Overview

During our audit, we reviewed the budgetary activities of the Essex Sheriff’s Department (SDE) to determine whether funds were sufficient to meet its obligations for the second half of fiscal year 2017. As of December 31, 2016, SDE had spent approximately 64% of its $53,257,829 budget, leaving the incoming Sheriff with $19,075,413 for the rest of the fiscal year. During the second half of fiscal year 2017, SDE incurred $33,902,668 in expenses, which necessitated supplemental appropriations of $14,827,255 to meet the department’s operating needs.

As part of the Commonwealth’s annual budgetary process, all agencies are required to prepare budgetary estimates outlining anticipated expenditure levels. During fiscal year 2016, SDE initially requested funding of $61,017,744 to cover its operating and administrative costs, but it only received a state appropriation of $53,795,787. For fiscal year 2017’s operating and administrative costs, SDE requested funding of $64,639,622 but only received $53,257,829. To address concerns raised by the incoming administration, we reviewed the first six months of each fiscal year of the audit period to determine whether the portion of its appropriated budget SDE expended in the first half of fiscal year 2017 was comparable to spending patterns in previous years. We found that 71% of the budget was expended during the first six months of fiscal year 2016 and 64% of the budget was expended during the first six months of fiscal year 2017.

In fiscal years 2016 and 2017, SDE’s expenditures exceeded its budget appropriation. As a result, SDE has relied on supplemental budgets, which it may or may not receive in the future.3 In fiscal years 2015 and 2016, SDE did not receive supplemental funding that fully covered its expenditures. As a result, prior year deficiency chargebacks4 were paid from the budgets of fiscal years 2016 and 2017, further affecting the funds available for those years. The following table summarizes the fiscal year 2016 and 2017 budget requests by SDE, original appropriations, supplemental appropriations, expenditures made, and amounts of each year’s expenditures that represented prior year deficiency chargebacks.

 

Fiscal Year 2016

Fiscal Year 2017

Initial Budget Request by SDE

$61,017,744

$64,639,622

Original Appropriation

$53,795,787

$53,257,829

Supplemental Appropriations

$16,766,627

$14,827,255

Total Available Funds

$70,562,414

$68,085,084

Total Expenditures*

$70,562,414

$68,085,084

Prior Year Deficiency Chargebacks

$5,058,324

$886,187

*     Unpaid expenditures are not included in the total expenses incurred for the year; rather, they are identified as prior year deficiency chargebacks in the next fiscal year’s expenditures.

†     In fiscal year 2018, SDE paid a prior year deficiency chargeback of $11,519, representing fiscal year 2017 expenses for which it did not receive sufficient appropriations in fiscal year 2017.

 

SDE used its operating appropriation to supplement other department activities, further increasing the budget deficiency. For the period July 1, 2015 through December 31, 2016, SDE used $1,021,673 for Civil Process Division administrative employee salaries; an estimated $51,038 for the salary of the Police Detail Fund coordinator; and $1,928,967 for administrative staff salaries and costs at the Essex County Regional Emergency Communications Center (RECC), which has its own operating budget and funding sources.

During our audit, SDE’s incoming administration implemented several initiatives, including a review of staff positions and operations, a review of longstanding vendor contracts, an emergency fiscal plan, and a comprehensive cost control plan, in an effort to contain costs and achieve budget savings. The initiatives included reducing staffing and overtime hours by ending the practice of assigning correctional officers to transport inmates from local police departments; implementing monitoring and authorization controls over correctional officers’ overtime work; and prioritizing staff positions and operations.

Auditee's Response

SDE appreciates the recognition of the insufficient funds necessary to maintain departmental operations upon Sheriff Coppinger’s transition. SDE concurs that department-requested budget allocation and Administration and Finance’s . . . budget recommendations are not consistent with legislatively authorized funding levels. Despite SDE efforts to cut spending (e.g. reducing SDE operating account contributions to the operation of the RECC by nearly $2 [million], a $700,000+ savings in overtime due to improved oversight), our [General Appropriation Act] funding levels are consistently noncommensurate with our operational needs. Reliance on supplemental funding at the end of the fiscal year (or later) acts as an obstacle to budgeting and prohibits routine encumbering in MMARS. . . .

In regards to SDE’s use of its operating appropriation to support department activities that were not among core functions, some clarification on SDE’s part is necessary.

  • We anticipate that the SDE contribution to the RECC will be $0 in FY20, as it is the intention of The Executive Office of Public Safety to take over all funding for the RECC, thereby addressing this comment.
  • The Police Detail account is going to undergo an overhaul and we anticipate this will no longer operate at a loss by FY20.
  • SDE’s operation of a Civil Process Division (CPD) is a . . . function . . . dictated by state statute. This public service comes at a cost to all Sheriff departments. The current statutorily mandated fees that we collect, and fees we pay to the state, do not yield to a profitable enterprise. SDE anticipates CPD will continue to require operating appropriation supplements to support this core service to the public. As our [General Appropriation Act] budget is adjusted to meet our operational needs, SDE hopes that CPD expenses will be recognized as a necessary expense, as per statute. Furthermore, in the FY2004 State Budget, the Commonwealth authorized an increase in certain Civil Process fees that appeared in MGL Chapter 262. In return, the Commonwealth required each Sheriff’s CPD to remit 50% of the increased portion to the State’s General Fund. From FY2004 to FY2017, SDE’s CPD has remitted $2,561,564.61 to the Commonwealth’s General Fund.

3.    For fiscal years 2016 and 2017, the state Legislature passed supplemental budgets that included reserve funding appropriations for the Sheriffs’ Offices.

4.    Prior year deficiency chargebacks are expenditures not funded in the prior year that are forwarded to the current year for payment and are included in the current year’s expenses.

Date published: August 27, 2018

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