Similar to how the LAO serves the California Legislature, the Department of Finance – DOF or Finance for short – serves as the chief fiscal policy advisor to the Governor. Its closest federal counterpart is the Office of Management and Budget, OMB, which serves as the President’s chief fiscal policy advisor.
The DOF engages in a number of activities related to the state budget. They prepare the proposed, revised, and enacted versions of the state budget, trailer bill language, and other budget details such as BCP’s (budget change proposals), finance letters, and pro rata statewide cost allocation plans. DOF also has a treasure trove of historical budget information. This includes old e-budgets, publications, summary schedules, historical charts, and other budget-related information.
DOF is also responsible for accounting issues for the state. Their responsibilities include devising, supervising, and maintaining a modern, uniform state accounting system. Finance also sets statewide fiscal and accounting procedures and they provide fiscal and accounting training, advice, and consulting services to different state agencies and their personnel.
Finance also does a fair amount of forecasting. DOF prepares four major forecasting reports each year on demographics, economics, general fund and special tax revenue estimates, and on major regulations where the costs or benefits are estimated to exceed $50 million. DOF also publishes a number of reports on different matters where there is a fiscal impact to the state of California.
Like the LAO, Finance has proven to be an invaluable player in the annual state budget bill negotiations working on behalf of the Governor and the administration to ensure that the Governor and his or her staff has all the data and information that they need to work collaboratively with the Legislature in order craft what is undoubtedly the most important bill enacted each and every year, the state budget bill.
You can read the transcript of today’s audio here.