US IS SAID TO OVERSTATE SPENDING ON DRUG CARE

Report Cites $1b In Discrepancies

WASHINGTON - Promising to further stoke the debate over America's
controversial war against drugs, a Rand Corporation study has found
that three federal agencies overstated their spending on drug
treatment by $1 billion, and that the reported costs of some law
enforcement efforts are no more than "educated guesses."

"I tracked down one budget guy for the Border Patrol and asked how
they figured out the drug budget and he told me, 'We made it up,"'
said Patrick J. Murphy, one of the study's authors and an assistant
professor of politics at the University of San Francisco. "He said 10
percent of their budget seemed too low, 20 percent too high, so they
settled on 15 percent."

The report, a copy of which was obtained by the Globe, was requested
by Barry R. McCaffrey, who stepped down last month as director of the
Office of National Drug Control Policy. It examined 10 agencies that
report their drug budgets to the drug policy office.

There were no allegations of misspending in the report, but the survey
said "flawed" reporting techniques made it impossible to know how
much money was actually spent on the battle against illicit drug use.
Critics of US drug policy have long argued that it gives short shrift
to treatment programs designed to help addicts overcome their cravings.

McCaffrey, who did not return telephone calls seeking comment,
insisted on completing the potentially embarrassing report because he
wanted a better accounting of the drug war, the authors said. They
noted that he had long been bothered by seemingly soft figures in
agencies' budgets, even though he continued to cite the inflated
treatment numbers in his defense of drug-control policy.

The drug policy office said in a statement that it "asked for the
Rand reports because we want the most reliable data" and that it has
"used the Rand findings, and will continue to do so, to improve the
way drug budgets are presented to the Congress and the public." Rand
is a consulting and research firm known for its work on complex subjects.

The statement said that the FBI drug methodology has been corrected
and that the Veterans Affairs and Education departments changed their
data collection so as to "substantially address Rand's findings." It
gave no specifics.

The most politically sensitive aspect of the Rand study, which for
more than a year examined the 1998 federal drug budget of $16 billion,
may be the amount spent on drug treatment.

In 1998, McCaffrey's office said US agencies spent $2.8 billion on
drug treatment. Rand said the actual number was closer to $1.8
billion, or 36 percent less than reported. That finding upset several
members of Congress.

"If a guy wants to surrender himself for drug treatment in this
country, there are not enough places to go," said Representative J.
Joseph Moakley, a Democrat from Boston. "I think it's terrible if
they are inflating figures that show there's more drug treatment than
there actually is."

Added Representative John F. Tierney, a Democrat from Salem: "Before
we ask for more drug-control money, we ought to be sure where it's
going."

The largest discrepancy originated from Veterans Affairs, which
reported spending $363 million on specialized care for drug addicts
and $710 million on related treatment for those with substance abuse
problems, according to Rand.

Veterans Affairs spokesman Jo Schuda said the department could not
comment on the report because it had not seen a copy. She said the
department reported spending $407 million on specialized care for drug
addicts in 1998, and $1.1 billion overall for medical care of addicts,
slightly higher numbers than Rand's.

Murphy, one of the study's authors, said the department included in
its accounting, for example, "heroin addicts who were seeking
treatment for a broken arm, not drug treatment."

"If people are serious about spending money on drug treatment, they
are going to have to look at the level of services they have been
providing, and it's much less than they had thought," Murphy said.

The report praised the Coast Guard, Bureau of Prisons, and Defense
Department for the accuracy of their accounting. But it said the
methodologies used for the Immigration and Naturalization Service and
Customs "are based largely on educated guesses."

The collection of data from the Substance Abuse and Mental Health
Services Administration, which administers about $2 billion in block
grants to states for drug prevention, "is a collection of arbitrary
assumptions and rules," the report said.

And the 1998 figures from the Health Care Financing Administration are
based on patient diagnoses and costs, "but the patient data are taken
from a 1983 study," the report said.

The Rand report recommends that the drug control office "define
explicitly what constitutes an antidrug activity" and that budgets
should be based on "empirical data, something more than guesses or
expert judgments."

Lynn E. Davis, a senior fellow at Rand and another of the report's
five authors, said that without better figures, the drug office is
unable to "measure performance against its goals."

She also said the lessons in the report could be applied to other
federal offices that compile figures from several agencies "to give
Congress and the American people a sense whether the right priorities
of money are being allocated, or whether there are gaps."

Herbert Kleber, medical director of the National Center on Addiction
and Substance Abuse in New York and deputy head of demand reduction in
the drug policy office from 1989 to 1991, said the Veterans Affairs
Department has "gotten a free ride" for some time on categorizing
non-drug-related medical care as drug treatment.

He called the level of funding for treatment a "bipartisan failure.
... It doesn't seem to matter whether you have Democrats or
Republicans, drug treatment doesn't get a lot of play. No one ever
lost an election being soft on drug treatment."

Many Democrats are expected to ask for a major jump in drug treatment
funding. One of them is Representative Nancy Pelosi of California.

"We are going to have much stronger oversight to make sure that money
is being spent in a cost-effective way to face the demand," Pelosi
said.