State officials want the Legislative Council to approve the transfer of 754 positions in the divisions of executive-branch departments to provide shared services within those departments, with the aim of saving money and improving management.
Kay Barnhill, the state's personnel administrator, said the concept of shared services means that the positions -- including budget, accounting, human resources, information technology and legal posts -- could be shared within the department that those employees come from.
The Legislative Council's personnel subcommittee on Tuesday recommended the council approve the transfer, which would take effect in fiscal 2021, which starts July 1.
The subcommittee didn't approve the transfer of positions in the Bank, Insurance and Securities departments, which are within the Department of Commerce, or the proposed transfer of Plant Board positions to shared services in the state Department of Agriculture.
The Department of Transformation and Shared Services proposed transferring 29 positions in the Department of Insurance, five positions in the Bank Department, and three positions in the Securities Department to shared services in the Department of Commerce. The transformation department didn't list any Plant Board positions to be transferred to shared services in the Department of Agriculture in its written proposal.
The Legislative Council's Performance Evaluation and Expenditure Review Subcommittee recommended the council approve the state Department of Finance and Administration's proposed transfer of $58.5 million in spending authority to support shared services, mostly for personnel costs.
The recommendation excluded the proposed spending authority tied to the proposed position transfers at the Bank, Insurance and Securities departments and the Plant Board.
"Those entities are supposed to retain that," said Sen. Jimmy Hickey, R-Texarkana. "That was our agreement within the transformation bill."
Hickey referred to Act 910 of 2019, which implemented Republican Gov. Asa Hutchison's reorganization of executive branch agencies that melded 42 agencies into 15 departments, effective July 1, 2019.
Sen. Bruce Maloch, D-Magnolia, who is a co-chairman of the review subcommittee, recalled that lawmakers were told in the 2019 regular legislative session that nothing would change when the Bank, Insurance and Securities departments were brought under the newly formed Department of Commerce under Act 910.
State Budget Administrator Jake Bleed said, "If you read the first dozen or so pages of the transformation act, it definitely the emphasizes the need and the benefit of setting up shared services appropriations.
"This is merely to set up that administrative background, so that those agencies not only save money, but can be freed up in a lot of ways to focus on their core missions, so that those secretaries or directors aren't tied with some of the more administrative nature of the job," he said.
Maloch said Act 910 states that "the secretary shall delegate the authority to hire employees and to make employment contracts and I think manage or directly oversee all the employees" to the bank, insurance and securities commissioners.
Creating shared services sections in each department "is part of what was done during the [2020] fiscal session to give the departments some leeway in how they created efficiencies within their department," said Tony Robinson, the Bureau of Legislative Research's personnel review administrator.
Several lawmakers were skeptical about whether the shared services would save money.
Sen. Kim Hammer, R-Benton, said, "I understand this is just one component of the bigger picture, [but] just curious what price tag y'all got on this for savings?"
Bleed said state officials haven't formally forecast the amount they anticipate saving.
"We do think that we can save significant amounts," he said. "But at this point, just because we are standing it up right now, we are not in a position where we can put a finite number on it."
A co-chairman of the personnel subcommittee, Rep. Jim Wooten, R-Beebe, said he's frustrated that state officials want the Legislative Council to authorize the transfer of the 754 positions to shared services in each cabinet department, yet state officials can't estimate savings.
"I am becoming more and more apprehensive about the savings," he said. "The only thing we have been told is this is going to save money and we haven't seen any examples of dollar amounts of money."
Bleed said, "We didn't want to put a price tag on a specific transformation change that we are presenting to the committee today because we are still standing it up."
He said he wants to work with the committee to document the savings in the future.
Barnhill said the Department of Transformation and Shared Services will track the savings.
"Over the past four years, we have eliminated approximately 1,400 positions for a total savings around $26 million of the state's budget," she said. "As some of these [positions] do vacate through attrition, we think we are going to accumulate more savings along those lines as well."
Ann Purvis, chief of staff at the Department of Transformation and Shared Services, said, "As we start looking at this and really maximizing the efforts across government, what we are finding is we may not need four fiscal support analysts, we may only need two.
"This gives us the opportunity to do that in a more effective operational manner," she said. "We will be able to track the cost savings. But right now, we are just asking for permission to move forward with this model and be able to provide that information as we go forward."
Wooten said, "I hope you all can back it up."
In advance of the fiscal session in April, Department of Transformation and Shared Services Secretary Amy Fecher reported to lawmakers that Hutchinson's administration had saved $26.7 million so far from the governor's overhaul of executive-branch agencies.