H. B. 4058

(By Delegate Michael)

[Introduced January 16, 2002 ; referred to the

Committee on Finance.]

A BILL to amend and reenact section twenty-four, article two, chapter five-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended; to amend and reenact sections one, one-a, one-b, four and six, article three, chapter twelve of said code; to amend and reenact sections three and four, article three-a of said chapter; and to amend and reenact section four, article four of said chapter, all relating to the management of state finances; requiring use of centralized accounting system; redefining "warrant"; redefining "electronic funds transfer"; authorizing treasurer to make direct deposits; requisitions of spending units authorized by auditor; authorizing treasurer to establish state debit card; payments authorized by treasurer; and electronic fund transfers.

Be it enacted by the Legislature of West Virginia:
That section twenty-four, article two, chapter five-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted; that sections one, one-a, one-b, four and six, article three, chapter twelve of said code be amended and reenacted; that sections three and four, article three-a of said chapter be amended and reenacted; and that section four, article four of said chapter be amended and reenacted, all to read as follows:
CHAPTER 5A. DEPARTMENT OF ADMINISTRATION.
ARTICLE 2. FINANCE DIVISION.
5A-2-24. Management accounting.
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.
Notwithstanding any provision of this code to the contrary, the secretary shall develop and implement a new maintain and continue developing the state of West Virginia centralized accounting system, which shall consist of one hardware platform, for the planning, reporting and control of state receipts and 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. The auditor, treasurer, secretary and all spending units shall use the centralized accounting system.
The financial statements shall be audited annually by Outside independent certified public accountants shall annually audit the financial statements of the state, and who shall also issue an annual report on federal funds in compliance with federal requirements.
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 Spending units shall use the centralized accounting system and shall maintain their internal accounting and financial systems and data files in a standard format in conformity format that conforms with the requirements of the centralized accounting system. Any system changes must be approved in advance of such change by the secretary. The auditor, treasurer, board of investments and secretary shall provide on-line interactive access to the daily records maintained by their offices.
CHAPTER 12. PUBLIC MONEYS AND SECURITIES.
ARTICLE 3. APPROPRIATIONS, EXPENDITURES AND DEDUCTIONS.

§12-3-1. Disbursing funds from the treasury; definition of warrant; contents of warrants; reports; payment by treasurer.

Every person claiming to receive A claim for money from the treasury of the state shall apply is submitted to the auditor for issuance of a warrant. for same A warrant is an authorization of the auditor that the treasurer may disburse funds from the treasury. The auditor shall thereupon examine the claim, and the vouchers, certificates and evidence, if any, offered in support thereof of the claim, and for so much thereof as the amount of the claim he or she finds to be justly due from the state, if payment thereof is authorized by law, and if there is an appropriation not exhausted or expired out of which it is properly payable, the auditor shall issue his or her warrant on the treasurer, specifying to whom and on what account the money mentioned therein is to be paid, and to what appropriation it is to be charged in paper or electronic form to the treasurer. The warrant shall contain the warrant number, warrant date, state fund or account number, centralized accounting system document identification number, payee name, payee identification number if available, payee mailing address if payment is by check, amount, any other information reasonably requested by a spending unit, and a certification of the auditor that the claim has been examined, sufficient appropriated funds remain to pay the claim and payment is authorized. The auditor shall present to the treasurer daily reports on the number of warrants issued, the amounts of the warrants and the dates on the warrants for the purpose of effectuating the investment policy of the investment management board reports each work day of all information contained in the warrants issued that work day, specified by warrant in numerical order in the electronic format requested by the treasurer.
On the presentation of the warrant to the treasurer, the treasurer shall ascertain whether there are determine that sufficient funds are in the treasury to pay that warrant, and if he or she finds it to be so that the warrant is facially correct and that he or she has received no notice that the payment should not be made, he or she shall in that case, but not otherwise, endorse his or her check upon the warrant issue a check or authorize an electronic funds transfer, directed to some depository, which check shall be payable to the order of the person who is to receive the money therein specified in the warrant and in the amount specified in the warrant. If a warrant containing multiple payees has a problem prohibiting payment of one or more but not all of the payees, the treasurer may reject that portion of the warrant containing the problem and process payment for the remaining payees.
If the a state check is not presented for payment within six months after it is drawn, it shall then be the duty of the treasurer to the treasurer shall credit it to the depository on which it was drawn, to credit the unclaimed property fund pursuant to the provisions of article eight, chapter thirty-six of this code, and immediately notify the auditor to make corresponding entries on the auditor's books. No state depository may pay a check unless it is presented within six months after it is drawn and every check shall bear upon its face the words "Void, unless presented for payment within six months." Any information or records maintained by the treasurer concerning any check which has not been presented for payment within six months of the date of issuance may only be disclosed to the state agency specified on the check, or to the payee, his or her personal representative, next of kin or attorney-at-law and is otherwise confidential and exempt from disclosure under the provisions of article one, chapter twenty-nine-b of this code.
All claims required by law to be allowed by any court, and payable out of the state treasury, shall have the seal of the court allowing or authorizing the payment of the claim affixed by the clerk of the court to his or her certificate of its allowance. No claim may be audited and paid by the auditor The auditor shall not issue a warrant for claims allowed by a court unless the seal of the court is thereto attached. as aforesaid. No tax or fee may be charged by the clerk The clerk shall charge no tax or fee for affixing his or her seal to the certificate, referred to in this section. The treasurer shall propose rules in accordance with the provisions of article three, chapter twenty-nine-a of this code governing the procedure for such payments from the treasury.

§12-3-1a. Definition of electronic funds transfer; authorizing electronic funds transfers.

The auditor may issue his warrant on the treasurer to pay any person claiming to receive money from the treasury by deposit to the person's account in any bank or other financial institution by electronic funds transfer, if the person furnishes Electronic funds transfer, also known as EFT, is the processing of a payment electronically through a wire transfer network, automated clearinghouse or other communication system of a clearinghouse or other association of financial institutions through which a payment order by a financial institution is transferred to another financial institution to which the payment order is addressed. As payments by electronic funds transfer are replacing and are less expensive than the traditional method of payments by check, the treasurer may receive and disburse funds from the state treasury by electronic funds transfer. The treasurer shall determine the operating system to process receipts and payments by electronic funds transfer. Persons desiring payment from the state of West Virginia by electronic funds transfer shall furnish authorization to receive payment by electronic funds transfer to the treasurer of specifying the method of payment and the information required to process payment. The auditor treasurer shall prescribe the form of the authorization and the procedures for making payments by electronic funds transfer. If the authorization is in written form, it shall be sent to the auditor for review and approval and then forwarded in electronic form to the treasurer. If the authorization is in electronic form, it shall be sent to both the auditor and the treasurer. The auditor must review and approve the authorization. This section shall not be construed to require the auditor to utilize the method of payment authorized by this section. An authorization furnished pursuant to this section may be revoked by written notice furnished to the auditor and then forwarded by the auditor in electronic form to the treasurer or by electronic notice furnished to both the auditor and the treasurer. Upon execution of the authorization and its receipt by the office of the auditor, the warrant shall be created in the manner specified on the authorization and forwarded to the treasurer for further disposition to the designated bank or other financial institution specified on the electronic warrant: Provided, That The treasurer shall receive all authorizations and changes to authorizations, and shall have the data from the authorizations and changes to authorizations entered into the centralized accounting system in secure files. The treasurer shall develop a system to verify, approve and utilize the authorizations and shall have the system audited annually by independent outside certified public accountants. Upon approval by the treasurer of an authorization or change to an authorization for a payee, that payee shall receive all payments according to the approved authorization or change. Payees may alter, amend, revoke or change authorizations as needed. However, the treasurer shall verify all alterations, amendments, revocations or changes before they become effective. When payment is made by electronic funds transfer and no corresponding documentation is sent to the payee by the treasurer, the department of administration shall notify the payee of the payment, specifying the amount of the payment and the purpose of the payment, including a reference to any invoice paid. For payments not fully processed through the centralized accounting system, the treasurer may process the payments by electronic funds transfer if he or she has approved the authorization for the method of payment. The auditor shall send all authorizations in his or her possession or control to the treasurer no later than five working days after the treasurer sends a request for the authorizations.
After the first day of July, two thousand two, the state auditor shall cease issuing paper warrants except for income tax refunds. After that date all warrants, except for income tax refunds, shall be issued by electronic funds transfer: Provided, however, That the auditor, in his or her discretion, may issue paper warrants on an emergency basis: Provided further, That shall make every effort to cease issuing paper warrants and checks, except as necessary. The treasurer and the auditor may contract with any bank or financial institution for the processing of electronic authorizations.
§12-3-1b. Voluntary direct deposits of salaries of employees.
Any officer or employee of the state of West Virginia may authorize the direct deposit of his or her net wages to his or her account in any bank or other financial institution by electronic funds transfer. Direct deposit authorizations shall comply with the requirements provisions of section one-a of this article. Upon approval of an authorization, the auditor shall issue the warrant in the manner specified on the authorization and forward the warrant to the treasurer for further disposition to the designated bank or other financial institution The treasurer shall make the direct deposit on or before the day or days the officer or employee is due his or her net wages. Direct deposit authorizations may be revoked at any time thirty days prior to the date on which the direct deposit is regularly made and on a form to be provided by the auditor: Provided, That On and after the first day of July, two thousand two, at the option of the auditor, all wages shall be deposited the treasurer may require deposit of all wages directly into the employees' account at any bank or financial institution designated by the employee via electronic funds transfer or, if the employee does not have a bank account, through the West Virginia check card program in accordance with section four,

article three-a of this chapter.

§12-3-4. No payment from depository having insufficient funds; necessity of check or electronic funds transfer authorized by the treasurer.

The treasurer shall draw no check authorize no payment on any depository unless there is sufficient money enough in the depository to the credit of the treasury to pay the check when duly presented for payment or to process the electronic funds transfer. No depository holding money to the credit of the treasury shall pay out the same money, or any part thereof, except upon a check of the treasurer endorsed on a warrant of the auditor authorizing a check or a duly authorized or an electronic funds transfer drawn in place of such check authorized by the treasurer.
§12-3-6. Requisitions of spending units.
Appropriations made to or for any state board or institution shall be drawn from the treasury upon the requisition of the proper officers thereof made upon the auditor at such times and in such amounts as may be necessary for the purposes for which such appropriations are made; and the auditor shall pay the amount named in any such requisition at such times and in such installments as shall be necessary for the purposes for which any such appropriation is made. But all requisitions for appropriations for new buildings and substantial betterments, except such as are under control of the state commissioner of public institutions, shall be accompanied by the architect's estimate that the amount named in such requisition is needed for immediate use. The auditor shall authorize payment of the amount specified in a requisition of the proper officers of a state spending unit with sufficient remaining appropriations at the times and in the installments as necessary for the purposes of the appropriation. For any construction work involving an architect that is contracting directly with a spending unit, the architect's estimate of the requisition amount that is needed for immediate use shall accompany any requisition. The auditor shall not issue his or her warrant to pay any money out of the state treasury unless the same amount specified in the requisition is needed for the present use.
ARTICLE 3A. FINANCIAL ELECTRONIC COMMERCE.
§12-3A-3. Financial electronic commerce.
The state auditor and the state treasurer shall implement electronic commerce capabilities for each of their offices to facilitate the performance of their duties under this code. The state auditor and the state treasurer shall competitively bid the selection of vendors needed to provide the necessary banking, investment and related commodities and services for their offices his or her office, and the provisions of article one-b, chapter five, and articles three and seven, chapter five-a of this code shall not apply, unless requested by the state auditor or state treasurer.
A record, or an authentication, a document or a signature used by the auditor, or the treasurer or the comptroller provided in article two, chapter five-a of this code may not be denied legal effect solely on the ground that it is in electronic form. The head of each spending unit is responsible for adopting and implementing security procedures to ensure adequate integrity, security, confidentiality, and auditability of the business transactions of his or her spending unit when utilizing electronic commerce.
§12-3A-4. Payment by the West Virginia check card.
The state auditor treasurer may establish a state debit card known as the "West Virginia Check Card" for recipients of employee payroll or of benefits or entitlement programs processed by the auditor who are considered unbanked and who do not possess a federally insured depository institution account. The state auditor treasurer shall use every reasonable effort to make a federally insured depository account available to a recipient, and to encourage all recipients to obtain a federally insured depository account. Prior to issuing the West Virginia check card, the state auditor treasurer shall first make a determination that a recipient has shown good cause that an alternative method to direct deposit is necessary. The state auditor and the state treasurer shall jointly issue a request for proposals in accordance with section three of this article to aid the auditor in the administration of the program, and to aid the treasurer in the establishment of state owned bank accounts, and accommodate in accommodating accessible locations for use of the West Virginia check card. In carrying out the purposes of this article, the state auditor and state treasurer shall not compete with banks or other federally insured financial institutions, or for profit.
ARTICLE 4. ACCOUNTS, REPORTS AND GENERAL PROVISIONS.

§12-4-4. Accounts of expenditures; signing of checks and warrants and authorizing electronic fund transfers; facsimile signatures and use of mechanical, electronic and electrical devices; forgery; penalty.

When the treasurer issues his check on authorizes payment from a depository, he or she shall credit the same to the account of the depository, and charge it to the summary account provided for in section two

NOTE: The purpose of this bill is to amend provisions relating to management of state finances. It requires the auditor, treasurer, secretary and all spending units to use the centralized accounting system. It redefines "warrant" and "electronic funds transfer." It authorizes the treasurer to make direct deposits; deals with requisitions of spending units to be authorized by the auditor; authorizes the treasurer rather than the auditor to establish a state debit card; provides that the treasurer is authorized to approve payments and deals with electronic fund transfers.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.