Department of Audit and Control
The enacted budget makes the following changes to the Executive Budget (analysis as of 4/2/2007):
- Adds $2.7 million to the department’s All Funds appropriation; $2.35 million of which is for personal services. The entire increase is in a new maintenance undistributed appropriation in the Local Government Services & Economic Development program. We believe this additional funding is for additional staff to audit school districts. The exact number of new staff should be clarified at Statewide Labor-Management.
The Senate recommends (analysis as of March 16, 2007):
Senate: Cuts $3.1 million in the personal services appropriation for the State Services program within the department’s State Operations budget. This program had a proposed $2.4 million (7.6%) increase in the personal service appropriation without a related increase in FTEs. The Senate claims that this reduction eliminates the funding for the 21 new FTEs in the Department which is related to a new “Business Processes Initiative”. According to the Executive Budget the new FTEs were in the Pension Investment and Public Finance (9 FTEs) and Retirement Services program (12 FTEs).
The Executive Budget recommends (analysis as of February 5, 2007):
A FY 2007-08 workforce of 2,484. This is an increase of 21 FTEs from the adjusted FTE level for FY 2006-07. The following chart identifies adjustments in current fiscal years FTEs along with the recommended differences in FY 2007-08 FTEs by program (if the FTE’s are the same the program is not listed):
Program
FY 2006-07 Adjustment
FY 2007-08 Difference
Administrative and Data Processing Services Program
44
0
Pension Investment and Public Finance Program
0
9
Local Government Services and Economic Development Program
50
0
Retirement Services Program
0
12
- The total appropriation for Personal Service is $146.9 million, a 5.9% increase from SFY 2006-07.
- An All Funds increase of $5.6 million, 2.5% from SFY 2006-07.
- An increase of $3.17 million, 16.8% in the Administration and Data Processing Services Program’s Personal Service funding. This is probably related to the 44 FTEs increase for this program during SFY 2006-07.
- A reduction of $3.2 million from the enacted SFY 2006-07 appropriation in Nonpersonal Service for the Administration and Data Processing Services Program . The Agency Budget Presentation does not show a reduction, indicating that this change is occurring in the current fiscal year. Approximately 87% of the Nonpersonal Service appropriation is allocated to Contractual Services. This change should be clarified at statewide labor management.
- An increase of $752,000, 17.5%, in the Executive Direction Program’s Personal Service funding. This increase is not related to an increase in FTEs for SFY 2007-08. This increase should be clarified at statewide labor management. .
- An increase of $210,000, 1.2%, in the Local Government Services and Economic Development Program’s Personal Service funding does not appear to support the 50 FTEs increase for this program during SFY 2006-07. This increase and the number of FTEs in this program should be verified at statewide labor management.
- A decrease of $3.2 million (11%) from the enacted SFY 2006-07 appropriation in Nonpersonal Service funding in the Payroll and Revenue Services Program. The Agency Budget Presentation does not show a reduction, indicating that this change is occurring in the current fiscal year. Approximately 70% of this appropriation is allocated to Contractual Services. This appropriation should be clarified at statewide labor management.
- The proposed increase of 9 FTEs for the Pension Investment and Public Finance Program appears to be accounted for in the $613,000, 15.6%, increase for Personal Service funding in the program’s Fiduciary Funds/State Operations - Common Retirement Fund. This should be clarified with management. According to the Assembly Ways and Means Committee $914,000 is appropriated for a staffing initiative in this program (9 FTEs) which probably includes the $613,000 increase in personal services and the $301,000 increase in non-personal services appropriation in the Fiduciary Fund. The Senate Finance Committee identifies this initiative as a new Pension Investment and Cash Management Initiative.
- An increase of $2.4 million, (7.6%) in the Personal Service funding for the State Services Program does not reflect an increase in FTEs for SFY 2007-08. This purpose for this increase in funds should be clarified at statewide labor management.
- A $4.5 million increase, 5.9%, in the Retirement Services Program (Common Retirement Fund) appropriation. This reflects a $952,000, 2.5%, increase in Personal Services funding for additional FTEs to implement new investment strategies. According to the Assembly Ways and Means Committee, $4.5 million is added for the 12 FTEs for the Business Redesign Process. Nonpersonal services increases by $3.5 million (9.2%), possibly related to the business process redesign of a legacy computer system.
- The Department of Audit and Control employed an estimated 179 employees under consultant contracts in SFY 2006-07 at an estimated cost of $13.1 million or an average cost of $73,263 per consultant contract employee. It is estimated that the number of employees employed under consultant contracts will decrease to 133 in SFY 2007-08, a decrease of 46 employees (a 26% decrease). The consultants will be paid $13.1 million, in SFY 2007-08, the same as the previous year, but due to a decrease in the number of employees the average cost will increase to $98,602 per consultant contract employee, a 35% increase over the average cost per consultant employee in SFY 2006-07. The purpose and use of these contract employees and whether they can be replaced by state employees should be clarified at statewide labor management.
Department of Audit and Control Program Details-State Operations Enacted Proposed Enacted Change in Percent Program 2006-07 Budget 2007-08 Budget 2007-08 Budget Appropriation Change All Funds $225,252,000 $230,877,000 $233,577,000 $8,325,000 3.7% General Fund $132,842,000 $133,052,000 $135,752,000 $2,910,000 2.2% Special Revenue-Other (SRO) $5,838,000 $5,838,000 $5,838,000 $0 0.0% Internal Service Fund (ISF) $3,487,000 $3,487,000 $3,487,000 $0 0.0% Fiduciary/Contingency Funds $83,085,000 $88,500,000 $88,500,000 $5,415,000 6.5% Personal Services $138,764,000 $146,939,000 $149,289,000 $10,525,000 7.6% Contractual Services $43,181,000 $43,181,000 $43,181,000 100.0% Administration & EDP $31,284,000 $31,249,000 $31,249,000 ($35,000) -0.1% Personal Service $18,830,000 $21,995,000 $21,995,000 $3,165,000 16.8% Regular $21,432,000 $21,432,000 Temporary service $563,000 $563,000 Nonpersonal Service $12,454,000 $9,254,000 $9,254,000 ($3,200,000) -25.7% Supplies and materials $609,000 $609,000 Travel $354,000 $354,000 Contractual Services $8,030,000 $8,030,000 Equipment $261,000 $261,000 Executive Direction $6,607,000 $7,359,000 $7,359,000 $752,000 11.4% Personal Service $4,294,000 $5,046,000 $5,046,000 $752,000 17.5% Regular $4,703,000 $4,703,000 Temporary service $343,000 $343,000 Nonpersonal Service $612,000 $666,000 $666,000 $54,000 8.8% Supplies and materials $74,000 $74,000 Travel $91,000 $91,000 Contractual Services $474,000 $474,000 Equipment $27,000 $27,000 Maintenance Undist. $54,000 $0 $0 ($54,000) -100.0% Internal Service $1,647,000 $1,647,000 $1,647,000 $0 0.0% Exec Direction Internal Audit (ISF) $1,647,000 $1,647,000 $1,647,000 $0 0.0% Personal Service $1,038,000 $1,038,000 $1,038,000 $0 0.0% Regular $990,000 $990,000 $990,000 100.0% Temporary Service $48,000 $48,000 $48,000 100.0% Nonpersonal Service $609,000 $609,000 $609,000 $0 0.0% Supplies and materials $24,000 $24,000 $24,000 100.0% Travel $42,000 $42,000 $42,000 100.0% Contractual Services $38,000 $38,000 $38,000 100.0% Fringe benefits $470,000 $470,000 $470,000 $0 0.0% Indirect costs $35,000 $35,000 $35,000