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• Accurately measuring pay in the public sector
• Government spending legislation aims to audit GSA each year
• Investigations could lead to tighter controls on agency spending

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The economic adjustment that began in 2008 continues to color the budgets and behaviors of government entities at all levels. With state and local budget forecasts indicating shortfalls for the coming three to five years, governments will continue to depend on spending cuts, service and workforce reductions, and aid from the federal government to balance budgets.¹ (See Table 1.)

Both state and local year-over-year expense budgets are estimated to grow approximately 6 percent, yet estimates show state revenue growth lagging at 0.6 percent and local budget growth near only 5 percent, a clear reflection of continuing budget challenges. These projected estimates are based on the previous four years of budget data, so they reflect a scenario that presumes status quo behavior, which is not necessarily an accurate presumption. Nevertheless, these estimates warn that continued attention to cost containment, program reductions, efficiency maximization and revenue generation are necessary to achieve balanced budgets in the coming years.

Focus on procurement, practices and supporting technology

Retired three-star general William "Gus" Pagonis, known for his logistical achievements during Desert Shield/Storm and later head of Sears' Logistics Group, observed at NIGP Forum this summer² that procurement and logistics remain a largely untapped source of bottom-line savings for the majority of both private corporations and public entities. As every government seeks the greatest value from each tax dollar, administrators will increasingly look to the procurement departments to derive maximum value from all contracting practices whether or not they are intrinsically expense-generating or have secondary (if not primary) revenue-generating capacities. Innovations in procurement practice to meet this demand are inevitable, and we can expect to see the increased and broader adoption of current practices that have previously benefited early adopters of cooperative purchasing practices, purchasing card (p-card) programs and federal grants.

In the procurement community, cooperative practices have been successfully employed by agencies of all sizes and types for a decade or more. These practices include piggy-backing, partnering with neighboring jurisdictions for shared services or increased economies of scale, and competitive solicitations of a national scope awarded by a lead public agency. However, awareness, adoption and use of these procurement tools are not yet universal. Anecdotal evidence — provided by those in city and county management, their elected officials and procurement practitioners — indicate that many state, city and county leaders remain unaware of procurement and the practices available to their jurisdictions to support budget effectiveness. Surprisingly, some states and localities still restrict the use of cooperative practices. As economic pressures continue to build, the environment for legislative change shifts in favor of cooperative purchasing. The growth of regional and national cooperative programs during the past five years confirms the value these programs offer for those who take advantage of them.

P-card programs are a tool both to delegate low-dollar purchasing authority to end-user departments and to realize rebates based on volume. While procurement departments have also had to adjust to fewer personnel, p-cards provide a mechanism to control, measure and analyze spend while increasing the speed at which material requirements are fulfilled.

Beyond these third-party cost-saving and revenue-generating resources, pressure over time from government administrators and the public will increasingly drive procurement and finance leaders to seek more effective tools to expand their internal capacities and eliminate redundancies. The aforementioned p-card is one such tool, and its use alongside online order entry and supplier "punch-out" tools feeds an important transactional data mine that supports spend analysis and spend management systems.

The United Kingdom, which is five to 10 years ahead of the United States in adoption of spend analysis and spend management applications in government practice, provides a ready reference for domestic government officials who seek a better understanding of these practices and their value. Similar to the pressures driving adoption of cooperative procurement practices, public pressure on elected officials to demonstrate fiscal responsibility will support the use of technology-based tools that contribute to more effective sourcing practices, reduce accounting and financial errors, and improve reporting, transparency and accountability throughout each government enterprise. Demonstrating greater effectiveness in any of these areas provides politicians a stronger platform upon which to build their reelection campaigns. As more and more elected officials make this realization, we can expect an increase in the adoption rate of spend management technologies.