DFA budget hearing: secretary offers SHARE audit savings and asks for $500K supplemental for financial control unit

The Appropriations & Finance Committee heard a budget briefing for the Department of Finance and Administration (DFA). That presentation laid out differences between the executive and Legislative Finance Committee recommendations, discussed revenue-source choices for certain programs and produced two formal requests from the secretary.

Wayne Proppst, Secretary of the Department of Finance and Administration, opened by thanking LFC and DFA analysts and framing the two items he wanted the committee to consider. "I am going to try to accomplish 2 things today," Proppst told the panel. He highlighted a supplemental request and then gave the committee an unanticipated savings: the required audit of the SHARE (state human resources and financial) system is now projected to cost roughly $250,000 rather than the $1,000,000 originally requested. "We now think instead of costing a million dollars, that audit will only be about $250,000, leaving you with $750,000," Proppst said.

Proppst also asked the committee to consider a $500,000 special supplemental appropriation to cover a projected shortfall in personal services and employee benefits in DFA’s financial control division. He said last year that division’s PSEB line was reduced substantially in HB2 and that the supplemental would fill that gap.

Analysts Emily Hilla (LFC analyst for DFA) and Nicole Macias (DFA analyst) reviewed program-level differences. Hilla summarized high-level differences in general fund recommendations and flagged three revenue sources — the Tobacco Program Settlement Fund, the Opioid Crisis Recovery Fund and county-supported Medicaid — as drivers of the net differences between executive and LFC packages. Both recommendations moved certain nonoperating costs and clarified line-items; both also proposed personnel increases compared with the current base but to different extents.

Civil legal services funding and opioid settlement revenue drew sustained attention from committee members. Hilla and Macias said recurring funding for civil legal services had been supported at the agency request level across the recurring budget lines (about $4,000,286.10 across funds). LFC recommended an additional special appropriation of $4,000,000 (including $1,000,000 for FY26 in its scenario); members urged higher support given federal grant cuts to legal aid and the increased demand for civil legal services in areas such as housing and tax exemptions.

The members also discussed revenue stability for opioid settlement funds. Hilla cautioned that opioid settlement distributions have not materialized as initially forecast and that LFC adjusted its numbers to avoid relying on an unstable principle balance. The executive recommendation used more fund balance for opioid-related programs; LFC recommended a more conservative approach.

Other items discussed at hearing - Law-enforcement-related funds: committee members asked for clarity on the law enforcement protection fund and recruitment/retention funds; DFA staff said the protection fund is structured to revert balances to the law enforcement retention fund at the Department of Public Safety and can be used for nonrecurring needs (vehicles, training, capacity building) and that remaining balances are deliberate. - Match Fund and infrastructure grants: legislators praised DFA’s administration of the match fund and its leverage of federal funds (DFA deputy reported $5.61 in federal funds per $1 of state match in FY25 for the program cited).

Votes and requested follow-ups Committee vote: a motion to adopt the LFC recommendation for DFA’s budget was moved by Vice Chair Dixon (mover) and seconded by Representative Garrett; the motion was adopted with no recorded opposition. The committee asked DFA to follow up on: (a) civil legal services funding options, (b) details about opioid settlement receipts and planned uses, and (c) the financial control division’s staffing shortfall details to support or refine the secretary’s supplemental request.

Why it matters DFA administers a wide range of interagency and statewide functions; choices in the DFA budget set the availability and timing of many programs (P-EB lines, fund transfers, administration of match and disaster funds, and state-level grant capacity). The SHARE audit outcome reduces an expected special request, and the department’s $500,000 supplemental seeks to avoid a shortfall in a core control function that affects statewide financial operations.

Ending note Committee members directed staff and DFA to provide further detail on civil legal services staffing and funding, to clarify which opioid settlement amounts are reliable, and to provide a full justification for the requested $500,000 supplement for the DFA financial control division.