2005 Winner
State of Iowa
Innovations in American Government Awards
Innovations in American Government Awards

Can bureaucratic culture change? Can concrete outcomes prevail over administrative rules in the everyday work of governmental agencies? Can better results be achieved for citizens at a lower cost for government? These are the challenges that all governmental agencies face. Since 2003, the Department of Management of the State of Iowa has been experimenting with the Charter Agency Program, a unique model aimed at improving government. The main goal is for government agencies to enhance their efficiency in exchange for flexibility and authority.

Six governmental agencies (the Departments of Corrections, Human Services, Natural Resources and Revenue; the Alcoholic Beverage Division of the Department of Commerce; and the Iowa Veterans Home) have volunteered to become "Charter Agencies." In exchange for their commitment to produce measurable benefits and to help save money—either by reducing expenditure or by increasing revenues—these agencies have received greater authority and flexibility. For example, the director of a Charter Agency can "stand in the shoes" of the directors at the Department of Administrative Services, which allocates general services, personnel, and information technology to the state agencies.

Charter Agencies are also exempt from statutory across-the-board budget cuts and can retain proceeds from asset sales and 80 percent of the revenues they generate, as well as half of their year-end general fund balances. They are exempt from several bureaucratic procedures such as full-time-equivalent employee caps and approval of the Executive Council for out-of-state travel, conference attendance, and professional membership. They also have access to a $3 million Charter Agency grant fund to foster innovation.

In the two years since their creation, and thanks to their high degree of flexibility, Charter Agencies have already produced a myriad of concrete results that have improved the life of the citizens of Iowa. Among some of the most notable results are: improved rates of income tax returns filed electronically; reduced rate of failure of probationers; increased inmate work opportunities; and increased number of veterans served at the Iowa Veterans Home. Charter Agencies have successfully reached their target of producing $15 million in expenditure savings or additional revenues.

The Charter Agency Program is one element of "Reinvention Partnership," a larger effort undertaken by the Iowa state government. The program is innovative compared to previous initiatives in two major ways. Firstly, the Charter Agencies' expanded authority is the result of a grant by the legislature and, secondly, these agencies commit to delivering improved results in exchange for increased authority and flexibility.

The Charter Agency model is broadly replicable across all levels of government and the Department of Management of Iowa has received many inquiries about the model.

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