State Administrative Board Acts On Granholm Request to Scrutinize State Spending

In an effort to further control state government spending, Governor Jennifer M. Granholm today asked the State Administrative (Ad) Board to approve a resolution tightening the restrictions on state contracting approvals.

“We cannot afford to spend even one tax dollar lightly,” said Granholm. “The current state budget crisis increases the need for the Ad Board to keep a closer eye on state contracts and expenditures. Today’s changes will provide greater assurance that only those expenditures that are absolutely necessary will be made.”

The resolution, approved this morning, will implement new, more stringent review policies that must be followed before any state contract is let. Beginning March 25, the Ad Board will review all new state contracts, and amendments of existing contracts, of $25,000 or more, subject only to limited exceptions. Currently, the six-member board had reviewed only state contracts and grants of $250,000 or more and contract amendments of $125,000 or more.

Granholm’s action helps put the brakes on state spending and is expected to result in hundreds, if not thousands, of contracts being reviewed by the State Ad Board before they are approved.

The Governor explained that reducing the threshold for state contracts that need approval has proven to be a successful cost saving measure in other states. She also expects that the action will encourage departments to “think hard” before considering discretionary contracts.

“This is one simple way to help us keep our expenditures in line while we attempt to balance our budget,” Granholm added.

Granholm indicated earlier this year that she would ask the Administrative Board to give greater scrutiny to the contractual expenditures of state government.

The State Ad Board also approved a second resolution authorizing limited exceptions to the general requirement for contract approval for construction or transportation projects when necessary to avoid delays or increased costs to the state.

The State Administrative Board has general supervisory control over the administrative activities of all state departments and agencies including, but not limited to, the approval of contracts and leases. The State Administrative Board members are the Governor, Lieutenant Governor, Secretary of State, Attorney General, State Treasurer, Superintendent of Public Instruction, and the Director of the Department of Transportation.