Report Title:

UH; Financial administration

Description:

Grants continued fiscal flexibility for the University of Hawaii.

HOUSE OF REPRESENTATIVES

H.B. NO.

2426

TWENTY-THIRD LEGISLATURE, 2006

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO CHAPTER 40, HAWAII REVISED STATUTES.

 

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

SECTION 1. Section 40-1, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) With respect to the executive branch, except the University of Hawaii and the Hawaii tourism authority, [he] the comptroller shall have complete supervision of all accounts. [He] The comptroller shall pre-audit all proposed payments of $10,000 or more to determine the propriety of expenditures and compliance with such executive orders[,] and rules [and regulations as] that may be in effect. [He shall, when] When necessary, the comptroller shall withhold [his] approval of any payment. Whenever [he withholds his approval, he shall promptly notify] approval is withheld, the department or agency concerned [.] shall be promptly notified. With respect to the University of Hawaii or the Hawaii tourism authority, the comptroller shall issue warrants for the release of funds for the operating costs of the university or the Hawaii tourism authority, as applicable, in amounts and at times mutually agreed upon by the governor or director of finance and the university or the Hawaii tourism authority, as applicable, provided[:] that:

(1) The amounts released shall not exceed the allotment ceilings for the respective funding sources of the university's appropriations established by the governor for an allotment period pursuant to section 37-34, or in the case of the Hawaii tourism authority, revenues received by the convention center enterprise special fund and the tourism special fund pursuant to section 237D-6.5; and

(2) The comptroller may issue warrants as an advance from the state treasury to the university and the Hawaii tourism authority to establish a checking account and provide working capital in amounts and at times mutually agreed upon by the governor or director of finance and the university and the Hawaii tourism authority.

The university and the Hawaii tourism authority shall preaudit all proposed payments to determine the propriety of expenditures and compliance with applicable laws, executive orders, and rules as may be in effect. The university and the Hawaii tourism authority shall make disbursements for operating expenses from the amounts released by the comptroller and maintain records and documents necessary to support those disbursements at times mutually agreed upon by the university president or the executive director of the Hawaii tourism authority, as applicable, and the comptroller; provided that when requested by the university or the Hawaii tourism authority, the comptroller shall make all disbursements for the university or the Hawaii tourism authority, as applicable, subject to available allotment. Funds released pursuant to this section shall be deposited by the university or the Hawaii tourism authority, as applicable, in accordance with the provisions applicable to the director of finance by chapter 38. Except for moneys deposited by the Hawaii tourism authority in the convention center enterprise special fund pursuant to section 201B-8, and in the tourism special fund pursuant to section 201B-11, any interest earned on the deposit of funds released pursuant to this section shall be deposited in the state treasury at the end of each fiscal year."

SECTION 2. 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 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. 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 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 3. Section 40-4, Hawaii Revised Statutes, is amended to read as follows:

"§40-4 Publication of statements. The comptroller shall prepare and submit to the governor, [and publish in a newspaper of general circulation in the State,] immediately following the close of each fiscal year, a statement of income and expenditure by funds, showing the principal sources of revenue, the function or purpose for which expenditures were made, together with a consolidated statement showing similar information for all funds; also a statement showing the balance in each fund at the beginning of the fiscal year, plus the receipts, minus the disbursements, and the balance on hand at the close of the fiscal year after deducting outstanding warrants and vouchers. The comptroller may request all agencies, the judiciary, the University of Hawaii, the Hawaii tourism authority, and the legislature to provide such information as may be required for the preparation of statements."

SECTION 4. Section 40-6, Hawaii Revised Statutes, is amended to read as follows:

"§40-6 Approval of business and accounting forms. The comptroller shall determine the forms required to adequately supply accounting and statistical data for the state government. The comptroller shall require heads of departments and establishments of the state government to submit proposed new forms or proposed changes in current business and accounting forms for review and approval before ordering the same printed; except that the University of Hawaii and the Hawaii tourism authority shall be subject to this requirement only with respect to uniform business and accounting forms of statewide use in the State's accounting system. All standard state forms shall be classified, numbered, and standardized in design, dimensions, color, and grade of paper and recorded in a catalogue of accounting and statistical forms by the comptroller."

SECTION 5. Section 40-58, Hawaii Revised Statutes, is amended to read as follows:

"§40-58 In favor of assignees. No assignment of moneys by a person to whom the State is directly indebted shall be effective unless the assignment is first approved by the comptroller[.] or, in the case of the University of Hawaii, by its president or the president's designee. The comptroller or the president of the University of Hawaii or the president's designee may prescribe the form for an assignment, and may approve the assignment within a reasonable time period if, in [the comptroller's] their respective discretion, the rights or obligations of the State or the university under any contract or other undertaking or under any law, rule, or order by a competent authority will not be prejudiced thereby. Upon approval of the assignment, the comptroller or the president of the university or the president's designee shall draw a warrant payable to the assignee. Except as to contracts encumbered by the comptroller[,] or the university, each expending agency, upon notification of the comptroller's approval of an assignment, shall prepare a claim for payment in accordance with the terms of the assignment."

SECTION 6. Section 40-81, Hawaii Revised Statutes, is amended to read as follows:

"§40-81 Report by agencies receiving special moneys. All state officers, departments, boards, bureaus, commissions, or agencies collecting or receiving any moneys not required by law to be deposited in the state treasury shall report to the comptroller all receipts and disbursements on account thereof for each quarterly period of the calendar year not later than the fifteenth day following the end of each quarterly period on such forms and under such rules [and regulations] as may be prescribed by the comptroller[.]; provided that with respect to all moneys held outside the state treasury by the University of Hawaii pursuant to the authority granted to the university by this chapter, the university shall report to the comptroller all transactions for each quarterly period not later than the fifteenth day following the end of each quarterly period on such forms and under such rules as may be prescribed by the comptroller."

SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 8. This Act shall take effect on July 1, 2006; provided that the amendments made to sections 40-1, 40-4, and 40-6, Hawaii Revised Statutes, by this Act shall not be repealed when those sections are reenacted on June 30, 2007, by section 14(2) of Act 58, Session Laws of Hawaii 2004, as amended by section 50 of Act 22, Session Laws of Hawaii 2005.

INTRODUCED BY:

_____________________________

BY REQUEST