Bill Text: MI SB0949 | 2013-2014 | 97th Legislature | Introduced
Bill Title: Local government; budgets; uniform budget and accounting procedures; revise. Amends secs. 1, 2c, 5, 14, 15, 16, 17, 18, 19 & 20a of 1968 PA 2 (MCL 141.421 et seq.) & adds sec. 13a. TIE BAR WITH: SB 0952'14, SB 0957'14
Spectrum: Partisan Bill (Republican 2-0)
Status: (Introduced - Dead) 2014-05-21 - Referred To Committee On Appropriations [SB0949 Detail]
Download: Michigan-2013-SB0949-Introduced.html
Local government; budgets; uniform budget and accounting
procedures; revise.
Local government: budgets; Education: financing; State agencies
(existing): education
A bill to amend 1968 PA 2, entitled
"Uniform budgeting and accounting act,"
by amending sections 1, 2c, 5, 14, 15, 16, 17, 18, 19, and 20a (MCL
141.421, 141.422c, 141.425, 141.434, 141.435, 141.436, 141.437,
141.438, 141.439, and 141.440a), sections 1, 2c, 14, 15, 17, and 19
as amended by 2000 PA 493, section 5 as amended by 1996 PA 146, and
sections 16 and 18 as amended by 2013 PA 172, and by adding section
13a.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. (1) The state treasurer shall prescribe uniform charts
of accounts for all local units of similar size, function, or
service designed to fulfill the requirements of good accounting
practices
relating to general government. Such A uniform chart of
accounts shall conform as nearly as practicable to the uniform
standards as set forth by the governmental accounting standards
board or by a successor organization that establishes national
generally accepted accounting standards and is determined
acceptable to the state treasurer. The official who by law or
charter is charged with the responsibility for the financial
affairs
of the local unit shall insure ensure
that the local unit
accounts are maintained and kept in accordance with the uniform
chart of accounts. The chief administrative officer for a local
unit shall present to the legislative body of the local unit a
recommended budget and proposed general appropriations act that
conforms
to the uniform chart of accounts. The
state treasurer may
also
shall publish standard operating procedures and forms for
the
guidance
of applicable to local units in establishing and
maintaining uniform accounting and the uniform chart of accounts in
compliance with this act.
(2) A local unit may request the state treasurer to provide
assistance, advice, or instruction in establishing or maintaining
the uniform chart of accounts required by subsection (1).
(3) The state treasurer may provide assistance, advice, or
instruction to a local unit to establish or maintain the uniform
chart of accounts required by subsection (1) based on information
from 1 or more of the following sources:
(a) Disclosure by the certified public accountant or the
department of treasury in an audit report required by section 5 or
6 that the local unit has failed to establish or maintain the
uniform chart of accounts required by subsection (1).
(b) Disclosure by the department of treasury in a special
examination report that the local unit has failed to establish or
maintain the uniform chart of accounts required by subsection (1).
(c) Disclosure in an audit report issued under section 5 or 6
that the records of the local unit are not auditable because the
local unit has failed to establish or maintain the uniform chart of
accounts required by subsection (1).
(d) Disclosure from another state agency.
(e) Department of treasury records indicate that the audit
required under section 5 has not been performed or filed and is
delinquent, and that the local unit is subject to the provisions of
section 21 of the Glenn Steil state revenue sharing act of 1971,
1971 PA 140, MCL 141.921.
(f) Information provided by the chief administrative officer,
member of the legislative body, or other officer of the local unit.
(4) The state treasurer, in performing the services under
subsection (2) or (3), may make a determination that the local unit
cannot adequately establish or maintain the uniform chart of
accounts without additional assistance, advice, or instruction from
the
state treasurer. The If
the state treasurer makes this
determination, the state treasurer shall submit a written report of
the findings and recommendations to the governing body of the local
unit. The local unit shall retain, within 90 days after receipt of
this report, the services of a certified public accountant or the
state treasurer to perform the needed additional services and shall
notify, by resolution of the governing body, the state treasurer of
such action. Upon failure of the local unit to respond within the
90-day period, the state treasurer shall perform the necessary
services to adequately establish or maintain the uniform chart of
accounts.
(5) The state treasurer shall charge reasonable and necessary
expenses, including per diem and travel expenses, to the local unit
for services performed pursuant to subsections (2), (3), and (4),
and the local unit shall make payment to the state treasurer for
these expenses. The state treasurer shall execute a contract with
the local unit or provide monthly billings if a contract is not
executed.
Sec. 2c. (1) "Expenditure" means the cost of goods delivered
or services rendered, whether paid or unpaid, including expenses,
debt retirement not reported as a liability of the fund from which
retired, or capital outlay.
(2)
"General appropriations act" means the budget as ordinance
or resolution adopted for a local unit by the legislative body or
as otherwise given legal effect pursuant to a charter provision in
effect on the effective date of this section that authorizes
expenditures by the local unit consistent with the budget.
Sec.
5. (1) A local unit having a population of less than
4,000
shall obtain an audit of its financial records, accounts, and
procedures
not less frequently than biennially. However, if any
audit
under this subsection discloses a material deviation by the
local
unit from generally accepted accounting practices or from
applicable
rules and regulations of a state department or agency or
discloses
any fiscal irregularity, defalcation, misfeasance,
nonfeasance,
or malfeasance, the department of treasury may require
an
audit to be conducted in the next year.
(1) (2)
A For a fiscal year of a
local unit ending after June
30,
2014, a local unit having a
population of 4,000 or more shall
obtain an annual audit of its financial records, accounts, and
procedures. An audit required under this section shall be completed
not less than 150 days after the end of the fiscal year.
(2) If a local unit fails to comply with subsection (1), the
department of treasury shall perform or contract for the necessary
services to complete the audit on behalf of the local unit.
(3) The department of treasury shall charge the local unit for
services performed and related expenses incurred under subsection
(2), and the local unit shall pay the state treasurer for these
expenses. The state treasurer may execute a contract with the local
unit for the payment or, if a contract is not executed, provide
monthly invoices to the local unit.
Sec. 13a. (1) For a fiscal year of a local unit ending after
June 30, 2014, a local unit shall not adopt or operate under a
deficit budget and shall not incur an operating deficit in a fund
during a fiscal year.
(2) If a local unit has an existing deficit fund balance,
incurs a deficit fund balance in the most recently completed fiscal
year, or adopts a budget for a fiscal year that projects a deficit
fund balance, the local unit shall immediately notify the state
treasurer.
(3) Within 90 days after notifying the state treasurer under
subsection (2), the local unit shall formulate and submit to the
state treasurer, in a form and manner prescribed by the department
of treasury, a deficit elimination plan for evaluation and
certification that the plan will assure elimination of the deficit.
If requested by a local unit, the department of treasury may assist
that local unit in the formulation and implementation of the plan.
Upon certification by the state treasurer, the local unit shall
implement the plan.
(4) The state treasurer may recognize a financial plan to
correct a deficit condition submitted under section 303 of the
revised municipal finance act, 2001 PA 34, MCL 141.2303, or section
921 of the Glenn Steil state revenue sharing act of 1971, 1971 PA
140, MCL 141.921, as satisfying the requirement for a deficit
elimination plan under this section.
(5) If a local unit fails to comply with this section, the
state treasurer may withhold state funds otherwise payable to the
local unit to the extent the state treasurer determines necessary
to assure compliance with this section by the local unit.
Sec. 14. (1) Unless otherwise provided by law, charter,
resolution,
or ordinance, the chief administrative officer shall
have
in each local unit has final responsibility for budget
preparation,
presentation of the a
recommended budget to the
legislative body, and the control of expenditures under the budget
and the general appropriations act.
(2) Unless another person is designated by charter, the chief
administrative officer in each local unit shall prepare the
recommended annual budget for the ensuing fiscal year in the manner
provided in sections 15 to 20a. The budgetary centers of the local
unit shall provide to the chief administrative officer information
which
the chief administrative officer
considers necessary and
essential to the preparation of a budget for the ensuing fiscal
period for presentation to the local unit's legislative body. Each
administrative officer or employee of a budgetary center shall
comply
promptly with a request for information which the chief
administrative officer makes.
(3) The chief administrative officer shall transmit the
recommended budget to the legislative body according to an
appropriate time schedule developed by the local unit. The schedule
shall allow adequate time for review and adoption by the
legislative body before commencement of the budget year. The
recommended budget, when transmitted by the chief administrative
officer,
shall be accompanied by a suggested proposed general
appropriations act to implement the budget. The chief
administrative officer for a local unit subject to section 1 shall
present a recommended budget and proposed general appropriations
act that conforms to the uniform chart of accounts. The chief
administrative officer for a local unit subject to the requirements
of section 622 or 1281 of the revised school code, 1976 PA 451, MCL
380.622 and 380.1281, shall present a recommended budget and
proposed general appropriations act that conforms to the basic
accounting system prescribed by the department of education. The
suggested
proposed general appropriations act shall fulfill the
requirements of section 16. A proposed general appropriations act
may not adopt a recommended budget by reference.
(4) The legislative body shall consider the recommended budget
and proposed general appropriations act transmitted by the chief
administrative
officer. shall be considered by the legislative
body.
(5) The chief administrative officer shall furnish to the
legislative body information the legislative body requires for
proper consideration of the recommended budget and proposed general
appropriations act. Before final passage of a general
appropriations act by the legislative body, the legislative body
shall
hold a public hearing shall be held as
required by 1963 (2nd
Ex Sess) PA 43, MCL 141.411 to 141.415, and the open meetings act,
1976 PA 267, MCL 15.261 to 15.275.
Sec. 15. (1) The recommended budget shall include at least the
following:
(a) Expenditure data for the most recently completed fiscal
year and estimated expenditures for the current fiscal year.
(b) An estimate of the expenditure amounts required to
conduct, in the ensuing fiscal year, the government of the local
unit, including its budgetary centers.
(c) Revenue data for the most recently completed fiscal year
and estimated revenues for the current fiscal year.
(d) An estimate of the revenues, by source of revenue, to be
raised or received by the local unit in the ensuing fiscal year.
(e) The amount of surplus or deficit that has accumulated from
prior fiscal years, together with an estimate of the amount of
surplus or deficit expected in the current fiscal year. The
inclusion of the amount of an authorized debt obligation to fund a
deficit shall be sufficient to satisfy the requirement of funding
the amount of a deficit estimated under this subdivision.
(f) An estimate of the amounts needed for deficiency,
contingent, or emergency purposes.
(g) Other data relating to fiscal conditions that the chief
administrative officer considers to be useful in considering the
financial needs of the local unit.
(h) For a school district, intermediate school district, or
public school academy required to submit a periodic financial
status report under section 1219 of the revised school code, 1976
PA 451, MCL 380.1219, or an enhanced deficit elimination plan under
section 1220 of the revised school code, 1976 PA 451, MCL 380.1220,
other data relating to fiscal conditions that the state treasurer
considers to be useful in considering the financial needs of the
school district, intermediate school district, or public school
academy in the form and manner prescribed by the department of
treasury.
(i) For a school district or public school academy, all of the
following:
(i) Pupil counts for pupils in membership in the school
district or public school academy for the current fiscal year and
the 2 prior fiscal years, as determined under the state school aid
act of 1979, 1979 PA 94, MCL 388.1601 to 388.1896, and projected
pupil counts for pupils in membership in the school district or
public school academy for the next 3 fiscal years.
(ii) Projected cash flow for the school district or public
school academy for the remainder of the current fiscal year and
projected cash flow for the next 3 fiscal years.
(iii) A cash flow borrowing ratio for the current fiscal year,
the prior 2 fiscal years, and a projected cash flow borrowing ratio
for the next 3 fiscal years. As used in this subparagraph, "cash
flow borrowing ratio" means the quotient of the sum of the total
amount of any tax anticipation notes issued by the school district
or public school academy in the fiscal year and the total amount of
any state school aid anticipation notes issued by the school
district or public school academy in the fiscal year divided by the
total general fund revenue for the fiscal year.
(iv) An operating reserve ratio for the current fiscal year,
the prior 2 fiscal years, and a projected operating reserve ratio
for the next 3 fiscal years. As used in this subparagraph,
"operating reserve ratio" means the quotient of the general fund
balance divided by the total general fund expenditures for a fiscal
year.
(v) An operating margin ratio for the current fiscal year, the
prior 2 fiscal years, and a projected operating margin ratio for
the next 3 fiscal years. As used in this subparagraph, "operating
margin ratio" means the quotient of the difference between the
total general fund revenue and total general fund expenditures for
a fiscal year divided by the total general fund revenue for the
fiscal year.
(vi) A fund balance change ratio for the current fiscal year,
the prior 2 fiscal years, and a projected fund balance change ratio
for the next 3 fiscal years. As used in this subparagraph, "fund
balance change ratio" means the quotient of the prior fiscal year
general fund balance and the current fiscal year general fund
balance divided by the prior fiscal year general fund balance.
(2) The total estimated expenditures, including an accrued
deficit, in the budget shall not exceed the total estimated
revenues, including an available unappropriated surplus and the
proceeds from bonds or other obligations issued under the fiscal
stabilization act, 1981 PA 80, MCL 141.1001 to 141.1011, and the
emergency municipal loan act, 1980 PA 243, MCL 141.931 to 141.942,
or the balance of the principal of these bonds or other
obligations.
Sec. 16. (1) Unless another method for adopting a budget is
provided by a charter provision in effect on April 1, 1980, the
legislative body of each local unit shall pass a general
appropriations act for all funds except trust or agency, internal
service, enterprise, debt service or capital project funds for
which the legislative body may pass a special appropriation act.
(2)
The If the local unit is
authorized to levy ad valorem
property taxes, the general appropriations act shall set forth the
total number of mills of ad valorem property taxes to be levied and
the purposes for which that millage is to be levied. The amendatory
act that added this subsection shall be known and may be cited as
"the truth in budgeting act".
(3) The general appropriations act shall set forth the amounts
appropriated by the legislative body to defray the expenditures and
meet the liabilities of the local unit for the ensuing fiscal year,
and shall set forth a statement of estimated revenues, by source,
in each fund for the ensuing fiscal year. The general
appropriations act may not adopt a recommended budget by reference.
An appropriation included within a general appropriations act is
not a mandate to spend.
(4) The general appropriations act shall be consistent with
and may not alter the uniform charts of accounts prescribed by the
state treasurer or, for local school districts and intermediate
school
districts, by the state board department
of education.
(5) This act shall not be interpreted to mandate the
development or adoption by a local unit of a line-item budget or
line-item general appropriations act. If a school district,
intermediate school district, or public school academy is subject
to an enhanced deficit elimination plan under section 1220 of the
revised school code, 1976 PA 451, MCL 380.1220, the enhanced
deficit elimination plan may require the school district,
intermediate school district, or public school academy to develop
or adopt a line-item budget or line-item general appropriations
act, or both.
(6)
The If the local unit is authorized
to levy taxes, the
legislative body shall determine the amount of money to be raised
by taxation necessary to defray the expenditures and meet the
liabilities
of the local unit for the ensuing fiscal year , under
the general appropriations act, shall order that money to be raised
by taxation, within statutory and charter limitations, and shall
cause the money raised by taxation to be paid into the funds of the
local unit.
(7) Except as otherwise permitted by section 102 of the state
school aid act of 1979, 1979 PA 94, MCL 388.1702, or by other law,
the legislative body shall not adopt a general appropriations act
or an amendment to that act which causes estimated total
expenditures, including an accrued deficit, to exceed total
estimated revenues, including an available surplus and the proceeds
from bonds or other obligations issued under the fiscal
stabilization act, 1981 PA 80, MCL 141.1001 to 141.1011, or the
emergency municipal loan act, 1980 PA 243, MCL 141.931 to 141.942,
or the balance of the principal of these bonds or other
obligations.
Sec. 17. (1) Except as otherwise provided in section 19, a
deviation from the original general appropriations act shall not be
made without amending the general appropriations act. Subject to
section 16(2), the legislative body of the local unit shall amend
the general appropriations act as soon as it becomes apparent that
a
deviation from the original general appropriations act then in
effect is necessary and the amount of the deviation can be
determined. For a school district, intermediate school district, or
public school academy subject to an enhanced deficit elimination
plan under section 1220 of the revised school code, 1976 PA 451,
MCL 380.1220, the legislative body of the school district,
intermediate school district, or public school academy shall amend
the general appropriations act as soon as the state treasurer
notifies the school district, intermediate school district, or
public school academy that compliance with the enhanced deficit
elimination plan requires a deviation from the general
appropriations act then in effect with the amount of the deviation
consistent with the amount requested by the state treasurer. An
amendment shall indicate each intended alteration in the purpose of
each
appropriation item affected by the amendment. The legislative
body
may require that the chief
administrative officer or fiscal
officer
of a local unit shall provide it the legislative body of
the local unit with periodic reports, not less than quarterly, on
the financial condition of the local unit.
(2) If, during a fiscal year, it appears to the chief
administrative officer or to the legislative body that the actual
and probable revenues from taxes and other sources in a fund are
less than the estimated revenues, including an available surplus
upon which appropriations from the fund were based and the proceeds
from bonds or other obligations issued under the fiscal
stabilization act, 1981 PA 80, MCL 141.1001 to 141.1011, or the
emergency municipal loan act, 1980 PA 243, MCL 141.931 to 141.942,
or the balance of the principal of these bonds or other
obligations, the chief administrative officer or fiscal officer
shall present to the legislative body recommendations which, if
adopted, would prevent expenditures from exceeding available
revenues for that current fiscal year. For a school district,
intermediate school district, or public school academy, if during a
fiscal year it appears to the chief administrative officer or
legislative body of the school district, intermediate school
district, or public school academy that actual pupil membership
within the school district, intermediate school district, or public
school academy during the fiscal year will be less than the
projected pupil membership upon which the general appropriations
act then in effect was based, the chief administrative officer
shall present to the legislative body recommendations that, if
adopted, should prevent expenditures from exceeding available
revenues for the fiscal year. The recommendations under this
subsection shall include proposals for reducing appropriations from
the fund for budgetary centers in a manner that would cause the
total of appropriations to not be greater than the total of revised
estimated revenues of the fund, or proposals for measures necessary
to provide revenues sufficient to meet expenditures of the fund, or
both. The recommendations shall recognize the requirements of state
law and the provisions of collective bargaining agreements.
Sec. 18. (1) A member of the legislative body, chief
administrative officer, administrative officer, or employee or
other officer of the local unit shall not create a debt or incur a
financial obligation on behalf of the local unit unless the debt or
obligation is permitted by law.
(2) The chief administrative officer may cause the
appropriations
made by the legislative body authorized
in the
general appropriations act for the local unit and its budgetary
centers to be divided into allotments if the allotments are based
upon the periodic requirements of the local unit and its budgetary
centers and consistent with the uniform chart of accounts for the
local unit. For a school district, intermediate school district, or
public school academy subject to an enhanced deficit elimination
plan under section 1220 of the revised school code, 1976 PA 451,
MCL 380.1220, the state treasurer may require the chief
administrative officer of the school district, intermediate school
district, or public school academy to cause appropriations
authorized in the general appropriations act for the school
district, intermediate school district, or public school academy to
be divided into allotments.
(3) Except as otherwise provided in section 19, the chief
administrative officer, an administrative officer, or an employee
or other officer of the local unit shall not incur expenditures
against an appropriation account in excess of the amount
appropriated
by the legislative body. The Except
for transfers
authorized under section 19(2) or by charter or law, the chief
administrative officer, an administrative officer, or an employee
or other officer of the local unit shall not apply or divert money
of the local unit for purposes inconsistent with those specified in
the
appropriations of the legislative body.general appropriations
act.
(4) No duties shall be delegated to the chief administrative
officer that diminish any charter or statutory responsibilities of
an elected or appointed official. No duties of a chief
administrative officer under this act or any charter provision or
law may be diminished or transferred except as expressly authorized
by charter or law.
Sec.
19. (1) A Except for
transfers authorized under
subsection (2) or by charter or law, a member of the legislative
body, the chief administrative officer, an administrative officer,
or an employee or other officer of a local unit shall not authorize
or participate in the expenditure of funds except as authorized by
a
general appropriations act. An Except
for transfers authorized
under subsection (2) or by charter or law, an expenditure shall not
be
incurred except in pursuance of the authority and appropriations
of
the legislative body of the local unit.general appropriations
act then in effect.
(2) The legislative body in a general appropriations act may
permit the chief administrative officer to execute transfers within
limits stated in the act between appropriations or budgetary
centers within the local unit without the prior approval of the
legislative body.
Sec. 20a. (1) The department of treasury shall publish
suggested
manuals, forms, and operating
procedures which may that
shall be used by local units in complying with this act. These
manuals, forms, and procedures shall be designed to account for the
various kinds and sizes of local units, except that the suggested
manuals, forms, and operating procedures which may be used by
intermediate school districts and local school districts shall be
developed by the superintendent of public instruction and shall be
promulgated by the superintendent of public instruction pursuant to
Act
No. 306 of the Public Acts of 1969, as amended, being sections
24.201
to 24.315 of the Michigan Compiled Laws.the administrative
procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.
(2)
The suggested manuals, forms, and operating procedures
described in subsection (1) shall be developed and may be
periodically updated by an advisory committee selected by the
department of treasury composed of persons from the department of
education, other interested state agencies, local units,
associations of local units, and other interested or concerned
groups.
(3)
The department of treasury shall provide, or and shall
cooperate in the provision of, training and educational programs to
assist local units to comply with this act. The department of
education shall provide, and shall cooperate in the provision of,
training and educational programs to assist school districts,
intermediate school districts, and public school academies to
comply with this act.
Enacting section 1. This amendatory act does not take effect
unless all of the following bills of the 97th Legislature are
enacted into law:
(a) Senate Bill No.957
.
(b) Senate Bill No.952
.