WEST virginia legislature
2018 regular session
Introduced
House Bill 4188
[Introduced January
18, 2018; Referred
to the Committee on Government Organization then Finance.]
A BILL to amend and
reenact §5A-2-1 of the Code of West Virginia, 1931, as amended; and to amend
said code by adding thereto a new article, designated §5A-2B-1, §5A-2B-2,
§5A-2B-3, §5A-2B-4, §5A-2B-5, and §5A-2B-6, all relating to creating the Shared
Services Section within the Finance Division of the Department of
Administration for accounting and financial reporting services; authorizing the
appointment of a deputy director; providing rule-making authority; defining
services offered; allowing for fees; applicability and exemptions; providing
for reports to the Legislature and Governor; providing for reporting of certain
information by spending units to the Shared Services Section; establishing
deadlines for information necessary for the consolidated annual financial
report; establishing a liaison between spending units and the Department of
Administration to facilitate compiling the consolidated annual financial
report; providing for a plan of corrective action and probation for spending
units; authorizing the Department of Administration to contract for accounting
services; and creating a new special revenue fund.
Be it enacted by the
Legislature of West Virginia:
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 2004. The Finance Division shall
be is 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 the Shared Services Section and a Financial
Accounting and Reporting Section.
(b) The accounting
section the Shared Services Section shall have the duties conferred
upon it by this article, §5A-2B-1 et seq. of this code, and by
the secretary, including, but not limited to, general financial accounting,
payroll, accounts payable, and accounts receivable for the Department of
Administration spending units which have entered agreements with the Shared
Services Section for accounting services.
(c) The Financial
Accounting and Reporting Section shall establish and maintain the centralized
accounting system required by §5A-2-24 of this code and issue annual general
purpose financial statements in accordance with generally accepted accounting
principles and with this article.
article 2b. shared
services.
§5A-2B-1. Legislative
purpose.
The Legislature finds
that the shortage of accountants throughout state government have hampered
financial services and reporting performed by state spending units. The
obstacles encountered by state spending units in compiling necessary
information and reports related to accounting services, in part, contributed to
the delay of the State of West Virginia finalizing its consolidated annual
financial report and single audit. The inability of agencies to find qualified
candidates for accounting positions also threatens continuity of services and
disaster recovery. Therefore, the Department of Administration began exploring
ways to provide for accounting services and financial reporting in a uniform
and efficient manner throughout state government that results in a savings of
taxpayer moneys. The Department of Administration believes the most efficient
model of providing these services is through a centralized agency staffed with
employees that can provide the services to a number of different spending
units.
§5A-2B-2. Shared
Services Section created; purpose; deputy director.
(a) There is created a
Shared Services Section within the Division of Finance for the purpose of
establishing centralized accounting and financial reporting services for state
spending units.
(b) The Shared Services
Section is under the supervision of a deputy director, who shall be appointed
by the Secretary of the Department of Administration.
(c) Candidates for
deputy director shall:
(1) Have at least a
bachelor’s degree from an accredited four-year college or university;
(2) Have at least six
years of full-time experience in finance or accounting, with two years of
experience as an administrator or supervisor; and
(3) Have knowledge of
generally accepted accounting principles and budgeting.
(d) The Shared Services
Section is authorized to employ employees, including, but not limited to,
accountants, auditors, and procurement officers, necessary to discharge the
duties of this article.
(e) The Shared Services
Section shall provide at a minimum accounting, financial reporting, and
budgeting services to spending units. The deputy director may charge a
reasonable fee to spending units for the accounting and financial reporting
services provided to agencies.
§5A-2B-3. Cost
analysis and reporting.
(a) On or before July 1,
2018, the Department of Administration shall develop a cost-performance
assessment to measure costs of providing each state spending unit’s accounting
and financial reporting services. The Department of Administration is
authorized to promulgate legislative rules, including emergency legislative
rules, to develop the assessment, any forms necessary for reporting costs, and
any other information necessary pursuant to §29A-3-1, et seq. of this
code. The Department of Administration shall develop baseline costs for the
provision of accounting and financial reporting services by the Shared Services
Section for comparison in the cost-performance assessment.
(b) State spending units
shall report annually to the Shared Services Section information related to
costs of providing accounting and financial reporting services based upon the
metrics identified by the Shared Services Section in the cost-performance
assessment in the prescribed format. The deputy director shall evaluate the
cost information provided by spending units to determine if the same services
could be provided by the Shared Services Section at a lower cost and in a more
efficient manner.
(c) On or before July 1,
2019, the Deputy Director of the Shared Services Section shall report to the
Governor and Joint Committee on Government and Finance the results of the
cost-performance assessment documenting the amount each state spending unit
incurs for accounting services, and make recommendations for providing the
services through the Shared Services Section.
(d) The deputy director
shall report annually to the Governor and Joint Committee for Government and
Finance the cost savings and efficiencies resulting from providing accounting
and financial reporting services by the Shared Services Section.
§5A-2B-4.
Applicability and exemptions.
(a) Those spending units
with a cost-performance assessment greater than the baseline cost set by the
Shared Services Section shall enter into an agreement with the Shared Services
Section for the provision of accounting and financial services, provided the deputy director determines the implementation
of the agreement would be feasible and documents that the agreement will result
in cost savings or efficiencies to the state.
(b) Any spending unit
seeking accounting and financial reporting services may voluntarily request an
agreement for the provision of accounting and financial reporting services by
the Shared Services Section.
(c) Those spending units
with one full-time equivalent position or less dedicated to providing
accounting and financial reporting services shall enter into an agreement with
the deputy director of the Shared Services Section for the provision of
accounting and financial reporting services, provided the deputy director
determines the implementation of the agreement would be feasible and documents
that the agreement will result in cost savings or efficiencies to the state.
(d) Those spending units
that fail to provide any required report or information to the Department of
Administration necessary for the consolidated annual financial report by the
established deadline will be given a one-year probationary period with a plan
of corrective action defined by the Department of Administration. The plan of
corrective action shall include defined benchmarks for completing all reports
or information necessary for the consolidated annual financial report by the
deadline in the next fiscal year.
(e) If a spending unit
fails to meet deadlines established in §5A-2B-5 of this code at the end of the
probationary period, the spending unit shall, at the deputy director’s
discretion, enter into an agreement for the provision of accounting and
financial reporting services by the Shared Services Section.
(f) When a spending unit
has entered into an agreement with the Shared Services Section for the
provision of accounting and financial reporting services pursuant to subsection
(a) of this section, the spending unit may cancel the agreement at the end of
the fiscal year when documentation showing the spending unit can provide the
services at a lower cost to the state is approved by the deputy director.
§5A-2B-5. Spending
unit liaisons; deadlines for required reporting; training; contracts for
accounting services.
(a) Each cabinet
secretary or head of an institution of higher education shall designate a
liaison within the agency or institution to work with the Shared Services
Section to produce necessary financial information for the consolidated annual
financial report. For those agencies that the Shared Services Section does not
provide accounting services to, the liaison shall work with the Department of
Administration to ensure accuracy of information reported and coordinate inputs
necessary for the consolidated annual financial report.
(b) The Financial
Accounting and Reporting Section of the Finance Division shall provide training
to those agencies in which accounting and financial reporting is not provided
by the Shared Services Section. The training shall encompass necessary
information for compilation of the consolidated annual financial report, format
of information, and required deadlines for reporting.
(c) The following
information must be submitted by spending units to the Finance Division for the
consolidated annual financial report:
(1) Drafts of closing
book forms of spending units with audited funds are due by September 15 of each
year.
(2) The final closing
book forms of spending units with audited funds are due by October 15 of each
year.
(3) Closing book forms
for spending units with unaudited funds are due by July 31 of each year.
(4) Closing book forms
for institutions of higher education are due October 15 of each year.
(5) Closing book forms
for the Higher Education Consolidated Fund are due by October 31 of each year.
(d) The Finance Division
is authorized to contract for accounting services necessary to complete the
information needed for the consolidated annual financial report for any agency
that misses the deadline in subsection (c) of this section. The Finance
Division shall invoice the agency for the cost of the accounting services.
There is created in the
State Treasury a special revenue fund designated the “Shared Services Section
Fund”. The fund consists of appropriations by the Legislature, funds received
for services provided pursuant to this article, and any gifts, grants, or
donations received. Expenditures from the fund shall be made by the deputy
director for the purposes set forth in this article, and are not authorized
from collections, but are to be made only in accordance with appropriation from
the Legislature and in §12-3-1 et seq. of this code, and upon the
fulfillment of the provisions of §11-2B-1, et seq. of this code.
NOTE: The purpose of this bill is
to create a centralized Shared Services Section to provide accounting and
financial reporting services to spending units. The bill requires reporting on
the costs of providing accounting and financial reporting services through the
Shared Services Section compared to costs of providing the functions by the spending
unit, in-house. The bill establishes deadlines for submission of information
from spending units necessary for the consolidated annual financial report, and
authorizes the Department of Administration to contract for accounting services
if a spending unit cannot provide necessary information by the deadline. The
bill creates a special fund to fund the agency.
Strike-throughs indicate language
that would be stricken from a heading or the present law and underscoring
indicates new language that would be added.