BILL ANALYSIS Ó
SB 335
Page 1
Date of Hearing: August 29, 2013
ASSEMBLY COMMITTEE ON BUDGET
Skinner, Nancy, Chair
SB 335 (Yee) - As Amended: August 5, 2013
SENATE VOTE : 28-10
SUBJECT : State Contract Expenditure Reporting
SUMMARY : Requires the FI$Cal accounting system, which is
currently under development, to report information on all
contracts over $5,001 for agencies and departments that use the
system. Specifically, this bill : Stipulates that contract
information for all contracts in departments that use FI$Cal
must be searchable and sortable and contain the name of the
contractor, a description of services, the total projected costs
of the contract, the amount paid to the contractor in the
current and prior years, the effective date of the contract, and
the procurement method.
FISCAL EFFECT : Committee staff believe any costs associated
with this bill have already been accounted for in the current
project costs for the FI$Cal project.
COMMENTS : FI$Cal, the State's effort to modernize the State's
accounting and budgeting practices and install modern automation
tools is well underway. This bill intends to set reporting
requirements upon the new system that are consistent with prior
legislative intent around the goals of the project to provide
accessible information on State expenditures.
In creating the FI$Cal project, the Legislature set some broad
goals and priorities for the information contained in the new
system. This bill builds upon those goals, by appropriately
refining the expectations regarding the project.
Currently, the State operates the State Contracting and
Procurement Reporting System (SCPRS), which provides information
on State contracts. This data cannot be easily analyzed or
sorted, which makes it difficult to analyze and search. The
data is also hard to aggregate because a single vendor name may
be coded inconsistently by different account clerks. This
limitation has been recognized during Assembly budget oversight
hearings in the recent past, when information regarding State
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contract expenditures were scrutinized.
The FI$Cal system will solve these problems with its
improvements to procurement. The system has already developed a
single chart of accounts, which will be rolled out across 140
departments and a centralized vendor management file that will
improve the standardization of the data. The system itself is
designed to produce reports that have the sortable functionality
that is similar to the requirements of this bill. When the
system is fully operational in 2016, the type of information
required in this bill will be available within the FI$Cal
system. Therefore, this bill appears to be consistent with the
efforts already underway with the FI$Cal project. Many of the
potential costs of this bill, such as changing the State
Contracting Manual, will need to be undertaken to implement the
FI$Cal project itself, so the additional specificity on
reporting articulated in this bill should have no additional
costs.
Fi$Cal project staff restate that not all State agencies will
use the contract procurement components of Fi$Cal and thus the
data requested in this bill will not be provided for those
departments. In particular, data for Lottery, Corrections,
DMV, Caltrans, and Water Resources will not have contract data
available in Fi$Cal. However, these departments would
technically "use the Fi$Cal system" for other functionality,
like budgeting. The author's office states that the intent of
the bill is consistent with this clarification and there is no
expectation that this bill would require an increase in the
scope of the project to require new functionality for
departments.
Currently the $616.8 million FI$Cal project is on schedule and
has met its significant project milestones. The project has
implemented its "Pre-Wave" activities to develop the templates
and architecture of the system and then will begin rolling out
the project through four "Waves" of departments over the next
three years.
The information gathered through the requirements of this bill
may not be sufficient to capture true contract expenditures for
State vendors. Most state appropriations can be encumbered for
up to three years, which means contractors can have pending
unpaid invoices that would not be reported in the current and
prior year data, as required in the bill. Very large projects,
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like the IT contracts for efforts like the FI$Cal system
contract or the High Speed Rail Authority's contracts for
construction, often have longer appropriation periods to
accommodate the complexity and duration of the project. Thus,
if this bill is enacted, further reporting could be required to
provide a comprehensive picture of contract expenditures.
The Legislature may need to revisit FI$Cal reporting language to
align the expectations of reporting with the capabilities of the
system. While the requirements in this bill appear to be broad
enough to fit within the expected functionality of the system,
it will be worth revisiting to ensure that the system is
providing data efficiently to the public and the Legislature
itself.
REGISTERED SUPPORT / OPPOSITION :
Support
AFSCME (Sponsor)
Opposition
None on File.
Analysis Prepared by : Christian Griffith / BUDGET / (916)
319-2099