Many programs should be terminated on the merits -- but that's not where to find waste or inefficiency, which don't have budget line items. Neither do most of the places where you'll find it in government. There is no line item in state budgets for electricity for Coke machines (or, in most cases, for the electric bill, period), or intra-office mail delivery, or purchase of road salt. It's an old adage: What gets measured gets done. And most budgets don't identify, track, and measure wasteful practices. That's why the waste occurs.

What should be cut is what's not in the budget. Another rule of thumb is that most of these savings will not be found in particular agencies or administrative units. While some large standard departments like health, human services, corrections, and transportation are reliable producers of inefficiencies, the real savings come in government-wide functions that affect all departments and, as a result, tend to be budgeted by none. Personnel and procurement functions are always good places to look for improvements to save money (remember Rule No.1: improve performance, savings will follow); utility costs like energy and phones also tend to be neither well-monitored nor cheap. These are not what most people think of when they think of government waste and inefficiencies -- but they are where most of the money disappears, just like in most organizations and probably your own household budget.

How do you ferret out all these hidden expense items? I'd like to say that it requires a team of well-versed experts like me, but, really, the first place to go is to public employees themselves -- the very people the public likes to imagine as lazy, stupid sinkholes for tax dollars. In fact, most public employees are conscientious and can tell you exactly how to make government work better and more efficiently. Unfortunately, in the current climate of disdain, they're rarely asked.

When we did ask, we learned about the salt spreaders. (I don't know anything about road salt otherwise.) We learned from state employees in West Virginia and city employees in Chicago the variety of pipes and lighting fixtures ordered and stored, and how greater standardization could lead to shorter lead times, lower storage costs, and more efficient replacement operations. One state employee in Colorado's transportation department had a great idea for using leftover asphalt from road-paving to stop weeds growing under highway dividers -- making use of something that was otherwise wasted to reduce weed-whacking costs.

Of course, probably not unlike your workplace, not everyone's in it to win it. All efforts at meaningful efficiency improvement require a top-down commitment. Some governors, like Chet Culver in Iowa, took the time to sit down with us and go through every single recommendation for savings and discuss how to make it work on implementation. Unfortunately, such a commitment from the CEO is needed. My favorite example was the department secretary who insisted to me that her agency couldn't possibly hit the savings targets we set, then bragged to me a year later about how she exceeded them. The kicker: When I complimented her and said that that ought to make it easy to hit the following year's targets, she protested, "Oh, no, we can't possibly do that!"