Bill Text: HI SB102 | 2016 | Regular Session | Introduced
Bill Title: Budget; Variance Reports, Program Memoranda
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2015-12-17 - Carried over to 2016 Regular Session. [SB102 Detail]
Download: Hawaii-2016-SB102-Introduced.html
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THE SENATE |
S.B. NO. |
102 |
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TWENTY-EIGHTH LEGISLATURE, 2015 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to budgeting.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The purpose of this Act is to improve the State's budgeting process.
More specifically, this Act:
(1) Changes the information required to be provided in the variance reports submitted to the legislature before each regular session. The major changes delete the requirement for estimated variances for the fiscal year in progress and, instead, require a comparison of the variances for the last completed fiscal year against the immediate preceding fiscal year; and
(2) Repeals the requirement that program memoranda be submitted to the legislature before regular sessions of odd-numbered years.
The legislature finds that variance reports, which show the differences between budgeted and actual expenditures, positions, program size indicators, and levels of effectiveness, will promote the legislature's decision-making capability. With the information, the legislature will be better able to evaluate the execution of the enacted budget and effectiveness, efficiency, and productivity of budget programs in relation to expenditures. The legislature intends that the variance reports be submitted annually to the legislature as prescribed by current statute. This intent is emphasized because the administration in recent years has submitted variance reports biennially.
This Act also requires the auditor to conduct an audit of the first two variance reports submitted under this Act. The legislature intends to review this Act based on the findings and recommendations of the auditor.
The legislature has repealed the requirement for program memoranda in order to compensate for the possible additional administrative workload required for the annual variance reports.
The legislature intends that the provisions of this Act also apply to the judiciary budget by operation of section 601-2, Hawaii Revised Statutes.
SECTION 2. Section 37-75, Hawaii Revised Statutes, is amended to read as follows:
"§37-75 Variance report. (a) Not
fewer than thirty days prior to the convening of each regular session of the
legislature, the governor shall submit to the legislature and to each member
thereof a variance report on program performance for the last completed
fiscal year and the immediate preceding fiscal year [in progress].
For purposes of this section, "immediate preceding fiscal year"
means the fiscal year immediately preceding the last completed fiscal year.
The purposes of the variance report shall be to:
(1) Compare and explain the differences between the:
(A) Budgeted expenditures, authorized positions, anticipated program sizes, and anticipated levels of effectiveness for the last completed fiscal year; and
(B) Actual expenditures, filled positions, actual program sizes, and actual levels of effectiveness for the last completed fiscal year; and
(2) Compare the differences between the information described in paragraphs (1)(A) and (B) for the last completed fiscal year and corresponding information for the immediate preceding fiscal year.
(b) In format, the variance report generally shall follow the fiscal requirements portion of the executive budget or budgets. The report shall include:
(1) At the lowest level of the program structure, for
each program contained in the budget finally approved by the legislature for
the last completed fiscal year and the immediate preceding fiscal year [in
progress]:
(A) A comparison, by the operating and
research and development cost categories, of the budgeted expenditures and [the]
actual expenditures for the last completed fiscal year and the budgeted
expenditures and [the estimated] actual expenditures for the immediate
preceding fiscal year [in progress];
(B) A comparison[, for the operating and
research and development cost categories,] of the [budgeted expenditures
and] number of positions authorized in the budget and [the
actual expenditures and] number of positions filled in the last
completed fiscal year and [a comparison of the budgeted expenditures and]
the number of positions authorized [for the fiscal year in progress] in
the budget for and [the actual expenditures and] number of positions
filled in [the first three months of the fiscal year in progress and the
estimated expenditures and number of positions expected to be filled in the
remaining months of] the immediate preceding fiscal year [in
progress];
(C) The program size indicators and a
comparison of the program size anticipated and [the] size actually
realized in the last completed fiscal year and the program size anticipated and
[the] size [estimated] actually realized for the immediate
preceding fiscal year [in progress];
(D) The effectiveness measures and a comparison
of the level of effectiveness anticipated and [the] level actually
attained in the last completed fiscal year and the level of effectiveness
anticipated and [the] level [estimated] actually attained for
the immediate preceding fiscal year [in progress]; and
(E) A narrative explanation of the significant
differences for the last completed fiscal year in each of the comparisons made
in subparagraphs (A), (B), (C), and (D), including an explanation of the basis
upon which the original estimates were made and the reasons why the estimates
proved accurate or inaccurate, and a statement of what the actual experience
portends for the future of the program in terms of costs, size, and
effectiveness[;]. No narrative explanation of the difference for the
immediate preceding fiscal year shall be required;
provided that expenditure amounts in the comparisons shall be shown to the nearest thousand dollars;
(2) Appropriate summaries at each level of the state program structure for each major grouping of programs encompassed therein, showing:
(A) A comparison of the total budgeted
expenditure and [the] total actual expenditure for the last completed
fiscal year and the total budgeted expenditure and [the] total [estimated]
actual expenditure for the immediate preceding fiscal year [in
progress]; provided that the expenditure amounts shall be shown to the
nearest thousand dollars;
(B) The effectiveness measures and a
comparison of the level of effectiveness anticipated and the level actually
attained in the last completed fiscal year and the level of effectiveness
anticipated and the level [estimated] actually attained for the immediate
preceding fiscal year [in progress]; and
(C) A narrative explanation summarizing the
major reasons for the differences in the comparisons made for the last
completed fiscal year in subparagraphs (A) and (B)[; and]. No
narrative explanation of the differences for the immediate preceding fiscal
year shall be required;
(3) A narrative explanation of the significant
variations in capital improvement costs[;] for the last completed
fiscal year; provided that capital improvement project variances shall be
referenced to the six-year program and financial plan, which shall contain the
information specified in section 37-69(d)(1)(K)[.]; and
(4) The percentage differences shall be shown when comparisons are required under paragraphs (1) and (2) between:
(A) Budgeted and actual expenditures, positions authorized and filled, anticipated and actually realized program size indicators, and anticipated and actually attained levels of effectiveness for a fiscal year; and
(B) The information specified under subparagraph (A) for the last completed fiscal year and the immediate preceding fiscal year.
(c) The variance report shall be submitted to the legislature in a document separate from the six-year program and financial plan and executive or supplemental budget."
SECTION 3. Section 37-70, Hawaii Revised Statutes, is repealed.
["§37-70 Program memoranda.
(a) Not later than the third Wednesday of January of each odd-numbered year,
the governor shall submit to the legislature and to each member thereof, a
program memorandum covering each of the major programs in the statewide program
structure. Each program memorandum will include:
(1) An overview of the program as a whole
including a discussion of:
(A) Objectives.
(B) Component programs.
(C) Departments involved.
(D) Relationships to other agencies
and jurisdictions.
(E) Major activities.
(F) Important external developments
affecting the program.
(G) Significant discrepancies
between previously planned cost and effectiveness levels and those actually
achieved.
(H) Trends and comparisons in costs,
effectiveness, or activity data over the budget and planning period.
(2) A statement of the major program
changes being recommended for the budget and planning period to include for
each proposed change:
(A) A brief statement of the
recommended change.
(B) The cost and program performance
consequences of the change over the budget and planning period.
(C) A summary of the analytic
rationale for the change.
(3) A discussion of emerging conditions,
trends and issues including:
(A) Actual or potential impact on
the State and its programs.
(B) Possible alternatives for dealing
with the specific problems occasioned by the emerging conditions, trends, and
issues.
(C) Suggestions for a program of
analyses to resolve the most urgent of the problems.
(4) Appendices as needed to include
appropriate issue papers, special analytic studies, other reports, and crucial
source data.
(b) If it is deemed more
desirable, the program memoranda and the six-year program and financial plan
may be combined into a single document containing all the information required
for each separate document."]
SECTION 4. Section 2 shall apply to the variance reports required to be submitted to the legislature pursuant to section 37-75 and 601-2, Hawaii Revised Statutes, after the effective date of this Act.
SECTION 5. (a) The auditor shall conduct an audit of the variance reports that have been issued by the department of budget and finance after July 1, 2016, and submitted to the legislature before the regular sessions of 2017 and 2018.
(b) The primary purpose of the audit shall be to determine if the information in the variance reports is accurate and worthwhile for legislative use. For this purpose, the auditor may limit the audit to a sample of budget programs and information from the variance reports of the executive and judiciary.
(c) The secondary purpose of the audit shall be to determine if:
(1) The format of or information in the variance report should be changed; and
(2) Any program size indicators or levels of effectiveness should be changed.
(c) The auditor shall submit the findings and recommendations of the audit to the governor, chief justice, and legislature not later than thirty days before the convening of the regular session of 2019.
(d) The auditor shall submit to the legislature, not later than twenty days prior to the convening of the regular sessions of 2017 and 2018, requests for annual appropriations to conduct the audit required under this section. With the requests, the auditor shall submit proposed scopes of work under the requested appropriations and alternative scopes of work under different appropriation amounts.
SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 7. This Act shall take effect on July 1, 2016.
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INTRODUCED BY: |
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Report Title:
Budget; Variance Reports, Program Memoranda
Description:
Changes the information required in the variance reports submitted to the legislature. Emphasizes the intent that the variance reports be submitted annually as prescribed by current statute. Requires the auditor to conduct an audit of the first two variance reports required under this Act. Repeals the requirement for submittal of program memoranda to the legislature before sessions of odd-numbered years. States intent that the provisions also apply to the judiciary budget by operation of existing law. Effective 07/01/16.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
