ENGROSSED
Senate Bill No. 524
(By Senators Tomblin, Mr. President, and Sprouse,
By Request of the Executive)
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[Introduced March 11, 2005; referred to the Committee
on Finance.]
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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be repealed; that §5A-2-1, §5A-2-24, §5A-2-32 and §5A-2-33 of said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.