and 9,700 employees, to reform from within.

That point may be hard to concede considering that the vast majority of her employees went to work there precisely so they could help those in need: Abused children, mentally ill, the elderly, disabled and indigent.

But even the best of intentions can go awry in a big bureaucracy like hers.

"Bureaucrat is a term of derision in almost every language," note John A. Baden and Andrew St. Lawrence in an article about another government behemoth, the National Forest Service. "This is no accident. Bureaucracies, regardless of their mission, eventually tend to be run for the people in them, and the clientele they benefit."

So it is that Matthew W. Raibley, a mid-level welfare manager at FSSA, was able to spend $2.8 million without approval on unneeded purchases, allegedly on behalf of needy families. Raibley was fired and is the subject of a criminal probe.

So it is that Peggy Bisig, a medical supplies provider for southern Indiana, was able to over bill the state Medicaid office by nearly $2 million, some of which she allegedly spent on a grand piano, mink coats and jewelry. Bisig recently pleaded guilty to federal fraud charges.

So it is that Lee and Carol Meriwether, owners of Daybreak Management of Marion County, were able to keep for themselves $9 million that was supposed to pay for poor families" child care expenses. The state is trying to recover the money.

Incidents of financial misconduct at FSSA are legion. It"s no coincidence that the agency is now under its 10th leader in 12 years. Who"d want the job?

I asked economist Bill Styring what he would do to clean up FSSA if he were in Sullivan"s shoes. "Resign office," he said. "It may be an unmanageable agency."

It"s tempting to blame former Gov. Evan Bayh for the mess. He"s the one who created the mega-agency in 1991 by merging separate human service divisions of government under one roof: mental health, child protection and welfare, disability and rehabilitation services.

Yet Styring can cite similar problems as far back as the late 1970s in one of the agencies now under FSSA jurisdiction. Working then for the state budget agency, Styring"s job was to manage "headache accounts." The office of vocational and rehabilitation services was one of those, which Styring remembers as a "cesspool of waste."

The agency"s problems have not gone unnoticed by lawmakers. The 2003 legislature passed a bill, sponsored by Sen. Gregory Server, R-Evansville, to audit the organizational structure of FSSA with an eye toward improvement.

It should be obvious that tinkering with organizational structure won"t be enough.

Blow it up and start over. Create smaller agencies with strong leaders and built-in incentives for high performance.

"It"s not working the way it is," Styring says. "Could we be any worse off?"

Andrea Neal, former editor of the Indianapolis Star editorial page, is an adjunct scholar and columnist with Indiana Policy Review Foundation. Contact her at


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