Money meant to help women, infants and children in the city of Hartford is being eaten up by high employee salaries. Hartford’s federally-funded WIC program, run through the city’s Department of Health and Human Services, served more than 11,000 of the city’s poor in 2013, according to an audit of the program. However, the agency’s high employee pay and benefits affect the number of people the program can help. If HHS paid competitively with other non-profit organizations it could service an additional 3,300 nursing or expectant mothers.
Every year the WIC program receives federal grant money through the U.S. Department of Agriculture to help low-income women who are either pregnant or nursing. The administration funds are distributed across the state to 12 agencies, seven non-profit and five municipal. On average, the municipalities acting as administrators for the WIC program had compensation 31 percent higher than the hospitals and non-profits performing the same work.
Hartford Health and Human Services had, by far, the highest salary and benefit cost for its WIC employees, at more than $90,000 per year. The department claimed in its response to the audit that “higher salaries are required in some areas to be competitive and attract qualified candidates.” However, the agency’s combined pay rate and benefit cost was 29 percent higher than any other WIC program in the state, including Stamford where the cost of living is higher.
On average, benefits for Hartford WIC employees cost more than $31,000 each.
For comparison, Yale New Haven Hospital had a higher number of participants than Hartford but its lower compensation – about $60,000 per year – resulted in lower administrative costs. If Hartford’s compensation were similar to Yale New Haven’s, the city would have funds to help an additional 3,300 people, or be able to dedicate more resources to those already participating in the program.
Last week mayor Bronin announced that there would be layoffs and union contract changes to address the “dire” financial outlook of the city, which faces a deficit of $9 million this year.
The high employee compensation for programs like WIC in Hartford negatively affects the other nonprofit organizations in the state. According to Fred V. Carstensen, director of the Connecticut Center for Economic Analysis and a University of Connecticut professor, these government entities are able to recruit away the best workers from local nonprofits, leaving them worse off. “This pattern also constantly disrupts the work of local NGOs, who lose not only their most experienced providers, but they also lose the local connections and knowledge those workers have,” Carstensen said.
Edith Pollack Karsky, executive director of the Connecticut Association for Community Action which includes some nonprofits that administer WIC, said she believes the employee salaries and benefits for government agencies are much higher than for nonprofits. “Each level of government takes a 10 percent cut,” she said. “We have much less to work with.”
Auditors pointed out the variation in costs in an audit of the Department of Public Health, which noted that administrative costs per participant varied by as much as 88 percent. The majority of the program’s administrative costs come from employee salary and benefits.
Overall, hospitals and non-profits were able to deliver more efficient services for the WIC program, whether through lower compensation – $37,000 in some cases – or fewer employees. Bristol Hospital, with a staff the same size as Hartford, was able to keep their administrative costs at $92 per participant as opposed to Hartford’s $116.
In their written analysis of the WIC program auditors expressed surprise in finding smaller agencies were generally able keep costs lower than the larger programs. They were also concerned that there is no “established market rate” for compensation of employees. They concluded there is no way to tell if a program is in need of more or less assistance or is operating efficiently.
“Certainly, logically, outsourcing to local NGOs (if well run and stable) would seem to be a better strategy. And from a fiscal perspective, such outsourcing does not create the long-term commitments for retirement and health care that bringing the providers into DSS produces,” Carstensen said.
Although the municipal providers generally performed better, Willimantic-based Access Community Action Agency had the highest administrative costs per participant. The nonprofit served one-tenth the number of people served by Hartford but with a staff more than one-third the size.