| Last Updated: | 3/3/2010 |
| Budget Issue: | Proposed funding of $500,000 ($250,000 General Fund) related to cash management, financial reporting, and actuarial advisory support. |
| Program: | State Controller |
| Finding or Recommendation: | We recommend denying this request. |
The State Controller’s Office (SCO) is responsible for reporting the financial condition of the state and local governments.
The Controller requests $500,000 ($250,000 General Fund) in additional funding related to its cash management, financial reporting, and actuarial advisory support responsibilities. (There are no new positions requested, but instead increased funding would support existing authorized positions.)
The Controller is responsible for the daily reconciliation of the State’s General Fund. During the past several years, SCO has reported substantial increases in overtime for its cash management staff due to the recent financial crisis and economic downturn. The SCO requests $214,158 ($107,079 General Fund) to bolster its cash management efforts.
We find that SCO staff has managed to handle recent cash crises as well as can be expected. The increased cash management workload for the office is largely cyclical in nature. There always will be certain times during a cyclical economic downturn when additional hours may be needed. Moreover, some elements of this request, such as exhaustive analysis of legislation, are unnecessary or duplicative of existing efforts (for example, the Department of Finance performs many of the same exercises already).
The SCO should be able to use existing staff and available resources to manage its cash management responsibilities throughout the year. Especially in light of the state’s fiscal condition, we recommend denying this request for additional resources.
The SCO gathers and compiles certain financial data for both state and local entities. The SCO requests $95,000 ($47,500 General Fund) to bolster these efforts and increase timeliness of reports. Given the state’s fiscal condition, we recommend denying the request at this time.
Chapter 371, Statutes of 2008 (SB 1123, Wiggins), creates the California Actuarial Advisory Panel to provide advice to public agencies regarding post-employment benefits, such as pensions and retiree health benefits. It also charges SCO with providing support to the panel. The SCO requests $190,842 ($95,421 General Fund) for the support of this panel.
Given the state’s fiscal condition, we recommend that the Legislature direct SCO to find the minimum resources necessary within its existing budgetary authority to support this panel. In the future, when state finances improve, the Legislature may wish to consider providing additional resources for this function.