FISCAL NOTE
Date Requested: March 11, 2025
Time Requested: 08:02 PM |
| Agency: |
Auditor, State of WV |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3673 |
Introduced |
HB3307 |
|
|---|
| CBD Subject: |
Boards and Commissions |
|---|
|
FUND(S):
State Funds
Sources of Revenue:
General Fund
Legislation creates:
Creates New Expense
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The purpose of proposed House Bill 3307 is to establish limitations on expenditures by non-governmental organizations or nonprofit corporations; require financial reporting; and authorize an audit of non-governmental organizations and nonprofit corporations.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2025
Increase/Decrease
(use"-") |
2026
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
4,107,600 |
8,215,200 |
| Personal Services |
0 |
3,344,000 |
6,688,000 |
| Current Expenses |
0 |
539,600 |
1,079,200 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
224,000 |
448,000 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
In order to develop an estimate of the potential costs of implementation of the proposed legislation, we requested and received information from the WVOASIS accounting system concerning the total population of organizations of all types who received $100,000 or more of State funding in Fiscal Year 2024. We should note although the proposed legislation makes reference to tax credits being within the scope of the proposed Bill, we do not have ready access to the allocation or monetary value of any such tax credits and they were not included in our analysis. Then, we attempted to eliminate those organizations who were obviously governmental in nature leaving only those organizations which appeared to fall into either the non-governmental or nonprofit organization categories. In the absence of an extensive review of the data which would require an amount of time which would make a timely response to the Legislature impossible for the current Session, we have determined the likely population of organizations potentially subject to the audit requirements of the proposed legislation would total several hundred organizations, probably at least 375 such organizations and State grants, awards, etc. made to these organizations totaled in excess of $400 Millon in Fiscal Year 2024. Therefore, we believe in order to conduct annual audits of these organizations, the State Auditor would need to hire an additional 105 Auditors in the Chief Inspector’s Division. Each of these new employees would undergo an initial training period of 9 months which is part of the State Auditor’s standard training for a new Auditor. We believe the costs of start-up implementation of the proposed legislation would be at least $8,215,200. We have set out the specifics of our cost analysis in other sections of this Fiscal Note Submission.
Memorandum
Due to the significant number of organizations involved, we believe the implementation period for start-up of the auditing process would encompass at least two fiscal years. The cost of implementation is significant enough the State Auditor could not fund implementation from existing resources and would require a dedicated appropriation of funds from the State General Revenue Fund in the amount of $8,215,200 split equally between the next two ensuing fiscal years. Due to the current difficulty in recruiting audit staff and the large number of additional staff positions needed to stand up the proposed legislation, we believe the annual salary offered for these positions would need to be at Going Market Value or $64,000 per year with an additional $21,760 in fringe benefit costs annually for each new employee. Based on historical standards, we anticipate travel costs for each employee would total $12,800 per year and an additional $5,760 in equipping expenses, licenses and continuing professional education expenses would be incurred. The total annualized cost per employee would be $104,320 and the cost of implementation would be based on the 9-month training period (75% of annual costs) and total $78,240 per employee. Our request for General Revenue Fund appropriations to fund start-up costs of $8,215,200 would be split equally between Fiscal Years 2026 and 2027 at $4,107,600.
Person submitting Fiscal Note: Michael E. Sizemore, CPA
Email Address: Mike.Sizemore@wvsao.gov