DBM report flags repeated closeout errors, costly procurement delays and ARPA spending near-term deadline
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Summary
DLS told the committee that DBM's FY27 budget is $49 million and highlighted serious fiscal closeout and accrual reconciliation issues across state agencies, costly contract extensions tied to procurement delays, and remaining ARPA funds that must be spent by Dec. 31, 2026.
Department of Legislative Services analyst Jacob Cash presented the Department of Budget and Management’s fiscal 2027 operating allowance of $49 million and outlined several issues DLS wants the committee to address.
Cash said the central collection unit (CCU) drove much of the budget increase, citing recoveries that reached $185 million in a recent reporting cycle with CCU retaining 17% for operations; CCU added staff and expects recoveries to increase year over year. Cash also highlighted fleet purchasing goals for 2025, noting progress on zero-emission vehicle (ZEV) purchasing targets.
DLS raised serious concerns about closeout and accounting errors in fiscal 2025 that required roughly $758 million in total deficiency appropriations (about $322 million in general funds) and identified $3.4 billion in accrued federal revenues that agencies had not adequately documented. "These failures could result in unrecovered funds, which could ultimately require the use of state general funds to resolve any deficits," Cash said.
On procurement, DLS described a prolonged procurement for fleet maintenance services with Element Fleet Management that began in April 2022, encountered a cancellation in August 2022 and repeated delays; DLS flagged a recent contract extension that cost $20 million for under six months of service and noted the per-day cost rose substantially.
DLS also reported $160 million in remaining ARPA funds by policy area (largest share for broadband) and reminded the committee that states must expend ARPA funds by Dec. 31, 2026. DLS recommended restrictions and additional reporting on final ARPA spending.
DBM Secretary Jake Weisman responded to the committee, describing steps the department has taken to modernize collections, implement AFCU quarterly reporting and to coordinate with agencies on corrective actions. Weisman corrected one procurement detail, noting that the Board of Public Works approved the new fleet contract on Dec. 17, 2025, with a $90 million base term and a $77 million renewal option, and said DBM will work with the committee on DLS recommendations.
DLS recommended several budget language changes and more detailed reporting; DBM concurred with many recommendations and disagreed with some proposed restrictions on secretarial authority. The committee requested additional detail on planned uses of DPA funding for fiscal leadership and on DBM plans to timely submit budget amendments and closeout documents.