A survey of these states by the Texas Performance Review found that agencies of this type can develop ex pertise in specialized areas which then can be made available to all other state agencies. This is more cost-effective than having every agency hire their own experts. It also helps ensure that smaller agencies, which cannot employ as many experts, can sti ll have access to them. For example, small agencies cannot always efficiently hire grievance and mediation experts, trainers, postal experts and others, yet the cost or risk to an agency from not having access to these experts can be considerable. Anothe r benefit of a central service agency is that it provides greater accountability over the state s assets through an improved ability to measure the costs of services.
Most governments have no idea how much it costs to deliver the services they offer.
Even if they can give you a budget figure for each service, it typically excludes indirect costs such as administrative overhead, capital cost s and employee fringe benefits. An example of how a central service agency can make more informed business decisions because the total costs are known is the case where expensive equipment must be procured each time technology improves or other more efficient means develop for conducting a function. One agency can keep up with these opportunities, replace equipment, monitor productivity levels and avoid the overlapping that would occur if the oversight were spread among a number of separate agencies. Other savings also can be achieved when various economies of scale are realized through bulk purchases or other bulk rates that stem from combining the administrative functions of several agencies. Perhaps the greatest advantage is that an administrative s ervices agency frees up other agencies to concentrate their resources on their core functions while being assured their administrative functions are carried out in compliance with existing laws.