Finance committee discovers possible discrepancy in Ministry of Education budget
The Senate Finance Committee dissected the Education Ministry’s draft budget for fiscal year 2022 during Thursday’s hearing, exposing the “inflated” benefit costs that make up 30% of the ministry’s annual budget.
The recommended cost for the ministry’s benefits was more than $ 55 million, ten percent more than the previous fiscal year, Education Commissioner Raquel Berry-Benjamin said. Within this cost, items such as the employer’s contribution to retirement, health and dental insurance, workers’ compensation premiums and unemployment insurance contributions are projected and aggregated to arrive at the recommendation.
But almost immediately, senators realized the calculations were incorrect.
Senator Marvin Blyden was the first to say, “The benefits seem to be pretty high”, and the committee needs to “look at the numbers”. He said the relationship between benefit costs and personnel costs is linked, and most agencies in the territory estimate employee benefit costs at 40% of the agency’s total staff cost.
Education Deputy Commissioner of Tax and Administrative Services Ava Penn said, “We have historically used 50 percent of calculated benefits and this year we’re up,” to 52 percent.
“The process in all the other departments is over 40 percent, not 50,” Blyden said. “You’re the first agency I’ve seen at 52%, so something’s wrong. He cannot be precise. Everyone is at, I believe, 42 percent – not 52. So far, every agency for this year’s budget process, no one has been at 52 percent.
Penn told the committee the calculations are based on formulas from the Office of Management and Budget and should reflect 52% of staff costs.
“What worries me is that personnel services have increased by $ 4,874,805. It’s the increase in staff, but your margin has increased by $ 5,029,012, ”said Senator Kurt Vialet. “So your bangs actually grew more than the staff. You say your margin is 50% of your staff, so your margin should have been $ 2.4 million. The increase should have been $ 2.4 million, instead of $ 5 million. He said the increase was closer to 110%.
But Penn assured senators the math was correct.
Senator Donna Frett-Gregory said that even if the math was correct, a fixed percentage for each employee would never produce accurate projections because individuals have different healthcare needs and plans.
“What is supposed to happen is that the human resources office and your office have to work together to establish singles and families,” Frett-Gregory said. “Not everyone is at 52% and that’s the problem. We cannot make a 52% duty on every employee. Some kind of analysis has to be done so that we can get a better picture. I know you can’t get a full picture of all the vacancies, but at a minimum you should have a better perspective on the vacancies. So, in fact, it’s inflated, it is.
The governor has recommended a 12 percent increase in the department’s budget allocation in recent years, to nearly $ 185 million, to be allocated from the general fund. Of that amount, 30 percent will go towards employee benefit costs, unless lawmakers adjust the department’s budget.
Separately, the committee also received testimony on the budget proposed by the Council for Technical Education and Careers of nearly $ 650,000 and the budget proposed by the Council of Education of the Virgin Islands of nearly $ 2 million. dollars.
Senators Marvin Blyden, Samuel Carrion, Dwayne DeGraff, Kurt Vialet, Donna Frett-Gregory, Javan James Sr. and Janelle Sarauw were present at the hearing. Other non-committee members also attended the hearing.