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Understanding the State Budget
David Oppenheim, Executive Director, CSDA
Mark Beckley, Chief Deputy Director, DCSS
Building a Budget
Have You Ever Wondered How…
• The child support program fits into state government?
• The state budget process works?
• Child support program funding is spent in California?
• California Child Support compares to other states?
Branches of Government
Executive Branch: • The Branches of Government Governor and all agencies, departments, boards and commissions that
report directly to the Governor.• Elected Constitutional Officers (Lieutenant Governor, Attorney General, Secretary of State, State Treasurer,
State Controller, Insurance Commissioner, and the State Superintendent of Public Instruction).
Legislative Branch: The legislature, including the elected members of the Senate and Assembly, as well as their staff.
Judicial Branch: The Supreme Court of California and all lower state courts.
Each branch of government is assigned distinct responsibilities:
Roles and Responsibilities
The Executive Branch is responsible for the execution and enforcement of laws.
The Legislative Branch is responsible for making laws.
The Judicial Branch is responsible for interpreting laws.
The State Constitution set up a system of checks and balances to ensure that no one branch becomes too powerful.
Executive Branch
• Headed by the Governor and the elected Constitutional Officers.
• The Governor oversees all agencies and departments and many boards and commissions that are not overseen by the Constitutional Officers.
• The portion of state government that the Governor oversees is organized into agencies.
• The “Governor’s Cabinet” is comprised of 12 Agency Secretaries that are appointed by the Governor.
• The Cabinet serves as the Governor’s chief policy advisory body. Each implements the Governor’s policies throughout the state.
Executive Branch (continued)
• More than 60 departments, boards, and commissions report to the Agency Secretaries.
• Departments are organized within each agency based on its specified mission and goals.
• The Department of Child Support Services (DCSS) is part of the California Health and Human Services Agency (CHHS).
CHHS
CHHS oversees 12 departments and other state entities, including the DCSS.
Department of Aging Department of Managed Health Care
Department of State Hospitals
Department of Child Support Services
Managed Risk Medical Insurance Board
Office of Statewide Health Planning and Development
Department of Community Services and Development
Department of Public Health
Office of Health Information Integrity
Emergency Medical Services Authority
Department of Rehabilitation
Office of the Patient Advocate
Department of Health Care Services
Department of Social Services
Office of Systems Integration
CHHS (Continued)
CHHS programs provide a range of services including
✷ Health Care and Public Health ✷ Social Services✷ Mental Health✷ Alcohol and Drug Treatment ✷ Income Assistance, and ✷ Child Support – Item 5175
Budget Process Quick Facts
• Funding authority is obtained through the annual State Budget Act.
• The budget act is the result of the year-long state budget process.
• The state fiscal year runs from July 1st through June 30th.
• The federal fiscal year runs from October 1st through September 30th.
• Each budget cycle focuses on two fiscal years: ✷ Current year – non-discretionary updates only✷ Budget year – future year budget proposal
• Legal authority to spend money in any fiscal year is provided by the annual State Budget Act.
Budget Responsibility
Development of the annual budget is a shared responsibility.
Departments
At the lowest level, each department is responsible for developing and submitting budget proposals and cost estimates for the department and the program(s) it oversees.
Agencies
Agencies are responsible to communicate the Governor’s priorities to the departments and to approve or deny departmental requests based on those priorities. Approved requests are forwarded to the Department of Finance.
Department of Finance (DOF)
The DOF acts as the financial arm of the Governor’s office, providing instruction and oversight for the budget process. All budget proposals and requests are analyzed and either approved or denied by the DOF.
DOF (continued)
Approved proposals and requests are published in the Governor’s January proposal and May revision.
The “May Revise” is released each year on or about May 15th
Legislative Analyst’s Office (LAO)
The LAO serves as the "eyes and ears" of the Legislature.
Ensures legislative policy is implemented in a cost efficient and effective manner.
Reviews and analyzes budget proposals and the state finances.
Makes recommendations for legislative action.
Legislature
The Legislature uses the Governor’s budget proposals as a starting point for budget bill discussions and negotiations.
The Legislature determines which proposals will be
Included in the final budget bill.
Governor
Once both houses of the Legislature agree and pass the budget bill, it goes to the Governor for final approval or veto.
The Governor may approve the budget bill “as is” or with changes (line-item veto).
The Budget Act
Once signed by the Governor, the Budget Bill becomes…
The Budget Act.
DCSS Budget
California’s Child Support Program
• The DCSS is designated as the single state entity responsible for ensuring that all functions necessary to establish, collect and distribute child support are effectively and efficiently implemented.
• Services are delivered to customers through a network of 51 county and regional Local Child Support Agencies.
• More than $2.3 billion in child support payments are collected and distributed annually.
DCSS Budgets and Procurement Branch
Department Budget Support Section
LCSA Budget and Contracts Fiscal
Contracts and Purchasing
State Operations Budget LCSA Admin Budget Contracts
CCSAS Budget LCSA EDP Budget Dept. Purchasing
SDU Budget Claims Policy
Local Assistance Estimate Contract Invoice Processing
One Budget - Two Categories
State Operations
Local Assistance
State Operations
DCSS’ state operations budget includes funding for:
• State staff [salaries, benefits, and operating expenses & equipment (OE&E)]
• Judicial Council of California (JCC) contract• Office of State Publishing contract• Locate & Intercept contracts• Other enforcement and support contracts
Local Assistance
DCSS’ local assistance budget includes funding for:
• Local Child Support Agency (LCSA) administrative costs• Internal Revenue Service (IRS) intercept fees• The Federal Deficit Reduction Act (FDRA) mandatory fee• California Child Support Automation System - Child
Support Enforcement (CCSAS CSE)• State Disbursement Unit (SDU) service provider
Budget Development
The Budget Support Section is responsible for • projecting costs • submitting proposals, and • requesting budget authority for all aspects
of the Child Support program.
Department Budget Overview
LCSA SFY 2014-15 Allocations
Federal$512,725
66%
General Fund
$223,81229%
Incentives$40,313
5%
Admin AllocationFunding Sources
(Dollars in Thousands)
Federal$17,193
66%
General Fund$8,857
34%
EDP AllocationFunding Sources
(Dollars in Thousands)
History of the Admin Allocation
• SFY 03-04 Baseline Allocations were set
• SFY 08-09 A negative adjustment of $12.6m was made to transfer funds from the LCSAs to the State for the print/mail services contract
Reduction was made based on prior reported expenditures $6m was added to the $12.6m to fully fund the contract
• SFY 09-10 $18.7m was appropriated for Revenue Stabilization
Funds were allocated based on revenue generating FTEs Adjusted for performance in Collections on Current Support
and Collections on Arrears
Program Performance
The federal performance and incentive system measures the performance level of states in five program areas:
1. Paternity Establishment 2. Child Support Order Establishment3. Current Support Collections4. Arrearage Collections 5. Cost Effectiveness
Federal incentive payments are based on each state’s earned share of a fixed amount incentive payment pool.
States that fail to meet the federal performance standards, or a 95% data reliability standard, are at risk of losing eligibility for incentive funds and incurring significant penalties to the TANF Block Grant.
Incentives
• California receives incentives based on the five performance measures
• The national pool for 14/15 is $553,000,000
• California’s share of the national pool is 7.29%
• For FY 13/14, the estimated incentives are $40.3m – an increase of 3.03% over the prior year.
California Compared to other States
Texas California Michigan New York Ohio Florida
Caseload 1,421,193 1,290,377 996,341 918,027 899,109 854,777
Collections $3.3b $2.3b $1.3b $1.8b $1.7b $1.6b
Statewide PEP 100.9% 98.6% 90.8% 91.8% 90.4% 90.5%
Cases with an Order 82.5% 89.0% 77.4% 80.8% 87.0% 80.3%
Current Collections 65.4% 63.3% 67.1% 65.5% 67.4% 53.6%
Arrearage Collections 64.6% 65.1% 58.3% 56.9% 64.2% 59.6%
Cost Effectiveness $11.61 $2.54 $5.93 $4.90 $7.45 $6.33
Expenditures per Case $232 $700 $226 $400 $257 $287
Questions?
And Here is why it is Important
David Oppenheim
Mark Beckley
