A report from the city’s Budget and Legislative Analyst shows that City Hall departments are billing each other to the tune of nearly $80 million a year, and then not paying in full, allowing for confusion or even chicanery on the following year’s budget.

It’s pretty well-known that one of Mayor Daniel Lurie’s biggest upcoming political fights will be over San Francisco’s budget deficit of more than $800 million, and what programs will get cut because of it, and which people will be laid off. And it's a fair guess that the city’s more progressive-leaning officials will be giving Lurie more political blowback over these cuts than the moderate, austerity-friendly officials will.

But here’s a curveball for the austerity crowd. Mission Local reports on a new Budget and Legislative Analyst audit shows that City Hall departments are over-billing one another for services, leaving tens of millions of dollars of those bills unpaid, and then allowing the over-budgeted money to pretty much disappear into the ether, so that money could theoretically be spent on just about anything.        

"At a time when the Mayor is proposing drastic cuts to our most critical social services, and trust in government is fragile, the City must hold itself to the highest standards of accountability,” Supervisor Jackie Fielder said in a Monday afternoon statement reacting to the report. “These findings highlight the importance of transparency, responsible budgeting, and making sure that every dollar is spent wisely.”

You can read the full 80-page Budget and Legislative Analyst report online. The lack of transparency and potential waste can be summed up in City Hall budget-speak as involving "work orders," “carryforwards,” “interdepartmental services.”

Work orders are when City Hall departments charge each other for interdepartmental services, like getting legal advice from the City Attorney’s office, or having Public Works do maintenance on something. And money budgeted for these purposes is not always getting spent, creating the carryforwards where that money is still in a department’s budget, and could theoretically be spent on god-knows-what.

And this is significant money. In the city’s 2022–23 fiscal year, departments had more than $79 million in carryforward appropriations that were still in the departments’ budgets, money that could conceivably be spent without any oversight, because it had already been budgeted.

"Ongoing and increasing overbudgeting for interdepartmental services causes overall budgetary inefficiency and ties up funding, including a significant amount of General Fund monies, that could otherwise be budgeted for and spent on other programs or services,” the analyst’s reports said.

The audit did not find any explicit wrongdoing, but certainly identified tens of millions of dollars that could have been spent unethically. And we’ve seen time and time again at SF City Hall that large sums of money not being tracked can turn into quite the slush fund for bad players in senior positions.

There is no evidence of this. But the audit certainly shows some sloppy budgeting practices.

Though it’s politically significant that the supervisor raising a stink about all this is progressive Jackie Fielder. Lurie is due to present his budget on June 1, and it will surely slash many causes near and dear to progressives. But here we have an emerging counterargument that there may be a ton of change sitting in the couch cushions, and we ought to assess that overbudgeted money before cutting any critical services.

And Fielder will likely be calling for hearings at the Government Audit and Oversight Committee, which she chairs. You can bet those hearings are probably coming before Lurie’s budget arrives June 1.

Related: City Audit Finds Poor Coordination, Lack of Oversight Among SF Homeless Outreach Teams [SFist]

Image: Unma Desai via Unsplash