South Dakota state budget

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South Dakota ended FY 2009 on June 30, 2009 with a slight General Fund shortfall of $1.364 million, 0.1% below projections. Minor cash adjustments and unexpended carryovers bridged the gap and allowed closing the year with a balanced budget.^[1]

Gov. Rounds recommended a FY 2010 total budget of $3.6 billion with a $1.2 billion General Fund budget, $58 million above FY 2009's actual General Fund figure.^[2]

The South Dakota Legislature approved a FY 2010 total budget of $3.945 billion, $342 million above the Governor's recommendation, with a General Fund budget of $1.134 billion, $67 million below the Governor's recommendation. $395 million of the difference from the Governor's recommended and approved Legislative total budget is federal funds.^[3]

The first quarter (July to September 2009) of FY 2010 General Fund revenues were down $33 million from the previous year, mostly due to a 4.8% drop in sales tax receipts. Gov. Rounds said, "That's not the greatest challenge we see. The greatest challenge will be the increased high costs of Medicaid." The number of South Dakota's Medicaid-eligible people increased by 6,400 the past year. Gov. Rounds' office is preparing the state government spending plan for FY 2011 to present to legislators on December 8, 2009.^[4]

[edit] Budget Background

South Dakota's fiscal year begins July 1 and ends June 30 of the following year. State law requires annual preparation and approval of the state's budget and according to the State Constitution, the budget is required to be balanced before approval. The Governor presents the annual budget to the Legislature by the first Tuesday following the first Monday in December. Both the House and the Senate are then required to approve a budget by the end of the legislative session. The Governor has the power to veto individual line items in the budget approved by the legislature. ^[6]
Throughout the fiscal year the state budget must remain in balance and state agencies are not allowed to request additional funds. However, the commissioner of the Bureau of Finance and Management has the authority to authorize intradepartmental transfers of funds so long as the total spending levels are not exceeded. Transfers must first be accepted by the legislature's Interim Appropriations Committee. ^[6]

[edit] Budget figures

The following table provides a history of South Dakota's expenditures and gross domestic product (GDP).

• NOTE: The figures for FY 2009 won't be finalized until the end of the fiscal year.
• See South Dakota state budget (2008-2009) for more information.

[edit] Accounting Principles

The South Dakota State Auditor is an elected position, and constitutionally independent office holder who performs pre-audits and performance audits of all state government agencies. Richard Sattgast has held the office since first elected in 2002.^[8]

The South Dakota Department of Legislative Audits (DLA) performs financial and compliance audits of state agencies and local governments including the following types of entities:^[9]

• State Agencies
• Universities
• Authorities
• Counties
• Municipalities
• School Districts
• Townships

The DLA publishes its audit reports online. Martin L. Guindon is Auditor General of the DLA.^[10]

The Institute for Truth in Accounting (IFTA) rates South Dakota “Worst” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA does not consider South Dakota's CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis does not include significant liabilities for the pension plans and for other post employment benefits, such as health care.^[11] South Dakota's CAFRs are annual publications of the South Dakota Bureau of Finance and Management (BFM). Jason C. Dilges has been Commissioner of the BFM since his appointment in 2003^[12], which lists its responsibilities as:^[13]

• To advise the Governor on overall fiscal policy and management procedures;
• To complete and present the Governor's annual fiscal plan for the state;
• To ensure that the directives of the Governor and Legislature are fulfilled;
• To improve the efficiency and effectiveness of state government programs, processes, and procedures;
• To control and provide accurate uniform accounting and payroll personnel information to state offices on a timely basis, meeting all deadlines as prescribed by law;
• To act as a service bureau to all users of the Central Accounting and Central Payroll operations and provide educational assistance to all state offices on accounting and payroll matters;
• To apply an efficient and accountable method of revenue and expenditure controls by which the state can record its financial transactions in a systematic way and extract historical date in an orderly fashion; and,
• To keep the accounting and payroll systems aware of the ever-increasing demands for new and more complete information, yet remain responsive to the every day needs of user agencies.

[edit] Accounting transparency checklist

Comprehensive Balanced budget Timeliness Usability

[edit] The good

• The website has Comprehensive Annual Financial Reports (CAFR) dating back to 2000.^[15]
• An independent auditor’s report is published on page 13 of the document.^[16]
• It provides supplements to the budget workup, starting on page 97.
• The budget is posted using organized and consistent methods of financial reporting.
• South Dakota law requires a balanced budget and a deficit is forbidden.^[17]
• It includes all costs incurred by the government, including long-term liabilities.^[16]
• The CAFR compares estimated and actual budgetary numbers, such as on page 98 of the document.^[16]

[edit] The bad

• The South Dakota office was tardy in submitting the budget.
• The CAFR is posted in a non-searchable PDF format, so it’s not searchable online.

Open.sd.gov is the name of South Dakota's publicly available spending transparency database. It was announced on March 12th, 2008, approximately 6 months after transparency legislation from State Representative Hal Wick had been vetoed.^[18] South Dakota Senate Bill 143 (2009), which was signed into law on March 13, 2009^[19] required "a searchable internet website for the posting and access of certain public records and financial information."^[19]

The following table is helpful in evaluating the level of transparency provided by a state spending and transparency database:

Criteria for evaluating spending databases

State Database	Searchability	Grants	Contracts	Line Item Expenditures	Dept/Agency Budgets	Public Employee Salary
Open.sd.gov

[edit] Budget transparency

[edit] Economic Stimulus Transparency

• The American Recovery and Reinvestment Plan of 2009 designated $787 billion to be spent throughout the U.S. Of that $787 billion stimulus package, it is estimated that 69%, or over $541 billion, will be administered by state governments.^[20]

• South Dakota will receive an estimated $369,155,575.^[21]

[edit] Error in ARRP

On November 16 and 17, 2009, many errors were found in the $747 billion plan that showed the plan set aside money for districts that do not exist. According to Recovery.gov, the plan shows its funds will go to 884 Congressional Districts, though there are only 435.^[22][23]

More than $288 million in stimulus money went to phantom districts in South Dakota to "create or save" 862 jobs, according to the ARRP tracking website. About $280 million of those funds are locked in a district that has not been seen since the 1980 census. South Dakota has only one Congressional District, represented by an at-large Representative.^[24]

[edit] Budget transparency

Open.sd.gov is the name of South Dakota's publicly available spending transparency database. It was announced on March 12th, 2008, approximately 6 months after transparency legislation from State Representative Hal Wick had been vetoed.^[25] South Dakota Senate Bill 143 (2009), which was signed into law on March 13, 2009^[19] required "a searchable internet website for the posting and access of certain public records and financial information."^[19]

[edit] News

South Dakota's Initiated Measure 10, the Open and Clean Government Act, would have required the creation of an online database for state contracts over $500. This, and other aspects of the Measure, lead the National Taxpayers Union to believe the Measure's passage would have a positive impact on taxpayers.^[26] However, unfortunately this measure fell by a margin of over 100,000 votes.^[27] Although South Dakota recently launched www.open.sd.gov, Measure 10 would have protected taxpayer funds even more directly by outlawing their abuse by government officials.

[edit] Website evaluation

Budget Usability Elected Officials Administrative Officials Ethics Audits Contracts Lobbying Public records Taxes

SD.gov is the website for the state of South Dakota.

• Main article: Evaluation of state websites

[edit] The good

• Site has a search function and is fairly easy to navigate.
• Revenue balances^[28] and expenditures^[29] by each agency are available.
• Elected officials are listed with contact information.^[30]
• Administrative officials are listed with contact information in a searchable database.^[31]
• Current state contracts are available.^[32]
• Budget is published.^[33]
• Annual financial audit reports are available.^[34]
• State tax information is posted.^[35]

[edit] The bad

• Information is not provided on ethics, lobbying, and how to make public records requests under the South Dakota Sunshine Law.

[edit] Legislation

• South Dakota Senate Bill 143 (2009)^[19]

[edit] Government tools

Open.sd.gov provides a database of state financial information, organized by broad topics such as budget, expenditures, revenues, vendor contracts, and payroll. Much of the information is updated twice per week. And, since data populating the database is tied directly to South Dakota's accounting system, payroll information is updated in real-time (that is, as soon as information enters the general accounting system software, it will appear on this database).

The following table is helpful in evaluating the level of transparency provided by a state spending and transparency database:

Criteria for evaluating spending databases

State Database	Searchability	Grants	Contracts	Line Item Expenditures	Dept/Agency Budgets	Public Employee Salary
Open.sd.gov

[edit] Economic Stimulus Transparency

• The Economic Recovery and Reinvestment Act of 2009 designated $787 billion to be spent throughout the U.S. Of that $787 billion stimulus package, it is estimated that 69%, or over $541 billion, will be administered by state governments.^[36]

• South Dakota will receive an estimated $523,121,310.^[37]

[edit] Limitations and Suggestions

• Provide line-item expenditure information.

[edit] Support for creation of the database

In January, 2008, State Representative Hal Wick introduced South Dakota House Bill 1233 to create a searchable transparency database. Although the bill passed both the House and Senate, it was vetoed in March by Governor Mike Rounds.^[38] On September 12th, 2008, the Governor's Office announced the launch of this website.^[39]

The National Taxpayers Union issued a press release questioning Governor Mike Rounds's decision to veto South Dakota House Bill 1233 in March, 2008.^[40]

[edit] Public employee salary information

The Argus Leader in South Dakota is providing this Interactive State Salaries database. It is searchable and current as of June 2007.

[edit] See Also

South Dakota taxpayer-funded lobbying

[edit] External links

[edit] Additional reading

• Gov. Mike Rounds,"State of the state," January 13, 2009
• Associated Press,"Governor says spending plan passed by Legislature will help balance state budget," March 17,2009

[edit] References

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