If I were a cabinet secretary and could have just one power, I would choose the power of budget review since theoretically it should give me all the clout I need. I just don’t know what happened between theory and reality, but I do know that most of the secretaries are not very happy with the system.

The speaker was Olin Thomas, Assistant Secretary of Administration and Finance and Director of the Office of State Planning and Management for the state of North Lincoln. He was reflecting on the nature of the changes that had taken place in the state’s executive branch during 2001 and 2002. He continued:

The basic intention of state reorganization was to increase the Governor’s control by having him deal directly with fewer people. Prior to reorganization, there were several hundred agency heads reporting to him, creating a very unwieldy system.

The agencies were organized into ten secretariats [see Exhibit 1], and the secretaries were given the power of budget review; that is, they were to review the budgets submitted to them from each agency within the secretariat, assure themselves that the budgets were adequate and properly directed, and make whatever changes were necessary before submitting them to A&F for final review. Under reorganization, the secretaries were also given the responsibility of program evaluation, resulting in the power to create, budget for, evaluate, and dispose of both programs and agencies within their secretariats.

At least that’s how the process was supposed to work. I’m not clear as to exactly why it’s not working that way, but it isn’t.

BACKGROUND

In late spring 2004, Mark Davidson assumed the position of Secretary of Administration and Finance (A&F) for North Lincoln. One of the principal problems he faced concerned the state’s budgeting system and the many changes that had taken place as a result of the reorganization of the executive branch into ten secretariats.

The process of preparing and implementing the state’s annual operating budget was a long and complex one that had undergone a number of changes between 2002 and 2004. There were essentially five participants in the process: the Governor and his staff, A&F, the other secretariats, the Bureau of the Budget (BOB), and the Legislature. The role of each participant had not been well-defined, either with respect to the budget or in relation to the other participants. Mr. Davidson was concerned with developing procedures and systems that would assure the state of effective budgeting and control. . . .

Assignment

1. How do the various participants in the budget process see the system working? Are their perceptions coherent? Consistent with the facts?
2. What are the strong and weak aspects of the state’s budget formulation and monitoring processes? Are OFA practices and procedures helping or hindering the state’s reorganization efforts?
3. What changes, if any, do you see as desirable and feasible? In particular, should the state adopt target levels, prioritizing, or some combination of the two?