S635

SENATE, No. 635

STATE OF NEW JERSEY

INTRODUCED FEBRUARY 5, 1996

By Senators LaROSSA and INVERSO

An Act consolidating the auditing functions and personnel throughout the executive branch of State government in a Division of Auditing, constituting the State Comptroller as the head of that division and providing for a separate Division of Budget in the Department of the Treasury, amending P.L.1944, c.112 and P.L.1948, c.92, amending and supplementing Title 52 of the Revised Statutes and repealing sections 27 and 30 of article 3 of P.L.1944, c.112.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. R.S.52:14-3 is amended to read as follows:

52:14-3. When such an agreement has been made between two departments, the heads thereof shall, from time to time, certify to the [state comptroller] Director of the Division of Budget the sum or sums due from the one to the other on account of such work, and the [state comptroller] director shall thereupon cause to be paid such sum or sums to the creditor department. Payment may be by check, as other state bills are paid, or by a system of debits and credits, as the [state comptroller] director may determine. All sums so received by or credited to any department shall be added to the current appropriation made for the support of said department, to the end that its appropriation may not be depleted by reason of the work done for another department.

(cf: R.S.52:14-3)

2. R.S.52:14-4 is amended to read as follows:

52:14-4. Two or more departments may unite in co-operative work in lines germane to the duties of said departments, and the heads thereof may agree between themselves for the distribution of the expense to be incurred. The agreement may include the payment or transfer from one department to another of a lump sum, and the payment, by the department receiving the same, of all expenses incurred in such co-operative work. The [state comptroller] Director of the Division of Budget shall, upon due notification of the agreement, make the necessary payments, or credits and debits, from sums not otherwise under requisition by the co-operating departments.

(cf: R.S.52:14-4)

3. Section 3 of P.L.1948, c.92 (C.52:18A-3) is amended to read as follows:

3. There shall be within the Department of the Treasury a Division of Budget [and] , a Division of Accounting, a Division of Purchase and Property, a Division of Taxation, and a Division of the New Jersey Racing Commission.

The State Treasurer shall have authority to organize and maintain in his offices an Administrative Division and to assign to employment therein such secretarial, clerical and other assistants in the department as his office and the internal operations of the department shall require.

(cf: P.L.1983, c.36, s.7)

4. Section 5 of P.L.1948, c.92 (C.52:18A-5) is amended to read as follows:

5. The Division of Budget [and Accounting] shall be headed by a director, who shall be a person qualified by training and experience to direct the work assigned to such division. The director of such division shall be appointed by the Governor, with the advice and consent of the Senate, and shall serve during the term of office of the Governor appointing him and until the director's successor is appointed and has qualified.

The director of the Division of Budget [and Accounting] shall receive such salary as shall be provided by law.

The individual in office as the Director of the Division of Budget and Accounting on the effective date of P.L. , c. (C. )(now pending before the Legislature as this bill) shall hold the office of the Director of the Division of Budget for the period of the term of the Director of the Division of Budget and Accounting which remains unexpired on July 1 next following enactment of P.L. , c. (C. ) (now pending before the Legislature as this bill).

(cf: P.L.1948, c.92, s.5)

5. Section 7 of P.L.1948, c.92 (C.52:18A-7) is amended to read as follows:

7. The office of State Comptroller, also designated and referred to as "Comptroller of the Treasury," [is] as continued[, but such office is hereby] and transferred to and constituted an office within the Division of Budget and Accounting in the Department of the Treasury [established hereunder] pursuant to the "Department of the Treasury Act of 1948, P.L.1948, c.92 (C.52:18A-1 et seq.), is continued and is hereby transferred to and constituted an office within the Division of Accounting in the Department of the Treasury. The [director of the Division of Budget and Accounting is hereby constituted the] State Comptroller [and comptroller of the treasury and, as such,]shall exercise the powers and perform the functions and duties [vested in, or imposed upon, the State Comptroller or comptroller of the treasury, by law] of the Director of the Division of Accounting.

(cf: P.L.1948, c.92, s.7)

6. Section 8 of P.L.1948, c.92 (C.52:18A-8) is amended to read as follows:

8. All State revenue collected by any department, institution, commission, board, committee or official of this State shall, except as otherwise provided by law, be deposited, in the method prescribed by the Director of the Division of [Budget and] Accounting, to the credit of the State of New Jersey in such depositories as the State Treasurer shall designate. A report of such moneys collected shall be submitted to such director and the State Treasurer in such form as the director shall prescribe. Such reports shall be submitted not later than the tenth day of the month following that during which such moneys were received. The director of the Division of [Budget and] Accounting, upon receiving such report, shall audit and register all amounts contained therein and make proper accounting thereof.

(cf: P.L.1948, c.92, s.8)

7. Section 9 of P.L.1948, c.92 (C.52:18A-9) is amended to read as follows:

9. The director of the Division of Budget [and Accounting] shall have authority to prescribe uniform forms to be used by all departments or other agencies of the State Government in encumbering any funds appropriated.

The director of the Division of [Budget and] Accounting shall prepare the forms upon which shall be rendered all statements of indebtedness against any department, institution, commission, committee, official, board, or body of State Government.

The forms, in this section provided, shall, when so prepared, be the only forms used for the evidence and record of such encumbrances and indebtedness.

(cf: P.L.1948, c.92, s.9)

8. Section 10 of P.L.1948, c.92 (C.52:18A-10) is amended to read as follows:

10. Each department, commission, committee, official, board or body of any institution or organization of the State shall designate the proper officer who shall approve and sign all encumbrance requests and statements of indebtedness. The designation shall be filed in the office of the Director of the Division of Budget and [Accounting] the office of the State Comptroller; and the requests and statements of indebtedness shall be presented to [such] the director and the State Comptroller.

The [Director of] State Comptroller in the Division of [Budget and] Accounting shall examine, audit and adjust all encumbrances and statements of indebtedness so presented. He may administer an oath to the persons presenting the encumbrance or statement of indebtedness and to any witness presented on behalf of such person and may examine such person or witness as to the truth, fairness and correctness of such encumbrance or statement of indebtedness.

The [Director of] State Comptroller in the Division of [Budget and] Accounting and the State Treasurer shall execute warrant checks in settlement of statements of indebtedness after such statements of indebtedness have been audited and approved by the [Director of the Division of Budget and Accounting] State Comptroller and after such warrant checks have been registered by him. Warrant checks after having been executed, shall be delivered to the payees.

(cf: P.L.1950, c.61, s.1)

9. Section 11 of P.L.1948, c.92 (C.52:18A-11) is amended to read as follows:

11. Checks or drafts used only for the transfer of State funds from one depository to another, drawn to the order of the State of New Jersey and restrictively endorsed by the State Treasurer in the following manner: "Transfer of State Funds--For Deposit Only," need not be signed by the director of the Division of Budget [and] or the director of the Division of Accounting.

(cf: P.L.1948, c.92, s.11)

10. Section 12 of P.L.1948, c.92 (C.52:18A-12) is amended to read as follows:

12. Wherever a provision of law relating to the presentation of claims or bills for approval, the drawing of warrants, the countersigning of receipts and checks, the administration of petty cash funds, the apportionment of taxes on railroad and canal property, [applies] applied to the Comptroller, or to the State Commissioner of Taxation and Finance from July 1, 1948, the effective date of the "Department of the Treasury Act of 1948," P.L.1949, c.92 (C.52:18A-1 et seq.), until July 1 next following enactment of P.L. , c. (C. )(now pending before the Legislature as this bill), such provision of law [shall when this act takes effect apply] shall be

construed as having applied instead to the director of the Division of Budget and Accounting.

(cf: P.L.1948, c.92, s.12)

11. Section 13 of P.L.1948, c.92 (C.52:18A-13) is amended to read as follows:

13. The Secretary of State shall, when the offices of State Treasurer [and] , director of the Division of Budget [and Accounting] and State Comptroller or [either] any of them shall become vacant or the officers or [either] any of them shall no longer be authorized to act as such, respectively, give written notice forthwith to all national banks located in this State and institutions authorized by the State to carry on a banking business of such vacancy or termination of power. No bank shall thereafter pay any check or draft of the State Treasurer, signed or countersigned by any person after his office shall become vacant or after he shall no longer be authorized to act.

(cf: P.L.1948, c.92, s.13)

12. Section 31 of P.L.1948, c.92 (C.52:18A-31) is amended to read as follows:

31. The State Treasurer shall, whenever he shall deem the same necessary, designate as deputy director of the Division of Budget [and Accounting] any officer or employee in the department. Such designation shall be in writing and shall be filed with the Secretary of State. The State Treasurer may at any time change or cancel any such designation. Any change or cancellation of such designation shall be in writing and shall be filed with the Secretary of State.

The deputy director of the Division of Budget [and Accounting] shall have and exercise the powers and perform the functions and duties of the director of the Division of Budget [and Accounting] during the absence or disability of such director. In the event that the director of such division shall die, resign or be removed from office, or become disqualified to execute the duties of his office, or a vacancy shall occur in the office of the director of the Division of Budget [and Accounting] for any cause whatsoever, the person then holding the office of deputy director of the Division of Budget [and Accounting] shall continue to hold such office and shall exercise the powers and perform the functions and duties of the director of the Division of Budget [and Accounting] until the successor of the director of the Division of Budget [and Accounting] shall be appointed and shall qualify.

(cf: P.L.1948, c.92, s.31)

13. Section 34 of P.L.1948, c.92 (C.52:18A-34) is amended to read as follows:

34. Any power which may be vested in a director of any division in the Department of the Treasury, except any power which may be exercised by the director of the Division of Budget [and] or the State Comptroller as the Director of the Division of Accounting pursuant to any authority contained in section 7, 8, 9, 10, or 12 hereof, may be exercised by the State Treasurer. To the extent that the State Treasurer exercises such power the power of the director or the State Comptroller shall be superseded.

(cf: P.L.1948, c.92, s.34)

14. Section 37 of P.L.1948, c.92 (C.52:18A-37) is amended to read as follows:

37. Before entering upon his duties, the State Treasurer, each division director other than the State Comptroller as provided for in R.S.52:19-2, any deputy director of the Division of Budget [and Accounting], and the deputy State Treasurer shall each make and subscribe an oath, to be filed in the office of the Secretary of State, that he will faithfully, impartially and justly to the best of his ability, perform the duties of his office and carefully preserve all records, papers, writings or property intrusted to him by virtue of his office, and make such disposition of them as may be required by law.

The State Treasurer, each division director, any deputy director of the Division of Budget [and Accounting], the State Comptroller, deputy director of the Division of Accounting and the deputy State Treasurer shall each give bond conditioned upon the faithful performance of his duties. The bond of the State Treasurer [and] , the bond of the director of the Division of Budget [and Accounting] and the bond of the State Comptroller shall be approved by the Governor and shall each be in a sum not less than one hundred thousand dollars ($100,000.00). The bond of any deputy director of the Division of Budget [and] or Division of Accounting and the bond of the deputy State Treasurer shall be approved by the Governor and shall be in a sum not less than fifty thousand dollars ($50,000.00).

The bond of each of the directors of the other divisions in the Department of the Treasury shall be approved by the Governor and shall be in an amount, fixed by the Governor, not exceeding fifty thousand dollars ($50,000.00). The Governor shall have authority to require any other officer or employee of the department to give bond conditioned upon the faithful performance of his duties, which bond shall be approved by the Governor and the amount thereof fixed by him.

The premiums on bonds provided for herein shall be paid by the State.

(cf: P.L.1948, c.92, s.37)

15. Section 46 of P.L.1948, c.92 (C.52:18A-46) is amended to read as follows:

46. Whenever the term "State Treasurer" occurs or any reference is made thereto in any law, contract or document, the same shall be deemed to mean or refer to the State Treasurer designated as the head of the Department of the Treasury established hereunder.

Whenever the term "State Director of the United New Jersey Railroad and Canal Company" occurs or any reference is made thereto in any law, contract or document, the same shall be deemed to mean or refer to the State Treasurer designated as the head of the Department of the Treasury established hereunder.

Whenever the term "State Comptroller" or "Comptroller of the Treasury" occurs or any reference is made thereto in any law, contract or document, the same, from July 1, 1948, the effective date of the "Department of the Treasury Act of 1948," P.L.1949, c.92 (C.52:18A-1 et seq.), until July 1 next following enactment of P.L. , c. (C. )(now pending before the Legislature as this bill), shall be deemed to mean or refer to the Director of the Division of Budget and Accounting in the Department of the Treasury established [hereunder] pursuant to P.L.1949, c.92 (C.52:18A-1 et seq.).

Whenever the term "Division of Purchase and Property in the State Department of Taxation and Finance" occurs or any reference is made thereto in any law, contract or document, the same shall be deemed to mean or refer to the Division of Purchase and Property in the Department of the Treasury established hereunder.

Whenever the term "Director of the Division of Purchase and Property in the State Department of Taxation and Finance" occurs or any reference is made thereto in any law, contract or document, the same shall be deemed to mean or refer to the Director of the Division of Purchase and Property in the Department of the Treasury established hereunder.

Whenever the term "Division of Local Government in the State Department of Taxation and Finance" occurs or any reference is made thereto in any law, contract or document, the same shall be deemed to mean or refer to the Division of Local Government Services in the Department of Community Affairs established hereunder.

Whenever the term "Director of the Division of Local Government in the State Department of Taxation and Finance" occurs or any reference is made thereto in any law, contract or document, the same shall be deemed to mean or refer to the Director of the Division of Local Government Services in the Department of Community Affairs.

Whenever the term "Local Government Board of the Division of Local Government in the State Department of Taxation and Finance" occurs or any reference is made thereto in any law, contract or document, the same shall be deemed to mean or refer to the Local Finance Board of the Division of Local Government Services in the Department of Community Affairs.

Whenever the term "Division of Taxation in the State Department of Taxation and Finance" occurs or any reference is made thereto in any law, contract or document, the same shall be deemed to mean or refer to the Division of Taxation in the Department of the Treasury established hereunder.

Whenever the term "Director of the Division of Taxation in the State Department of Taxation and Finance" occurs or any reference is made thereto in any law, contract or document, the same shall be deemed to mean or refer to the Director of the Division of Taxation in the Department of the Treasury established hereunder.

Whenever the term "New Jersey Racing Commission" occurs or any reference is made thereto in any law, contract or document, the same shall be deemed to mean or refer to the New Jersey Racing Commission constituted the Division of the New Jersey Racing Commission established hereunder in the Department of the Treasury.

Whenever the term "State Commission of Taxation and Finance" occurs or any reference is made thereto in any law, contract or document, the same shall be deemed to mean or refer to the State Treasurer designated as the head of the Department of the Treasury established hereunder.

(cf: P.L.1983, c.36, s.8)

16. R.S.52:19-10 is amended to read as follows:

52:19-10. The state comptroller shall:

a. Superintend the collection of the revenue;

b. Take general charge and supervision of all rights, interest and property of the state;

c. Institute and direct prosecution against delinquent officers of the revenue, and for just claims and debts due to the state; [and]

d. Draw all warrants on the treasurer in favor of such public officers as receive salaries from the state and for the payment of all moneys directed by law to be paid out of the treasury, and such warrants shall designate the purpose for which they are drawn;

e. Serve as the director of the Division of Accounting in the Department of the Treasury;

d. Direct and control the internal and external audit functions carried out within the departments, commissions, committees, boards and institutions of the Executive branch of State government; and

f. Direct and control economy and efficiency audits within the departments, commissions, committees, boards and institutions of the Executive branch of State government to determine whether each such entity is acquiring, protecting and using its resources economically and efficiently, including but not limited to personnel, revenues andproperty, and the causes of any inefficiencies or uneconomical practices.

(cf: R.S.52:19-10)

17. R.S.52:20-1 is amended to read as follows:

52:20-1. The State House Commission shall consist of the Governor, who shall be the presiding officer, the State Treasurer, and the [Comptroller] Director of the Division of Budget in the Department of the Treasury, or the persons upon whom shall devolve by law the powers, duties and emoluments of said offices respectively, for the time being, and 2 members of the Senate appointed by the President thereof and 2 members of the General Assembly appointed by the Speaker thereof, no more than one of either group of 2 being of the same political party. The members of the commission shall serve without pay in connection with all such duties as are prescribed in this chapter. The appointed members of the commission shall serve as members thereof for terms co-extensive with their respective terms as members of the Houses of the Legislature from which they were appointed.

(cf: P.L.1963, c.180, s.1)

18. Section 1 of P.L.1940, c.35 (C.52:22-16.1) is amended to read as follows:

1. The [Comptroller] Director of the Division of Budget in the Department of the Treasury is hereby authorized to transfer by debit and credit, upon request in writing for that purpose by the head of any department or spending agency of the State government, monies appropriated to any such department or spending agency, to enable any such department or spending agency to pay telephone, telegraph, postage and rent charges.

(cf: P.L.1940, c.35, s.1)

19. Section 2 of P.L.1940, c.35 (C.52:22-16.2) is amended to read as follows:

2. Whenever it is necessary so to do, the [Comptroller] Director of the Division of Budget in the Department of the Treasury is hereby authorized to transfer and make the necessary credit directly to the State House Commission.

(cf: P.L.1940, c.35, s.2)

20. Section 3 of article 3 of P.L.1944, c.112 (C.52:27B-12) is amended to read as follows:

3. [There is hereby established in the Division of Budget and Accounting the] The Bureau of the Budget established in the Division of Budget and Accounting pursuant to P.L.1944, c.112 (C.52:27B-1 et seq.), together with all its functions, powers and duties is continued, but such bureau is transferred to and constituted the Division of Budget in the Department of the Treasury. All transfers shall be made pursuant to the "State Agency Transfer Act," P.L.1971, c.375 (C.52:14D-1 et seq.). The [commissioner, through the Bureau] Director of the Division of the Budget, shall carry into effect and execute the formulation of the annual budget recommendations submitted by the Governor to the Legislature and shall control the execution of the annual budget act [through a system of allotments by work programs].

(cf: P.L.1944, c.112, art.3, s.3)

21. Section 4 of article 3 of P.L.1944, c.112 (C.52:27B-13) is amended to read as follows:

4. The [commissioner, through the Bureau] Director of the Division of [the] Budget, shall follow the provisions and procedures set forth in sections 5 through 23, inclusive of this article.

(cf: P.L.1944, c.112, art.3, s.4)

22. Section 24 of article 3 of P.L.1944, c.112 (C.52:27B-33) is amended to read as follows:

24. [There is hereby established in the Division of Budget and Accounting the] The Bureau of Accounting established in the Division of Budget and Accounting pursuant to P.L.1944, c.112 (C.52:27B-1 et seq.), together with all its functions, powers and duties is continued, but such bureau is transferred to and constituted the Division of Accounting in the Department of the Treasury. All transfers shall be made pursuant to the "State Agency Transfer Act," P.L.1971, c.375 (C.52:14D-1 et seq.). The [commissioner, through the Bureau] State Comptroller, who shall be the Director of the Division of Accounting, shall prescribe the procedures for the collection of revenues; institute and direct prosecution against delinquent officers of the revenue and for just claims and accounts against the State; provide and maintain a uniform system of accounting for the State, its departments, institutions, courts and other State agencies. The [commissioner, through the Bureau of Accounting,]State Comptroller shall follow the provisions and procedure set forth in sections 25 through 38, inclusive, of this article.

(cf: P.L.1944, c.112, art.3, s.24)

23. Section 25 of article 3 of P.L.1944, c.112 (C.52:27B-34) is amended to read as follows:

25. All State revenue collected by any department, institution, commission, board, committee or official of this State shall, except as otherwise provided by law, be deposited, in the method prescribed by the [commissioner] State Comptroller, to the credit of the State of New Jersey in such depositories as the State Treasurer shall designate. A report of such moneys collected shall be submitted to the [commissioner] State Comptroller and the State Treasurer in such form as the [commissioner] State Comptroller shall prescribe. Such report shall be submitted not later than the tenth day of the month following that during which such moneys were received. The [commissioner] State Comptroller, upon receiving such report, shall audit and register all amounts contained therein and make proper accounting thereof.

(cf: P.L.1944, c.112, art.3, s.25)

24. Section 26 of article 3 of P.L.1944, c.112 (C.52:27B-35) is amended to read as follows:

26. The [commissioner] Director of the Division of Budget shall have authority to prescribe uniform forms to be used by all departments or other agencies of the State Government in encumbering any funds appropriated.

The [commissioner] State Comptroller shall prepare the forms upon which shall be rendered all statements of indebtedness against any department, institution, commission, committee, official, board, or body of State Government.

The forms, in this section provided, shall, when so prepared, be the only forms used for the evidence and record of such encumbrances and indebtedness.

(cf: P.L.1944, c.112, art.3, s.26)

25. Section 28 of article 3 of P.L.1944, c.112 (C.52:27B-37) is amended to read as follows:

28. Each department, commission, committee, official, board or body of any institution or organization of the State shall designate the proper officer who shall approve and sign all encumbrance requests and statements of indebtedness. The designation shall be filed in the office of the [commissioner] Director of the Division of Budget and the office of the State Comptroller; and the requests and statements of indebtedness shall be presented to the [commissioner] State Comptroller.

The [commissioner] State Comptroller shall examine, audit and adjust all encumbrances and statements of indebtedness so presented. He may administer an oath to the persons presenting the encumbrance or statement of indebtedness and to any witness presented on behalf of such person and may examine such person or witness as to the truth, fairness and correctness of such encumbrance or statement of indebtedness.

The [commissioner] State Comptroller shall execute and register warrant checks in settlement of statements of indebtedness, approved by him, and shall transmit them forthwith to the State Treasurer who shall thereupon sign and deliver the same to the payees.

(cf: P.L.1944, c.112, art.3, s.28)

26. Section 29 of article 3 of P.L.1944, c.112 (C.52:27B-38) is amended to read as follows:

29. Checks or drafts used only for the transfer of State funds from one depository to another, drawn to the order of the State of New Jersey and restrictively endorsed by the treasurer in the following manner: "Transfer of State Funds--For Deposit Only," need not be signed by the [commissioner] Director of the Division of Budget or the State Comptroller.

(cf: P.L.1944, c.112, art.3, s.29)

27. Section 31 of article 3 of P.L.1944, c.112 (C.52:27B-40) is amended to read as follows:

31. The [commissioner] State Comptroller shall have authority to prescribe and enforce, to every extent practicable, a centralized payroll system. For the purposes of the preaudit of all payrolls, the [commissioner] State Comptroller shall have authority to require of the civil service agency in the State Government notice of payroll changes in the form prescribed by the [commissioner] State Comptroller, which form the [commissioner] State Comptroller is hereby authorized to prescribe.

(cf: P.L.1944, c.112, art.3, s.31)

28. Section 32 of article 3 of P.L.1944, c.112 (C.52:27B-41) is amended to read as follows:

32. The Secretary of State shall, when the offices of State Treasurer and [commissioner] Director of the Division of Budget and State Comptroller or [either] any of them shall become vacant or the officers or [either] any of them shall no longer be authorized to act as such, respectively, give written notice forthwith to all national banks located in this State and institutions authorized by the State to carry on a banking business of such vacancy or termination of power. No bank shall thereafter pay any check or draft of the State Treasurer, signed or countersigned by any person after his office shall become vacant or after he shall no longer be authorized to act.

(cf: P.L.1944, c.112, art.3, s.32)

29. Section 33 of article 3 of P.L.1944, c.112 (C.52:27B-42) is amended to read as follows:

33. The [commissioner] State Comptroller shall, except as otherwise provided by law, cause suit to be instituted in any competent court of this or any other State for the recovery of any money due the State or any of its institutions, departments, commissions or officers. The suit shall be in the name of the "State of New Jersey" as plaintiff.

(cf: P.L.1944, c.112, art.3, s.33)

30. Section 34 of article 3 of P.L.1944, c.112 (C.52:27B-43) is amended to read as follows:

34. The [commissioner] State Comptroller shall keep and maintain, at all times, within the [division] Division of Accounting all such books of accounts and other accounting records leading to and including the general ledger as may be necessary for the centralized control of all accounts.

(cf: P.L.1944, c.112, art.3, s.34)

31. Section 35 of article 3 of P.L.1944, c.112 (C.52:27B-44) is amended to read as follows:

35. The [commissioner] State Comptroller shall install, keep and maintain in the [division] Division of Accounting a complete set of double-entry accounts, which shall reflect directly or through proper controlling accounts, on an accrual basis, all assets, liabilities, revenues, and expenditures of the State, and all of its accounting agencies. Such accounts shall reflect all accounts receivable and payable, all balances of all funds, and such other information as is required for a proper statement of the financial conditions and operations of the State.

(cf: P.L.1944, c.112, art.3, s.35)

32. Section 36 of article 3 of P.L.1944, c.112 (C.52:27B-45) is amended to read as follows:

36. The [commissioner] State Comptroller shall prescribe and enforce the form, manner and content of accounts to be kept by each accounting agency, and the form, manner and content of accounting reports and statements to be rendered to him with respect thereto. The [commissioner] State Comptroller, if he deems such action necessary, may install a system of accounts in an accounting agency of the State Government. He shall provide for reports and statements to be submitted to him at least once each month which shall show the complete operation of each accounting agency and such other information as may be necessary in his judgment. This requirement shall not be in limitation of such other reports and statements, at longer or shorter intervals, containing the same or other information, as may be necessary in the judgment of the [commissioner] State Comptroller.

(cf: P.L.1944, c.112, art.3, s.36)

33. Section 37 of article 3 of P.L.1944, c.112 (C.52:27B-46) is amended to read as follows:

37. The Director of the Division of [Budget and] Accounting shall prepare, within 60 days following December 31 and 90 days following the last day in which annual appropriations are available for expenditure during each fiscal year, a complete report showing:

a. Balance sheet of all assets and liabilities for all State funds.

b. Statement of General State Fund accrued revenues as compared with anticipated revenues.

c. Summary report of the General State Fund showing the condition of the appropriations, which shall reflect the original appropriation, supplemental appropriations, appropriated revenue, reappropriations, transfers to and from, allotments from the emergency fund and expenditures made against such appropriations.

d. Such other information as he may deem necessary and proper.

Such statement, certified by the director, shall be transmitted forthwith to the Governor, and shall be and remain a public document on file in the office of the director, subject to inspection by any citizen of the State, who shall have the right to make or obtain copies thereof under such reasonable regulations as the director may prescribe. Copies of said statement shall be transmitted at the same time to the President of the Senate, the Speaker of the General Assembly, the chairman of the respective appropriation committees, the State Treasurer and the State Auditor. In addition the director shall prepare a summarized monthly report of the General State Fund no later than 30 days following the end of each month which shall reflect the accrued revenues as compared with anticipated revenues, itemized by revenue source for major taxes, by department for miscellaneous revenues, by department for major sources of Federal aid budgeted and with information on income to the General State Fund from the major dedicated and trust funds. The report shall reflect the condition of the appropriations and other such data which the director shall determine.

(cf: P.L.1977, c.158, s.1)

34. Section 38 of article 3 of P.L.1944, c.112 (C.52:27B-47) is amended to read as follows:

38. If the [commissioner] State Comptroller should find that any officer or head of a department of the State Government willfully or negligently fails or refuses to keep or have kept such accounts, render such reports or perform such other duties as may be prescribed by the [commissioner] State Comptroller under this article, or refuses to conform to any of the provisions of this article, he shall notify such officer or head of a department in writing of such failure or refusal, and the particulars thereof, and shall allow him reasonable opportunity to be heard thereon. If such failure is not explained to the satisfaction of the [commissioner] State Comptroller, he shall prepare written charges against such officer or head of a department, and submit the same to the Governor forthwith, and serve a copy thereof upon such officer or head of a department charged with such failure or refusal. Thereupon the Governor shall fix a time and place for hearing such charges by giving not less than five days' notice thereof in writing to such officer or head of a department so charged and to the [commissioner] State Comptroller. After due hearing, the Governor may take such action as may be necessary, in his judgment, including the removal of such officer or head of a department found guilty of such charges, but if the right of removal in any case is vested exclusively in the Legislature, the Governor shall transmit to the Legislature a written report of his findings with his recommendations thereon for consideration and action by the Legislature.

(cf: P.L.1944, c.112, art.3, s.38)

35. R.S.52:19-2 is amended to read as follows:

The State Comptroller shall be a person qualified by training and experience to direct the work assigned to the office of the State Comptroller and the Division of Accounting in the Department of the Treasury. The State Comptroller shall be appointed by the Governor, with the advice and consent of the Senate, and shall serve during the term of office of the Governor making the appointment and until the State Comptroller's successor is appointed and has qualified. The State Comptroller shall receive such salary as shall be provided by law.

The State Comptroller, before entering upon the duties of his office, shall take an oath before one of the justices of the Supreme Court, that he will well, faithfully and impartially discharge all the duties required of him by law, and that he will not allow any claim, charge or account against the State unless satisfied that the same is justly due. Such oath shall be filed in the office of the Secretary of State.

(cf: R.S.52:19-2)

36. Section 36 of P.L.1948, c.92 (C.52:18A-36) is amended to read as follows:

36. The director of any division in the Department of the Treasury and the State Comptroller may be removed from office by the Governor, for cause, upon notice and opportunity to be heard.

Any vacancy occurring in the office of director of any division in the department or in the office of State Comptroller shall be filled in the same manner as the original appointment.

(cf: P.L.1948, c.92, s.36)

37. (New section) The State Treasurer shall direct the consolidation and coordination of the internal and external audit functions, including, but not limited to economy and efficiency audits, in the executive branch of State government and shall transfer, on July 1 next following enactment of P.L. , c. (C. )(now pending before the Legislature as this bill), to the Division of Accounting in the Department of the Treasury, which division shall be headed by a director who shall be the State Comptroller, such employees, positions, funding, facilities, equipment, powers, duties and functions from throughout the executive branch of State government to effectuate such consolidation and coordination. The State Treasurer shall organize these functions in such units as the State Treasurer determines are necessary for the efficient operation of the division.

Each department, office, division, bureau or agency in the executive branch of State government shall cooperate with the State Treasurer and make available to the State Treasurer such information, personnel and assistance necessary to effectuate the purposes of this act.

38. (New section) All references in any law, order, rule, regulation, contract, document, judicial or administrative proceeding, or otherwise, to the Division of Budget and Accounting in the Department of the Treasury, or the supervisor thereof, shall mean the Division of Budget in the Department of the Treasury or the director thereof, except for references to the payment by warrant check or expenditures permitted by warrant of the Director of the Division of Budget and Accounting, which references shall mean the State Comptroller.

39. Sections 27 and 30 of article 3 of P.L.1944, c.112

(C.52:27B-36 and C.52:27B-39) are repealed.

40. This act shall take effect immediately but sections 1 through 36 and sections 38 and 39 shall remain inoperative until July 1 next following enactment.

STATEMENT

This bill requires that the internal and external auditing functions and departmental auditing personnel within all executive branch departments be consolidated within a new Division of Auditing in the Department of the Treasury under the control of the State Comptroller. The government auditing functions within the current Division of Budget and Accounting are enhanced to include responsibility for State government-wide coordination and control of internal and external auditing procedures and techniques conducted previously by personnel responsible to the respective department heads.

Internal auditing concentrates primarily on adherence to management policies, existence of proper internal controls, uncovering misappropriation of funds, existence of proper recordkeeping, and effective agency operations. This type of financial auditing will be expanded under the new division to include economy and efficiency audits which will be undertaken to determine whether each department is acquiring, protecting and using its resources economically and efficiently, including but not limited to personnel, revenues and property, and the causes of any inefficiencies or uneconomical practices within the departments. The State Comptroller through the Division of Auditing will also direct the external auditing throughout the executive branch that examines the activities and compliance of third parties that are under contract or grant agreements with State agencies.

The separate budget planning and expenditure control functions of the current Division of Budget and Accounting will be performed through the new Division of Budget within the Department of the Treasury. The current director of the Division of Budget and Accounting will continue to serve as budget director. The traditional preaudit financial control duties of the current division will continue under the Division of Auditing under the supervision of the State Comptroller.

The enhanced auditing function is intended to allow greater auditing resources to be applied in order to identify the inefficient or ineffective programs and policies within State government. The separation of this function from the spending and appropriation planning functions is intended to free efficiency and economy auditing within the government from the influence of the annual effort by department heads to justify continuing appropriations for programs or organizations regardless of whether they are maximizing their current resources and efforts on behalf of the taxpayers of the State. Throughout the executive branch, during periods of decreasing State budgets, departmental managers have directed reductions in auditing services that have resulted in the failure of departments to maximize their resources and revenues.

Consolidates auditing functions and personnel throughout the executive branch of State government in a Division of Auditing in the Department of the Treasury, constitutes the State Comptroller as the head of that division.