BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 335
                                                                  Page  1

          SENATE THIRD READING
          SB 335 (Yee)
          As Amended  September 6, 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  
          legislative intent around the goals of the project to provide  








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          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.

          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  








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          unpaid invoices that would not be reported in the current and  
          prior year data, as required in the bill.  Very large projects,  
          like the information technology 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


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