BILL ANALYSIS Ó SB 335 Page 1 SENATE THIRD READING SB 335 (Yee) As Amended August 5, 2013 Majority vote SENATE VOTE :Vote not relevant BUDGET 14-10 -------------------------------- |Ayes:|Skinner, Bloom, Campos, | | |Chesbro, Daly, Dickinson, | | |Gordon, | | |Jones-Sawyer, Mitchell, | | |Mullin, Muratsuchi, | | |Nazarian, Stone, Ting, | | | | |-----+--------------------------| |Nays:|Gorell, Chávez, Grove, | | |Harkey, Mansoor, | | |Melendez, Morrell, | | |Nestande, Patterson, | | |Wagner | | | | -------------------------------- SUMMARY : Requires the Financial Information System for California (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 : 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 SB 335 Page 2 legislative intent around the goals of the project to provide accessible information on state expenditures. In creating the FI$Cal project, the Legislature set some broad goals and priorities for the information contained in the new system. This bill builds upon those goals, by appropriately refining the expectations regarding the project. Currently, the state operates the State Contracting and Procurement Reporting System (SCPRS), which provides information on state contracts. This data cannot be easily analyzed or sorted, which makes it difficult to analyze and search. The data is also hard to aggregate because a single vendor name may be coded inconsistently by different account clerks. This limitation has been recognized during Assembly budget oversight hearings in the recent past, when information regarding state contract expenditures were scrutinized. The FI$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$Cal and thus the data requested in this bill will not be provided for those departments. In particular, data for California Lottery, Department of Corrections and Rehabilitation, Department of Motor Vehicles, Department of Transportation, and Water Resources will not have contract data available in FI$Cal. However, these departments would technically "use the FI$Cal system" for other functionality, like budgeting. The author's SB 335 Page 3 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, 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. Analysis Prepared by : Christian Griffith / BUDGET / (916) 319-2099 FN: 0002048