The state of Kansas is spending money in hopes of saving money.
Kansas lawmakers Friday chose to begin negotiations with the Kansas City, Mo. firm Alvarez & Marsal on an efficiency study for Kansas state government.
The Kansas Legislature set aside up to $3 million to hire a consultant for that purpose. Kansas has a state budget of $26 billion.
The consulting firm that gets the contract will have to come up with ways for the state to save money. Even though Alvarez & Marshal gets first crack at the project, three other firms could still get the contract if negotiations with Alvarez and Marshal fail.
About Alvarez &Marshal
"Companies, investors and government entities around the world turn to Alvarez & Marsal (A&M) when conventional approaches are not enough to activate change and achieve results." -- Company website
Clients include: Corporations, law firms, non-profits, government agencies, fiduciaries, private equity investors, and distressed borrowers and lenders.
Alvarez & Marsal has experience advising Kansas City's Board of Utilities, the states of Louisiana and North Carolina, and other government entities..
The top areas to be examined by the efficiency experts include K-12 education funding, higher education and social services. All non-judicial and legislative expenditures are also included.
Four firms interviewed
The Kansas Legislative Budget Committee, comprised of seven state lawmakers, heard proposals from three other companies in addition to Alvarez & Marshal:
- Boston Consulting Group
- Deloitte Consulting
The lawmakers praised all four proposals, but decided to begin negotiations with Alvarez & Marsal.
What will the firm do for the Kansas budget?
According to the request for proposal (RFP) for the contract, there are three objectives for the firm to accomplish after being hired.
From the document:
• Objective 1 (Budget Analysis) – Conduct a comprehensive diagnostic analysis of the State or state authorized entity’s budget to identify spending trends and outliers.
• Objective 2 (Efficiency and Cost Savings Recommendations) – Develop a set of recommendations that prioritizes target areas with large and substantial expenditures of state general funds and where the State can become more efficient and thereby provide cost savings to the state’s taxpayers.
• Objective 3 (Budget Process) – Evaluate the State’s budgeting process itself and identify improvement opportunities based on best private sector and government sector practices.
The firm will examine past budgets and future budgets in determining potential efficiencies for the state.
According to the RFP document, the study could begin as soon as Oct. 1. It's unknown how long the process will last.