Addressing concerns of predictive analytics for child well-being

As state and local government leaders and community advocates explore how predictive analytics can improve child well-being outcomes, many questions and potential concerns surface.

It is critical to understand that government youth services agencies across the United States have used actuarial Risk & Need Assessment tools for many years. Many of these were developed using predictive analytics to identify “static” risk factors, such as low birth weight and mother was previously in foster care, that contribute to risk of maltreatment.

While these tools are a good starting point, there face implementation problems such as accuracy requirements, worker bias, amount of time to complete, etc.   With an operational analytic approach, analytics is continually assessing and reassessing data, making the system smarter. Ongoing assessment of risk and needs allows for both static and dynamic factors to be used when calculating risk of maltreatment.  This supports increased accuracy, real time risk scoring, limited worker bias, etc.

Below is a comparison/contrast of actuarial tools vs. and operational analytic solution such as SAS for Child Safety:


I worked in child well-being for 22 years, and have met with countless leaders and community advocates to discuss advance analytic approaches and their applicability to human services. Several concerns have been raised consistently that can be addressed with data driven and research based responses.  These include:

  • False Positives
  • Racial Bias/Disparity
  • Equation vs. Comprehensive Process
  • Current Tools are Sufficient

In my next posts, I will dive deeper into these concerns as well as findings from my peers in SAS Solutions on Demand, who are engaged in pioneering work on child welfare analytics. I will explain why leaders and child well-being advocates can feel confident in predictive analytics, and its ability to help kids and ease the burden on caseworkers.

Do you have concerns beyond these, or heard of others? Please share in the comments.

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Celebrate (?!) Tax Day

Embrace the inevitability of Tax Day! Image by Flickr user Paul Stumpr

Embrace the inevitability of Tax Day!
Image by Flickr user Paul Stumpr

Happy Tax Day, America!

Today marks our annual ritual of filing tax returns in the United States.  And complaining about taxes.  And cursing the IRS (even though it's misguided to shoot the messenger, in my opinion).

Think you know a lot about taxes?  Let's travel back in time to 1913, when the current version of the US income tax code was first enacted.  Here are four fun tax facts to ponder:

  1. The first US individual income tax return was 4 pages in length... including instructions.  Don't believe me?  Check it out!
  2. Tax brackets have ranged from a low of 0.375% (1929) to a high of 94% (1944/45).  The highest "low" bracket?  It was 23% during World War II (1944/45).  The lowest "high" bracket?  It was 7% from 1913 through 1915.  (For argument's sake, we'll omit the 0% bracket for very low income taxpayers.)
  3. Think the tax code has too many deductions?  Deductions have been part of the US tax code from Day 1.  Here are the "Original 8" deductions from the original US income tax law (summarized here for brevity):
    • Business expenses
    • Interest paid on "indebtedness"
    • "All national, state, county, school, and municipal taxes paid..."
    • Losses "incurred in trade or arising from fires, storms, or shipwreck"
    • "Debts... ascertained to be worthless and charged off within the year"
    • Depreciation
    • Dividends
    • Withholding amounts
  4. Since 1913, the number of returns filed with the IRS has grown by 4,120%!  A mere 357,598 returns were filed in 1914 (for tax year 1913).  Now, during peak filing season, the IRS processes more returns than that in a single day and receives almost 150 million individual income tax returns each year.

It's pretty clear that the present-day US tax code -- and how it is administered -- is vastly different than what Congress enacted in 1913.  (BONUS FACT! Tax Day was originally March 1st.) Times change...

The challenges tax administrators face today are daunting.  Globalization of commerce.  The rise of technology and data analytics.  A change in attitudes about civic responsibility. The good news is that there are a lot of smart people who think about how to help tax administrators solve these challenges.  Like who?

So, on this day of angst and financial stress, be sure to check out what these experts have to say about our modern Tax Day.  They have ideas that solve problems that William Henry Osborn (IRS Commissioner in 1913) could have never imagined would exist.

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State government center of analytics goes nowhere without user engagement

"I find your lack of faith in a center of analytics disturbing." Note: This is not the way to engage users. Image by Flickr user Ripster55

"I find your lack of faith in a center of analytics disturbing." Note: This is not the way to engage users.
Image by Flickr user Ripster55

In this third post about a government center of analytics, the focus is on creating an environment that enables successful implementation, and perhaps even more importantly, successful adoption of new analytic solutions. (Check out "Hey, government of [insert state], where's your center of analytics?" and "4 keys to building a state government enterprise analytics system", if you missed them.)

While analytic solutions can bring significant benefit to business decision makers, those benefits are only realized if the solutions is actually used to impact business decisions.  New analytic solutions represent change.  And change can create both anticipation and trepidation.

Questions about how analytics will impact job security, create more work, reveal information that may be less than positive, and other concerns can impact willingness to embrace new technology.  By recognizing these challenges, a center of analytics team can facilitate more successful implementations.

Engage the business users

It’s important to understand the business need and how access and insight to enterprise data can improve an organization decisions and service of citizens. But remember that an agency leader’s, and a front-line worker’s, idea of what is needed may differ.  Acknowledging these different perspectives helps ensure that the right people are involved early and often so the analytics will meet everyone’s needs. Here are some tips to engage business users.

  • Avoid developing analytics for the sake of analytics. Ensure there is measurable benefit for the user.
  • Keep it simple. Fix the critical problems first to show value and then expand to more advanced analytic capabilities.
  • Allow the user to “see and feel” how the analytic solution will work through tool demonstrations and building prototypes.
  • Build an advisory team of end users to ensure the final outcome works well for the user community.

And keep in mind that no analytic solution can replace the knowledge and expertise of the business user.  Analytics cannot make a decision about how to act on a business problem – but it can help equip the business user with the right information to make the decision.

Learn a new language

One of the best phrases I’ve heard was shared by the Oregon Youth Authority when discussing their analytics approach to support juvenile justice reform – “learn a new language”.  The point of the message was that business users of an analytic solution and developers of an analytic solution each speak different languages based on prior experiences and knowledge.  When striving to build a new solution, finding a common new language for mutual communication is critical to the adoption and integration of a new solution into business processes.

If the users of the solution find it challenging or frustrating to use, if they haven’t been involved in learning the new language of the solution, they will return back to what they’ve always known and the solution may become shelfware.  Regular, iterative engagement, training, and education can help institutionalize the new language, increasing the chances of the analytics becoming embedded in business process and changing business outcomes.

Operationalize the result

A focus on change management can help organizations understand how analytics will help make current processes and searches for information data more efficient.  Who wouldn’t want to be freed up from tedious administrative tasks to focus on more challenging and meaningful activities?

But that line of thinking can change slowly. Training and adoption efforts should be a planned and iterative activity.  Find the champions and innovators in an organization – those people who like a new opportunity.  Tap into their enthusiasm to encourage others.  Pilot the solution to work out the kinks before deploying to a more expansive user community.  These activities can help identify, mitigate and resolve inhibitors to usage of the new solution.

Learn, refine, repeat

Finally, recognize that developing and using analytic solutions is a learning process.  Once the user community can use their analysis, they begin to understand what else they might be able to do with the data.  Models are refined, new processes developed and additional data sources added.  Analytics allows us to be proactive, creative and better informed.

Watch for the final post in this series about finding the value in analytics!

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Tax returns, identity theft and hackers – Oh my!

Welcome to Tax Week, identity thieves!  Photo by Flickr user Aranami

Welcome to Tax Week, identity thieves!
Photo by Flickr user Aranami

Monday, April 18th is Tax Day, aka, National Identity Theft Day. OK, that part’s not true, but as millions of taxpayers go online to file taxes, it may as well be. The majority of taxpaying citizens file online, using services such as the popular TurboTax, H & R Block, and TaxSlayer . Even the IRS now offers its own free online tax filing service, Free File.  While online filing provides a convenient and more expedited means to submit tax documentation, it also introduces challenges akin to a massive clearance special on the Dark Web. With all that personally identifiable information (PII) flying around the web, you (almost) can’t blame criminal enterprises. They’re kids in a candy store… They just can’t help themselves.

In all seriousness, identity theft and fraud are real problems that far too many of us have faced in recent years, thanks to the “internet of everything”.  Never before have we enjoyed the ability to recon a vacation property via Google Earth, log into our bank account to check our balances or pay bills, “chat” with colleagues over instant message, purchase that miniature horse pet door, or binge watch another season of Homeland – right from that one spot on the couch you haven’t moved from…. for days.  And as convenient as all that may be, the very same technology that allows us to avoid human contact for weeks on end, also provides a very attractive vehicle for criminal activity.  The same benefits we enjoy while not cyber stalking an ex on Facebook, cyber criminals and hackers enjoy while “breaking into” financial institutions, the Department of Defense, retailers and even the IRS.  And this time of year, it’s like Cyber Christmas.

From across the world, or the basement next door, bad actors could be submitting fraudulent tax returns with the information stolen from tax preparing software websites or the IRS itself.  The data that can be obtained from tax documents is the cybercrime “holy grail.”  Far more valuable than a person’s bank account info, or a credit card stolen from a retailer’s point of sale, tax data exposes so much of one’s personal life, including family members and their PII and employment information. With these golden nuggets, a motivated bad guy can steal an identity by applying for new credit lines and causing a whole mess of liability issues for the unlucky victim to unravel.

While I have never personally endured such an ordeal I have heard from many that it’s so challenging to recover from that the punishment for actually committing a petty crime is a seemingly better outcome. Considering this, I am surprised to still see audits that cite continuing security vulnerabilities in e-filing systems, additional data breaches and even unresolved vulnerabilities in software months after detection.

While there is evidence government agencies are facing decreasing budgets, while cyber criminals continue to become more advanced, responsible parties seem to be outraged at such “lax security”. But t the fact of the matter is – without adequate priorities, funding and oversight, we cannot expect our sensitive information to protect itself.

Right now, as tens of millions of taxpayers transmit their PII over the web, criminals are planning and executing to commit fraud.  We know that tax data is highly valuable, and identity theft is debilitating for a victim, yet the ability to verify true identities is still difficult.  As the 2015 tax dollars are reconciled, it is my hope that all the “responsible parties” take notice of the risk citizens face with their tax information, and take the necessary steps (priorities, planning, funding, execution and oversight) to ensure the best possible safeguards in protecting it.


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Gamifying tax preparation is the biggest threat to the US tax system

Who would have thought this could lead to the gamification of tax evasion? The Odyssey 2 was basically the GoBots of 80's gaming systems. Photo by Flickr user moparx

Who would have thought this could lead to the gamification of tax evasion? The Odyssey 2 was basically the GoBots of 80's gaming systems. Photo by Flickr user moparx

Tax preparation software has encouraged the gamification of tax evasion, making it tantalizingly simple to bump up the value of a tax refund. This is alarming, but it's easy to see how we got here.

I love classic video games.

When I was a kid, Atari made the best games, but hard core fans may remember ColecoVision. Or maybe Odyssey 2? My brother Brendan and best friend Lee played K.C. Munchkin on an Odyssey 2 for hours on end. We had epic battles to determine who was best. The competitions got heated. We bickered. We developed (secret) strategies. We practiced after school and on weekends. All in a quest to get the highest score.

Little did we know that we were training ourselves to become tax cheats.


Yep, there is an intriguing connection between Space Invaders and tax evaders.

Fast forward from 1982 to 2016. Video games have evolved from child’s play into a $93 billion a year industry.

The influence of these games is broader than the immediate market for them. Concepts from video games have found their way into many aspects of society. This phenomenon even has a name – gamification. says that gamification is “the process of turning an activity or task into a game or something resembling a game.”

Ever put a purchase on a credit card, just to get enough points for a free flight? That’s gamification.  Wear a pedometer, track the number of steps you take, and try to beat what you did last week?  That’s gamification.

Here’s another example, just in time for Tax Week 2016. Ever use tax software to file your taxes? I have, and the elements of gamification are hard to miss. Here’s my experience.

I enter the information from my W2. The software shows me a really cool animated “refund calculator” at the top of the screen. It tells me I owe $3,054. Next, I enter my wife’s W2. The refund calculator fires up again… now I owe $4,490. “Damn! That can’t be right!”, I mumble to myself.

With furrowed brow, I turn to other documents in my pile. I grab my mortgage interest statement and enter the information. The refund calculator begins to flash and turn. But wait! This time the number is going DOWN! $4,000… $2,000… it begins to slow, as it settles on $1,334.

Next up? Property taxes. I live in New York, so this is a big number. I enter the figures, and as I press the enter button, my eyes move quickly to the refund calculator. It starts to move…. $1,000… $500… it turns GREEN!... $500… $1,000… settles on a refund of $1,083! I start to get excited.

Now to a pile of charitable donations. They are all small amounts. $50 for cancer research. $100 for Covenant House. $30 for St. Baldrick’s. Each time I enter a donation, my refund goes up by a few dollars. I like that I can make my refund amount go up, just by pressing a few buttons. It's fun... almost like a video game.

A thought crosses my mind. What happens if I add a donation for $5,000? What would THAT do for my refund? I change the cancer research donation from $50 to $5,000. The refund calculator goes wild. “Wow!”, I think to myself. “Wouldn’t it be nice to have a refund like that?!”

That's a reaction that should be concerning to tax administrators.

I could continue with my story, but by now, you see the point. Tax software firms have gamified the chore of filing taxes. That’s good, because it eases the burden of filing. But, gamification has big consequences. Everybody wants a big refund. Gamification makes it easy to engineer one for yourself.

Think gamification of tax evasion isn’t a big deal? Consider that 27 million filers use tax software to file their taxes. That makes it amazingly easy for a large segment of taxpayers to get a refund amount larger than they should.

To me, that makes tax preparation software the single biggest threat to the integrity of the US tax system. It's easy to (literally) 'game the system.'  Tax administrators and policy makers should be greatly concerned about the effect of gamification on compliance.

As fraud fighter, and as a founding member of the video game generation, I sure am concerned. You should be, too.

NOTE: The author dutifully complies with all tax laws, and the tax line item figures presented in this blog are for illustrative purposes only.

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The underground economy, aka can you spare $2 trillion?

Helpful map of tax havens, in case you want to contribute to the underground economy.

Helpful map of tax havens. You too can contribute to the underground economy!

Welcome to the dreaded week when procrastinators embrace their fates as responsible taxpayers. While you and I may be paying our taxes, to no surprise, as much as $2 trillion in the underground economy will go unreported this year in the U.S.  While that number may seem shocking, and the percentage is higher than some countries, it's still low compared to countries like Greece, Italy and Romania, where 30-48% of all business is part of the underground economy.  No wonder Greece is failing at yet another bailout.

It's one thing to let economists, even ones that study this on an ongoing basis, weigh in on the problem of the underground economy.  However, the IRS themselves admit that the "tax gap" is at least $450 billion and only 83.1% of taxes owed are reported and paid.  Or at least was, the last time they reported on it in 2012.  I can't wait to see how much it's grown by the time they update it early next year.  Stay tuned!

Okay, so it's one thing to talk about this in big numbers, another to bring it home.  What the heck is this underground economy anyway?  The answer is many different things.  It ranges from a construction company that does part of its business through official bids and payments, but also does "side projects" with cash payment for a significant discount, to individuals working a second (or first) job for cash "under the table" with nothing reported.  It's restaurants that use "zappers" to delete some of their credit card transactions, to people that rent out houses or rooms on AirBNB, HomeAway and VRBO and don't report it as income.  But it's not just little people and small businesses playing these games.  It's just that the big boys play it differently - through methods like shell companies and offshore tax havens that range between dodgy and outright criminal.  In recent weeks, that was pushed into the limelight as the "Panama Papers" were released.  Fallout from that has already taken down Iceland's Prime Minister.

All of this avoids not only the federal taxes, but state income and sales tax as well.  That doesn't just hurt some big government that might be thousands of miles away and wasting your money, but hits home very directly.  The school your children goes to becomes underfunded, cuts teachers and hurts education and the future.  The bridges around the state are in severe disrepair, crumbling, and sometimes just falling into the river.

Why is this a significant and growing issue?  Well, part of it comes back to a sense of right and wrong within a given country.  This comes back to that study I mentioned earlier that showed how badly Greece is doing.  Countries in northern Europe tend to rank the highest in this area - think Finland, Sweden and Norway.  A high sense of community and social responsibility equals a low rate of fraud, tax evasion and underground economy.  Now think for a moment.  How many people do you know that shave a little off their taxes?  If not now, in the past.  The answer is telling.  Another great example is a recent study that showed 1 in 5 employees worldwide would sell their work passwords to a third party. The U.S. fared well below average in that respect, with a full 27% willing to do so.

What can be done about this, outside of trying to teach morality in school?  Start using government and external data wisely.  Bring together sets of information that data aggregators like TransUnion have, along with information from utilities, government social programs, licenses and taxing agencies.  Then, layer strong analytics on top of it.  Start drilling down from that $2 trillion in high level economic activity that's missing and begin finding the gaps.  Belgium took this approach to help deal with fraud in their version of a sales tax, known as value added tax, or VAT, and eliminated 98% of the problem.  The HMRC, an equivalent to the IRS in the UK that handles income and sales (VAT) tax also undertook similar steps.  The problem is real, quantified and growing.  Instead of saying "Hey Brother, can you spare $2 trillion", let's go find it and collect it.

Care to join the conversation? Reply to this blog directly, or reach out on Twitter @carlhammersburg



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Tax fraud detection & good reporting can save your job

Don't get these cookies this year. Use fraud analytics. Image by Flickr user m01229

Don't get these cookies this year. Use tax fraud analytics.
Image by Flickr user m01229

Tax fraud doesn’t just steal money from taxpayers, it can strip people of their livelihoods and reputations.

When a manager in a tax agency’s property tax division stole nearly $50M in property tax refunds, the media and external auditors asked:  “How did no one notice this?”  The woman started small, then took larger and larger property tax refunds over a 15 year span.

Her supervisors were terminated because it happened on their watch. They didn’t put the right controls and reporting in place to prevent tax fraud, or even recognize it was happening.  These 20-year agency veterans didn’t know what they didn’t know – and ended up as collateral damage.  The in-house economists did notice the woman’s average property tax refund was trending upward but attributed it to increasing property values during the real estate boom.

The real problem was simply a lack of good reporting.  If they’d had more advanced reporting capabilities and tax fraud detection analytics in place they would have been able to figure out pretty fast that rising property values were not responsible. It wouldn’t have gone on for 15 years.  In fact, it probably wouldn’t have gone on for more than a few months before it was discovered.

The kicker? The tax agency didn’t find it themselves. She was caught when a Bank of America bank teller noticed something suspicious and called the FBI.

In another case, four Oregon Department of Revenue workers were punished after a woman successfully claimed a $2.1 million state tax refund. The employees failed to examine her return, not once but four times. The embarrassing oversights were blamed on an overwhelming workload.

Good reporting from a solid tax fraud analytics solution helps ease the burden on tax agencies, and would have revealed these fraudsters quickly. So, with jobs and reputations on the line, why aren’t more tax agencies adopting these technologies? To answer that, we have to look at how we got here…

Most of the internal systems that tax agencies run on are at least 20 years old. Tax agencies are now replacing them in favor of commercial off-the-shelf products which use business rules engines to do their heavy lifting.  These systems are a bit more out-of-the-box but still require several years, a very large financial investment (e.g. $30-50M), and teams of 30 or more people to implement at a typical state tax agency.  These projects consume tax agencies’ attention, financial resources and their best staff.  They’re trying to implement these new systems while, simultaneously, fighting identity theft and other types of tax fraud.  With battles raging on multiple fronts, tax agency workers often feel overwhelmed and disheartened.

A side-effect of having antiquated tax systems for so many years is that internal reporting is limited or non-existent. Tax agencies have struggled to get real-time reports for management that tell the story about what is going on in the agency.  They might have basic reports of inventories and even some executive dashboards. However, getting their data into more advanced reporting tools - including tools that do advanced analytics, statistics, and forecasting - has been a struggle for them.  Yet, it’s not for lack of wanting.

The alarming tax fraud examples above are the tip of the iceberg. The moral of those stories is that top-notch reporting and fraud detection analytics aren’t “nice to haves”. They are necessities for executives and anyone in a position of managing others, or an organization. In fact, your job might depend upon it.



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In defense of tax agencies: Refund fraud causing delays

By Pictures of Money, Flickr

By Pictures of Money, Flickr

With tax week quickly approaching, tax agencies have been issuing press releases alerting the public they’re holding tax refunds for review longer than in years past. This is a departure for tax agencies.  Tax agencies have traditionally lived and died by refund cycle time.  Refund cycle time, or getting refunds out in 7 days or less, has been a key performance indicator for them.

Things are shifting. Tax refund fraud – and specifically the use of stolen or false identities to obtain tax refunds – has risen the past 5 years.  It’s such a notorious problem that tax agencies have no choice but to communicate more openly with the public about their internal stressors (and processes) related to fraud detection.  Tax agencies are admitting they need more time to issue refunds. Taxpayers are frustrated, forcing agencies to defend against claims of ineptitude.

These claims are completely unfounded.  Rather, the delays signal tax agencies are getting BETTER at issuing refunds – not worse.

As the refund fraud problem has grown, tax agencies have been shifting their resources away from improving “core” operations (e.g. tax return bar coding and returned-mail automation) to tools that deter and detect refund fraud.  For better or worse, tax agencies have morphed into full-time, year-round criminal investigation shops. It’s almost as if the IRS has magically turned into the FBI overnight.  This new responsibility often lies within the agency’s criminal investigation division (CID), which is typically small relative to the overall size of a tax agency. The people who work in CID are trained as law enforcement officers - not computer scientists. They are trained to carry weapons – not to write database queries.  So what is a tax agency to do when more and more often the first evidence of the crime shows up in the data?

Tax agencies are arming CID teams with something other than weapons. They’re giving them easy-to-use, tax fraud detection solutions.  These solutions scan terabytes of tax data on a nightly basis and look for patterns of taxpayer behavior that correlate highly with tax refund fraud.  When the CID team comes in the next morning the fraud cases are ready for them to triage and investigate.  These tools replace what used to be a pile of chicken scratch-covered sticky notes on an investigator’s desk.

So, then why the big refund delay?  Shouldn’t it be faster to detect refund fraud?  Well, in fact, it is faster.  Way faster.

The use of fraud analytics is extraordinarily prevalent in the banking industry.  Every time you use your credit card, your bank is running real-time anomaly detection models to see if the transaction seems abnormal for you. SAS does this for large banking institutions for every single card swipe, every day, across the globe.  Within seconds the answer is returned to the point of sale.  The service level agreements with one of our banking clients require us to send that signal back in less than 4/10ths of a second.  This is done for 4.5 million transactions a day.  This gives you a sense for the amount of data that an advanced analytics fraud detection solution can handle, and just how quickly it can provide an answer.

So the fraud detection system is not the source of the lag time.  Fraud analytics done right should never add time to your refund cycle.  The lag time is a result of how many more fraud alerts are being generated.  Therefore, refund delays should give the public confidence in their tax agency.  It’s a measure of how well their taxpayer dollars are being protected by those who were hired to do just that.

The general consensus in the tax industry is that refund delay in favor of fraud detection is a change for the better and one that is here to stay.  Maybe next year we can stop calling them “refund delays” – and just call them what they are:  refunds done right.

To learn more, join the International Institute for Analytics and SAS for a webinar on April 21st. During Analytics to Fight Tax Fraud, I’ll talk about how some tax agencies are getting ahead of the curve and using advanced analytics to detect refund fraud.



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Can analytics fix a broken juvenile justice system?

Photo by Flickr user Michael Coghlan

Photo by Flickr user Michael Coghlan

“We could send a juvenile justice youth to Harvard for what we pay for incarceration, and we don't get very good outcomes.”

That was said by Gladys Carrion when she was Director of the New York State Office of Children and Family Services. (She’s now Commissioner of NYC Administration for Children's Services.)

The annual cost of juvenile confinement averages $140K, more than 3.5 times more than the typical college tuition (not Harvard’s, of course.) And, ironically, one of the things a former juvenile delinquent likely won’t have to worry about is college tuition. Youth with juvenile justice involvement are 39% less likely to graduate high school and 41% more likely to enter the adult criminal justice system.

Despite a more than 40% reduction in juvenile incarceration since 2002, the United States still imprisons more juvenile delinquents, by far, than any other country. Despite steps in the right direction, many questions must still be asked and answered by juvenile justice leaders, policy makers, judges, advocates, etc.

Because here’s the startling reality about incarcerated youth:

  • More than 60% are non-violent offenders
  • They are less likely to find and/or retain employment.
  • They are more likely to suffer from mental health issues.
  • They are more likely to re-offend as juveniles.

And here’s the reality about the system that incarcerates them:

  • More than 20% of state juvenile justice systems do not consistently measure juvenile justice recidivism rates.
  • Some systems have realized recidivism rates up to 75% within 3 years of a youth being discharged from the system.
  • Minority youth are still represented at disproportionately high rates.
  • A 2013 a study found that West Virginia youth detained pending court were three times as likely to be committed to a corrections facility as youth with identical offending histories who were not detained, mirroring similar results from studies in Arizona, Florida, Iowa, Nebraska and Ohio.

If we know this, why aren’t states taking a more research-based and data-driven approach to addressing the problem? Fortunately, at least one is.

The Oregon Youth Authority (OYA) has approached reform differently and is realizing different outcomes.

OYA-8 questions-WillJones blog

Based on what they learned, OYA created the Youth Reformation System, which is designed to inform decisions, measure outcomes, and improve accountability. Using advanced analytics, Oregon has improved the accuracy of population forecasting, identified the placement and service interventions with the highest probability of success, and evaluated program effectiveness.

Actuarial risk and needs assessment tools that are widely used in the industry provide good information, but do not accurately assess risk of recidivism and/or violence. In discussions with a recent state Juvenile Justice leader, she stated that “we could get better accuracy from flipping a coin”. Another state leader noted that 90% of youth were assessed as being high risk. However, 75% of those kids were either charged as minors (status offenders) or with misdemeanors and, generally, those kids are not a high-risk to re-offend!

Oregon’s approach allows for the data, combined with worker discretion, to help make the best informed decision possible for a youth in the juvenile justice system. I encourage you to view a recent webinar featuring Oregon’s approach to reforming juvenile justice.

I look forward to more discussions with state and local juvenile justice agencies as they use analytics to put young people on a path towards positive outcomes, even Harvard!

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4 keys to building a state government enterprise analytics system

Enterprise analytics success has 4 key requirements

Photo credit: Got Credit

In my previous blog post I talked about how the rapid and varied growth of data calls for states to consider an enterprise analytics program, in the form of a Center of Analytics. This entry, first posted as an article on Government Executive's Route Fifty, gives the most important success factors for an enterprise analytics program.

Enterprise can mean a lot of things – full scope across all government agencies for a state or county, one agency with several divisions that need to share data more effectively, or a group of similar business organizations with shared interest in data and outcomes, like criminal justice or health services.

During my time in North Carolina state government, I had the good fortune to work with a dedicated team of resources to establish the Government Data Analytics Center. The GDAC grew from a focus in one business area to an enterprise analytics program supporting a variety of business needs across the state. While the challenges were significant, the GDAC learned to build collaboration and engagement with agencies across NC government through strong leadership, governance and best practices.

In speaking with other government organizations who are implementing enterprise data management and analytics, there are several key components that are helping these efforts achieve success.

Active and Engaged Leadership

Government organizations typically follow a philosophy of data ownership and protectionism rather than one of data stewardship. Creating a culture of data sharing and analytics requires the active and visionary support of business and IT leaders.

Leadership can evangelize the value of having access to quality, consistent and reliable data to help answer government’s most complex business problems, building collaborative relationships across agency boundaries. Through strong leaders, a Center of Analytics can find ways to share data for business needs while addressing the essential need for data privacy and adherence to regulation.

A strong leader will also help seeking funding, set priorities and ensure that business units are actively engaged in the process of creating their analytic solutions.

Strong Governance Approach

Data sharing is generally the first objection raised when discussing the concept of enterprise analytics. Government organizations often recognize the benefits of comprehensive, data-driven analytics, only to respond with “that sounds great, but we cannot share our data.” At times the reasons for not being able to share data are vague references to regulations or law, based on opinion that has become ingrained as fact, or based on the idea that “it has never been done.”

A strong approach to data governance can facilitate better understanding of the rules, regulations and law that impact data sharing. Governance establishes data sharing and usage agreements, defines requirements for security access and user authorization controls and may determine audit and reporting requirements.

In addition, governance ensures that data used in the enterprise program is standardized, clearly defined and understand, quality, consistent and reliable.

Start Small, Show Value

Enterprise programs often get a bad rap – taking so long to develop and produce results that the business needs may have changed before the program is implemented. So when considering the idea of starting an enterprise analytics program, avoid the “big bang” approach.

Help organizations see value before investing tons of time and resources. Start with a smaller business focus, perhaps building from a pilot into a larger, full-scale implementation. Understand the burning issue – is it a legislative issue, federal compliance mandate, governor’s strategic priority, or a key social issue? Opt for areas of analysis that can produce quick wins and demonstrate measureable outcomes - a quick win for the business can mean faster buy-in and adoption and a collaborative partnership for future opportunities.

With each analytic solution, envision how the data and analytic functionality might support the next business problem. Develop with the enterprise in mind and a focus on re-use, repeat and grow.

Build Strong Teams

And perhaps most importantly, focus on the people involved in your enterprise analytics program. Build key skill sets and resources that understand the power of data management and analytics. Engage strong business users who can set key goals and objectives, provide necessary business requirements and help design the analytic solution. Develop strong analysis and technical resources who ensure that the solution provides quality data and targeted analysis to support business needs. Where skill sets are limited, seek external organizations who can partner with government to provide the necessary capabilities.

Successful enterprise analytics demands strong leadership and governance, a talented workforce and realistic near and long-term goals. The process breaks down established data barriers and fosters a data culture, opening up new frontiers of evidence-based services and governing.

Do you have other ideas for getting a project like this off the ground? Please share them, and stay tuned for my next post in this series, which will give tips on how to support implementation and adoption of analytics.

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