This Budget Process is Flawed

Before the end of September, cities all across Texas will be approve their budgets for the fiscal year starting October 1.  In a technical sense, the budgeted expenditures are established by the approval of an appropriation ordinance.  Each of the City’s departments or functions is authorized to incur obligations and make expenditures up to the limit of their individual appropriation.

As the year progresses, unexpected needs and expenditures are inevitable.  Texas law provides a methodology to amend  the appropriations, based on the nature of the expenditure.

Here’s the rub.  When do you request an adjustment to a line item in the appropriation?  If the budget is to be a tool for management and planning control, known “budget busters” should be disclosed and approved prior the time a commitment is made to spend the money. This borders on a common-sense approach easily understood by all parties involved.

That’s not the way we do business in Dallas.  On Wednesday, the Council will approve budget adjustments for the fiscal year ending September 30, 2006.  Yes, that’s almost a year ago.  This methodology borders on unreality.

The $6.2 million of excess expenditures in certain departments are made up by under spending in other areas.  Overall, not too bad when compared to the total budget.

However, what is curious are that some of the departments exceeded their budget authority.  These include the City Attorney, City Manager and Financial Services.  One should realize that with the City’s “Budgeting for Outcomes” methodology, these items are designated under “Staff Accountability”.  What irony! 

Especially egregious is the $771,550 (177%) additional appropriation for Independent Audit.  The original budget amount for this item was $435,975.  This is explained as “additional charges for work related to fiscal years 2004-05 and 2005-06”.  That’s a lot of extra audit work.

Even though the Finance, Audit and Accountability Committee has not been briefed on this item, it is listed as Consent Agenda Addendum Item #7.  This means that the Council will approve the item without discussion, unless a Council member requests that it be considered individually.