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Press Release

For Immediate Release
August 1, 2014

Communications Office

Governor Hassan’s Statement on Allowing SB 222 to Become Law Without Signature

CONCORD – Governor Maggie Hassan issued the following statement after allowing SB 222 to become law without signature:

“On August 1, 2014, I chose to allow Senate Bill 222, restructuring the department of administrative services, division of plant and property management and relative to the authority of the adjutant general and establishing the position of deputy commissioner in the department of information technology, to become law without my signature. While SB 222 accomplishes several important goals, it also places extensive additional duties on the Bureau of Financial Reporting without the corresponding necessary funding.

“I support the majority of the provisions of SB 222. The restructuring of the organizational chart at the Department of Administrative Services, the administrative procedures changes at the Adjutant General, and the creation of the Deputy Commissioner position at the Department of Information Technology are all vital improvements that are required to allow these state agencies to continue to operate at peak efficiency. Because these provisions are so important, I am allowing this bill to become law without my signature.

“This bill also, however, places significant new responsibilities on the Bureau of Financial Reporting within the Department of Administrative Services without providing the staff and the funding necessary to meet those responsibilities. While the goal of this legislative proposal is worthy, these duties – without adequate resources to meet them - could interfere with the timely completion of the state’s annual financial report and other critical financial reporting deadlines.

“The Bureau of Financial Reporting has only four staff members who already have significant responsibilities, particularly in preparing the state’s Comprehensive Annual Financial Report (CAFR). The bureau begins the planning and organizational process for the financial statements well before the end of each fiscal year, efforts that continue through the closing of the books in July of each year. Once the books have been closed, the bureau must by the September 30 statutory deadline prepare the preliminary unaudited financial statements and annual report. After the preliminary report is issued, the bureau spends the next three months working closely with the Legislative Budget Assistant and its contracted outside accounting firm to issue the final audited CAFR by December 31. After the issuance of the final CAFR, the bureau then addresses any audit findings and implements any recommendations made by the auditors, which then leads into the planning and organizational process for the subsequent year’s financial statements. In the fiscal note the Department of Administrative Services prepared for this bill, the department stated the new responsibilities would require the hiring of a new financial reporting administrator, at a cost of approximately $100,000 per year, in order to comply with the new reporting requirements. The legislature did not authorize that new position nor include funding for it.

“The bureau will have significant difficulties meeting the responsibilities outlined in this bill within its current structure. RSA 21-I:8 sets clear deadlines for the state’s Comprehensive Annual Financial Report and subsequent audit. The accurate and timely completion of these statewide audited financial statements is critical in maintaining both the trust of the citizens of New Hampshire and the confidence of the financial markets and bond ratings agencies. It is one of the most vital mechanisms by which state government illustrates its proper management of taxpayer dollars. The additional duties proposed under this bill may be worthwhile, and I know the department would like to continue its productive and cooperative working relationship with the Office of the Legislative Budget Assistant. But we must be clear that we cannot allow the new additional – and unfunded -- financial reporting responsibilities imposed by this bill to delay or impede any reporting requirements under current law, which are critical for meeting the state’s financial obligations and maintaining its bond rating. The department will continue to make its legal obligations – particularly preparation of the Comprehensive Annual Financial Report – its first and most important priority. In the next budget cycle, the Commissioner of Administrative Services will also request an additional financial reporting staff person - as outlined as necessary in the fiscal note that she submitted – to meet the requirements of this legislation.”