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CMS warns comptroller over draining special funds

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* From a letter sent by CMS Director Mike Hoffman to Assistant Comptroller Kevin Schoeben…

Dear Mr. Schoeben:

Your office recently informed the Illinois Department of Central Management Services (“CMS”) that, effective immediately, we must stop relying on the State’s General Revenue Fund (“GRF”) to pay approximately 400 CMS employees. Instead, you directed us to pay this group of employees out of certain other limited state funds administered by CMS, namely the Facilities Management Revolving Fund and the State Garage Revolving Fund (together, the “Revolving Funds”).

We are concerned that your office’s direction may put the Comptroller out of compliance with the St. Clair County decision ordering you to continue processing payroll, regardless of the fund. And, of course, we need to make sure that this group of employees—indeed, all employees—continue to get paid for their important work. I write to flag these issues for you and clarify that our understanding of your position is correct.

It is important to keep in mind what these Revolving Funds are intended to support. The limited cash in the Revolving Funds must be used to cover critical state services such as leases and bond payments on facilities, utilities, maintenance of the State’s vehicles, and fuel-related costs. If landlords evict the State from its facilities or if local utility companies shut off service, citizens throughout Illinois could find themselves unable to go to State offices to apply for critical benefits and services that they are legally entitled to receive, such as medical care or child support. If the State cannot properly maintain its vehicles, including those by used by the State Police for patrolling our roads and highways, the Department of Corrections for transporting inmates, or the Department of Transportation for snow removal, the general welfare of the public may be placed in jeopardy.

The State Garage Revolving Fund also is the source of critical fuel-related payments that keep state vehicles on the road, as well as fund the maintenance of Department of Human Services’ vehicles that transport our most vulnerable citizens for medical treatment. By forcing CMS to drain the Revolving Funds, your office is putting those critical health and safety functions of the State at risk. And make no mistake, shifting payroll to these funds ensures they will be depleted long before the fiscal year is over. We have determined that, if payroll is included, the cash projected to be in Revolving Funds through the end of this fiscal year is not sufficient to cover all of the above critical services. Because these funds get the bulk of their revenues from GRF payments required to be made by the agencies that CMS serves, in the current budget impasse, those agencies do not have sufficient GRF or other available appropriations to make complete and timely payments into these CMS Revolving Funds.

This is yet another reason why keeping your comptroller happy is so important. If she really is trying to drain those special revolving funds down to nothing, that would indeed cause big problems for the administration.

* Doug Finke has the comptroller’s response…

However, in a response to CMS, Mendoza’s office said it believes it is complying with the intent of the General Assembly to pay workers from the revolving funds this fiscal year. During the previous fiscal year, it said, more than $32 million from the funds was spent for payroll.

“Furthermore, our records indicate that CMS currently has active payroll appropriations of over $32 million from these funds for FY 2017 in which no expenditure has yet to be expended for payroll purposes,” Mendoza’s office said in a letter to CMS.

Mendoza’s office also said it is juggling payments for a wide range of state services. Illinois’ bill backlog has continued to climb, and some vendors have waited months for payments because the state isn’t collecting enough in taxes to pay all of its expenses.

“I hope you can understand our concern as we try to make payments from the extremely limited general revenues funds that all efforts to utilize existing resources from other state funds should be examined,” said Kevin Schoeben, assistant comptroller. “We are prepared to work with you to ensure that no critical state services are disrupted going forward. However, please also understand that the Office of Comptroller is tasked with the responsibility of addressing the continuity of critical services across the state of Illinois to the extent our limited state funds allow.”

Her point is basically she’s looking under couch cushions for change to make payroll. That’s understandable as well.

The governor’s office says the employees were formerly paid out of the revolving funds, “but were moved to GRF prior to the stop gap budget passage due to low fund balances.”

Either way, the governor’s people say, there are no appropriations now because the stopgap has expired and the still-valid court order allows the comptroller to pay from GRF, so they believe the comptroller should do so.

I don’t think we’ve seen the end of this story.

…Adding… The comptroller’s full response is here.

posted by Rich Miller
Friday, Feb 17, 17 @ 1:19 pm

Comments

Translated= Mendota calling BS on the superstars at CMS?

Sounds like it.

Comment by JS Mill Friday, Feb 17, 17 @ 1:23 pm
Mendoza- sorry!

Comment by JS Mill Friday, Feb 17, 17 @ 1:24 pm
–If landlords evict the State from its facilities or if local utility companies shut off service, citizens throughout Illinois could find themselves unable to go to State offices to apply for critical benefits and services that they are legally entitled to receive, such as medical care or child support. If the State cannot properly maintain its vehicles, including those by used by the State Police for patrolling our roads and highways, the Department of Corrections for transporting inmates, or the Department of Transportation for snow removal, the general welfare of the public may be placed in jeopardy.–

Is that a gag? Paying vendors, honoring leases and contracts and the proper functioning of state government is a priority of the Rauner crew?

You can’t make that stuff up.

Comment by wordslinger Friday, Feb 17, 17 @ 1:26 pm
and I’m sure there are people on here who don’t think Mendoza and Lisa are working for the Speaker to help create the crisis he wants.

Comment by Ahoy! Friday, Feb 17, 17 @ 1:29 pm
I suppose I was just too used to the boring Hynes model of Democratic Comptrollers to realize how constantly Mendoza was going to bedevil the Governor.

Comment by Arsenal Friday, Feb 17, 17 @ 1:30 pm
===are working for the Speaker to help create the crisis he wants===

Which is why I wrote that we probably haven’t seen the end of this matter. Cue ILGOP email in 3… 2…

Comment by Rich Miller Friday, Feb 17, 17 @ 1:30 pm
For me?

This is the “behind the curtain” angst Rauner kept hidden with Munger at the helm, not requiring Memorandum of explanation. Not dinging Munger, it’s the difference between untied government in party, and divided government in “governing”.

The loss of Munger to keep the curtain closed to the “discussions” like these in the political, are now Memorandums to the governmental, making Rauner Staff describe how Mendoza Staff “should” go about assisting with as “less pain” to those Rauner wants “painless”

Comment by Oswego Willy Friday, Feb 17, 17 @ 1:33 pm
My first thought when I read the story in the SJ-R about 3 AM this morning was that Rauner / CMS wanted to keep the revolving fund money as a slush fund to pay strike breakers in the event of an AFSCME strike.

My second thought, now, is they just want it as a CYA slush fund for whatever emergency they have to paper over.

Comment by RNUG Friday, Feb 17, 17 @ 1:33 pm
Uh, the lack of a budget is a crisis. As long as Rauner only able to hurt the people he wants, he’s fine with it. The crisis (for him) will be when he loses control of the victims of his ideological wants, and people demand a budget now.

Comment by PublicServant Friday, Feb 17, 17 @ 1:35 pm
I may be misunderstanding, but I don’t believe these are “special” funds. These are the revolving funds that CMS employees are supposed to be paid from.

Comment by Daniel Plainview Friday, Feb 17, 17 @ 1:36 pm
She is in so far over her head

Comment by anonymous retiree Friday, Feb 17, 17 @ 1:36 pm
I’m more impressed with Comptroller Mendoza each time I read about her actions. We could use more elected officials like her.

Comment by Big Joe Friday, Feb 17, 17 @ 1:37 pm
==Translated= Mendota calling BS on the superstars at CMS?==

If by “calling out” you mean “making known the new Comptroller folks do not understand their obligation under the Court order”, then sure.

Comment by Anonymous Friday, Feb 17, 17 @ 1:40 pm
===She is in so far over her head.===

Nah. Rauner Staff is trying to manage and curtail their own pitfalls, not the state’s

Mendoza Staff is trying to do what they think they should do, without regard to what Rauner Staff wants to manage.

Thus, like Rich said… ILGOP press release in 3… 2… 1

The political and givernmental aren’t reconciling the way the Rauner Staff would… prefer.

Comment by Oswego Willy Friday, Feb 17, 17 @ 1:43 pm
CMS used to have quite a few revolving funds that were used to pay both employees and various other items and services. Medoza suggesting that related employees be paid out of the revolving funds is, to my mind, simply following past practices.

If Munger had changed that practice to paying from GRF, then Medoza changing it back is, I think, the proper step.

Comment by RNUG Friday, Feb 17, 17 @ 1:46 pm
I’d rather our elected officials not use the state as a giant chess board but since that’s the way it’s gonna be I have to admit it’s more fun when both sides are playing competitively.

Comment by Cubs in '16 Friday, Feb 17, 17 @ 1:47 pm
–She is in so far over her head –

She’s not the one engineering a tripling of the backlog of bills in only two years in office.

$11.9 billion backlog, as of today.

Comment by wordslinger Friday, Feb 17, 17 @ 1:48 pm
CMS said their revolving funds were not being replenished because of the shortfall in GRF. What does that imply for the DOIT and the system upgrades?

The cash shortfall could really be starting to bite.

Comment by Last Bull Moose Friday, Feb 17, 17 @ 1:55 pm
== She is in so far over her head ==

Nope. She’s actually doing her job and making sure expenditures come from the proper funds.

Comment by RNUG Friday, Feb 17, 17 @ 1:56 pm
== CMS said their revolving funds were not being replenished because of the shortfall in GRF. What does that imply for the DOIT and the system upgrades? ==

Rumor has it, so I’ve heard, that a lot of the DOIT expenses are being paid from individual agency funds, not any CMS revolving fund. More questionable shuffling if true.

Comment by RNUG Friday, Feb 17, 17 @ 2:00 pm
If only there were a process by which the Governor could direct what funds from where get spent to do things.

Comment by Anon Friday, Feb 17, 17 @ 2:01 pm
To RNUG - can they not just pay the strike replacement with the GRF Fund instead if Mendoza isnt using it?

Thanks

Comment by Seats Friday, Feb 17, 17 @ 2:09 pm
I love this sentence from the Comptroller’s full response:

“We realize the stress your agency is under while trying to operate without a traditionally enacted budget.”

Dry. Delightfully dry.

Comment by Hamlet's Ghost Friday, Feb 17, 17 @ 2:22 pm
== can they not just pay the strike replacement with the GRF Fund instead if Mendoza isnt using it? ==

Maybe, but contracts for replacement workers would be different from straight payroll. May be out of “appropriated” funds in GRF. I think they are playing fast and loose with what is appropriated funds … and it sounds like these two revolving funds have some unused (lapsed?) appropriation authority. Or maybe I just see conspiracy theories everywhere when CMS gets involved …

Comment by RNUG Friday, Feb 17, 17 @ 2:23 pm
So if there isn’t a valid appropriation for the $32 million, how can legally spend it in things for which it wasn’t appropriated?

They should request an appropriation for state leases and such if they need one. To me this sounds like some of that fraud, waste, and abuse that Rauner said he was going to find. He should thank the Comptroller for finding it for him.

Comment by A Jack Friday, Feb 17, 17 @ 2:25 pm
If the conspiracy is that Railuner wants to break AFSCME money to pay replacements is critical. But, the logistical nightmare of what is needed as far as workers? Is there a real plan in place? Or is this all mindless worrying?

Comment by Anonymous Friday, Feb 17, 17 @ 2:58 pm
Plans for scabs have been in place since 2015.

Comment by Honeybear Friday, Feb 17, 17 @ 3:05 pm
“can they not just pay the strike replacement with the GRF Fund” The National Guard comes out of a different fund.

Comment by Skeptic Friday, Feb 17, 17 @ 3:15 pm
= “I think they are playing fast and loose with what is appropriated funds” “maybe I just see conspiracy theories everywhere when CMS gets involved” … =

RNUG you are not the only one who smells a rotten egg here.

Comment by Mama Friday, Feb 17, 17 @ 3:33 pm
If by “calling out” you mean “making known the new =Comptroller folks do not understand their obligation under the Court order”, then sure.=

Their obligation is to pay. They can pay using the funds available. In this case, under the same order, Munger paid from those funds.

But, don’t let the revolving fund hit you in the….

Comment by JS Mill Friday, Feb 17, 17 @ 4:03 pm
== She is in so far over her head == Anonymous, get real and get a name. If anyone is over his head it’s Rauner who can’t count to 60 and 30.

Comment by don the legend Friday, Feb 17, 17 @ 4:05 pm
There is a long history of a) agencies stiffing the revolving funds and b) CMS moving front office people on to revolving funds payrolls to cover shortfalls, “extend payroll, and the like.

The employees that work for these bureaus should be paid from the funds, no if’s, ands, or buts. Heck, IDOT, the biggest user of the State garages, leaves more dough on the floor at the end of the FY than they owe CMS.

Comment by Arthur Andersen Friday, Feb 17, 17 @ 4:26 pm
==Their obligation is to pay. They can pay using the funds available. ==

The discretion on which funds are to be used that can be used has always been, and should always be, with the Department, not the Comptroller. The Comptroller’s job is to process the payment, not direct where it comes from if the fund they’re directed to use is allowable. Which the fund CMS is wanting to use is.

Comment by Anonymous Friday, Feb 17, 17 @ 4:26 pm