Ka Wai Ola - Office of Hawaiian Affairs, Volume 15, Number 8, 1 August 1998 — The budget process [ARTICLE+ILLUSTRATION]

The budget process

AS THE chairperson of the Committee on Budgel & Fmance. I would like to share my thoughts on the recenl budget process and ideas for improvement. The process encompassed five committee meetings , over three weeks totaling approximately 22 ) hours. Thisdoesnotindudehundredsofhours spent on preparation and revision. Although the ) process was at times grueling and tedious for trustees and staff, it was necessary to ensure a ► sound budgeL On June 30. the BOT approved a compreheni sive (operating and personnel) budget before the start of the new fiscal vear. July 1 . For FY 1998- , 99. the comprehensive budget totals J $ 1 2.633,326. whieh is comprised of $2,729,382 , in general funds, $4,373,085 in the pubhc land 1 trust fund and $5,530.859

I in trust funds only. 1 The main philosophy ^ behind the budget i process within the eommittee was that it would i beinclusive. Alltmstees would analyze the pro- , posed dollar amounts and justification, and partici- , pate in questioning the ' admimstrator and divi- , sion officers. Alltrustees ' would be aware wheie deletioas or additions i were made and why. In : . other words, all trustees i weie to be active participants in the key stages of i the decision-making 1 process.

, lneadmmistration 1 prepared a comprehensive proposed budget, ^ whieh included budget narratives, justifications and tables fOT trustee review. It based the proposed budget primarily on what it believed neeessary to meet OHA's and beneficiary needs. This amount was then compared to what was spent last year and what was budgeted last year. The final product submitted to the trustees at the , Committee on Budget & Finance meeting on June 16, was a good attempt at a comprehensive ^ budget with justifications. However, at this and two subsequent commit- ^ tee meetings, it became increasingly clear that many questions posed by the trustees could not be answered by the administration. Thus, addi-

tional meetings were held with the administrator and di%ision officers. whieh produced a more consistent framework for the development of the budgeL and stronger justification where necessary. At the June 29 and 30 eommhlee meetings. the newly revised budgeL with the prompt answers from the administration. gained committee approval in time for BOT consideration and approval. My vision of the desired committee process was what happened at the June 29 and 30 B&F meetings. There was a sound budget with solid justification; staff" was ready to answer questions from the trustees; and trustees askcd the necessary questions to ensure that we fulfilled our fiduciary duties. As for the future, OHA needs to develop a policy regarding the budget process, and to set

the guidehnes and tune trames by whieh budgets will be developed. The policy should include, but not be limited to, the following framework: * The administrator and chief Unaneial officer will work closely to determine the assumptions by whieh the division officers will develop their budgets; * These assumptions should be communicated with the appropriate trustees to ensure that the work performed by the division officers and staff will be in line with trustees' wishes; * The division officers and staffs, in conjunction with the CF() and planning officer, should develop their budgets and justifications;

* The CFO should eompile these divisional budgeLs, ensuring consistency in assumptions andformats; * The administrator should review the proposed budget and, upon acceptance, present the administration's proposed budget to the B&F Committee and the BOT. I am proud to report that a comprehensive operating budget was approved by the BOT before the beginning of the fiscal year. Iam proud of the efforts of the trustees to ask hard questions and of the staffs competence to answer those questions. And finally, I am proud that most increases in the budget were in program areas where they will address beneficiary needs. S

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