While state lawmakers have been wringing the budget to scrape together money for a small income tax cut, millions of dollars in cash has been accumulating in some of the obscure corners of about 2,700 state agency accounts, records reveal.
Some of the stashed cash is being squirreled away for emergencies. Some is being held for long-term projects. Other accounts have been tied up in legislative squabbles, or abandoned and all but forgotten.
Money stashed in agency accounts became an issue for the state Department of Corrections recently when it was discovered the agency had about $22 million held in three revolving funds. The department was asking for a $6.4 million supplemental appropriation at the time — a request that since has been withdrawn.
But the Corrections Department is far from the only agency with stockpiled cash.
There are many, many others.
“We do have concerns about that,” state Auditor Gary Jones said.
In the legislative appropriation process, there can be a tendency to start by assigning an agency the same amount it got the previous year and then allocating more money if the agency can show justification, he said.
But someone needs to determine how much each agency has “rat-holed” away and also take that into consideration, he said.
Some lawmakers periodically have attempted to do that — especially during lean years — but it is a mammoth task since the state has about 220 major agencies, boards and commissions (not to mention the minor ones) and about 2,700 agency accounts.
The Oklahoman recently questioned agency officials about several of those accounts. Every account seemed to have its own story behind it. Here are just a few of those stories.
Caught in turf war
The Oklahoma Department of Public Safety maintained its Troop K highway patrol headquarters in Pawnee for many years — until it became so dilapidated that agency officials decided to abandon it and set up operations in leased space in Perry.
The state Legislature responded in 2007 by voting to appropriate $1.2 million for construction of a new headquarters, said Commissioner Michael Thompson.
The money has been languishing in its own bank account ever since.
Public safety officials said the problem was that a state senator and state representative couldn't agree on where the headquarters should be built. While the original bill called for it to be built in Perry, Gov. Brad Henry line-item vetoed the specific location to give lawmakers time to work out an agreement. They never did.
Former state Sen. Joe Sweeden acknowledges he was the lawmaker who was holding out for Pawnee.
“Pawnee was in my district at that time, and Perry wasn't,” Sweeden said. “I had everybody in my district wanting it to remain there.”
Former state Rep. Rex Duncan was equally adamant the headquarters should be in Perry.
Duncan said both Perry and Pawnee were in his House district, but many troopers wanted the headquarters in Perry so it would be along the Interstate 35 corridor.
“It did digress into a turf war,” Duncan recalls.
A resolution is in sight, however. Sweeden was forced to leave office in 2010 because of term limits, and Duncan chose to leave his House position that same year to successfully run for Osage County district attorney.
The new Troop K headquarters now will be built — in Perry.
Construction is expected to begin within 60 days, officials said.
Thompson said $1.2 million would have paid for the new headquarters in 2008, but now his agency will have to come up with an additional $300,000 from somewhere else in its budget to pay for a building that is expected to cost closer to $1.5 million.
“We'll take it out of our hide,” he said.
Ask Thompson about the Department of Public Safety's greatest needs, and he immediately begins talking about the need for more state troopers.
The agency went three years without a patrol school during the recession years, and its trooper ranks dropped by about 80 or 85, he said. The school has been reinstated, but it will take years to rebuild the staff, he said.
Outsiders might wonder why the agency doesn't use forfeiture funds to speed up the process. The agency carried over more than $6.4 million in federal asset forfeiture funds and more than $4.2 million in state asset forfeiture at the end of last June.
However, the state is prohibited from using federal forfeiture funds for that purpose, and it would be unwise to use state forfeiture funds that way, Thompson said.
Federal funds often come with strings attached. One of the strings attached to federal forfeiture funds is they must be used to enhance law enforcement activities but can't be used to replace funds that previously had come from other sources, officials said.
There is more flexibility in how state forfeiture funds can be spent, but it is impossible to predict how much money the agency will receive from asset seizures each year, so it is considered unwise to lock in those revenues for salaries, which would be a recurring expense each year, Thompson said.
Thompson said it costs about $133,000 to train, equip and pay a cadet for a year.
County road fund
Within the Oklahoma Department of Transportation is a fund called the County Road Improvement Fund.
The agency started out the last fiscal year with $3,952,035.87 in that fund, and 12 months later that same $3,952,035.87 was still sitting there.
It's not because there aren't county roads that need improving, said Mike Patterson, director and chief financial officer of the transportation department.
The $3.9 million was designated for specific counties as part of a program the Legislature abolished about eight years ago, Patterson said.
Even after the program was terminated, however, it took years to complete contracts, make all the necessary disbursements and complete the agency's auditing process, he said.
Patterson said he believes all that is now done.
“We need to return it to the counties for their use,” he said of the money. “All the projects are closed out. So now we're able to do that.”
Patterson said the account is one of three similar accounts related to county roads and bridges that his agency has been working to close out over a period of years.
“We've had numerous discussions about getting those funds closed out,” he said.
“I really do want to get it back in the hands of the counties.”
After the Legislature terminated the old county road program, it created a new one, and a new fund was created called the County Improvement for Roads and Bridges Fund.
Records show cash rapidly has been accumulating in that account. It recently had a cash balance of about $227.8 million.
“This is one of those deals where essentially we started a complete new program,” Patterson said.
Little money was spent during the program's first couple of years because time was spent identifying projects and on relatively low-cost things such as engineering and right-of-way purchases, he said.
As more construction projects actually begin, Patterson said, he expects money will be spent at a faster clip and predicted the account eventually will carry an average cash balance of about $60 million.
Ho Ho Ho
Some state funds have unexpected names, such as the Santa Claus Commission Revolving Fund administered by the Office of Juvenile Affairs.
That fund is to provide gifts at Christmas time to underprivileged youths housed in Office of Juvenile Affairs' facilities and group homes, said Paula Christiansen, spokeswoman for the agency.
The commission only spent $2,568 out of the fund last fiscal year and carried over more than $87,000, which might raise questions about whether the state version of Santa is a bit of a Scrooge.
Christiansen said the fund relies solely on contributions from private donors.
“We put a cap on the spending because donations are not always a guarantee from year to year,” she said.
The agency operated several other funds that ended last fiscal year with cash balances that far exceeded the amounts spent from them over the entire year, including the agency's main revolving fund. That fund ended the fiscal year with a cash balance of more than $1.29 million after a year's worth of expenditures totaling about $292,500.
“General revolving funds are OJA emergency funds,” Christiansen said. “There is nowhere for an agency to go if there is a shortage of funding during the year. We can request a supplemental appropriation, but these are rarely funded and cannot be obtained timely. Without these reserve funds, many of our programs would be at risk toward the end of our budget year.”
Sometimes funds get abandoned and all but forgotten.
Such is the case for a series of five funds ranging from about $2,337 to more than $3.2 million maintained by the Oklahoma Office of Management and Enterprise Services.
The old computer system used for processing payroll withholding used to require the creation of a new fund every year, said Lynne Bajema, state comptroller.
The state has switched to a PeopleSoft system that now uses just one payroll withholding account and rolls over the money from year to year. But when the switch was made, money was left stranded in five old accounts.
“Those funds should be consolidated,” Bajema said.