HB1367 (2008) Detail

(New Title) relative to the conversion to a new state financial accounting and statewide budget system.


CHAPTER 177

HB 1367 – FINAL VERSION

05Mar2008… 0606h

04/17/08 1202s

15May2008… 1799eba

2008 SESSION

08-2488

05/09

HOUSE BILL 1367

AN ACT relative to the conversion to a new state financial accounting and statewide budget system.

SPONSORS: Rep. Estes, Graf 7; Rep. D. Eaton, Ches 2

COMMITTEE: Finance

AMENDED ANALYSIS

This bill provides the authority and oversight for the conversion to a new statewide budgeting, accounting, and financial and human resources management system. The bill also repeals certain budget and federal aid requirements.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

05Mar2008… 0606h

04/17/08 1202s

15May2008… 1799eba

08-2488

05/09

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Eight

AN ACT relative to the conversion to a new state financial accounting and statewide budget system.

Be it Enacted by the Senate and House of Representatives in General Court convened:

177:1 Scope of Authority and Statement of Purpose.

I. The governor shall designate an executive sponsor who, with the assistance of all agencies of the state, including but not limited to the department of administrative services, the office of information technology, and the department of health and human services, shall manage the conversion to a new integrated financial accounting/enterprise resource planning (ERP) system. The ERP system shall consist of all related subsystems including, but not limited to, financial accounting, job costing, cash management, personnel and payroll, and budget systems.

II. The purpose of this act is to facilitate an efficient and effective conversion to this new system, to provide the authority necessary to effect that conversion and efficiently manage the new system once in place, and to clarify certain statutes.

177:2 Review by the Fiscal Committee of the General Court. During the biennium ending June 30, 2009, the executive sponsor shall report monthly to the fiscal committee of the general court on the ERP system. The report shall provide information on:

I. Implementation of a new state financial accounting, financial reporting, and financial and human resources management system and a new statewide budget system.

II. The process for the state’s transition to a new chart of accounts and statewide budgeting system.

III. The requirements for the oversight of financial transactions, budgeting, and related matters, and the need, if any, for additional statutory revisions to facilitate an effective and efficient conversion to the new systems.

IV. Revisions to the authority for the transfer of appropriations and other matters related to the new state financial accounting, financial reporting, financial and human resources management system and statewide budget system.

V. Changes to the current budget schedule and responsible departments or agencies.

VI. Proposed processes for transitioning from a program appropriation unit (PAU) format to a budget format consistent with the chart of accounts in the new budgeting and financial systems.

VII. The status of actions accomplished and any changes to the implementation date.

177:3 Conversion to New Integrated Financial Accounting System.

I. Notwithstanding any law to the contrary, including RSA 9:8-a as amended by this act:

(a) No later than June 1, 2008, the executive sponsor shall, with the prior approval of the fiscal committee of the general court, convert the budget for the year ending June 30, 2009, which is presently in program appropriation unit format to a format that is consistent with the chart of accounts of the new state integrated financial accounting system. There shall be no increase or decrease in statewide total amounts for any source of funds attributable to the transition from the old accounting system to the new. The executive sponsor shall maintain complete records of all transfers made for the purposes of this conversion and shall, no later than June 1, 2008, provide to the fiscal committee of the general court a report:

(1) Indicating the source and destination of all appropriation transfers including: the dollar amount, source of funds, and the program appropriation unit (PAU) and class line in the operating budget as passed and the new account, class line, source of funds, and dollar amount in the new chart of accounts within the new state integrated financial accounting system.

(2) Providing a cross-reference from the old program appropriation unit (PAU) and class structure to the new chart of accounts and class structure.

(b) For the biennium beginning July 1, 2009 and each biennium thereafter, budgets shall be in a format that is consistent with the chart of accounts of the new state integrated financial accounting system.

II. The executive sponsor may take such actions as are necessary to convert the budget for the year ending June 30, 2009 to a format that is consistent with the chart of accounts of the new state integrated financial accounting system, including but not limited to:

(a) The creation of new expenditure and revenue class lines within the current state integrated financial accounting system.

(b) The renaming of existing expenditure or revenue class lines within the current state integrated financial accounting system.

(c) The transfer of appropriations contained in the operating and capital budgets from expenditure classes 085-099 into more descriptive existing, newly created, or renamed expenditure or revenue class lines within the current state integrated financial accounting system.

(d) The transfer of amounts authorized in non-budgetary accounts from expenditure classes 085-099 into more descriptive existing, newly created, or renamed expenditure or revenue class lines in the current state integrated financial accounting system.

(e) The implementation of a new chart of accounts necessary to implement the new state integrated financial accounting system.

(f) The transfer of existing appropriations and authorized amounts from the current state integrated accounting system and PAU structure to the new state integrated financial accounting system and chart of accounts.

(g) The representation of the office of information technology budget in a format that is consistent with the chart of accounts of the new state integrated financial accounting system.

III. Notwithstanding RSA 9:16 and 9:17, or any other law to the contrary, for the biennium ending June 30, 2009, the governor may, with prior approval of the fiscal committee of the general court, authorize transfers of up to $50,000 between and among classes and program appropriation units, if necessary, for the effective implementation of the new integrated financial accounting system.

177:4 Interim Authority and Administrative Services Manual of Procedures. To facilitate the implementation of the enterprise resource planning (ERP) system and related alterations and improvements to the state’s budgeting, integrated financial accounting, financial reporting, financial and human resources management systems, and related systems and subsystems, and notwithstanding RSA 21-G:9 or any other law relative to the powers or duties of commissioners or other state officials, during the biennium ending June 30, 2009:

I. The executive sponsor shall have the authority to specify practices, procedures, policies, protocols, guidelines, specifications, instructions and directives, or alterations in practices, procedures, policies, protocols, guidelines, specifications, instructions, and directives relative to budgeting, financial accounting, financial reporting, financial and human resources management systems, and related systems and subsystems to be followed by one or more, or all, state agencies, their personnel, and such other persons as are necessary.

II. The executive sponsor shall issue such specifications or instructions in writing, and such specifications or instructions shall be binding upon such agencies, officers, employees, and others to whom the provisions are directed. The executive sponsor shall not be required to follow the rulemaking procedures of RSA 541-A when specifying or issuing these binding practices, procedures, policies, protocols, guidelines, specifications, instructions, and directives, or binding alterations in these practices, procedures, policies, protocols, guidelines, specifications, instructions, and directives. The executive sponsor may cancel, revise, alter, or amend these practices, procedures, policies, protocols, guidelines, specifications, instructions, and directives as deemed necessary.

177:5 Budget Presentation Format. Amend RSA 9:8-a, I to read as follows:

I. All budgets provided for by this subdivision shall be in program appropriation unit format consistent with the chart of accounts of the state integrated financial accounting system. For expository purposes, the budget may be presented as a summarized 3 class line document consisting of personnel services, operating expenses, and other expenses; provided, however, that the final budget as passed and the warrants issued by the commissioner of administrative services shall be classified into at least the following classes as appropriate: personnel services, current expense, equipment, other personnel services, benefits, travel in-state, travel out-of-state, individual and departmental dues to national and regional organizations, and other expenditures.

177:6 Department of Administrative Services. Amend RSA 21-I:1, II to read as follows:

II. The department of administrative services, through its officials, shall be responsible for managing and coordinating the following administrative and financial functions, upon which the effective and efficient management of all state programs and operations relies:

(a) Budgeting.

(b) Automated accounting and financial and human resources management systems.

[(b) Pre-auditing] (c) Business process auditing.

[(c)] (d) Accounting.

[(d)] (e) Financial reporting.

[(e)] (f) Data processing.

[(f)] (g) Graphic services.

[(g)] (h) Property and physical plant management.

[(h)] (i) Risk management.

[(i)] (j) General support services.

[(j)] (k) Personnel administration.

[(k)] (l) Developing and maintaining state owned and supported land and buildings, including public works design and construction relating to projects as defined in RSA [21-I:73, VII] 21-I:78, IX.

[(l)] (m) Providing central management and administration of space rented by, or the processes relating to the rental of space by, state agencies, except as otherwise provided by law.

177:7 Division of Accounting Services. RSA 21-I:8 is repealed and reenacted to read as follows:

21-I:8 Division of Accounting Services. There is hereby established within the department the division of accounting services under the supervision of an unclassified director of accounting services, who shall also be known as the comptroller. The comptroller shall direct the state’s accounting functions, using generally accepted accounting principles and taking full advantage of all benefits of automated data processing applications, to the end that the fiscal affairs of all state agencies and departments will be adequately and uniformly serviced and that periodic financial and management reports will be available to serve the various needs of all state agencies and the executive and legislative branches in their decision making processes. The commissioner of administrative services may authorize deviations from generally accepted accounting principles if the commissioner deems it is in the best interest of the state, provided that the explanation for the deviation is provided in the annual report required by subparagraph II(a). The division shall include the following internal organizational units:

I. The bureau of accounting under the supervision of a classified administrator of accounting who shall be responsible for functions that include at least the following, in accordance with applicable laws:

(a) Reviewing all state contracts for budget control and for substantive protection of the public interest.

(b) Implementing a system established by the commissioner to specify how and when business process auditing of claims is to be performed.

(c) Business process auditing of claims in accordance with subparagraph (b) to be presented for the issuance of warrants and certifying to the governor and council that such claims are just and proper claims against the state and within appropriations provided by statute.

(d) Preparing appropriate warrants and schedules of manifests supporting the same, for consideration and execution by the governor, with the advice and consent of the council.

(e) Making appropriate departmental and agency budget adjustments for services performed by the department of transportation.

(f) When so authorized by the governor and council, making such transfers of appropriation items within any division or functional unit of state government as may be necessary or desirable to best carry out the purpose of such division or functional unit.

(g) Making use of the most advanced and economical techniques within the capabilities of the state’s data processing system in carrying out his or her duties.

(h) Controlling all payment of moneys into the treasury.

II. The bureau of financial reporting, under the supervision of a classified administrator of financial reporting who shall be responsible for functions that include at least the following, in accordance with applicable laws:

(a) Not later than 90 days after the close of the fiscal year, unless the governor and council for good cause shall extend such period, completing a comprehensive annual report concerning the preceding fiscal year that details the financial condition and operation of the state during that period in a manner consistent with generally accepted accounting principles. Said report shall subsequently be audited by the legislative budget assistant who may designate a certified public accountant not employed in the state service to conduct the annual audit and may accept the findings and report of the certified public accountant as fulfilling the provisions of this section provided that in either case said audit shall be conducted in accordance with prevailing standards and practices of governmental auditing specified by authoritative national standard setting bodies. The audited report shall be completed and available to the public by December 31 of each year unless for good cause the joint legislative fiscal committee shall extend such period.

(b) Producing periodic reports and analysis of government revenues and expenditures.

177:8 New Paragraphs; Duties of the Commissioner of Administrative Services. Amend RSA 21-I:13 by inserting after paragraph XIV the following new paragraphs:

XV. Administer, and, as necessary, revise an integrated system of governmental budgeting, financial accounting, financial reporting, financial and human resources management systems, and related systems and subsystems which accurately and systematically account for all revenues, receipts, resources, and property of the state and each of its agencies; which record information about the financial activities of the state and its agencies necessary to compare and control expenditures and commitments, within budgets and appropriations; from which it shall be possible to obtain accurate annual and interim financial statements and other reports which present fairly and with full disclosure the financial position and results of operations of the state of New Hampshire in conformance with generally accepted accounting principles; and which makes it possible to determine and demonstrate compliance with finance-related legal and contractual provisions, including federal grants, to which the state or any of its agencies are subject. The commissioner of administrative services may delegate the performance of functions associated with the above systems, including accounting functions, to appropriate units, divisions, or bureaus within the department and may authorize deviations from generally accepted accounting principles when the commissioner deems it in the best interest of the state, provided that the explanation for so deviating is provided in the annual report required by RSA 21-I:8, II(a).

XVI. Implement and manage an integrated, multi-module, information technology system that facilitates collection and integration of information related to various areas of government such as finance, accounting, human resources, inventory, procurement, and customer service. The commissioner of administrative services may delegate the performance of functions associated with the above system to appropriate units, divisions, or bureaus within the department.

177:9 Department of Administrative Services; Rulemaking Authority. RSA 21-I:14, I is repealed and reenacted to read as follows:

I. A comprehensive and uniform system of state financial management described in RSA 21-I:13, XV and XVI in the form of a manual to be updated and revised as the commissioner of administrative services deems necessary, that clearly explains procedures applicable to all state agencies, officers and employees other than the legislative branch and the state judicial branch. Notwithstanding RSA 21-G:9 or any other law relative to the powers or duties of commissioners or other state officials, the state agencies, officers, employees, and others to whom the provisions of the manual are directed shall abide by the requirements of the manual. The manual shall:

(a) Be subject to the approval of governor and council but, pursuant to RSA 541-A:1, XV, the manual and its contents shall not be a rule subject to the rulemaking requirements of RSA 541-A.

(b) To the extent deemed necessary by the commissioner, set forth standards, practices, procedures, policies, protocols, guidelines, specifications, instructions, directives, requirements, or descriptions of requirements related to the financial management of the state, including but not limited to:

(1) Budget preparation requirements.

(2) Fiscal year closing requirements.

(3) State fund structure.

(4) Governor and council actions.

(5) Fiscal committee actions.

(6) Transfer of appropriated funds.

(7) Reimbursement of travel, meals, and lodging.

(8) Staff development reimbursement.

(9) Asset and inventory requirements.

(10) State-owned motor vehicles.

(11) Implementation or alteration of practices, procedures, policies, protocols, guidelines, specifications, instructions, and directives related to the statewide budgeting and uniform financial accounting, financial reporting, financial and human resources management systems, and related systems and subsystems.

(12) Any other matter relating to budgeting, integrated financial accounting, financial reporting, financial and human resources management systems, and related systems and subsystems.

177:10 Department of Administrative Services; Rulemaking. Amend RSA 21-I:14, IX to read as follows:

IX. Standards for the format, content and style of agency annual or biennial reports, after consultation with the administrator of the bureau of graphic services with regard to format. These standards shall require that agency reports provide statistical information on agency activities and operations in addition to narrative discussions; and that agency reports analyze the operational efficiency of state operations and program performance in terms of explicitly stating the statutory functions each agency is to perform and how these statutory functions are being accomplished, in terms of unit-cost measurement, workload efficiency data, and program output standards established by the commissioner. These standards shall be in the form of a manual to be updated and revised as the commissioner of administrative services deems necessary. Notwithstanding RSA 21-G:9 or any other law relative to the powers or duties of commissioners or other state officials, the state agencies, officers, employees, and others to whom the provisions of the manual are directed shall abide by the requirements of the manual. The manual shall be subject to the approval of governor and council but, pursuant to RSA 541-A:1, XV, the manual and its contents shall not be a rule subject to the rulemaking requirements of RSA 541-A.

177:11 Extension of Dates for Submissions of Expenditure Requirements and Tentative Budget During 2008.

I. Notwithstanding the date established in RSA 9:4, during the year 2008 all departments of the state shall transmit to the commissioner of administrative services the materials set forth in RSA 9:4 on or before October 15, 2008. In case of the failure of any department to submit such estimates within the time above specified, the commissioner of administrative services shall cause to be prepared such estimates for such department as in the commissioner’s opinion are reasonable and proper.

II. Notwithstanding the date established in RSA 9:6, during the year 2008, upon the receipt of the estimates of expenditure requirements called for by RSA 9:4, adjusted as to date by paragraph I, and the preparation of the estimates of income called for by RSA 9:5, and not later than November 15, 2008, the commissioner of administrative services shall cause to be prepared a tentative budget conforming as to scope, contents, and character to the requirements of RSA 9:3 and containing the estimates of expenditure and revenue as called for by RSA 9:4, adjusted as to date by paragraph I, and RSA 9:5, which tentative budget shall be transmitted to the director of the budget for submittal to the governor. The budget shall be made available in printed format and in at least one electronic computer file format in common use at the time.

177:12 Transfer of Appropriations with Fiscal Committee Approval. Amend RSA 9:17 to read as follows:

9:17 Transfer Within Division or Functional Unit. The governor and council, with the prior approval of the fiscal committee of the general court, may authorize the commissioner of administrative services to make such transfers of appropriation items and changes in allocation of funds available for operational purposes within any division or functional unit of a department or institution as may be necessary or desirable to best carry out the purpose of such division or functional unit of such department or institution.

177:13 Reference Change. Amend RSA 9:17-a through 9:17-c to read as follows:

9:17-a Limitations. Notwithstanding the provisions of RSA [9:16 and] 9:17, no transfer shall be made:

I. From appropriation items for equipment to any other use or purpose.

II. To or from any out of state travel appropriation and the state treasurer and state commissioner of administrative services shall maintain separate appropriation accounts for all out of state travel appropriations.

II-a. From any appropriation items for permanent personal services to any other use or purpose, provided however that this provision shall not supersede the provisions of RSA 99:4.

III. [Repealed.]

IV. The provisions of this section shall apply to transfers in general appropriations, capital budget appropriations and in any other special appropriations.

9:17-b Fish and Game Limitation. Notwithstanding the provisions of RSA [9:16 and] 9:17, no transfers shall be made into the appropriation for the fish and game department for land acquisition.

9:17-c Employee Benefit Adjustment Account. Whereas the appropriations for employee benefits in state departments and institutions may upon occasion not be totally needed for each position due to vacancies and personnel turnover, the department of administrative services shall transfer said amount quarterly from the departmental or institutional appropriation to a special account to be known as the employee benefit adjustment account. This fund shall lapse at the end of each fiscal year and revert to the appropriate fund. Upon the certification of the commissioner of administrative services, subject to the approval of governor and council, the employee benefit account shall be available for transfer to departments and institutions in amounts that are deemed necessary to pay the state’s required proportionate share of any legally authorized employee benefit. Notwithstanding the provisions of RSA [9:16 and] 9:17, no transfer shall be made from any appropriation for employee benefits to any other appropriation for any other use or purpose except as provided in this section.

177:14 Reclassification of Positions; Reference Change. Amend RSA 21-I:56, III to read as follows:

III. Notwithstanding the provisions of RSA [9:16,] 9:17 and [17-a] 9:17-a, whenever the director of personnel in consultation with the affected department shall determine that the personal services-permanent line item in any PAU and the salary adjustment fund cannot cover the cost of funding a reclassification and a transfer of funds from other line items is required, the director of personnel shall notify the governor and council and the fiscal committee as soon as possible. No such transfer shall be permitted without approval first of the fiscal committee and then of governor and council.

177:15 Funds Set Aside. Amend RSA 124:16 to read as follows:

124:16 Funds Set Aside. Every state department, board, institution, commission or agency which receives federal funds shall set aside an amount equal to [.2 percent] the rate approved in the statewide indirect cost plan of the funds received. The amount set aside shall be used to pay for financial and compliance audits as required by the federal government or by state statute.

177:16 Repeal. The following are repealed:

I. RSA 9:4-c, relative to monitoring the Old Man of the Mountain by the department of resources and economic development.

II. RSA 9:16, relative to transfers of appropriations.

III. RSA 21-I:6, III, relative to recommendation of quarterly allotments for operation of the budget.

IV. RSA 124:6, relative to authority for certain capital improvement agreements.

V. RSA 124:7-9, relative to requirements for state participation in federal aid.

177:17 Effective Date. This act shall take effect upon its passage.

Approved: June 11, 2008

Effective Date: June 11, 2008