Existing state policies, procedures, and systems were geared to direct service delivery and were applied uncritically to contract systems. Consequently, we treated providers more as subdivisions of state government than as independent entities. The same kind of direct budgetary and program controls were assumed to be appropriate for purchased services. Government helps produce fiscally unstable agencies. Providers have sacrificed the fiscal viability of their agencies to serve more and more clients with inadequate resources.
Government turns providers into hostages to state funding.
State funding now accounts for 85 to 95 percent of the typical provider's budget. This dependency makes the provider hostage to the state'the relationship ceases to be a partnership. Government ignores ultimate outcomes. Ironically, the paper chase has not led to greater accountability or control of service delivery. As the system increased in size and complexity, bureaucratic layers were added, paperwork increased, and the ability to evaluate the program was lost.