Mysterious state office reorganized after Call 6 Investigation

Office spent tax dollars with no clear results

INDIANAPOLIS - The State of Indiana is making changes after a Call 6 Investigation exposed a state office spending hundreds of thousands of tax dollars without clear results.

Governor Mike Pence has dismantled the Office of Federal Grants and Procurement, created by the administration of former Gov. Mitch Daniels in 2005 to bring Hoosiers more federal dollars.

On July 30, Pence announced the establishment of the Office of State Based Initiatives through an executive order.

The ultimate goal is for Hoosiers to get the most out of federal dollars, to lower taxes for Hoosiers and to lessen the negative impact of federal mandates.

“We want this office to be the place, the central clearing house where we can find the right kinds of strategic partnerships for the State of Indiana with the federal government,” said Office of Management and Budget (OMB) director Chris Atkins. “We’re still seeking federal money for many programs, but we’re also trying to catalog where the negative impacts come in the long term.”

But as Call 6 Investigator Kara Kenney found, the new office is raising questions of its own.

Pence announced the creation of OSBI on July 30, but the office does not yet have a website.

The Office of State Based Initiatives has an annual budget of $88,984 per year, and one employee on its payroll -- executive director David Johnson.

Johnson works within the OMB offices at 1 North Capitol Avenue, but Johnson was not there when Kenney stopped by.

Kenney asked Atkins how the office will achieve its goals on such a small budget.

“I'm happy to report we make resources stretch pretty thin here,” Atkins said. “We try to protect taxpayers.”

Atkins explained other employees within OMB are working with Johnson to reduce the impact of federal mandates.

“This new office, for the very first time, will subject a federal grant request from a state agency to a cost benefit analysis,” Atkins said. “Before we say yes, we want to understand the long-term costs.”   

In 2011, the Call 6 Investigators found the Office of Federal Grants and Procurement under Governor Daniels spending hundreds of thousands of dollars without clear results.

In 2011, the OFGP website did not list a phone number, address or person in charge.

Instead, the website included a list of government liaisons that was so out of date, some of the contacts had not worked for the state in years and others told RTV6 they didn’t work with federal grants at all.

At least nine Republican lawmakers told Kenney in 2011 they had not heard of OFGP or did not know what it had been doing.

Records show OFGP spent about $600,000 since 2005, and the Call 6 Investigators could not determine how those dollars helped secure more federal dollars for Indiana.

Kenney asked Atkins where OFGP failed.

“They were in a much different place than we are now,” Atkins said. “When Governor Daniels entered office in 2005 the state was broke. We find ourselves in a much different place today. The state’s in very strong financial condition and we have $20 billion in reserves.”         

This summer, Indiana House Democratic leader Scott Pelath told RTV6 he’s skeptical OSBI will be any different.

"We saw an issue of neglect with the previous administration,” said Pelath. “You can call something whatever you want, but it's what you do once you've created the name."

Atkins denies it’s just a name change.

"The Governor has really expanded the mission," said Atkins, who worked under Daniels from 2007 to 2011.

According to the Governor’s office, in 2012, the federal government collected $51.2 billion from Hoosier taxpayers and businesses.

“This year, 49 state departments and agencies will receive almost 20 percent of that money in the form of federal grants, stipends and programs that often come with expensive, burdensome mandates and regulations that stifle ingenuity, cost Hoosier taxpayers and hamstring Hoosier businesses,” read a July 30 news release from the Governor’s office.

The new Office of State Based Initiatives aims to ensure Hoosiers are getting their fair share in return.

OSBI is working on a report detailing the impact of federal mandates on Indiana.

It is due to the Governor’s office by January 1 and will also be shared with Indiana Congressmen

“We believe it will be a success,” said Atkins. “David and his team will work with our congressional delegation to make them aware of these mandates.”

Atkins said when the report comes out it will be used as a “measuring stick” for OSBI’s success.

Follow Kara Kenney on Twitter: @karakenney6 | Facebook: KaraKenneyNews

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