$12 million is added to budget

By Kathy Helms
Diné Bureau

WINDOW ROCK — The Budget and Finance Committee will present its 2008 budget recommendation today to the Navajo Nation Council, which will meet this week to decide whether to accept the budget as presented, make amendments, shuffle money, or pull down the undesignated reserve.

There are three special features in the budget proposed for 2008, Budget and Finance Chairman LoRenzo Bates said Monday. One is a new planning base amount; another is a newly created capital expenditure line item, and the third is a new Condition of Appropriation, or COA, according to Bates.

“In determining the planning base amount for the Navajo Nation, we brought in Minerals Department, we brought in the tax people, and the Controller to provide the committee with the projected revenue for this coming year, 2008. That amount this year is $137 million,” he said.

Budget and Finance then looked at the actual revenue from 2007, 2006, 2005, and 2004.

“In almost every instance, the actual revenue exceeded the projected amount for a given year by as much as $25 million. So, given that, we took an average over the last five years. We then looked at the unfunded mandates that council has done, such as the Commission on Race Relations and the license plates,” Bates said.

After the Executive, Legislative and Judicial branches agreed on the $137 million planning base amount, “We asked each of the three branches to provide their unfunded mandates and unmet needs,” he said.

Then, looking at projected revenue, “We decided the Nation could stand an increase of $12 million, so we went from $137 million to $149 million. But the $12 million must be used by each of the three branches for unfunded mandates and unmet needs.”

The Executive Branch received $6.1 million, with the remainder divided between Legislative and Judicial.

“The second thing is we created a new line item to the comprehensive budget to add capital to the tune of $5 million to fund unfinished chapter projects on Navajo,” Bates said. Through the coordinated efforts of the Transportation and Community Development Committee and Budget and Finance, they came up with 20 unfinished projects in Arizona and New Mexico chapters.

“They’re not termed as capital improvement projects. They’re termed as unfinished capital projects. They’re titled capital expenditure, which does not require a five-year plan,” he said.

“Right now, there is no actual money within the government’s line item to fund projects on Navajo. It comes from cash flow.” Such projects include chapter houses, senior citizen centers, and parking lots, to name a few.

The third feature of the budget, the Condition of Appropriation, was prompted by what appears to be $286 million in unspent grant money, or external funds, Bates said. “Education has over $60 million unspent.”

But though the books may reflect an unexpended balance, “That’s not necessarily the case,” he said. During two weeks of budget hearings, some of the programs said they had expended those funds, “So it’s an internal problem that exists.”

He said the matter is significant because when council delegates go to Washington to lobby for 638 money, if the federal programs happen to have the same documents that show the Nation has a balance remaining, they will be less likely to hand out further funding.

So, in the interest of accountability, Budget and Finance decided to create a Condition of Appropriation. “This is a significant COA because in 2008, the Controller and Office of Management and Budget programs are to come up with a process that will identify the correct amount of external money, or grant money,” Bates said.

“At the end of each quarter, those programs will report to their oversight committees, as well as Budget and Finance, the balance remaining from the grant money received or expended.”

Though the programs are now reporting their external funds to the oversight committees, the figures are inaccurate, he said.

“For example, a program within Public Safety that was appropriated an amount, the program itself may have an accurate accounting of the expenditures; but on the Controller’s side, the FMIS (Financial Management Information System), there’s a break between the program and the FMIS.

“So that amount that they have expended entirely, or a portion of it, may show differently on the FMIS. It may show twice as much, or it may show no expenditures,” Bates said.