Treasurer John Kennedy has floated an interesting idea: Giving Louisiana colleges and universities first shot at state contracts for outside services.

The proposal, which the Legislature may take up when it convenes in the spring, is aimed at addressing a couple of problems.

One is the financial condition of higher education in Louisiana. It’s already dire, but a new round of cuts of as much as $300 million is on the horizon. If state contracts go to universities instead of outside organizations, that’s a tiny step toward shoring up their finances.

The other problem Kennedy hopes to address is the oversight — or lack of it — of the outside groups that are getting these contracts now. Kennedy has been battling many such organizations, which get state money but never bother to file the required paperwork to verify that they’ve done what they agreed to do.

The contracts are for a variety of tasks, such as after-school tutoring and job counseling. The work matches up nicely with the core competencies of those universities that have schools of education to train future teachers and schools of social work for those who want to make a career out of helping needy people.

It all makes sense in theory.

But in the real world, things get a little muddier. Many of the nongovernmental organizations, or NGOs, that are getting these contracts have ties to current and former government officials. That’ll make it harder for legislators to rein them in.

There are a lot of strands intertwined in this whole debate. For those who think government, whether in Baton Rouge or Washington, is out of touch with people at the local level, contracting with local organizations to provide needed services makes sense.

It’s an outgrowth of the government-is-too-big idea. Big government makes itself small by having its services performed not by government workers but by comparatively tiny organizations at the neighborhood level.

It’s also a variant of the privatization movement that has been going strong for the past three or four decades. Instead of having government employees do certain jobs, hire an outside contractor, whether a business or a community organization, to take them on. That means you need fewer government workers, and you cut back on such pesky issues as providing benefits and attractive pay levels.

Just about all of the garbage collection in the New Orleans area is done now by private companies under contract. The operation of public hospitals is increasingly being put in the hands of private operators. There even have been attempts to privatize public water operations.

The charter school movement is another example of formerly public services being turned over to other concerns. In fact, as a kind of preview of the process Kennedy is suggesting, the University of New Orleans was involved early, even before Hurricane Katrina, in the operation of some charters.

But while privatization was meant to be a reform — or at least has been touted as one — it has created new problems, as the state’s experience with NGOs shows. By contracting with a multiplicity of smaller entities, it becomes harder for the state to keep tabs on what is being done with the public’s money by each organization.

Another part of Kennedy’s proposal would have the colleges and universities operating as the oversight agency for those contracts they don’t want to take on themselves. That lets the state still use the expertise of the schools even though the contract may go to an outside NGO.

It’ll be a small step toward improving state management of the Hydra-headed monster that is spending taxpayer money now.

Dennis Persica’s email address is dpersica@theadvocate.com.