FY2010 Budget Analysis - Legislative Post Audit

FY2010 Budget Analysis - Legislative Post Audit

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LEGISLATIVE POST AUDITActual Agency Est. Gov. Rec. Agency Req. Gov. Rec.Expenditure FY 2008 FY 2009 FY 2009 FY 2010 FY 2010Operating Expenditures: State General Fund $ 2,483,204 $ 2,808,623 $ 2,808,623 $ 2,813,490 $ 2,750,359 Other Funds 0 0 0 0 0 TOTAL $ 2,483,204 $ 2,808,623 $ 2,808,623 $ 2,813,490 $ 2,750,359Percentage Change: Operating Expenditures: State General Fund 2.6% 10.9% 10.9% 0.2% (2.1)% All Funds 2.6 10.9 10.9 0.2 (2.1)FTE Positions 27.0 27.0 27.0 27.0 27.0Non-FTE Perm. Uncl. Pos. 0.0 0.0 0.0 0.0 0.0 TOTAL 27.0 27.0 27.0 27.0 27.0AGENCY OVERVIEWThe Legislative Division of Post Audit is the audit arm of the Kansas Legislature. TheDivision is responsible for the financial-compliance and performance audits of state agencies andprograms. The Division’s audit work is conducted in accordance with generally acceptedgovernmental auditing standards as set forth by the U.S. General Accounting Office. The agencyoperates under the supervision of the ten member Legislative Post Audit Committee.MAJOR ISSUES FROM PRIOR YEARSIn previous years, concerns have been raised in both the House Budget Committee andSenate Subcommittee that Legislative agencies be fully staffed. Legislative Division of Post Audithas fully funded their existing positions in this budget request, and has budgeted funding for somecontract audit work if an outside audit is directed by the Legislature.In 2003, the Governor implemented a new placeholder budget ...

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Legislative Post Audit
1431
L
EGISLATIVE
P
OST
A
UDIT
Actual
Agency Est.
Gov. Rec.
Agency Req.
Gov. Rec.
Expenditure
FY 2008
FY 2009
FY 2009
FY 2010
FY 2010
Operating Expenditures:
State General Fund
$
2,483,204 $
2,808,623 $
2,808,623 $
2,813,490 $
2,750,359
Other Funds
0
0
0
0
0
TOTAL
$
2,483,204 $
2,808,623 $
2,808,623 $
2,813,490 $
2,750,359
Percentage Change:
Operating Expenditures:
State General Fund
2.6%
10.9%
10.9%
0.2%
(2.1)%
All Funds
2.6
10.9
10.9
0.2
(2.1)
FTE Positions
27.0
27.0
27.0
27.0
27.0
Non-FTE Perm. Uncl. Pos.
0.0
0.0
0.0
0.0
0.0
TOTAL
27.0
27.0
27.0
27.0
27.0
A
GENCY
O
VERVIEW
The Legislative Division of Post Audit is the audit arm of the Kansas Legislature. The
Division is responsible for the financial-compliance and performance audits of state agencies and
programs.
The Division’s audit work is conducted in accordance with generally accepted
governmental auditing standards as set forth by the U.S. General Accounting Office. The agency
operates under the supervision of the ten member Legislative Post Audit Committee.
MAJOR ISSUES FROM PRIOR YEARS
In previous years, concerns have been raised in both the House Budget Committee and
Senate Subcommittee that Legislative agencies be fully staffed. Legislative Division of Post Audit
has fully funded their existing positions in this budget request, and has budgeted funding for some
contract audit work if an outside audit is directed by the Legislature.
In 2003, the Governor implemented a new placeholder budget process for all Legislative and
Judicial branch agencies. The FY 2004 budget recommended by the Governor was the exact
amount approved for FY 2003 by the 2002 Legislature. This process left all the budget decisions
to be made by the Legislature during the session.
In 2004, the Governor modified the placeholder budget process that was used in 2003. Both
the Legislative Branch and the Judicial Branch budgets were recommended by the Governor as the
agency requested, without proposed changes. While required under 2003 SB 21 (law) to submit the
judicial budget without change, it was a policy decision to use the same process for the Legislative
Branch.
In the 2005 session, the legislature passed 2005 HB 2247, the school finance bill, that
created a new role for the Legislative Division of Post Audit with regard to oversight of school district
costs and expenditures. The bill requires the Division to make a professional cost study analysis to
determine the costs of delivering the kindergarten and grades one through 12 curriculum, related
services, and other programs that are mandated by state statute in accredited schools. This bill also
established the "School District Audit Team" within the Legislative Division of Post Audit to
accomplish the new role and provided an additional five positions.
Legislative Post Audit
1432
BUDGET SUMMARY AND KEY POINTS
FY 2009 – Current Year. Legislative Post Audit requests a revised FY 2009 budget
totaling $2.8 million, all from the State General Fund, an increase of $108,315, or 4.0 percent, above
the amount approved by the 2008 Legislature.
The increase is the result of an unlimited
reappropriation of $174,789 which carried forward from FY 2008. The agency anticipates spending
$108,315 of this reappropriation and lapsing $57,500 or 2.0 percent of available funding for FY 2009.
The remaining $8,974 will be carried forward to FY 2010 to reduce the amount of State General
Funds requested for FY 2010.
The Governor concurs with the agency estimate.
FY 2010 – Budget Year. Legislative Post Audit requests an FY 2010 budget of $2.8
million, all from the State General Fund an increase of $4,867, or 0.2 percent, above the revised
current year estimate. The request would fund 27.0 FTE positions. The increase is reflected in
salaries and wages ($22,1640) offset by a reduction in Financial Audit Contracts ($6,500) and other
operating expenses ($10,800).
The Governor concurs with the agency request and reduces $63,131, all from the State
General Fund, for the implementation of statewide moratoriums. The two moratoriums include a
reduction of $13,452, all from the State General Fund, from a nine-month moratorium on state
contributions to the KPERS Death and Disability Fund, and $49,679, all from the State General
Fund, for a seven payroll period moratorium on state contributions to the state employee health
insurance program.
Legislative Post Audit
1433
B
UDGET
T
RENDS
OPERATING EXPENDITURES
FY 2001–FY 2010
Fiscal Year
SGF
% Change
All Funds
% Change
FTE
2001
$
1,649,667
6.0%
$
1,649,667
6.0%
21.0
2002
1,710,969
3.7
1,710,969
3.7
21.0
2003
1,635,705
(4.4)
1,635,705
(4.4)
21.0
2004
1,694,380
3.6
1,694,380
3.6
21.0
2005
1,927,713
13.8
1,927,713
13.8
21.0
2006
2,405,851
24.8
2,405,851
24.8
26.0
2007
2,419,159
0.6
2,419,159
0.6
26.0
2008
2,483,204
2.6
2,483,204
2.6
27.0
2009 Gov. Rec.
2,808,623
10.9
2,808,623
10.9
27.0
2010 Gov. Rec.
2,750,359
(2.0)
2,750,359
(2.0)
27.0
Ten-Year Change
Dollars/Percent
$
1,100,692
66.7%
$
1,100,692
66.7%
6.0
OPERATING EXPENDITURES
FY 2001–FY 2010
L
e
g
is
la
t
iv
e
P
o
s
t
A
u
d
i
t
1
4
3
4
Summary of Operating Budget FY 2008-FY 2010
Agency Request
Governor’s Recommendation
Dollar
Percent
Dollar
Percent
Actual
Estimate
Request
Change
Change
Rec.
Rec.
Change
Change
FY 2008
FY 2009
FY 2010
from FY 09
from FY 09
FY 2009
FY 2010
from FY 09
from FY 09
By Program:
Legislative Post Audit
$
2,483,204 $
2,808,623 $
2,813,490 $
4,867
0.2%
$
2,808,623 $
2,750,359 $
(58,264)
(2.1)%
By Major Object of Expenditure:
Salaries and Wages
$
2,018,402 $
2,260,342 $
2,282,509 $
22,167
1.0%
$
2,260,342 $
2,219,378 $
(40,964)
(1.8)%
Contractual Services
449,088
522,181
508,381
(13,800)
(2.6)
522,181
508,381
(13,800)
(2.6)
Commodities
13,674
16,600
16,600
0
0.0
16,600
16,600
0
0.0
Capital Outlay
2,040
9,500
6,000
(3,500)
(36.8)
9,500
6,000
(3,500)
(36.8)
Subtotal - State Operations $
2,483,204 $
2,808,623 $
2,813,490 $
4,867
0.2%
$
2,808,623 $
2,750,359 $
(58,264)
(2.1)%
Aid to Local Units
0
0
0
0
0.0
0
0
0
0.0
Other Assistance
0
0
0
0
0.0
0
0
0
0.0
TOTAL
$
2,483,204 $
2,808,623 $
2,813,490 $
4,867
0.2%
$
2,808,623 $
2,750,359 $
(58,264)
(2.1)%
Financing:
State General Fund
$
2,483,204 $
2,808,623 $
2,813,490 $
4,867
0.2%
$
2,808,623 $
2,750,359 $
(58,264)
(2.1)%
All Other Funds
0
0
0
0
0.0
0
0
0
0.0
TOTAL
$
2,483,204 $
2,808,623 $
2,813,490 $
4,867
0.2%
$
2,808,623 $
2,750,359 $
(58,264)
(2.1)%
Legislative Post Audit
1435
B
UDGET
O
VERVIEW
A. FY 2009 – Current Year
CHANGE FROM APPROVED BUDGET
Approved
Agency
Agency
Governor
Governor
2008
Estimate
Change from
Rec.
Change from
Legislature
FY 2009
Approved
FY 2009
Approved
State General Fund
$
2,700,308 $
2,808,623 $
108,315 $
2,808,623 $
108,315
All Other Funds
0
0
0
0
0
TOTAL
$
2,700,308 $
2,808,623 $
108,315 $
2,808,623 $
108,315
FTE Positions
27.0
27.0
0.0
27.0
0.0
Legislative Post Audit requests a revised FY 2009 budget totaling $2.8 million, all from the
State General Fund, an increase of $108,315, or 4.0 percent, above the amount approved by the
2008 Legislature. The increase is the result of an unlimited reappropriation of $174,789 which
carried forward from FY 2008. The agency anticipates spending $108,315 of this reappropriation
and lapsing $57,500 or 2.0 percent of available funding for FY 2009. The remaining $8,974 will be
carried forward to FY 2010 to reduce the amount of State General Funds requested for FY 2010.
Most of the increased expenditure estimate is for salaries and wages ($90,678), and reflects the
most recent calculation of expenditures. Increases are also estimated in contractual services
($15,137) and capital outlay ($2,500).
The Governor concurs with the agency request.
Kansas Savings Incentive Program (KSIP) Expenditures
Legislative Post Audit does not participate in the Kansas Savings Incentive Program.
Legislative Post Audit
1436
B. FY 2010 – Budget Year
FY 2010 OPERATING BUDGET SUMMARY
Agency
Governor’s
Request
Recommendation
Difference
Total Request/Recommendation $
2,813,490 $
2,750,359 $
(63,131)
Change from FY 2009:
Dollar Change:
State General Fund
$
4,867 $
58,264
All Other Funds
0
0
TOTAL
$
4,867 $
58,264
Percent Change:
State General Fund
0.2%
(2.1)%
All Other Funds
0.0
0.0
TOTAL
0.2%
(2.1)%
Change in FTE Positions
0.0
0.0
Legislative Post Audit requests an FY 2010 budget of $2.8 million, all from the State
General Fund an increase of $4,867, or 0.2 percent, above the revised current year estimate. The
request would fund 27.0 FTE positions. The increase is reflected in salaries and wages ($22,164)
offset by a reduction in Financial Audit Contracts ($6,500) and other operating expenses ($10,800).
The Governor concurs with the agency request and reduces $63,131, all from the State
General Fund, for the implementation of statewide moratoriums. The two moratoriums include a
reduction of $13,452, all from the State General Fund, from a nine-month moratorium on state
contributions to the KPERS Death and Disability Fund, and $49,679, all from the State General
Fund, for a seven payroll period moratorium on state contributions to the state employee health
insurance program.
FY 2010 ENHANCEMENTS
Agency Request
Governor’s Recommendation
Enhancement
SGF
All Funds
FTE
SGF
All Funds
FTE
The agency did not submit any enhancements in FY 2010.
FY 2010 REDUCED RESOURCES
Agency Recommendation
Governor’s Recommendation
Item
SGF
All Funds
FTE
SGF
All Funds
FTE
The agency did not submit a reduced resources budget in FY 2010.
Legislative Post Audit
1437
Governor’s Recommended Salary and Wage Adjustments
State Employee Pay Increases. The Governor's FY 2010 recommendation includes a 1.0 percent base salary
adjustment for all employees for the entire fiscal year. W hile there is a base salary increase recommended, the
Governor’s recommendation is for the pay increase to be self funded from within existing resources. It is estimated
that the 1.0 percent increase would total $22.8 million, including $10.7 million from the State General Fund. For this
agency, the recommended self-funded pay increase is estimated to be $20,869, all from the State General Fund.
Classified Employee Pay Plan. During the 2007 interim, the State Employee Compensation Oversight Commission
was charged with the development of a new pay plan for classified employees for the Governor, Chief Justice of the
Supreme Court and 2008 Legislature to consider. The Commission endorsed the recommendation of the Hay Group
that five separate pay plans be created for state employees in the classified service, with different opportunities for
pay increases to acknowledge the different types of work performed. The five pay plans recommended include: a
management pay plan for those involved in managerial functions (increases based on performance); a professional
individual contributor for employees requiring knowledge of principles and theories of a professional discipline that
is normally obtained through a college curriculum (increases within broad bands to reflect different levels of work and
performance against established standards); a protective service pay plan for uniformed officers and all other
positions that meet the definition of police or law enforcement officer (increases based on achievement of milestone
and certification events as well as time on the job and performance); a basic vocational pay plan for employees that
perform routine, structured, work where performance can be measured on a pass/fail basis (increases based on the
traditional step movement approach, based on time on the job); and a general classified pay plan for those
employees who do not fall within the parameters of the other four plans (the pay ranges will have steps below the
market rate and an open range above the market rate).
The time frame to fully implement the recommended plan is five years.
Under the Governor’s
recommendations, the classified employees will be divided into three groups to first address those with the greatest
salary disparity to the market rate. In the first year, FY 2009, the first phase included the basic vocational classes,
as well as the isolated worst cases costing $16.0 million, including $8.5 million from the State General Fund. The
2008 Legislature appropriated $8.5 million from the State General Fund for FY 2010 through FY 2013 to the State
Finance Council. The Governor does not recommend changing the funding and leaves the money appropriated to
the State Finance Council. Because funding was appropriated to the State Finance Council, no funding is included
in the individual agency budgets.
Moratorium on Employer Contributions to the State Employee Health Plan. The Governor is recommending a
partial year moratorium for the State’s contribution to the state employee health plan. The moratorium will occur
in the first seven payroll periods of FY 2010, with balances in the Health Insurance Premium Reserve Fund sufficient
to maintain state employee health benefits. The state health plan moratorium is anticipated to save $66.1 million,
including $32.0 million from the State General Fund. In addition, the Governor recommends sweeping savings from
special revenue funds (excluding federal funds) that would have been spent for this purpose totaling $23.7 million.
For this agency, the recommended savings is estimated to be $49,679, all from the State General Fund.
Moratorium on KPERS Death and Disability The Governor recommends a partial year moratorium on the employer
contribution to KPERS death and disability. The moratorium will last the first nine months of FY 2010 and generate
an estimated $37.7 million, including $30.4 million from the State General Fund, in savings. In addition, the Governor
recommends sweeping savings from special revenue funds (excluding federal funds) that would have been spent for
this purpose totaling $5.1 million. For this agency, the recommended savings is estimated to be $13,452, all from
the State General Fund.
Longevity Bonus Payments. The Governor recommends the continuation of the current “temporary” longevity bonus
payment program. The recommendation provides for a bonus of $50 per year of service, with a 10-year minimum
($500) and a 25-year maximum ($1,250). The current statutory provisions of the longevity bonus payment are $40
per year of service, with a 10-year minimum ($400), and a 25-year maximum ($1,000). The estimated cost for the
recommended FY 2009 payments is $12.7 million, including $6.2 million from the State General Fund. For this
agency, the Governor recommends longevity funding totaling $11,951, all from the State General Fund.
Kansas Public Employees Retirement System (KPERS) Rate Adjustments. A total of $7.1 million, including $3.4
million from the State General Fund, is included in the Governor’s FY 2009 recommendations for KPERS adjustments.
The FY 2009 rate for KPERS regular and school members will increase by 0.6 percent, from 6.97 percent to 7.57
percent, when compared to FY 2008. This increase is attributable to the annual statutory increase for financing the
unfunded liability of the KPERS fund.
Legislative Post Audit
1438
Funding Sources
Agency Req.
Gov. Rec.
Percent of
Percent of
Funding Source
Total FY 2010
Total FY 2010
State General Fund
100.0%
100.0%
Legislative Post Audit
1439
P
ROGRAM
D
ETAIL
Gov. Rec.
Percent of
PROGRAM
FY 2010
Total
Salaries and Wages
$
2,219,378
80.7%
Contractual Services
508,381
18.5
Commodities
16,600
0.6
Capital Outlay
6,000
0.2
TOTAL
$
2,750,359
100.0%