A state lawmaker on Tuesday questioned whether the state benefited from spending $900,000 on a consultant to assist Gov. Asa Hutchinson's administration in developing a plan to reorganize state government.
Sen. Ron Caldwell, R-Wynne, expressed concerns that the Cabinet secretaries who would head the 15 state agencies in the governor's reorganization plan would be granted too much authority. Those concerns were shared by an official with the Independent Insurance Agents of Arkansas.
Hutchinson countered that the consultant's work was beneficial and that his administration's proposal would allow his Cabinet secretaries to create efficiencies in state government.
The Republican governor is seeking approval for legislation that would reduce the number of agencies that report to him from 42 to 15.
Caldwell is the chairman of the Senate State Agencies and Governmental Affairs Committee that has been reviewing in detail 16 bills that would implement the reorganization plan. Rep. Andy Davis, R-Little Rock, said he hopes, by week's end, to introduce a bill of more than 2,000 pages that consolidates those bills.
[RELATED: Complete Democrat-Gazette coverage of the Arkansas Legislature]
During the Senate committee's review of House Bill 1360, which would create a Cabinet-level Department of Finance and Administration, Caldwell said the committee received its copy of the report by consulting firm PricewaterhouseCoopers last week.
"Was that when the report was officially finished?" he asked.
Hutchinson's chief transformation officer, Amy Fecher, replied: "Yes. We got the final report last week."
But, Caldwell said, that was "Feb. 26. Y'all have been working 15 months."
The governor unveiled his reorganization plan in October, Caldwell noted. Hutchinson had appointed a transformation advisory board in February 2017. In May 2018, the Legislative Council authorized a $900,000 consulting contract with PricewaterhouseCoopers.
"It seems that we threw away $900,000," Caldwell said.
Caldwell asked why nobody seemed to "wait on the report to come back and see what it was."
But Fecher said there were "a lot of discussions" with the consultant and the advisory board throughout the process.
"The final report wasn't the first time that we were in discussion" with the consultant, she said.
"We worked with PwC throughout the process," Davis said. "They were involved in providing advice as this was formulated."
Afterward, Hutchinson said that "The contributions from PwC have been very significant throughout our work on transformation.
"Their review of a number of different state agencies, specifically their insights into those and their comments on which cultures fit well together and which cultures don't, have been instrumental," he said in a written statement.
"Certainly we did not [accept] every recommendation they made. I, along, with the Transformation Advisory Board, took their recommendations and made our adjustments that uniquely reflect Arkansas. Their value goes way beyond the report. It was the day-to-day interaction and exchange of information with PwC that was invaluable," Hutchinson said.
During the Senate committee's meeting, Caldwell expressed concerns several times that Hutchinson's legislation grants each Cabinet-level secretary too much authority.
Then, Lynn Zeno, executive vice president of the Independent Insurance Agents of Arkansas, told the Senate committee, "There is a threat, as the chairman mentioned, about the authority of the secretary.
"We would like to echo [Caldwell's] concerns. We have talked to the governor's office at length. They said, 'Well, that's not the intent that he has unfettered power over all the agencies,' but that's what the legislation says," he said.
"Your department heads, they are not going to come forward and challenge the governor. There are a lot of fellow association folks, they are not going to come forward and challenge the governor, so I am sort of chosen as one that falls on the sword," Zeno said.
"We think that the secretary has the power to usurp the authority of all those department agencies. I'm very concerned about his ability to place personnel within the agencies," Zeno said.
Hutchinson later said, "You have to be able to empower the Cabinet secretaries to create efficiencies.
"We already have carved out protections for special revenues and regulatory authorities of different agencies from the Banking Department to the Plant Board to the Medical Board," the governor said in a written statement. "These are appropriate exceptions, but you have to have a chain of command that goes to the secretary to be successful in this reorganization."
Regarding the Department of Finance and Administration, Hutchinson has proposed merging into it the Assessment Coordination Department and Tobacco Control Board.
The governor has proposed shifting the department's Employee Benefits Division, Building Authority, Offices of Procurement and Personnel Management to a newly created Department of Transformation and Shared Services, which will include the Department of Information Systems.
Sen. Will Bond, D-Little Rock, said the consultant recommended splitting the Department of Finance and Administration into three distinct departments of revenue, operations and human resources. He questioned why the governor isn't proposing that.
Fecher said the governor and advisory board took the advice of the consultant in making the final decision.
Davis said, "I can't remember what everybody's comments were, but I can say for me, I would have taken that [recommendation] as just ... too much."
Later, Davis said, "There are more ideas of things that we could do to improve state government in that report than is feasible to do in one session. I think that this is a report members can refer back to for the next 10 years for ideas on how to make things work better."
Metro on 03/06/2019