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Engrossed Version Senate Bill 524 History

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sb524 eng
ENGROSSED

Senate Bill No. 524

(By Senators Tomblin, Mr. President, and Sprouse,

By Request of the Executive)

____________

[Introduced March 11, 2005; referred to the Committee

on Finance.]

____________



A BILL to repeal §5A-2-25 of the Code of West Virginia, 1931, as amended; to amend and reenact §5A-2-1, §5A-2-24, §5A-2-32 and §5A-2-33 of said code; and to amend said code by adding thereto a new article, designated §12-4C-1, §12-4C-2, §12-4C- 3, §12-4C-4, §12-4C-5, §12-4C-6, §12-4C-7 and §12-4C-8, all relating to transfer of the central accounting system from the Department of Administration to the Auditor's Office; and creating a Financial Services Oversight Committee.

Be it enacted by the Legislature of West Virginia:
That §5A-2-25 of the Code of West Virginia, 1931, as amended, be repealed; that §5A-2-1, §5A-2-24, §5A-2-32 and §5A-2-33 of said code be amended and reenacted; and that said code be amended by adding thereto a new article, designated §12-4C-1, §12-4C-2, §12-4C-3, §12-4C-4, §12-4C-5, §12-4C-6, §12-4C-7 and §12-4C-8, all to read as follows:
CHAPTER 5A. DEPARTMENT OF ADMINISTRATION.

ARTICLE 2. FINANCE DIVISION.
5A-2-1. Finance Division created; director; sections; powers and duties.

(a) The Finance Division of the Department of Administration is hereby continued except that the budget section is transferred to and shall become a part of the Department of Revenue on the effective date of this section as amended in the year two thousand four. The Finance Division shall be under the supervision and control of a Director, who shall be appointed by the Secretary. There shall be in the Finance Division an accounting section and a financial accounting and reporting section.
(b) The accounting section shall have the duties conferred upon it by this article and by the Secretary, including, but not limited to, general financial accounting, payroll, accounts payable and accounts receivable for the Department of Administration.
(c) The financial accounting and reporting section shall establish and maintain the centralized accounting system required by section twenty-four of this article and issue annual general purpose financial statements in accordance with generally accepted accounting principles and with this article. §5A-2-24. Management accounting.
(a) It is the intent of this section to establish a centralized accounting system for the offices of the auditor, treasurer, board of investments, secretary of administration and each spending unit of state government to provide more accurate and timely financial data and increase public accountability.
(b) Notwithstanding any provision of this code to the contrary, the secretary of administration shall develop and implement a new centralized accounting system for the planning, reporting and control of state expenditures in accordance with generally accepted accounting principles to be used by the auditor, treasurer, board of investments, secretary and all spending units. The accounting system shall provide for adequate internal controls, accounting procedures, recording income collections, systems operation procedures and manuals, and periodic and annual general purpose financial statements, as well as provide for the daily exchange of needed information among users.
(c) The financial statements shall be audited annually by outside independent certified public accountants, who shall also issue an annual report on federal funds in compliance with federal requirements.
(d) The secretary shall implement the centralized accounting system no later than the thirty-first day of December, one thousand nine hundred ninety-three, and, after approval of the system by the governor, shall require its use by all spending units. The auditor, treasurer, board of investments, secretary and every spending unit shall maintain their computer systems and data files in a standard format in conformity with the requirements of the centralized accounting system. Any system changes must be approved in advance of the change by the secretary. The auditor, treasurer, board of investments, budget director and secretary of administration shall provide on-line interactive access to the daily records maintained by their offices.
The management accounting system is transferred to and shall become a part of the Auditor's Office on the first day of July, two thousand five.
§5A-2-32. Submission of requests, amendments, reports, etc., to
Legislative Auditor; misdemeanor penalty for noncompliance.

(a) The provisions of section sections three, eleven, twelve, thirteen, nineteen, twenty-three and twenty-five of this article requiring the Secretary and the spending officer of the spending units, as the case may be, to supply copies of the documents specified therein to the Legislative Auditor shall be strictly adhered to by the secretary all such persons.
(b) Any failure by a secretary any person to comply with the provisions of subsection (a) of this section shall be a misdemeanor and, upon conviction thereof, the secretary such person shall be fined the sum of one thousand dollars. This penalty shall be in addition to other penalties provided elsewhere in this article and other remedies provided by law.
§5A-2-33. Financial accounting and reporting section; comptroller; powers and responsibilities.

(a) The financial accounting and reporting section created under section one of this article shall be under the control and supervision of a comptroller. The provisions of this section shall apply to all component units of state government, as defined by generally accepted accounting principles.
(b) The comptroller, under the direction and supervision of the Director of the Finance Division, has the power and responsibility to:
(1) Maintain financial records supporting the comprehensive annual financial report required under subsection (8) subdivision (6) of this section subsection in accordance with generally accepted accounting principles;
(2) Maintain the official chart of accounts of the state;
(3) Maintain the centralized accounting system;
(4) (2) Maintain the statewide accounting policies and procedures, except for the statewide accounting policies and procedures for the centralized accounting system;
(5) (3) Direct the establishment and maintenance of an adequate internal control structure by the various component units of state government, except for the establishment and maintenance of an adequate internal control structure by the various component units of state government for the centralized accounting system;
(6) (4) Verify the periodic reconciliation of assets as reported by the Board of Investments and Budgetary Fund balances as reported by the State Auditor;
(7) (5) Issue management financial reports by component unit and department, as well as consolidated management financial reports, as follows:
(a) (A) Monthly budgetary basis reports by revenue and expense, budget compared to actual, and encumbrances; and
(b) (B) Financial position reports, including, but not limited to, cash, investments, indebtedness, obligations and accounts payable;
(8) (6) Issue a comprehensive annual financial report in accordance with generally accepted accounting principles;
(9) (7) Have the general purpose financial statements of the state audited annually by independent certified public accountants who shall issue an annual report on federal funds in compliance with federal requirements;
(10) (8) Require the State Pension Systems, Workers' Compensation Commission, Public Employees Insurance Agency, Board of Risk and Insurance Management and the various other component units of the state to prepare financial statements audited by independent certified public accountants and submit the audited financial statements to the financial accounting and reporting section in the form and within the time frames established by the financial accounting and reporting section;
(11) Maintain controls over access to the centralized accounting system and the required modifications, as well as edits, controls and tables;
(12) (9) Promulgate legislative rules in accordance with article three, chapter twenty-nine-a of this code to effectuate the intent and purpose of this section: Provided, That such rules may initially be implemented by emergency rule; and
(13) (10) Do all things necessary and convenient to maintain the centralized accounting system, to issue financial reports of the state and to carry out its powers and responsibilities.
The centralized accounting system is transferred to and shall become a part of the Auditor's Office effective the first day of July, two thousand five.
CHAPTER 12. PUBLIC MONEYS AND SECURITIES.

ARTICLE 4C. CENTRALIZED ACCOUNTING SYSTEM.
§12-4C-1. Financial Accounting Division.

(a) There shall be a Financial Accounting Division within the Auditor's Office which shall maintain responsibility for the centralized accounting system heretofore contained within the financial accounting and reporting section of the Finance Division, Department of Administration, previously provided in article two, chapter five-a of this code and now provided in this article;
(b) The Auditor shall exercise and perform any other powers and duties as set forth in this article or previously conferred upon the financial accounting and reporting section of the Finance Division of Department of Administration as they relate to the centralized accounting system prior to the effective date of this section in calendar year two thousand five; whether in article two, this article or elsewhere in the code.
§12-4C-2. Powers and duties of Financial Accounting Division.
(a) The Financial Accounting Division created under section one of this article shall be under the control and supervision of the Auditor. The provisions of this section shall apply to all component units of state government, as defined by generally accepted accounting principles.
(b) The Auditor has the power and responsibility to:
(1) Maintain the official chart of accounts of the state;
(2) Maintain the centralized accounting system;
(3) Maintain the statewide accounting policies and procedures for the centralized accounting system;
(4) Direct the establishment and maintenance of an adequate internal control structure by the various component units of state government for the centralized accounting system;
(5) Maintain controls over access to the centralized accounting system and the required modifications, as well as edits, controls and tables;
(6) Promulgate legislative rules in accordance with article three, chapter twenty-nine-a of this code to effectuate the intent and purpose of this section: Provided, That such rules may initially be implemented by emergency rule; and
(7) Do all things necessary and convenient to maintain the centralized accounting system.
§12-4C-3. Management accounting.
(a) It is the intent of this section to continue the centralized accounting system, heretofore a part of the Department of Administration provided in article two, chapter five-a of this code and now provided in this article, for the offices of the Auditor, Treasurer, Board of Investments, Secretary of Administration and each spending unit of state government to provide more accurate and timely financial data and increase public accountability.
(b) Notwithstanding any provision of this code to the contrary, the Auditor shall continue and maintain a centralized accounting system for the planning, reporting and control of state expenditures in accordance with generally accepted accounting principles to be used by the Auditor, Treasurer, Board of Investments, Secretary and all spending units. The accounting system shall provide for adequate internal controls, accounting procedures, recording income collections and systems operation procedures and manuals and periodic and annual general purpose financial statements, as well as provide for the daily exchange of needed information among users.
(c) The Auditor shall require the use of the centralized accounting system by all spending units. The Auditor, Treasurer, Board of Investments, Secretary of Administration and every spending unit shall maintain their computer systems and data files in a standard format in conformity with the requirements of the centralized accounting system. Any system changes must be approved in advance of such change by the Auditor. The Auditor, Treasurer, Board of Investments and Secretary of Administration shall provide on-line interactive access to the daily records maintained by their offices.
§12-4C-4. Effectuation of transfer of centralized accounting system and transition.

To effectuate the transfer of the centralized accounting system of the Department of Administration to the Auditor's Office upon the first day of July, two thousand five:
(a) All employees, records, responsibilities, obligations, assets, funds, moneys, fees, receivables and property, of whatever kind and character, associated with and/or supporting the centralized accounting system, formerly maintained by the Department of Administration are hereby transferred to the Financial Accounting Division of the Auditor's Office beginning on the first day of July, two thousand five.
(b) All revenues collected pursuant to section ten, article seven, chapter five-a of this code attributable to the maintenance, support and/or operation of the centralized accounting system shall hereinafter be credited to the Centralized Accounting System Maintenance Fund created in section five, article five, chapter twelve of this code. Changes in the rates associated with revenues collected pursuant to section ten, article seven, chapter five-a of this code which affect the revenues hereinafter credited to the Centralized Accounting System Maintenance Fund shall be approved by the Auditor.
(c) The unencumbered balances of all funds allocated to the centralized accounting system of the Division of Finance for fiscal years ending the thirtieth day of June, two thousand five, and the fiscal year ending the thirtieth day of June, two thousand six, are hereby transferred to the Auditor's Office on the first day of July, two thousand five.
(4) All orders, determination, rules, permits, grants, contracts, certificates, licenses, waivers, bonds, authorizations and privileges which have been issued, made, granted or allowed to become effective to the Governor, any state department or agency or official thereof, or by a court of competent jurisdiction, in the performance of functions which have been transferred to the Auditor's Office from the Finance Division of the Department of Administration and were in effect on the date the transfer occurred continue in effect, for the benefit of the Auditor's Office, according to their terms until modified, terminated, superseded, set aside, or revoked in accordance with the law by the Auditor's Office or other authorized official, a court of competent jurisdiction or by operation of law.
(5) Any proceedings, including, but not limited to, notices of proposed rulemaking, in which the Department of Administration was an initiating or responding party are not affected by the transfer of the centralized accounting system to the Auditor's Office. Orders issued in any proceedings continue in effect until modified, terminated, superseded or revoked by the Auditor, by a court of competent jurisdiction or by operation of law. Nothing in this subdivision prohibits the discontinuance or modification of any proceeding under the same terms and conditions and to the same extent that a proceeding could have been discontinued or modified if the centralized accounting system had not been transferred to the Auditor's Office. Transfer of the centralized accounting system to the Auditor's Office does not affect suits commenced prior to the effective date of the transfer and all such suits and proceedings shall be had, appeals taken and judgments rendered in the same manner and with like effect as if the transfer had not occurred, except that the Auditor or other officer may, in an appropriate case, be substituted or added as a party.
§12-4C-5. Centralized Accounting System Maintenance Fund.
There is hereby created in the State Treasury a fund entitled the Centralized Accounting System Maintenance Fund. The Fund shall consist of all funds, moneys, fees or other sources of revenue transferred from the Information Services and Communications Division of the Department of Administration pursuant to the provisions of this article and all revenues hereinafter collected pursuant to section ten, article seven, chapter five-a of this code attributable to the maintenance, support and/or operation of the Centralized Accounting System. The Centralized Accounting System Maintenance Fund shall be used to pay for the operation and maintenance of the Centralized Accounting System. The accrued surplus over and above the amount of two hundred fifty thousand dollars remaining in the Fund at the end of any fiscal year shall be transferred into the Statewide Accounting Development Fund for the purposes provided therein.
§12-4C-6. Statewide Accounting Development Fund.
There is hereby created a fund in the State Treasury entitled the Statewide Accounting Development Fund. The Fund shall consist of any transfers, donations, or grants made for the purpose of studying, evaluating, creating and implementing a new centralized accounting system and any fees or other moneys dedicated by the Legislature for that purpose.
Expenditures of the Fund are to be made in accordance with appropriations by the Legislature and not authorized from collections.
§12-4C-7. System of accounting to be certified to Legislative Auditor.

The Auditor shall certify the system of accounting and reporting installed pursuant to the provisions of this article, and any changes made therein, to the Legislative Auditor.
§12-4C-8. Financial Services Oversight Committee created; purpose; membership; expenses.

(a) There is created a Financial Services Oversight Committee to provide advice and guidance concerning the development and coordination of effective and efficient financial services for state government. The Committee shall solicit input from state agencies and make recommendations to improve the provision of financial services to state government: Provided, That the Committee has no oversight of banking or cash management services. The Committee consists of twelve members, including the Governor or his or her designee; the Auditor or his or her designee; the Treasurer or his or her designee; the Secretary of Administration or his or her designee; the Secretary of Revenue or his or her designee; the Secretary of Health and Human Resources or his or her designee, the Secretary of Transportation or his or her designee, one member of the West Virginia Higher Education Policy Commission to be selected by it annually; three members from institutions of higher education appointed by the Auditor; and one citizen of the state appointed by the Auditor.
(b) The Auditor or his or her designee serves as chair of the committee.
(c) Committee members shall receive reimbursement for expenses actually incurred in the performance of their duties on the committee.

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