I.T.--big investment, bigger returns: in many cases, information technology can reduce the costs of government operations, as well as capture additional revenue.

• Author: Bourquard, Jo Anne

This may not seem the ideal time to expand government investments in technology, but states can do it without tapping the general fund and in the long run save a bundle.

Information technology (IT) makes government more productive by automating routine tasks, cutting the costs of processing mail and checks, and storing and retrieving data. And Internet applications, which permit citizens to renew licenses, apply for benefits and access information online, make government more convenient while reducing the need for staff.

One resource for state lawmakers is Paul W. Taylor's white paper "Pay IT Forward: Doing the Public's Business with Digital Technologies While Reducing Pressure on the General Fund." Taylor is chief strategy officer at the Center for Digital Government in Folsom, Calif. He outlines ways information technology can increase revenue, reduce expenditures, spur innovation and work with even greater efficiency. And he gives ideas on how to pay for the equipment and people needed to launch new systems.

Over the last four decades, information technology has brought efficiency to government agencies and allowed them to do more with fewer people, says Cathilea Robinett, the center's executive director. The strategies governments used to achieve this growth are still working well, she says, and more states could take advantage of them.

California, Hawaii, Kansas and Virginia used "revenue recovery" IT systems to collect a combined total of $1.5 billion for their treasuries in unpaid taxes. But there are billions of dollars more owed to state and local governments. Unfortunately, Taylor says, many states don't have an accurate tally of uncollected money. The software needed to help track down delinquent accounts, he argues, could, in fact, be financed by what was collected.

FIGHTING FRAUD

Sophisticated software systems can spot and stop fraud and misuse of benefits. Since Texas began an automated detection system, it has recovered almost $30 million that would have been lost through Medicaid fraud, abuse and waste. Good software can highlight inaccuracies that show where overpayments have occurred, as well as winnow out false claims and other abuse, Taylor says.

Applicants can be prequalified for public assistance through online eligibility systems, which verify identity and income, cross check with other benefit programs and examine data for any patterns of potential abuse. Automated auditing checks provider and supplier records for...