2016 Annual Report
Working for Effective Government
the
volcker Alliance
2016 Annual Report
The volcker alliance
2016 Annual report
“The true test of a good government is its aptitude and tendency to produce a good administration.” Alexander Hamilton
THE VOLCKER ALLIANCE was launched in 2013 by former Federal Reserve Board Chairman Paul A. Volcker to address the challenge of effective execution of public policies and to help rebuild public trust in government. The nonpartisan Alliance works toward that broad objective by partnering with other organizations—academic, business, governmental, and public interest—to strengthen professional education for public service, conduct needed research on government performance, and improve the efficiency and accountability of governmental organization at the federal, state, and local levels.
Paul A. Volcker
Thomas W. Ross
“Vision without execution is hallucination.” Thomas Edison
Thomas W. Ross joined the Volcker Alliance as president effective July 1, 2016. Mr. Ross served as a judge in the North Carolina Superior Court for seventeen years and continued his public service as director of the North Carolina Administrative Office of the Courts before becoming chief executive of the Z. Smith Reynolds Foundation Inc. From 2007 to 2010, he was president of Davidson College, his alma mater. He was president of the seventeencampus University of North Carolina from 2011 to 2016 and remains president emeritus. Mr. Ross also currently serves as the first Terry Sanford Distinguished Fellow at Duke University’s Sanford School of Public Policy. A New President Joins the Volcker Alliance
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Letter from the Chairman and President The year 2016 was a significant one for our nation and the still-young Volcker Alliance. Dominated by the presidential primaries and the election, amid a flood of competing policy proposals and political narratives, one theme seemed clear enough: Public distrust of, and discontent with, the status quo of our governmental processes has reached a critical point. and financial practices in US states. We are partnering on this effort with students and professors of public finance from eleven universities to review the current state of financial reporting of all fifty states. Preparing Tomorrow’s Public Service is the second initiative, focused on spurring educational innovation to meet the challenges of complex governance. As a first step in this effort, the Alliance is conducting research and gathering input from government practitioners and educators to identify and categorize the needs of the 21st-century government workforce. This work builds on an initial study published by the Alliance of the skills and competencies necessary for an effective public procurement workforce. Beyond these two initiatives, we continue to review efforts to reshape the financial regulatory system for the 21st century while also emphasizing the need to preserve key reforms enacted after the recent financial crisis. In December, we partnered with the Institute for New Economic Thinking to convene a forum to discuss particular regulatory and structural challenges and released a report, Unfinished Business: Banking in the Shadows, which included recommendations on the needed changes. As the “rubber meets the road” for the new administration in Washington, DC, and as we
An analysis published by the Volcker Alliance in 2016 made clear that this deep-seated and growing lack of confidence in government cuts across traditional attitudes of the established political parties. At the same time, the study suggests a more useful view: It identifies a broad consensus that government could and should do a better job. The author, Paul C. Light, the Paulette Goddard Professor of Public Service at New York University’s Wagner School of Public Service and special adviser to the chairman at the Volcker Alliance, suggests that there is real opportunity for government reforms with bipartisan appeal. What is clear to us in the wake of the 2016 election is that our work for effective government is both relevant and increasingly important, and that our commitment to nonpartisanship in a time of great political polarization has substantial value. Soon after Tom Ross joined the Alliance as president in July, we announced two initiatives that have broad resonance and high potential to identify and drive the kind of changes needed to increase the transparency and capability of government. We are pleased to report here that these initiatives are gaining momentum. Launched in October, the Truth and Integrity in Government Finance Project is a multiyear study designed to encourage effective budgeting
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Paul A. Volcker, Thomas W. Ross
ing changes in institutions and practices. We appreciate your interest in the work of the Volcker Alliance, work we believe to be vital to the future of our democratic government.
find ourselves at a unique time in our nation’s history, the Alliance is committed to identifying meaningful opportunities to advance efficient and effective government at the federal, state, and local levels. We will act as a catalyst in concert with partners to achieve results that matter to citizens. We are fully engaged in this challenge, refining a strategy that defines high standards of rigor in our work and sharpens our focus on driv-
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Paul A. Volcker
Thomas W. Ross
Chairman
President
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2016 Annual report
Public Service Excellence Program the public service excellence program is a collaboration among the Volcker Alliance, distinguished universities, and governments to develop more efficient and effective management practices at all levels of government. The program focuses on building a highly capable corps of public servants and, simultaneously, relevant research. Launched in 2015, this program works to enhance the role of schools of public policy and administration as beacons of public education and research. The Alliance partners with these schools to execute specific projects designed to determine how best to educate, train, and motivate the current and next generation of great public administrators. Key Competencies for Public Procurement In 2016, the Volcker Alliance examined the state of the public workforce responsible for $2 trillion in procurement spendDoing ing each year. The Public The People’s Business Service Excellence Program proposed a model of the essential skills and competencies required for public procurement that could be applicable at all levels of government. The Alliance then engaged with procurement officials and thought leaders, public affairs
scholars, vendors, and other government leaders to collect their impressions of the workforce’s current proficiency in each critical capacity. The resulting report, Doing the People’s Business: Key Competencies for Effective Public Procurement, contains the competency model, the proficiency findings, and a variety of recommendations from procurement leaders to enhance the workforce. The report’s findings include the need to clarify procurement’s role within public sector organizations; the need for greater specialization in and integration with internal customers and suppliers; the importance of developing a better approach to risk management; and the impera-
KEY COMPETENCIES FOR EFFECTIVE PUBLIC PROCUREMENT
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tive to leverage data and adopt procurement technologies to better harness government’s buying power.
Suzanne Cooper Harvard University, John F. Kennedy School of Government Kevin Desouza Arizona State University, College of Public Service and Community Solutions Elizabeth Kellar Center for State and Local Government Excellence Laurel McFarland The Network of Schools of Public Policy, Affairs and Administration J. Christopher Mihm US Government Accountability Office haron Minnich Pennsylvania Office of S Administration Jon Nehlsen Carnegie Mellon University, H. John Heinz III College
Preparing Tomorrow’s Public Service In the fall, the Alliance launched an initiative with the objective of encouraging educational innovation to meet the challenges of complex governance in the future. This project furthers one of the primary objectives of the Alliance: supporting the development of new educational approaches to achieve public service excellence. Preparing Tomorrow’s Public Service is a research-based project intended to contribute to the vital work of governance by • determining what the essential skills and competencies required of an effective managerial public servant will be in 2025, based on input from government practitioners and educators, and • generating ideas for educational innovations that can support future public managers in attaining those skills and competencies. The initiative is supported by Huron Consulting Group’s higher education strategy practice and guided by an advisory group made up of senior leaders from government, higher education, and government partnership organizations. Advisory Group for Preparing Tomorrow’s Public Service Project: Jason Briefel Senior Executives Association Karl Brooks University of Texas at Austin, Lyndon B. Johnson School of Public Affairs Daniel Chenok IBM Center for The Business of Government
Understanding Tenure and Promotion at Schools of Public Affairs As part of its interest in promoting collaboration between research and practice, the Volcker Alliance is working with leading schools of public policy and administration to understand how the community balances consideration of faculty research, teaching, and service in tenure and promotion decisions.
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Financial Regulation Program The Volcker Alliance’s Financial Regulation Program focuses on the legal and administrative structures for financial regulators and supervisors. The Alliance’s interest in this area stems primarily from the longstanding concerns of its founder and chairman, Paul A. Volcker, about the regulation of financial markets and lapses in oversight, the 2008 crisis, and markets’ growing complexity. Publication of Unfinished Business Unfinished Business: Banking in the Shadows, a report published by the Volcker Alliance in December 2016, was Unfinished the result of a yearlong Business review. The report idenBanking in the Shadows tifies areas of vulnerability that pose a high level of risk to the public and warrant greater attention by policymakers, including the risk of runs associated with excessive reliance on short-term debt; the growing concentration of credit risk in a small
number of highly interconnected clearinghouses for over-the-counter derivatives; and the fragmented and disjointed framework for regulating financial institutions in the United States. The report concludes that absent action, excessive uninsured short-term debt will remain an important risk amplifying financial crises and leading to the need for taxpayer-funded bailouts. It encourages policymakers to develop strategies to enhance the resilience of clearinghouses, establish an effective framework for their regulation and supervision, and craft a clear statutory scheme for their recovery and resolution. Finally, the Alliance urges policymakers to reorganize the
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2016 Annual report
financial regulatory system. The report presents a vision for a simpler, more comprehensive framework consistent with the Volcker Alliance’s April 2015 report, Reshaping the Financial Regulatory System: Long Delayed, Now Crucial. EVENT AT NATIONAL PRESS CLUB On December 5, 2016, the Volcker Alliance released Unfinished Busi-
ness and partnered with the Institute for New Economic Thinking to convene a group of influential thinkers for a half-day forum. Panels of experts discussed regulatory reform and structural changes needed to ensure the stability and resilience of financial markets.
Top (l to r): Sheila Bair, Donald Kohn, Paul A. Volcker, William Donaldson, Antonio Weiss, Barney Frank. Left: Jacob “Jack” Lew. Right: William Rhodes
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8 1: Thomas W. Ross 2: Thomas M. Hoenig 3: Sheila Bair 4: Donald Kohn, Mary J. Miller 5: (l to r) Thomas M. Hoenig, Michael Bradfield, Simon Johnson 6: Gaurav Vasisht 7: Colleen M. Baker 8: (l to r) Dennis M. Kelleher, Robert A. Johnson, Kevin Warsh
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2016 Annual report
State and Local Program The Volcker Alliance’s State and Local Program addresses specific challenges to effective execution of public policies that arise in state and local governments. To that end, the Alliance partners with other organizations—academic, business, governmental, and public interest—to conduct needed research on government performance and improve the efficiency, transparency, and accountability of governmental organization at the state and local levels. Truth and Integrity in Government Finance The Alliance announced that it is conducting a multiyear study to help improve budgeting and fiscal sustainability in all fifty US states. The Alliance is partnering with academic institutes and universities’ schools of public administration or policy to accomplish the study. Together, they will also collaborate with Municipal Market Analytics Inc., a leading independent financial consulting firm based in Concord, Massachusetts, and Kath-
erine Barrett and Richard Greene, special project consultants to the Alliance. The data collected by professors and graduate students from around the country will provide the Alliance with the basis for evaluating state budgeting and financial reporting performance in areas including clarity, transparency, and integrity. The Truth and Integrity in Government Finance Project, as the study is known, will lay the groundwork for governors, legislators, civic
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An Annotated Guide to State Budgets, Financial Reports, and Fiscal Analyses to provide improved tools for elected officials, analysts, and members of the media researching the critical fiscal decisions that governors State Budget and legislators must Sources make. Written by Katherine Barrett and Richard Greene, the guide includes links to budgets for all the states as well as legislative analyses of budget bills and treasurers’ or comptrollers’ monthly cash-flow statements; capital spending plans; reports on public-worker pension funding and returns; and reports by local and national fiscal research organizations, bond rating firms, and associations of state fiscal and finance officials.
organizations, and citizens concerned about fiscal stewardship to effect meaningful improvements in the quality and transparency of state budgets during a time of fiscal stress for many governments. University Partners for the Truth and Integrity in Government Finance Project: Arizona State University City University of New York Cornell University Florida International University Georgia State University University of California, Berkeley University of Illinois at Chicago University of Illinois Springfield University of Kentucky University of Minnesota University of Utah PUBLICATION OF State Budget Sources In October, the Alliance published State Budget Sources:
AN ANNOTATED REFERENCE GUIDE TO STATE BUDGETS, FINANCIAL REPORTS, AND FISCAL ANALYSES •••
Katherine Barrett and Richard Greene October 2016
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Other Activities Publication of Moneyball for Head Start Moneyball for Head Start: Using Data, Evidence, and Evaluation to Improve Outcomes for Children and Families, authored by Sara Mead and Ashley LiBetti Mitchel, was jointly published by Results for America, Bellwether Education Partners, the National Head Start Association, and the Volcker Alliance. Released in January 2016, it offers nine key recommendations to policymakers and practitioners on better use data, evidence, and evaluation to strengthen the impact of the Head Start program and improve results for the children and families it serves. The report builds on policy recommendations outlined in Renewing Head Start’s Promise: Invest in What Works for Disadvantaged Preschoolers, released by Results for America and Bellwether Education Partners in July 2014 at an event titled “Moneyball for Government.” It was co-sponsored by Results for America, the Brookings Institution, and the Volcker Alliance. The paper became the springboard for a more in-depth engagement on the implementation of the Head Start program, developing into a working group on the use of data,
evidence, and evaluation to improve outcomes for Head Start children and families. Shelley H. Metzenbaum, nonresident senior fellow at the Volcker Alliance, spearheaded our engagement in this project and participated in the working group.
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Working Paper on Government Performance Research on What Americans Want and Use of Evidence from Government Reform The Alliance released a bipartisan working paper In December 2016, Paul C. Light, the Paulette authored by former senior US Office of ManageGoddard Professor of Public Service at New York ment and Budget officials Dr. Metzenbaum and University’s Wagner School of Public Service and Robert J. Shea on October 5, special adviser to the chair2016. The paper, Performance man at the Volcker Alliance, Accountability, Evidence, and released new research revealImprovement: Reflections and ing a surge in the percentPerformance Accountability, Recommendations to the Next age of Americans who think Evidence, And Improvement Administration, outlines six that government needs major practices that should be used reform. The analysis also at all levels of government found broad cynicism about to improve effectiveness, as government performance well as five recommendations across the political spectrum. to the incoming presidential The paper, What Ameriadministration for building on cans Want from Government established successes in govReform, is based on data from ernment. eight public opinion surveys Dr. Metzenbaum and Mr. conducted between 1997 and Shea unveiled the paper at a 2016. Dr. Light calls for a slate forum in Washington, DC, of reforms of the federal govhosted by the National Acadernment that data suggest emy of Public Administrawould draw bipartisan suption and the Volcker Alliance. port, such as electoral reform They were joined by Seth Harto reduce the influence of What ris, former deputy secretary of money in elections; ethics Americans Want the US Department of Labor; reform to address conflicts of From Government Reform Ted McCann, assistant to the interest for elected officials; a Speaker of the House for polconcerted reduction in waste icy; and Sharon Kershbaum, and inefficiency in governchief operating officer of ment operations; a bipartisan Washington, DC’s Department of Human Sernational commission to overhaul government vices and former deputy assistant secretary for systems and the government workforce; and a management and budget at the US Department stronger personnel system. of the Treasury. Reflections and Recommendations to the next administRation
shelley h. metzenbaum RobeRt shea
WoRking PaPeR october 2016
CONTACT THE AUTHORS
Robert Shea Robert.Shea@us.gt.com
Shelley H. Metzenbaum smetzenbaum@outlook.com
The analysis and conclusions contained in this paper are those of the authors and should not be interpreted as reflecting the position of the National Academy of Public Administration, the Volcker Alliance, the Board of Directors of either organization, or the staff of either organization. Any errors and omissions are the responsibility of the authors.
issue PaPer • December 2016
Paul C. Light
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US Treasury Secretary Jack Lew (left) presents the Treasury Department’s Henry Morgenthau Jr. Award to Mr. Volcker on December 5, 2016.
Vice President Joe Biden, giving a speech on financial regulation at Georgetown University on December 5, 2016, congratulates Mr. Volcker on receiving the Henry Morgenthau Jr. Award and thanks him for his introductory remarks. (Georgetown/Phil Humnicky)
Chairman Honored for Public Service Mr. Volcker received, on December 5, 2016, the US Department of the Treasury’s Henry Morgenthau Jr. Award in recognition of his extraordinary public service. The award was presented by Secretary of the Treasury Jack Lew at the conference on financial crises that the Volcker Alliance cohosted with the Institute for New Economic Thinking in Washington, DC. In his remarks, Mr. Lew said, “As I’m about to complete my own term, it’s my honor to bestow this award to Paul Volcker, with my personal appreciation for his many contributions over a distinguished career.”
The Public Service Career of Paul A. Volcker 1952-1957 Economist, Federal Reserve Bank of New York 1962-1963 Director of Financial Analysis, US Department of the Treasury 1963-1965 Deputy Under-Secretary for Monetary Affairs, US Department of the Treasury 1969-1974 Under Secretary for Monetary Affairs, US Department of the Treasury 1975-1979 President, Federal Reserve Bank of New York 1979-1987 Chairman, Federal Reserve Board of Governors 2008-2011 Chairman, President’s Economic Recovery Advisory Board In 1987, after almost 30 years of public service, Mr. Volcker agreed to head a distinguished private, nonpartisan National Commission on the Public Service, reporting to President George H.W. Bush. Fifteen years later, he led a second National Commission on the Public Service, in collaboration with the Brookings Institution’s Center for Public Service, recommending a sweeping overhaul of the organization and personnel practices of the federal government. Mr. Volcker’s legacy of government service and his longstanding passion for effective government form the backdrop and inspiration for the work of the Volcker Alliance.
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Board of Directors, Advisers, and Fellows Paul A. Volcker CHAIRMAN William H. Donaldson
Sheila Bair Charles Arthur Bowsher
Anthony J. Dowd
TREASURER
Richard Ravitch William Rhodes
Shirley Clarke Franklin
Alice Rivlin
William “Bill” Bradley
Francis Fukuyama
Anthony Walton
Thomas M. Davis
Norman J. Ornstein
Michael Bradfield
COUNSEL
Advisers and Fellows Katherine Barrett and Richard Greene Donald F. Kettl Paul C. Light
Special Project Consultants
Nonresident Senior Fellow
Special Adviser To The Chairman
Shelley H. Metzenbaum
NONRESIDENT SENIOR FELLOW
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Financials Statements of Activities
Statements of Financial Position
Years ended December 31, 2016 and 2015 2016
Years ended December 31, 2016 and 2015 2015
REVENUES Grants and contributions
2016
2015
$1,353,968
$1,333,250
16,849,718
17,186,554
ASSETS $3,072,796
$704,550
Speaker fees
–
154,695
Investments
Other income
18,517
20,093
550,542
-312,609
Grants and contributions receivable
341,191
50,000
3,641,855
566,729
Prepaid expenses
28,466
46,889
Security deposits
70,327
70,327
OPERATING EXPENSES
Premises and equipment, net
45,001
52,940
Program services
Total assets
18,688,671
18,739,960
119,275
113,026
Investment return, net Total revenues
Cash and cash equivalents
Public Service Excellence Program
970,071
336,223
LIABILITIES
Financial Regulation Program
540,189
552,372
Accounts payable and accrued expenses
State and Local Program
921,963
576,779
Deferred revenue
325,000
–
Other program activities
376,339
566,646
Total liabilities
444,275
113,026
2,808,562
2,032,020
887,331
958,102
17,500,826
18,626,934
328,500
99,060
743,570
–
1,215,831
1,057,162
18,244,396
18,626,934
Total expenses
4,024,393
3,089,182
$18,688,671
$18,739,960
Change in net assets
–382,538
–2,522,453
18,626,934
21,149,387
$18,244,396
$18,626,934
Total program services
NET ASSETS
Supporting services Management and general Fundraising Total supporting services
Net assets, beginning of year Net assets, end of year
Unrestricted net assets Temporarily restricted net assets Total net assets Total liabilities and net assets
2016 Program Expenses State and Local Program $921,963
Other program activities $376,339
Financial Regulation Program $540,189
Public Service Excellence Program $970,071
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Our Supporters We gratefully acknowledge the following foundations and individuals, whose generosity and commitment to our mission made it possible to launch the Volcker Alliance and to begin to address the challenge of effective execution of public policies and to help rebuild public trust in government.* Founder
Paul A. Volcker Supporters and Contributors
Laura and John Arnold Foundation
Lewis A. Miller
Sheila C. Bair and Scott P. Cooper
The New York Community Trust – Lise Strickler and Mark Gallogly Charitable Fund
Mr. and Mrs. Robert R. Bench William Bradley
Norman Ornstein
Carnegie Corporation of New York
Tan Soo Pang
The Challenger Foundation
Peter G. Peterson Foundation
Ray and Barbara Dalio
Richard Ravitch Foundation
William H. Donaldson
George T. Reichman
R. Anthony Elson
William Rhodes
The Lee and Juliet Folger Fund
Robertson Foundation for Government
Francis Fukuyama and Laura Holmgren
The Sedoric Family
Gisela R. Gall
Thomas Seidenstein
Healey Family Foundation
Richard Syron
Henry and Elaine Kaufman Foundation
Mr. and Mrs. Edwin M. Truman
Thomas G. Labrecque Jr.
Marshall W. Whigham
Thomas Lyon
Lawrence and Carol Zicklin
The Mallinckrodt Foundation
*This report reflects support received through December 31, 2016.
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2016 Annual report
Staff Thomas W. Ross
President
Melissa Austin
Naomi Major *
Henry Owens
Emily S. Bolton
Melanie Martha
Amy M. Smitherman
Elizabeth Donnelly
Maggie Mello
Gaurav Vasisht
Kaeleigh Forsyth
Peter Morrissey
Noah A. Winn-Ritzenberg
William Glasgall
Pradeep Nair **
Back row, left to right: Gaurav Vasisht, Amy Smitherman, William Glasgall, Peter Morrissey, Thomas W. Ross, Henry Owens Front row, left to right: Pradeep Nair, Elizabeth Donnelly, Melanie Martha, Kaeleigh Forsyth, Melissa Austin, Noah A. Winn-Ritzenberg, Maggie Mello, Emily S. Bolton
*Naomi Major joined the Alliance in March 2017; she is not pictured. **Pradeep Nair directed the Alliance’s Public Service Excellence program until March 2017.
Don Besom, art director; Michele Arboit, copy editor. Photography: Albert Cheung in New York; Lindsay King in Washington, DC. Cover illustration: Robert Neubecker.
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