Alvarez & Marsal

Public Sector Consulting

State of Louisiana

In its seventh year in office and already having undertaken multiple cost-savings initiatives, Governor Jindal’s administration retained A&M for a government efficiency initiative covering multiple state agencies. Over a four month period, A&M worked with each of those agencies and built consensus around dozens of recommendations, implementation of which could begin immediately, and which will realize more than $500 million a year in cost savings and non-tax revenue enhancements. Agencies included in this project included Revenue, Economic Development, Risk Management, Transportation, Public Safety & Corrections, Health & Hospitals, Children and Family Services, Facilities, Group Benefits and Procurement.

Cities

Facing budget pressure, a City was looking for ways to meet citizens’ service needs and support operations, all while balancing the budget. Analysis by the City’s Finance department discovered that a significant source of unrealized revenue was being lost to business permit non-compliance. A&M was engaged to help address the revenue leakage through improved permit compliance identification techniques, coupled with application of lean initiatives to increase the permitting capacity within the current cost structure. By applying lean techniques across multiple departments and developing Supplier Relationship Management (SRM) with third-party collection agencies, the City’s collections/revenue has increased by over $20MM annually.

School Districts

A&M was instrumental in the recovery of the New Orleans public school system in the wake of Hurricane Katrina, served as interim management for the St. Louis Public Schools, formed a restructuring team for the New York City schools that reallocated $200 million a year from central administration into classrooms, and held significant advisory positions with school systems in Washington, DC and Detroit. 

Commonwealth of Puerto Rico  

A&M executed a broad scale effort to shore up the Commonwealth’s finances, identifying $1.7 billion a year in recurring savings and non-tax revenue enhancements. A&M was appointed by a U.S. territorial government in the midst of a series of downgrades by major bond rating agencies and a highly-charged political environment. After taking on interim management roles, we realized the budget deficit was actually five times larger than previously thought. Our team included professionals with experience in healthcare, tax, education and public safety who were able to set the government on a course to close a $1 billion gap over two to three years.

Health & Human Services

Facing cost overruns in its Medicaid system of nearly $1.8 billion over a five year period, a State Department of Health & Human Services retained A&M and asked us to serve in Interim CFO, Budget Director, and Program Integrity Director positions. We redesigned an outdated organizational structure, gained transparency into key expenditure drivers and built a forecasting model that would allow for accurate budgeting and restore the agency’s credibility. The last year-end close showed a $63 million surplus for the agency.

Insurance

A&M identified how a state Office of Risk Management could save $21 million a year by changing its process for procuring insurance on state-owned properties by attracting more bidders and increasing competition.

Procurement

By implementing a strategic sourcing initiative for all procurement across various agencies, A&M estimated cost savings for its client would be in excess of $60 million a year.

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