Friday, January 20, 2012

Silent Fraud in Federal Grant Evaluations Costs Billions

I'm stuck in a very difficult position with one of my evaluation clients right now. I have a report due very soon and there are some poor outcomes to report and some whistle blowing that needs to be done. This is the very reason why this particular program requires that all grantees hire independent external evaluators.  Many federal programs have the same requirement.  It's an effort to ensure that grantees don't fudge their evaluation results to make themselves look better and worthy of continued funding.

The problem is that most external evaluators are not independent.  In fact, they are very dependent on the grantees for their livelihood.  Sure, they aren't employees of the grantees; they are usually independent contractors, but bias is inherently built into the relationship by the very people who want to ensure an unbiased evaluation - the funders.

The problem: Grantees have the freedom to fire evaluators who say things that they don't want to hear and hire someone else who will be more amenable to telling the story the way the grantee wants it told. And in this time of economic hardship and massive budget cuts impacting almost every organization in the country, grantees have a powerful incentive to look good at all costs just to keep the dollars flowing.

Sure, you can say that an evaluator with integrity will tell the truth anyway, and I agree with you to some extent.  Unfortunately, in today's economy jobs are hard to come by and independent contractors have to do everything they can to get and keep jobs, so many are faced with this ethical conundrum at a time when they will pay a very high price for their integrity. They are faced with biting the hand that feeds them, and hoping that the hand doesn't bite back.

And for every honest evaluator who stands her ground, there are 20 unscrupulous ones ready and willing to step in and say whatever the client wants to hear.

And it's not just about the integrity of the evaluator in that situation or keeping that job. The grant world is a fairly small one and word spreads.  No one wants the reputation of being someone who isn't afraid to make their client look bad.  It makes you a hero among evaluators and funders, but it also makes you untouchable to clients, and they are the folks who make the hiring decisions.

Here's another problem:  Many external evaluators write the federal performance reports for their clients.  In many ways this makes sense because they are the ones most familiar with the data and in the best position to describe and report the outcomes. However, performance reports technically are the responsibility of the grantee and they are submitted by the grantee as their statement of progress. In a performance report, the grantee has every right to change what the evaluator writes to align it with their own perspective. So, even if the evaluator has the integrity to tell the ugly truth, the funder won't see it, unless of course the grantee doesn't read their own report before it is submitted which is an unfortunate, but very common, practice..

Unlike performance reports, evaluation reports cannot be tampered with by the grantee, but the evaluator has to deal with the first problem I described - biting the hand that feeds them.

So here I sit, staring at some data that tell a very unflattering story. I'll write the performance report that tells the truth and the client will get very upset and change it before they submit it. Then we'll have some tension in our professional relationship, which I'll spend the next 5 months trying to repair before the decision about contracting with me next year has to be made.

Yes, my friends, these are your tax dollars at work. It's a corrupt system. Because performance reports are used by the federal government to make decisions about continuation funding, lying in performance reports constitutes fraud, but everyone looks away.  Looking away is the only way the corrupt system can continue.

In a time when banks and big businesses are being vilified for their fiscal practices, this fraud - which amounts to billions of dollars a year - goes unexamined and continues to thrive in every corner of the country.


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Dave Cearley said...

And now you know why investors (and banks) are up in arms at the rating agencies that graded subprime mortgages as triple A. The politicians demanded banks make more loans to poor people, and fined them if they didn't. Fannie mae
Used govt funding to steal hundreds of billions in business from said banks, and the) sting agencies left them holding the bag. Even better, politicians, who were the primary cause of the mess, blamed it all on the banks and added a bunch f new rev's (that make it harder for people to get a legitimate loan, all because the existing regulators were asleep st the switch. Yeah, the government is really skilled at spending ur money, and telling us we're evil and greedy when we call them on their incompetence.

Nu8gDva said...

In an ideal world, poor outcomes could serve as a learning and quality assurance tool, providing valuable feedback to the program administrators and staff regarding changes that need to be made. As a realist, I know this often does not happen. And even in those situations where the data and evaluation results are transparent, funding may continue for other reasons. Abstinence only programs is just one example of unsuccessful programs that continued to receive funding despite poor outcomes.
In my opinion, poor outcomes can tell us as much, if not more, than positive outcomes--if the findings are used to make improvements.

Dave Cearley said...

When it comes to government money, everyone involved has a strong incentive to either abuse power or steal. To the politicians, there's no law better crafted than the one that puts a line of people at their door, hat in hand, asking for help to navigate the funding or regulatory maze.

Author said...

Were I a grant administrator that hires a monitor, I'd want the discretion to use or ignore, the monitor's product... as I see fit. Were I a governing board member, ultimately responsible for the administration of the grant, I'd want an uncorrupted copy of the monitor's evaluation. I'd hope that a member of the governing board would want a say in whether the identified weakness in grant administration is, or is not acceptable. It might depend on whom (the specific role) is being reported to.

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