Department Operations Manual

21010.1 Budget Planning Policy The California Department of Corrections and Rehabilitation (the Department) shall submit an annual budget that is consistent with the policies set by the Governor, the Secretary of the California Department of Corrections and Rehabilitation, and the Director of the Department of Finance (DOF). 21010.2

21010.2 Purpose of Budget Planning This Article describes the Department's portion of the process for submittal of the Governor's Budget exclusive of Major and Minor Capital Outlay projects. For a description of the Major and Minor Capital Outlay processes, see the Department Operations Manual (DOM) Chapter 2, Article 4, Capital Outlay. 21010.3

21010.3 Budget Planning Responsibility The Budget Management Branch (BMB) provides coordination for the central support budget planning process. 21010.4

21010.4 Budget Planning Preparation Calendar (a) Based on the schedule established by the DOF, the BMB issues a calendar of actions and deadlines required in the preparation of the Governor's Budget. (1) This serves as a guideline for operating units of the Department to schedule workloads accordingly. (2) Because requirements change annually and State revenues may not be available as anticipated, this calendar is subject to numerous changes. 21010.5

21010.5 Budget Process (a) The Budget Act is the primary source for appropriations and provides for the usual and current expenses of the State. Departments are responsible to operate within budgeted levels and to comply with any restrictions or limitations enacted by the Legislature. The Legislature has provided provisions in the Budget Act to allow for budget adjustments. (1) These provisions include authorizations for: intra-item transfers (Section 26.00), deficiencies (Section 27.00), changes to federal funding levels (Section 28.00), and changes to reimbursements (Section 28.50). (b) The basic concept of budget development uses incremental budgeting. This approach uses the current departmental level of funding as a base amount to be adjusted by change proposals. (1) The Budget Change Proposal (BCP) is the traditional decision document to change the level of service or funding sources for activities authorized by the Governor and the Legislature, or to propose new program activities not currently authorized. 21010.6

21010.6 Requesting Budgetary Resources (a) The following are standardized processes used to request budgetary resources: (1) Policy Budget Change Proposal The BCP process is used to request the increase, decrease, or redirection of resources due to changes in existing programs, departmentwide problems, policies, procedures, mandates, increase or decrease in workload, etc. Based on direction provided by the DOF through the annual budget policy letter, the Office of Fisal Services (OFS) issues instructions annually to set forth overall budgetary policies and the BCP process and timelines. (A) The BCP process usually starts with the Budget Concept Statement (BCS), which is an internal departmental process. BCPs have to be clear, concise, direct, and supported with factual statements and workload data. Approval of this request by the Governor and the Legislature will address changes in resources for the budget year. Current year resource changes will be addressed in either a deficiency request, changes to federal funding levels, or changes to reimbursements, as appropriate. (B) BCPs containing information technology (IT) components related to IT projects, generally must secure Department of Information Technology approval of the related Feasibility Study Report or Special Project Report prior to submission to the DOF. These BCPs are subject to the same DOF submittal deadlines. (C) For BCPs that are tied to a Capital Outlay project, program staff need to coordinate with the Capital Outlay staff to include information that is consistant with the Capital Outlay BCP. (D) If a requesting program’s BCP affects other administrative or operational entities within the Department, the requesting program must contact the affected entity(s) for input on whether additional resources are needed to offset the workload. The requesting program shall coordinate the inclusion of any identified resources into the BCP. (E) If a BCP affects another state agency, program staff must contact the other agency to ensure that they concur and will not be in opposition of the BCP. When sending BCP related documentation to another state agency, the following statement is to be in cluded on all correspondence: “CONFIDENTIAL: DO NOT FORWARD OR DUPLICATE EXCEPT TO AUTHORIZED STAFF.” (2) Responsibility for BCPs Individuals who direct the preparation and submission of BCPs are as follows: (A) Deputy Director, OFS. (B) Undersecretaries (C) Program Directors. (3) Population Budget Change Proposal A Population Budget Change Proposal (POP BCP) is processed every year, starting in September, to address changes in resources as a result of projected inmate and parolee population changes in both the current and budget years. (4) Population Projections Fall and Spring Utilizing the projections issued by the Office of Research (OR), and the construction schedule issued by the Facility Planning, Construction and Management Division, the program support unit of the Division of Adult Institutions schedules the placement of inmates in what is known as the "Institution Activation Schedule." Based on this schedule, the OR issues the following projections in September or October and updates them in February or March of each fiscal year (July 1 to June 30): (A) Preliminary estimates of prison and parole populations for the preparation of the budget which becomes effective July 1 of the following year. (B) Revised population estimates for the current fiscal year. (5) Finance Letter This is an emergency Policy BCP request for unforeseeable events that arise after the Governor has submitted the budget request to the Legislature or a proposal to refine or adjust a BCP that was included in the January 10 budget. Finance Letters are usually submitted in February. Approval of this request by the DOF will revise the budget previously submitted to the Legislature in January. (6) May Revise A BCP submitted to the DOF by April 1 and then to the Legislature by May 14 requests augmentation to the Governor’s Budget for the inmate and parolee population change in both current and budget years. This document is submitted in the Spring as a revision to the budget previously submitted to the Legislature in January. (7) Deficiency Requests The deficiency request allows departments to add monies to their budget in the current year to address immediate program changes (i.e., population increases). The request is to be submitted as soon as the need is identified for unforeseen and significant costs over and above what is in the budget. The deficiency request is submitted by the BMB to the DOF, Governor, and the Legislature for approval. (A) The deficiency process is also used to recover those funds spent during an emergency, which cannot be absorbed by existing resources. The Secretary has defined an emergency as a sudden, unexpected occurrence that poses a clear and imminent danger requiring immediate action to prevent or mitigate the loss or impairment of life, health, property, or essential public services. (B) An emergency has to be an event of large magnitude and severe impact, such as, but not limited to, earthquake, flood, tornadoes, major riots, severe and prolonged disruption of utilities, etc. Only in extreme emergencies are departments allowed to incur expenditures prior to securing the proper funding. (C) Such expenditures still need to be submitted by the BMB to the DOF, Governor, and the Legislature for approval. Therefore, managers need to immediately, within the next business day of the emergency, notify their chain of command and the BMB of the emergency and, at the end of the emergency, submit to the BMB an expenditure report of all costs incurred. (D) Once the BMB validates that those costs meet the requirements of an emergency, it will immediately notify the Office of the Secretary and the DOF of its intent to file for a deficiency if the costs cannot be absorbed. (8) Approval Process All budgetary requests will be forwarded to the BMB for approval prior to final submittal to the DOF in compliance with State Administrative Manual (SAM) Section 6120. 21010.7

21010.7 Budget Change Proposal Adjustments Adjustments are often required between the final submission of BCPs and the final preparation of the Governor's Budget. The BMB shall notify departmental administrators of such changes and recommend proper action. 21010.8

21010.8 Budget Allotments By July 1 of each fiscal year, an initial allotment is issued for each facility, office, and division, provided timely passage of the Budget Act. As the fiscal year progresses and changes are made to the budget, corresponding changes are made to the allotments through the budget change process. Operations Manual DEPARMENT OF CORRECTIONS AND REHABILITATION Chapter 2 77 21010.9

21010.9 Fiscal Reviews (a) Fiscal reviews are an important process, which ensures the Department remains fiscally sound. The areas involved with the fiscal review process are: (1) Programs Each facility, office, division, and parole region will complete a monthly Budget Forecasting Function (BFF) document using the standardized methodologies listed in the BFF instructions, which can be provided by the BMB. For those line items with no standardized projection methodology, a detailed explanation is to be provided. The BFF will be submitted to the BMB beginning September of each fiscal year and then every month after based on an annual calendar. Programs must continuously monitor their fiscal situation and quickly raise financial problems to the BMB as soon as they become known. (A) During the third quarter of each fiscal year, fiscal reviews are held at headquarters to validate the projected expenditures by facility, office, division, and parole region. At the fiscal reviews, Wardens, Associate Directors, Deputy Directors, Parole Administrators, and departmental managers are expected to: 1. Identify the reasons for a potential budgetary surplus or deficit. 2. Identify measures to be taken to offset a potential deficit. 3. Provide detailed information for temporary help and overtime expenditures. 4. Provide a clear and accurate reflection of the operation’s fiscal state. (2) Office of Fiscal Services – Budget Management Branch The BMB is responsible for oversight of the BFF and the fiscal review process and making recommendations to executive staff. (A) The BMB budget analysts are responsible for analyzing the BFF, and providing feedback to all facilities, offices, divisions, and parole regions. (B) The BMB will provide training to the BMB budget analysts and the institutions’ managers and budget analysts about how to make fiscal projections and understand cost data. This training module will also include an in-depth discussion on the fiscal and operational challenges of managing a prison. (C) The BMB provides a monthly expenditure report of all departmental programs to the Office of the Secretary. (3) Executive Office The Director, Division of Administrative Services, and the Undersecretary of Administration, or their designee(s), will chair fiscal reviews and make final decisions on the approval or disapproval of expenditure projections. The committee shall consist of: (A) OFS executive staff, managers, and analysts. (B) Respective division Directors or designee(s). (C) Respective program executive staff, managers, and analysts. 21010.10

21010.10 Fiscal Responsibility (a) Government Code Section 13324 states: “Every person who incurs any expenditure in excess of the allotments or other provisions of the fiscal year budget as approved by the Department (OFS) or as subsequently changed by or with the approval of the Department (OFS), is liable both personally and on his official bond for the amount of the excess expenditures.” The Secretary and Undersecretaries approve all policy decisions. (b) Wardens, Directors, Deputy Directors, and Parole Administrators have the primary responsibility to follow approved policies and remain within budgetary authority by adhering to the following guidelines: (1) Notify the BMB as soon as possible of new policies, procedures, or changes in policies and procedures that may have a fiscal impact. Fiscal impact is defined as an increase in cost that is not funded and cannot be absorbed within existing resources in the current or subsequent fiscal year(s). If a program is operating in a deficit, there shall be no changes that will increase costs. Follow the established process to acquire additional funding. (2) Immediately notify the appropriate chain of command and the BMB of an emergency that may require expenditures to be incurred prior to securing the Office of the Secretary’s approval and the appropriate funding. (3) Immediately notify the appropriate chain of command, Office of Legal Affairs and the BMB when the Department is compelled by court order or other legal process to make non-budgeted expenditures. The BMB shall contact the DOF to begin the process of securing the necessary funding. (4) Hold in abeyance the implementation of new or adjusted policies and procedures until the Office of the Secretary’s approval and proper funding is secured. (5) Agreements with local unions must stay within the parameter of the contract and authorized resources, and must not have a statewide impact. (6) Follow the established budget process to request additional resources (e.g., Policy and Population BCPs, Finance Letters, May Revise, Deficiency Requests). (7) Minimize temporary help and overtime expenditures. (8) Eliminate unauthorized positions. (9) Position upgrades (reclassifying a position to a classification with a higher salary) must be accomplished within existing resources. (10) Achieve the savings identified in the Non-Custody Vacancy Plan. (11) Control sick leave usage in conformance with DOM Chapter 3, Article 8. (12) Maximize the use of permanent full time and intermittent officers. (13) Eliminate programs for which no funding is available. (14) Eliminate the liability for accumulated holiday leave and excess vacation and annual leave balances by utilizing the budgetary authorized holiday and vacation relief factor. (15) Closely monitor the BFF. (16) Reduce or postpone non-critical expenditures if a budget deficit is projected. (17) It is the responsibility of the Warden, Associate Director, Deputy Director, or Parole Administrator to ensure that the BMB is notified immediately via the BFF cover memorandum when a projected budget deficit is anticipated. Also, it is their responsibility to submit an action plan addressing every action available to eliminate the projected deficit. 21010.11

21010.11 Policy Decisions and Fiscal Impact (a) The Secretary, Undersecretaries, and Assistant Secretaries approve all departmental policy changes as set forth in DOM Section 11010.3. The program division Directors shall prepare a request to change policy identifying the scope of the recommended policy change and any fiscal impact. (1) The Director shall route the recommended policy change package to the BMB who shall analyze the projected fiscal impact and ensure the proposal has been costed accurately and the program has identified the funding source and availability of funds for the recommended change. Based on the BMB analysis, the Deputy Director will determine one of the following: (A) The funding for the request is identified, but not yet allotted to the program. In this situation, the Deputy Director will respond directly to the program, and not forward the request to the Office of the Secretary. (B) The program could internally redirect funding within its allotment. Similar to the above situation, the Deputy Director will respond directly to the program. However, if the program disagrees with the Deputy Director’s determination, the Deputy Director shall forward the request along with a recommendation to the Office of the Secretary for final decision. (C) No funding is available to implement the request, but program has identified a critical or time sensitive need. In this situation, forward the request to the Office of the Secretary and follow the process for non-urgent requests as described below. (D) No policy decisions shall be recommended for implementation without the funding being identified, secured, and if necessary, approved by the Office of the Secretary and the DOF. (2) Non-Urgent Requests Non-urgent requests are to be submitted to the Office of the Secretary, the BMB and the DOF through the normal budgetary process described in Sections 21010.5 and 21010.6. The BMB will work with the program staff to identify which of the processes described in these Sections is to be used to request funding prior to implementation of the change. (3) Urgent Requests For urgent requests, the following steps will be taken as expeditiously as possible: (A) Program submits the request to their headquarters chain of command, with a copy to the Deputy Director, OFS, using the BCS format. (B) Deputy Director, OFS submits the request to the BMB for fiscal impact analysis. (C) The BMB reviews and submits the request to the Office of the Secretary with a recommendation to approve or disapprove. (D) The Office of the Secretary approves or disapproves and returns the request to the BMB. (E) If disapproved, the BMB returns the request to the originator, closing the request. (F) If approved, the BMB immediately notifies the DOF to secure approval of the request prior to implementation of a policy change. (G) The BMB will work with the DOF on the best approach to acquire additional resources within the budgetary cycle. 21010.12

21010.12 Inmate Welfare Fund The Inmate Welfare Fund (IWF) is shown as a separate item in the Budget Act and is subject to the same schedule as the Department’s. Information about the IWF is contained in DOM Chapter 2, Article 20. 21010.13

21010.13 Revisions The Deputy Director, OFS, or designee shall be responsible for ensuring the contents of this Article are kept current and accurate. References SAM § 6120 BA § 32. Operations Manual DEPARMENT OF CORRECTIONS AND REHABILITATION Chapter 2 78 VCGCB Rule § 614. DOM §§ 11010.3, 21010.5, and 21010.6. Revision History Revised: April 25, 2001 Revised: January 29, 2021 A RTICLE 2 — O PERATING E XPENSES AND E QUIPMENT Revised April 25, 2001 21020.1

21020.1 Policy The Department shall allocate all available funds required for departmental operating expenses. 21020.2

21020.2 Purpose This Article describes the allocation process for Operating Expenses and Equipment. 21020.3

21020.3 Allocation of Funds By August 1, the BMB shall issue a program/line item budget allocation to each facility office, and division, provided timely passage of the Budget Act. This shall normally be an allocation of the total funds available for operating expenses. If additional funds become available during the fiscal year, subsequent allocations of these funds shall be made at the earliest possible opportunity. Subsequent changes to original allocations shall be transmitted by numbered budget change documents during the fiscal year. In some instances, informational letters about the changes shall precede the budget change document, but shall not be used to enter the change into the official accounting records. This shall be done only after the budget change document is issued. 21020.4

21020.4 Schedule 9, Equipment The Schedule 9 process is for replacing existing equipment only. Equipment for new positions or new programs shall be requested via the BCP process. Equipment reported in the Schedule 9 has a unit acquisition of $5,000 (e.g., four identical assets at $3,000 each, for a $12,000 total would not meet the requirement). For more information, refer to SAM Section 8602. The BMB sends specific instructions annually (around end of August) on how to complete the Schedule 9 process. DAI, DAPO, and each Headquarters’ division/office need to complete the Schedule 9. 21020.5

21020.5 Written Justification for Requested Equipment Except for those complements related to new positions, a CDC Form 533, Equipment Budget Request, detailing the description of the equipment, it's function, and the need for it shall be attached to the Schedule 9. 21020.6

21020.6 Equipment for New Positions Equipment needs related to new positions shall be included in the BCP for the position and submitted to BMB for computation of cost of standard office equipment complement. If equipment and furnishing are required beyond the standard office complement, it must be identified by description and cost in the BCP. 21020.6.1

21020.6.1 Standard Equipment Complements When requesting standard equipment complements, the basic equipment complement guidelines, which are utilized in new prison construction, should be referred to for guidance. For the purpose of BCP, BMB calculates a standard office furnishing complement. This complement, based on classification, may include a chair, table, desk, bookcase, and personal computer or calculator, where applicable. 21020.6.2