FOCUS Opinion
Professionalizing the state budget process
By Gary A. Jones, CPA, CFE
Gary A. Jones, CPA, CFE, is the Oklahoma State Auditor. He has been a on the Governmental the OSCPA Southwestern Chapter.
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n Oklahoma, we have three budget offices which is two too many. Every year, the governor presents a budget at the State of the
State Address that’s been prepared by the Office of Management & Enterprise Services (OMES) with input from every appropriated agency. Te governor’s budget book is prepared and distributed following the annual address. In large part, the governor’s budget is dead on
arrival. Why? It turns out the House and Senate each have a budget office too. We’re doing things in triplicate and, when you have three different budgets, two are probably wrong. In recent years and before the governor’s
budget is released, agencies answer a questionnaire from both House and Senate analysts and each agency is then brought before two subcommittees, one from each chamber, to grade its own work, make its case for increased funding and explain how it will absorb yet another budget cut. Not much happens on the budget from the
first Monday in February until late May. Tat’s when a small group of decision-makers go behind closed doors and create a budget. Hidden in the details is a relatively new accounting trick in which the legislature raids an agency’s revolving fund and re-appropriates money it already has along with permission to spend it. Tis trick effectively masks the actual size of the agency’s budget cut. In addition to the time and effort agencies
spend responding to the legislative analysts, OMES requires performance measures that it doesn’t fully comprehend and in which an agency basically grades its own work. In the years since, the legislature invested millions in this process, but nothing has been produced to improve efficiencies in state government. It’s past time to professionalize the state
budget process. Oklahoma needs to establish an Office of Accounting and Budgets (OAB) staffed with professional accountants and not political
16 CPAFOCUS May/June 2018
hires. Complimenting the OAB would be the Joint Committee on Accountability (JCA). Appropriations should be based on an
agency’s needs and not its wants. Te process of starting where the last fiscal year ended should be discontinued. Objective, impartial, professional accountants would conduct actual performance audits of agency programs and practices to identify what works and what wastes. In this manner, legislators could begin the budget process by first funding what an agency needs to fulfill its mission. A couple of years ago, faced with the pending declaration of a revenue failure, the governor told agencies to cut 10 percent of non-mission critical spending. Te call should have been to cut 100 percent of non-mission critical spending. If it isn’t mission critical, we don’t need to be doing it. Te OAB would review an agency’s actual
revenues and expenditures compared to its budget to identify anomalies that indicate an agency’s expenditures are outpacing its revenues. Tis type of accounting activity would have identified the actual shortfall created at the State Department of Health years before it became a crisis. Te practice of simply accepting its annual budget request without even a minimal review of the agency’s actual revenues and expenditures permitted a process of “borrows” to occur and the misuse of federal funds. It turns out common sense isn’t really all that common. Log jam after stalemate after log jam at the legislature has become as predictable as it is dysfunctional. Our state has engaged in crisis budgeting for so long it’s lost sight of the value of short-term and long-term planning. Professionalizing the state budget process will
provide clarity from which lawmakers can make good decisions for next year, plan for the next five years and set 10-, 15- and 20-year goals to put the state on a path to prosperity and not just getting by.
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