Coping with unfunded mandates: when the buck gets passed to you.

• Author: Malinowski, Matthew
• Position: Fair Labor Standards Act

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Am "unfunded mandate" is a requirement that is passed down from another party--often a governing body --without full funding or support for its implementation. These can be mandates for accessibility, services, and even operating functions such as audits.

Common mandates include the Every Student Succeeds Act (the new version of No Child Left Behind, which includes federally mandated state tests); a federally mandated wage paid to workers of a particular function, known as the prevailing wage (which stipulates that contractors on contracts for public works projects receive the same type of wages and benefits as laborers in the private sector would receive); and human resource mandates (including mandatory leave granted for the Family and Medical Leave Act, the Americans with Disabilities Act, workers' compensation, sick time, hourly rates, and so on).

Beyond just the budget implications, unfunded mandates can complicate a public manager's job in other ways. Consider, for example, a recent change to the Fair Labor Standards Act (FLSA) that raised the minimum salary necessary for an employee to be classified as exempt from certain provisions (e.g., overtime). Complying with this mandate would not be as simple as just converting an employee who formerly met the threshold for exemption to a non-exempt position. Managers had to consider how this might lead to additional overtime costs, whether a resulting change in schedule could lead to the loss of a supervisor, whether there would be an adverse effect on the jurisdiction's current salary versus hourly wage schedule, or if there might be a legal issue with non-compliance at some point. In the case of this mandate, claims can go back over multiple years, extending an employer's potential exposure.

This article will examine some of the ways in which unfunded mandates can make a public manager's life difficult, and some potential solutions.

BEYOND THE LETTER OF THE LAW: WHEN MANDATES MUDDY THE WATERS

Sometimes mandates mix with local conditions to create even more potential confusion and stress. For example, perhaps a municipal government is mandated by the state to contribute a certain amount of funding to the local school district each year. And perhaps, because of the importance of education to the community or other factors, the municipal government extends more financial assistance to the school district than it is legally obligated to provide. Eventually, that additional assistance is no longer distinguished from the mandated level of assistance, leading to potential conflict if the city or school district wishes to change the level of funding. The same sort of problem can even occur within a single government, when the mandate is used to justify a certain level of spending, even if the letter of the law does not require it.

To avoid this kind of confusion and ensure that mandates are accurately considered throughout the budgeting process, jurisdictions should clearly document mandates that apply to the budget process, and their effects. A budget document or financial report can be one way of accomplishing...