Brian Schatz promises government-nonprofit collaboration

“This is the beginning of a great collaboration. The beginning of a new day,” Lt. Gov.-elect Brian Schatz told Hawaii nonprofit leaders at a pau hana following the Nov. 9 sessions of the Conference of Nonprofit Communities of Hawaii at the Sheraton Waikiki. Newly elected Gov. Neil Abercrombie’s running mate and former CEO of the nonprofit Helping Hands Hawaii, Schatz said he was happy to choose this occasion for his first public appearance in his new capacity.

Schatz, a former state representative and chair of the Hawaii Democratic Party, told the gathering he is open to ideas and initiatives for change from the nonprofit sector, welcomes regular, informal communications with nonprofits and is willing to work with them to create such a process.

Referring to recent reports of government payment delays and mid-stream, unilateral contract changes, Schatz said he is committed to changing state government’s relationship with nonprofit contractors.

He said he does not want to see the nonprofit sector continue to be a "zero-interest lender" to the state and pledged to review the procurement process to see what works, what doesn't and to prevent nonprofits from losing money on state contracts. Schatz said he also wants to see a reform of the Legislature’s Grants-in-Aid process.

In return, Schatz said, he asks nonprofits to exercise good governance, pursue excellence and best practices and embrace a spirit of cohesion as they interact with the new administration. Abercrombie and Schatz will be inaugurated on Dec. 6.

His first official project as Lieutenant Governor, he said, will be the Hawaii Fair Share Initiative, "to chase every source of external money," including private money and achieve a faster draw down of American Recovery and Reinvestment Act money.  His office will lead this initiative, he said, but this initiative will involve the Governor and rest of the administration, too.

The Abercrombie-Schatz campaign website details the initiative:

“Maximizing our federal dollars is a critical component to Hawaii’s economic recovery,” Abercrombie said. “First, we need to go through a Recovery Phase, and Brian will play a major role by heading up the Hawaii Fair Share Initiative. Together, we will restore the public’s confidence in government by ensuring that government works for the people.”

On the web page, Schatz notes three specific areas where the initiative would yield substantive results:

1. Competitive funding – Hawaii must take fast action to compete for important grants with short lead times. Many federal grants now have short timetables for submitting applications, sometimes only 30 days. We need to become nimble enough to apply for federal grants as they come up. A few simple changes in practices at the Governor's office level will enable us to get monies for important priorities. For instance, right now all grant applications must be approved through the Office of the Governor, making it extremely difficult to prepare and submit grant applications with 30-day windows in a timely fashion. These bottlenecks can be demoralizing and get in the way of talented people at the department level.
2. Non-competitive funding – We must ensure the bureaucracy runs right when big money is on the line. Hawaii missed out on more than $20 million per year in Medicaid reimbursement for mental health services. Failure to do so was a budget-buster.
3. Spend it or lose it – After the hard work of getting the money for good programs is over, we must be able to get the programs working on time. We are sending money back to the federal government because of our inability to execute in a timely fashion. For example, when awarded federal grants, the state procurement code, and other administrative requirements have deferred expenditure of the funds to the point where the money is lost. This can happen if the grant calls for an independent review of the project and the reviewer must be named using the procurement process before money is spent. Federal monies have been lost when the procurement takes too long. Better oversight and amending our laws will remedy this.

The initiative will recognize that some federal grants may not work for Hawaii, because they aren’t relevant to the public’s needs, or the matching share is not available or there are sustainability questions. “This is a matter of adjusting to the flexibility now required to be competitive and improving the way government works for all of us,” said Schatz.