The proposed 2009 budget would permit the Board to spend $157.6 million, and to end next year with a staff of 531. The budget represents an increase in authorized spending of about $13 million, or 9 percent, above the 2008 budget of $144.6 million and an increase of $26.6 million, or about 20 percent, over projected 2008 spending. I support the proposed 2009 budget and would like to briefly highlight several points.
First, personnel costs are nearly 72 percent of the 2009 budget. We have set high standards as to whom we will employ, particularly in the experience levels of our inspections staff. Attracting, compensating, and retaining talented people, particularly veteran auditors, require significant resources. The budget reflects those costs.
Second, in the Sarbanes-Oxley Act, Congress envisioned an oversight process driven by an active and timely audit firm inspection program. In 2009, the Board will allocate $69.6 million of its proposed budget, or 44 percent, directly to the Division of Registration and Inspections. Other Board units, particularly the Office of Research and Analysis and the Office of Information Technology, use their resources to support inspections. Further, much of the work of the Division of Enforcement arises from problems that are first uncovered in an inspection. At $12.2 million, Enforcement’s budget is second only to Inspections among the Board’s operating divisions. That level of funding for investigations and enforcement cases is an increase of about 13 percent over 2008, and underscores the accelerating pace of the Enforcement Division’s work.
Further, the 2009 budget reflects some changes in direction and emphasis. Three of these are particularly significant --
Given these developments, and the stresses on financial reporting from the current economic environment, a question might be raised as to whether the 2009 budget will be adequate. It is certainly possible that factors that we do not fully anticipate today will cause the Board to need more resources than this budget provides. However, the budget already reflects significant growth, including a net staffing increase of 46 people over the projected December 31, 2008 headcount. Based on what we know now, this level of funding should be adequate to do our job.
Today’s meeting is the end of a process that began last Spring, and I want to thank everyone who has worked on the budget, especially Angela Desmond, the Board’s Chief of Staff, Yoss Missaghian, Senior Budget Analyst, and particularly Bill Wiggins, the Board’s tireless, but unflappable, Budget Officer.