Testimony of Jenny Reed, Policy Analyst, DC Fiscal Policy Institute, For the Public Oversight Hearing on The FY 2011 Budget for the Office of Budget and Planning, of the Office of the Chief Financial Officer, Committee of the Whole

Chairman Gray and members of the Committee, thank you for the opportunity to testify today.  My name is Jenny Reed, and I am a policy analyst at the DC Fiscal Policy Institute.  DCFPI engages in research and public education on the fiscal and economic health of the District of Columbia, with a particular emphasis on policies that affect low- and moderate-income residents.

I appreciate the opportunity to testify today on the Office of Budget and Planning. As you know, the DC Fiscal Policy Institute cares deeply about budget transparency and works in an ongoing way to make recommendations for improving the transparency of the city’s budget documents.  We believe that having access to clear, timely, and accurate budget information is critical to promoting a healthy discussion of budget priorities, enabling the DC Council to perform its agency oversight functions, and to empowering residents to hold public officials accountable for the delivery of public services.

We are encouraged that that the FY 2011 budget reflects solid incremental progress in this regard.

  • Online budget information is now organized by appropriations title and agency, with each agency’s budget chapter, operating appendix, and capital budget in one place.   This makes it much easier to identify the relevant budget information for any particular agency.
  • The budget web site includes crosswalks that help users identify budget shifts that were made between FY 2010 and Y2011 under the new division based budgeting structure.
  • The CFO has introduced a new budget tool ‘ CFO Info ‘ that has great potential for allowing users to drill down to a particular part of the budget that is of interest.  We say that CFO info has great potential because we are eager for it to have more functionality. For example, CFO Info allows a view of the operating budget for each agency by funding source from FY 2008 though FY 2011.  It would be even better if it could provide this information at the division and activity level as well.
  • The CFO Info site indicates that they plan to add more information soon, including budgets by grant and agency fund and also on capital projects.  We hope that OBP also will add more information on special purpose funds and federal funds, with spending detail at the division and activity level.  These two funding sources support critical programs and services in the District ‘ such as homeless services and HIV/AIDS treatment to name a few ‘ and are long overdue for transparent budget information.  Table 1 at the end of my testimony provides an example of how information on these two funding sources could be organized and displayed.

FY 2011 marked the beginning of a transition to division-based budgeting, a joint effort between OBP and the office of the City Administrator. We applaud this effort, because we believe it has great potential to create a new set of budget line items that better tie budget information to the agency divisions that administer them.  The FY 2011 budget is a good first step, but we hope OBP and OCA will work over the next year to implement this reform for all agencies.  We think this reform will be most useful if it includes changes at the activity level to include more detail.  As DCFPI has noted in the past, line items in the DC budget are often too large and encompass multiple programs and services, making it difficult or impossible to track funding for specific programs.

There are a few important other reforms that I would like to address.  First, it is important to help the public understand and track changes to the budget from its approval in the prior year. Many people may think that the budget approved by the Council in the spring in the budget an agency spends for the upcoming fiscal year.  The budget passed by the Council is after all, the result of months of hearings, advocacy and debate over what the Districts priorities should be.  However, changes are often made to the budget by the Mayor’s office over the course of the year. And many of these changes can be significant.

The Office of Budget and Planning should take the following steps to help the public understand what changes were made to the budget in the course of a year:

  • Use revised budget figures. The DC budget contains not only the proposed budget figure for upcoming fiscal year but also the approved budget figure from the prior year’s budget.  These figures can be used to make year-to-year comparisons of funding changes for critical programs and services.  However, many times these figures are not useful because the budget has been changed over the course of the year.  DCFPI recommends that OBP use revised budget figures as of a certain date’for example as of February 1st‘that would provide a more accurate snapshot of the budget for the agency.  It is worth noting that the FY 2011 budget includes a “re-allocated budget” for DC Public Schools that does precisely what we are recommending.
  • Improve the transparency of reprogrammings and intra-District transfers. The Mayor’s office has the authority to make changes to an agency’s budget during the year through reprogrammings’changes that move funding from one purpose to another’and through intra-District transfers’changes that move funding from one agency to another for the same purpose.  Giving the executive the flexibility to make changes to the budget makes sense, but all changes should be made in a transparent manner and substantial changes should come before the Council for review.  Bill 18-559, the “Reprogramming Policy Reform Act of 2009″’introduced by Chairman Gray’would, among other things, require additional reporting by the OBP to make these changes. DCFPI testified in support of this legislation and we recommend the OBP undertake the new reporting requirements.

Thank you for the opportunity to testify.  I am happy to answer any questions you may have.