Tuesday, April 08, 2008

Foxes Guarding the Hen House

One of the key assumptions underlying arguments for government regulation is that when people switch over from the private sector to the public sector, they're somehow transformed from devils to angels. I've never understood any part of this -- most people I see in the private sector are more conscientious and harder working than those I see in the public sector; and more importantly, the market provides an incentive to do good, honest work lest a competitor unseat you -- no such mechanism is at work in the public sector.

So it comes as no surprise to me that the government "watchdogs" are generally much less honest than anything you might find in the private sector:
The review of card spending at more than a dozen departments from 2005 to 2006 found that nearly 41 percent of roughly $14 billion in credit-card purchases, whether legitimate or questionable, did not follow procedure — either because they were not properly authorized or they had not been signed for by an independent third party as called for in federal rules to deter fraud.

For purchases over $2,500, nearly half — or 48 percent — were unauthorized or improperly received.

Out of a sample of purchases totaling $2.7 million, the government could not account for hundreds of laptop computers, iPods and digital cameras worth more than $1.8 million. In one case, the U.S. Army could not say what happened to computer items making up 16 server configurations, each of which cost nearly $100,000.

Agencies often could not provide the required paperwork to justify questionable purchases. Investigators also found that federal employees sometimes double-billed or improperly expensed lavish meals and Internet dating for many months without question from supervisors; the charges were often noticed only after auditors or whistle-blowers raised questions.

"Breakdowns in internal controls over the use of purchase cards leave the government highly vulnerable to fraud, waste and abuse," investigators wrote, calling the governmentwide failure rate in enforcing controls "unacceptably high."
Now if we could only get the general public and our politicians to see this, we might actually be able to roll back some of the terrible regulations that have been instituted over the past 100+ years.


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