Report Title:

Comptroller

Description:

Delineates the responsibilities of the Department of Accounting and General Services and the duties of the Comptroller.

HOUSE OF REPRESENTATIVES

H.B. NO.

2185

TWENTY-SECOND LEGISLATURE, 2004

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO THE DEPARTMENT OF ACCOUNTING AND GENERAL SERVICES AND THE COMPTROLLER.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Presently, the comptroller as the head of the department of accounting and general services is the general accountant of the State and is responsible for recording every receipt and disbursement of money made to, by, or through the state treasury. The department of accounting and general services is further directed by law to preaudit and conduct after-the-fact audits of the financial accounts of all state departments to determine the legality of expenditures and the accuracy of accounts and report to the governor and the legislature as to the finances of each department of the State.

Concurrently, by constitutional and statutory mandate, the auditor is directed to conduct postaudits of the transactions, accounts, programs, and performance of all departments, offices, and agencies of the State and its political subdivisions to discover evidence of any unauthorized, illegal, irregular, improper, or unsafe handling or expenditure of state funds, or other improper practice of financial administration.

This has resulted in some confusion and overlapping of efforts. Further, it has led to the present situation where most postaudits of the State's administrative departments, offices, and agencies have been conducted or commissioned and overseen by the department of accounting and general services. In some cases, the agency being audited has selected its own auditing agent or, due to familiarity or convenience, the department of accounting and general services has repeatedly used the same auditing agent to audit the same agency year after year. The result has been a situation that is not as objective and transparent as desired.

The purpose of this Act is to delineate the responsibilities of the department of accounting and general service and the duties of the comptroller as the general accountant of the State and not its auditor.

SECTION 2. Section 26-6, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The department shall:

(1) Preaudit and conduct [after-the-fact] internal audits of the financial accounts of all state departments to determine the legality of expenditures and the accuracy of accounts;

(2) Report to the governor and to each regular session of the legislature as to the finances of each department of the State;

(3) Administer the state risk management program;

(4) Establish and manage motor pools;

(5) Manage the preservation and disposal of all records of the State;

(6) Undertake the program of centralized engineering and office leasing services, including operation and maintenance of public buildings, for departments of the State;

(7) Undertake the functions of the state surveyor;

(8) Establish accounting and internal control systems;

(9) Provide centralized computer information management and processing services, coordination in the use of all information processing equipment, software, facilities, and services in the executive branch of the State, and consultation and support services in the use of information processing and management technologies to improve the efficiency, effectiveness, and productivity of state government programs; and

(10) Establish, coordinate, and manage a program to provide a means for public access to public information and develop and operate an information network in conjunction with its overall plans for establishing a communication backbone for state government.

The state communication system shall be established to:

(1) Facilitate implementation of the State's distributed information processing and information resource management plans;

(2) Improve data, voice, and video communications in state government;

(3) Provide a means for connectivity among the state, university, and county computer systems; and

(4) Provide a long-term means for public access to public information."

SECTION 3. Section 40-2, Hawaii Revised Statutes, is amended to read as follows:

"§40-2 Accounting systems and internal control; enforcing the use of and inspection of the same. The accounting system installed by the commission on public accountancy under Act 181, Session Laws of Hawaii 1923, as amended by Act 220, Session Laws of Hawaii 1925, for use in the offices of the comptroller, director of finance, departmental and agency services of the State, and the auditors, treasurers, departmental and agency services of the several counties shall be the accounting and reporting systems of the State and counties; provided that [the]:

(1) The University of Hawaii may install a different accounting system which shall be in conformity with generally accepted accounting principles as applied to colleges and universities; and [provided further that the]

(2) The department of education may install a different accounting system which shall be in conformity to generally accepted accounting principles.

The comptroller shall make such changes and modifications in the accounting system as [shall], from time to time, appear to be in the best interest of the State and counties.

The departments and agencies of the executive branch are respectively charged with the responsibility to maintain an adequate system of internal control and with the further responsibility to see that the internal control system continues to function effectively as designed. The comptroller shall make such investigations and internal audits from time to time to enforce the use of the accounting system and internal control systems in the executive branch.

The judiciary, the legislature, and each county shall be responsible for the establishment and maintenance of its respective internal control system."

SECTION 4. Section 40-5, Hawaii Revised Statutes, is amended to read as follows:

"§40-5 Annual reports. The comptroller shall make an annual report to the governor and to the legislature. The comptroller may[,] recommend, in the comptroller's yearly report[,] or in any special report which the comptroller may at any time think fit to make, [recommend] any plans and suggestions that the comptroller may think fit or worthy of adoption for the better collection, custody, and payment of the public moneys and the more economical internal auditing and examining of the public accounts, and any improvements in the mode of keeping these accounts that may at any time be brought to the comptroller's notice, and generally report upon all matters relating to public accounts."

SECTION 5. Section 40-7, Hawaii Revised Statutes, is amended to read as follows:

"§40-7 Count of money and securities in treasury. The comptroller, with the aid of the staff of the director of taxation and the director of finance, shall count the money and securities in the state treasury once in each fiscal year, or such other times as the comptroller may deem necessary, provided that the scope of the examination shall be determined by the comptroller who shall use such [auditing] accounting procedures as the comptroller deems necessary.

The comptroller shall prepare, in [triplicate,] quadruplicate, statements showing:

(1) The amount of money actually in the treasury reconciled with the amount of money as shown by the comptroller's record.

(2) The amount of securities owned by the State in the treasury reconciled with the amount of securities as shown by the comptroller's records.

(3) The amount of the depository securities actually in the treasury as compared with the amount of cash deposited in the respective banks (depositories); provided that the sufficiency of these deposits shall not be made a part of the examination."

SECTION 6. Section 40-8, Hawaii Revised Statutes, is amended to read as follows:

"§40-8 Statements of count to be filed. The comptroller shall file the original copy of the statement with the governor, [duplicate] a copy with the legislature and with the director of finance, and the comptroller shall post and maintain the [triplicate] quadruplicate copy in the comptroller's office for at least one month thereafter."

SECTION 7. Section 40-59, Hawaii Revised Statutes, is amended to read as follows:

"§40-59 Comptroller to keep list of salaries, contracts, bids, etc. The comptroller shall keep in the comptroller's office, in a convenient form for easy reference, a correct list of all state permanent settlements, specific salaries, payrolls, subsidies, rents, contracts, and all bids for materials and supplies; and in [auditing] reviewing all bills for service rendered or merchandise supplied, or other bills against the State, the comptroller shall compare all rates and prices charged with the list[,] and disallow all amounts in excess of the current rates and prices, as shown by the list[,] or that in the comptroller's judgment are excessive."

SECTION 8. Section 40-62, Hawaii Revised Statutes, is amended to read as follows:

"§40-62 Payment of warrants. Every lawful demand upon the treasury, duly [audited] reviewed and approved as provided in this chapter [provided], shall in all cases be paid by the director of finance on the date authorized and enfaced thereon or as soon thereafter as presented if there are sufficient funds at that time in the treasury applicable to the payment of the demand; and upon payment all warrants shall be canceled and proper entry made thereof."

SECTION 9. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 10. This Act shall take effect upon its approval; provided that amendments made to section 40-2, Hawaii Revised Statutes, by this Act shall not be repealed when that section is reenacted on June 30, 2005, by section 24 of Act 115, Session Laws of Hawaii 1998.

INTRODUCED BY:

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