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Alice Khosravy: Sandbagged department budgets

Posted: February 21, 2014 2:00 a.m.
Updated: February 21, 2014 2:00 a.m.

On Feb. 19 the state Legislative Analyst’s Office released a report that analyzes the governor’s budget plan for the Department of Corrections.

Gov. Brown is proposing a 4 percent increase, which will bring the total department budget for 2014-2015 to $14.1 billion.

The major areas of spending are trial court funding, correctional relief staffing and overtime, and additional funding for jail construction.

The recommended spending for trial courts was generally accepted as appropriate by the LAO. The report did suggest the Legislature clarify its priority and establish guidelines for spending the additional $100 million.

It also recommended that the Legislature re-examine some current policies that are causing unintended glitches in projections, cash flow and contracting.

With regards to the governor’s plan for $500 million in lease-revenue bonds for jail construction, the analyst’s office found that proper analysis had not been conducted and thus a budget increase recommendation was premature.

It specifically requested that more analysis be performed on the extent to which county resources had been leveraged and efficiently maximized.

The area of greatest discrepancy was by far the staffing and overtime pay. While the governor has proposed $207.2 million in overtime pay, the Legislative Analyst’s Office found justification for only $104 million!

Most of the divergence can be attributed, according to the Legislative Analyst’s Office, to the fact that the department has a large number of vacancies which, if filled, would dramatically reduce the need for overtime.

In closer examination, the LAO found that the average leave utilized by each departmental employee during 2011-2012 was 365 hours. To fill the void left by employee leave (and general vacancy), the department has the ability to tap resources known as relief officers, redirected/reassigned officers, and permanent intermittent correctional officers knows as PICOs.

If all three areas of replacement resourcing fail, then the department is also allowed to fill shifts by commissioning overtime pay for current employees. So why is the increase in overtime projected by the department and Brown so much larger than the LAO recommendations?

The LAO report noted that there are legitimate circumstances when overtime utilization is warranted. Those instances appear to connected to medical guarding and transportation, as they tend to fall outside of a normal shift. Upon closer examination of the current use of overtime, the LAO found that only one-third of the overtime paid in 2012-2013 fell within the sanctioned conditions.

In addition, the LAO found that the department regularly budgets to fill general vacancies with overtime vs one of the three less expensive staffing methods at its disposal. It also fails to account for the savings from the original position being empty.

This means it is budgeting for the additional expense without reducing salary expenditures for the original position that resulted in overtime being enacted. In the real world, we call this double-counting, or sandbagging.

In a corporate environment overstating your expenditures by 100 percent would probably result in termination.

To add insult to taxpayer injury, the LAO reported that there was evidence the “savings” from the vacant positions had been redirected to other, non-position-related purposes.

A perfect example cited by the LAO was from 2012, when “the department incurred $290 million in workers’ compensation costs, despite having only $210 million in its budget for such costs.

“In order to cover the $80 million shortfall, CDCR redirected unused funds from various places within its budget including funds tied to vacant positions.”

The budgeting gimmicks were so severe that the LAO is actually recommending the state Legislature require the department to “revise its budgeting methodology for relief officers and PICOs and adjust CDCR’s overtime budget to more closely reflect its need for overtime spending.”

With $103 million on the table, one would hope that Gov. Brown takes this assessment seriously and stops rewarding sandbagged department budgets.

Alice Khosravy is a Santa Clarita Valley resident. “Right Here, Right Now” runs Friday’s in The Signal and rotates among several local Republican writers.



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