HARRISBURG - Despite widespread state spending cuts, the General Assembly ended fiscal 2011-12 with an uncommitted surplus of $140 million, according to an audit report approved Wednesday by a state commission.
The report, approved by the Legislative Audit Advisory Commission, also shows that 80 percent of the $306 million spent by the legislative branch that fiscal year went for salaries and benefits of lawmakers and staff.
The surplus was reduced last year by $43 million from a $183 million surplus in fiscal 2010-11, and is nearing an appropriate level, said Rep. Gordon Denlinger, R-99, Ephrata, the commission chairman.
"The reserve is maintained to allow the General Assembly to operate during a stalemate," he said. The General Assembly spends about $30 million each month and needs to be able to operate independently in case of a prolonged state budget stalemate as happened in 2009 with former Gov. Ed Rendell, Denlinger said. Stalemates are more likely to occur when state government is under divided political control, he explained.
Lawmakers had openly discussed reducing the surplus to $120 million last year, but the audit report indicates that goal wasn't reached, Capitol activist Tim Potts said.
Another activist leveled a broader criticism of the legislative surplus which has developed over decades.
"The slush fund is justified as an emergency reserve to protect the balance of power should the budget not be done June 30, 2012," said Eric Epstein, cofounder of RocktheCapital.com. "Surplus money has been used in ways over the years that have nothing to do with a budget impasse."
The Legislature has ignored previous recommendations from an auditor to adopt a policy to cap the surplus and monitor it, Epstein said.
The report by the Philadelphia firm of Mitchell & Titus finds the House keeps several dozen committee and leadership checking accounts for expenses, down from a peak of 100.
The report recommends consolidating the remaining House checkbooks into one account under the House controller and providing more documentation on the specific legislative or businesses purpose for an expense item in those checkbooks.
Denlinger said legislative caucus leaders need to approve audit report recommendations for them to be implemented. He said he plans to discuss the report with respective leaders.
The report includes a statement by the auditor that it didn't audit the Legislature's "internal controls" over financial reporting, meaning it doesn't verify if money was spent for the stated purpose.