In the 2015-17 biennium, 36 state entities were authorized to spend a total of $6.1 billion from the capital budget. This includes 29 state agencies and the state's higher education institutions (i.e., 6 four-year colleges/universities and the community & technical college system). The 2018 Legislature directed the Joint Legislative Audit and Review Committee (JLARC) to review how these funds were used to pay state employees.
State agencies and higher education institutions reported spending $149 million of capital budget funds on 840 FTEs during the 2015-17 biennium
A full-time equivalent (FTE) is a way to measure the size of the state's workforce. It is equal to 2,088 work hours in a fiscal year. An FTE can represent a single individual working full time, or time spent by several people.JLARC staff compiled and reviewed data from all 36 entities that were authorized to spend capital funds.
- 71% of the capital-funded full-time equivalents (FTEs) and salary/benefit costs were reported by three higher education institutions and five agencies.
- Half of all capital-funded FTEs and salary/benefit costs were paid from bond-funded accounts. Another 40% were paid from university-specific building accounts.
- Skilled trades and project management made up 79% of the functions performed by capital-funded FTEs.
AFRS data on capital-funded FTEs and salary/benefit costs is reliable for state agencies, but lacks detail for higher education institutions
The Agency Financial Reporting System (AFRS) is the state's financial accounting system and is administered by the Office of Financial Management. It is used to report the overall financial activity across state government. Most agencies use it to pay their bills, receive payments, and complete other transactions. JLARC staff asked state agencies and higher education institutions to provide detail about their capital-funded FTEs and salary/benefit costs beyond what is recorded in AFRS.
For the 2015-17 biennium:
- State agencies recorded capital-funded FTEs and salary/benefit costs in AFRS that are generally consistent with the data compiled by JLARC staff. There are agency-level discrepancies that can be explained by variations in accounting practices.
- Four-year colleges and universities recorded fewer capital-funded FTEs and salary/benefit costs in AFRS than the amount compiled by JLARC staff. These discrepancies are because colleges/universities use their own accounting systems and data is aggregated in AFRS. The colleges/universities provided additional data for this study from their internal systems. In some cases, this involved retroactively allocating employees to capital projects they worked on during the biennium.
- State Board for Community and Technical Colleges (SBCTC) recorded salary/benefit costs in AFRS that are consistent with the costs compiled by JLARC staff. There is a discrepancy between the number of FTEs in AFRS and in the compiled data due to cost reallocation between the central office and the campuses.
The state provides guidance and flexibility for using capital funds to pay for state employees. Oversight occurs at several stages.
State policies from the Office of Financial Management, budget development tools, and statutes authorize entities to spend portions of their capital funds on state employees. State entities have flexibility in how they account and pay for staff working on capital projects and programs. OFM and the Legislature oversee budget development and spending on capital-funded FTEs.
Committee Action to Distribute Report
On September 25, 2019 this report was approved for distribution by the Joint Legislative Audit and Review Committee. Action to distribute this report does not imply the Committee agrees or disagrees with Legislative Auditor recommendations.
This report was updated on September 26, 2019 to clarify FTE functions.