Summary of current service performance
DOA is committed to excellence in all service areas. The major service areas within DOA include:
Summary of current productivity
Finance & Administration
Systems Development, Maintenance, and Computer Operations
Payroll Service Bureau
A description of the services provided by each of these service area follow.
The Department of Accounts (DOA) maintains the official accounts for the Commonwealth in the Commonwealth Accounting and Reporting System (CARS). Deposit and disbursement transactions are entered by agencies on-line during the workday and computer edited against authorized spending levels in nightly batch runs. A daily reconciliation of the state’s cash position in the books of the Comptroller to the books of the State Treasurer is performed. Various accounting reports are generated for use by agency and DOA staff to reconcile the accounts each day and identify and resolve any discrepancies that are identified. All disbursements of public funds must be processed through CARS. This service area also includes management of the state-aid-intercept program as well as the responsibilities that follow:
This service area involves the internal control procedures used by state government to enforce compliance with appropriation law. Following enactment of the Appropriation Act, two agencies become responsible for ensuring that appropriation law is followed. DPB authorizes the expenditure of appropriated funds through the allotment process, while DOA enforces this authorization through the automated edits and manual procedures that support the general ledger. This service area includes the preparation of year-end reconciliations that account for all expenditures as authorized in the Appropriation Act.
Support Locality Revenue Deposits
DOA has general oversight for deposit reconciliation for all sources of state revenue. However, a separate service involves the processing of deposits from local governments and the court system. Given the many different administrative environments found among local governments and the various state courts, DOA has assumed a higher level of processing responsibility for these deposits. Each month DOA handles an average of 4,500 local deposit certificates that account for between $80 million and $190 million in state receipts. Following a decentralization initiative begun in early 2003, entry of these deposit transactions into the central accounting system is largely executed by localities. A related responsibility is the monthly summarization and certification of recordation taxes, a portion of which are ultimately due to localities. This service also includes procedures for refunding forfeited bail bonds as ordered by a court.
Virginia statutory and appropriation law frequently allocates interest income earned by the Treasurer to specific non-general funds. This requires detailed calculations and record keeping necessary to allocate interest and demonstrate compliance with the related legal provisions.
Debt Setoff Program
Section 2.2-4806 of the Code authorizes the recovery of overdue debts owed the Commonwealth from suppliers for amounts to be paid for procured goods and services. This is a debt setoff program similar to that used by Tax to recover debts from state tax refunds. Since its inception in 1991 through FY 2007 this program has recovered in excess of $89.9 million in overdue debts owed the Commonwealth. The $89.9 million includes funds initially setoff but ultimately returned to the vendors because the debt was recovered by other means.
Loan, Line of Credit and Grant Coordination
The Appropriation Act provides for intra-governmental loans and lines of credit from the Treasury to support state programs that are anticipating non-general funds from federal grants and contracts, bond sales, and similar situations. The Comptroller’s office is responsible for development of procedures for agencies to follow in applying and justifying such requests. DOA must administer these financial transactions including interest calculation, timing of repayment, and proper accounting and reporting. This service includes the processing of state grants to non-state agencies as authorized by the Appropriation Act and regulated by DPB.
Financial Electronic Data Interchange (FEDI)
FEDI increases administrative efficiency and reduces costs through the replacement of check payments with automated transactions. The program was implemented in 1994. The Commonwealth has over 44,500 trading partners accepting electronic payments including vendors, localities, state agencies/employees and grant recipients.
Distributions to Local Governments
The State Comptroller is mandated by law to distribute certain funds to local governments. Such distributions include funds allocated to localities pursuant to the sales and use tax based upon school age population, a percentage of ABC profits based on total population, and recordation tax for which the total distribution is fixed but each locality’s share is based upon their collections compared to total collections.
Personal Property Tax Relief Act (PPTRA)
DOA disburses funds to local governments pursuant to the Personal Property Tax Relief Act.
Small Purchase Charge Card Program
The Small Purchase Charge Card Program (SPCC) was initiated in order to reduce the volume and cost of accounts payable transactions. The program was implemented in January 1, 1995 and offers state agencies and institutions an alternative payment method when making small purchases under $5,000. A “gold card “ program also enables certain types of purchases to be charged up to $50,000. In 2009, over $344 million was purchased under this program and the Commonwealth received over $5 million in rebates from the charge card vendor.
Travel Card Program
The travel charge card program is used by individuals who travel overnight more than two times a year to pay for official state travel expenses. Employees request and receive reimbursement for travel expenses as they complete travel, but must pay their travel charge card bills monthly. In 2009, over 5,000 travel charge cards were in use.
Internal Control Compliance Quality Assurance
This activity involves reviewing state agencies implementation of Agency Risk Management and Internal Control Standards (ARMICS). These Standards provide guidance for establishing and assessing agency internal controls in order to more effectively manage risk and maintain accountability. These Standards are an extension and clarification of existing requirements contained in the annual Comptroller's Financial Reporting Directives and the Commonwealth Accounting Policies and Procedures Topic 10305, Internal Control. This activity includes the review and testing of agency internal controls and development of reports and recommendations for improvement in the agency's implementation of ARMICS. Additionally, the results of the review are used to determine the extent of training needed by agency management and staff charged with ARMICS implementation.
This service area's organizational objective is to complile, review and produce the Comptroller's Report on Statewide Financial Management and Compliance, to review, evaluate and report on current statewide decentralized agency compliance with expenditure and disbursement policies defined in the Commonwealth Accounting Policies and Procedures (CAPP) manual. This area also provides professional and technical training programs and timely assistance for improving agency compliance with CAPP procedures. This area also ensures compliance with the Cash Management Improvement Act (CMIA), 1099 reporting, and provides a pre-audit function for non-decentralized agencies as well as follows up on agency corrective action workplans for deficiencies noted in APA audit reports.
Since 1992, DOA has been in the process of decentralizing the pre-audit function to individual agencies under a delegation of authority from the State Comptroller. This activity includes the identification of qualified agencies, negotiation of delegation agreements, and quality control reviews that monitor delegated pre-audit performance for compliance with published policies and procedures and advice to agencies of corrective measures that may be needed.
Division of the State Internal Auditor
The Division of the State Internal Auditor provides an effective and efficient method for state employees to report fraud, waste, and abuse through the administration of the State Employee Fraud, Waste, and Abuse Hotline. DOA also assists in the establishment, development, and maintenance of agency Internal Audit Programs through training and technical assistance.
Cash Management Improvement Act
The Compliance Assurance area administers the requirements of the federal Cash Management Improvement Act (CMIA) of 1990. CMIA governs the timely transfer and expenditure of funds between the federal government and the states for major federal assistance programs. It provides an interest calculation and exchange incentive for the time the state and/or federal government hold each other's money to compensate each other for the time value of the funds. As part of this process, states negotiate an annual agreement with the United States Department of the Treasury that specifies the funds transfer procedures for the major federal assistnce programs in the agreement. An interest calculation and exchange occurs annually.
The State Payroll Operations service area administers the central payroll system (CIPPS) and ensures and facilitates the calculation of payroll and benefits for state employees by agency payroll personnel. Most state employees are served by CIPPS, although the largest state-supported colleges and universities operate independent payroll systems.
Agencies may calculate several payrolls on a weekly, biweekly, semimonthly or monthly basis or “as needed” to cover special situations and demands. About 1,200 payroll staff at over 218 agencies and institutions are granted secure access to the central payroll system. The distribution of pay is either by direct deposit (about 98% of all salaried employees) or by payroll check.
Employers are subject to severe financial penalties for inaccurate reporting of federal tax withholding. DOA deposits about $225 million each quarter on behalf of over 218 state agency employers. This activity includes the administration of the Federal Automated Deposit program (FAD), preparation and electronic filing of quarterly withholding reports (IRS Form 941), preparation of year end filings for over 120,000 W-2 forms, electronic reporting to the IRS and the Social Security Administration, and preparation and filing of adjusted forms as needed (Forms 941C, W-2C, and W-3C).
Accounting and disbursements processing for benefits covers the deduction, reconciliation, disbursement and accounting for all amounts deducted from employee pay for both state benefit and supplemental deduction programs. The major benefit deductions include health care, Section 125 flexible spending accounts, and the Section 457 deferred compensation program. This service also includes the transmission of data to the VRS for retirement service credit recording, as well as the accounting of funds for employees who are eligible and have elected to participate in one of the three optional retirement programs offered in place of VRS. All deducted amounts are reconciled before the funds are disbursed to the appropriate receiving party. Deductions for other purposes are also supported including, CVC (charitable foundation contributions), U.S. Savings Bond purchases, child support orders, garnishment fees, dues for employee associations and premiums for supplemental insurance coverage and tax-deferred annuities.
The Virginia Constitution requires that accounts be maintained and reported based on when cash is received and paid out. This service area involves ongoing reporting of cash activity in the state accounts throughout the year. DOA reports cash activity in state accounts throughout the year for the Governor, Secretary of Finance and General Assembly include the monthly report on the cash position of the Commonwealth. A general fund preliminary annual report is prepared by August 15 as required by law. Financial reporting also has the following responsibilities:
Producing the Comprehensive Annual Financial Report (CAFR) of the Commonwealth, which is audited by the Auditor of Public Accounts. Generally accepted accounting principals (GAAP) are promulgated by the Governmental Accounting Standards Board (GASB) and include the recognition of accrued assets and liabilities along with other non-cash accounting requirements. Planning, information gathering, and preparation of this report take approximately 6 1/2 months. In order to obtain all of the financial information necessary to prepare the CAFR, DOA issues the State Agency, Higher Education, and Component Unit Financial Statement Directives. These Directives provide guidance and assistance to State Agencies, Institutions of Higher Education, and Component units on the GAAP presentation of financial statement information.
Summarizing and simplifying the presentation of information contained in the Commonwealth’s Comprehensive Annual Financial Report in a report often referred to as the “popular report.” This report is intended to better inform the public about the Commonwealth’s financial condition without excessive detail or the use of technical accounting terms. This service area also produces the Schedule of Expenditures of Federal Awards for inclusion in the Statewide Single Audit Report. The schedule is prepared in accordance with the requirements of OMB Federal Circular A-133.
The Code of Virginia (§2.2-4801 et seq., the Virginia Debt Collection Act) assigns DOA the responsibility to provide oversight reporting, and monitoring for the procedures used by state agencies to collect accounts receivable. Data on accounts receivable balances are compiled quarterly. These data are also used for the Comprehensive Annual Financial Report of the Commonwealth (CAFR) and the Report to the Citizens of the Commonwealth (PAFR).
A revenue report is prepared monthly to report General Fund and Lottery revenue collections tracked against the latest official revenue forecast. Comparative data on the various revenue sources are provided reflecting actual revenues collected for the month and year-to-date compared to collections for the same period in the previous fiscal year. The percentage change in revenues for the month and year-to-date are also compared to the percentage change required by the revenue estimate.
Preparing two indirect cost allocation plans. The first is prepared in accordance with 2 CFR, Part 225 and is used by agencies entitled to recover indirect costs from federal grants and contracts. The plan is audited and approved by the federal government on behalf of the Commonwealth and recovered over $244 million from federal sources in FY 2009. In addition, a second “full costing” plan is developed for DPB that supports the recovery of indirect costs borne by the General Fund on behalf of non-general funded agencies and programs. The Appropriation Act is used to recover these costs for the General Fund. In FY 2009, $7.0 million was recovered for the General Fund through this program.
Accounting for all major land, building and equipment assets of the Commonwealth. Also included is the accounting for certain capital leases, which are reflected as assets in the Commonwealth financial statements. Typically about 45,000 fixed asset transactions are processed annually.
The Audited December 15 Comprehensive Annual Financial Report (CAFR) is prepared on the basis of generally accepted accounting principles (GAAP) and is used extensively by rating agencies, investment banks and others involved in the issuance and marketing of Commonwealth bonds. Virginia has produced a GAAP basis report that has received an unqualified audit opinion every year since 1986. This activity involves selecting state agencies for quality assurance reviews based on risk analysis. A review of the agency prepared financial reporting attachments is conducted and documented. A report is prepared detailing findings and recommendations for improvement in the process and is discussed with agency management. This activity improves the reliability of accounting data submitted for inclusion in the Comprehensive Annual Financial Report and helps to define agency training needs as it relates to financial reporting.
The American Recovery and Reinvestment Act (ARRA) carries stringent federal reporting requirements to ensure accountability and to allow accurate and transparent reporting. This activity involves reviewing and evaluating internal controls and processes in place at the agencies receiving ARRA funding. Review efforts are focused towards ensuring appropriate use of the funds received and verifying reporting accuracy/transparency.
FINANCE & ADMINISTRATION
DOA’s Finance & Administration section provides payroll, invoice processing/accounts payable and accounting reconciliation services in support of the Departments of Accounts, Treasury, and Planning and Budget. DOA staff provides accounts payable services to the State Council of Higher Education in Virginia, and the Commonwealth Health Research Board. DOA staff provide accounts payable, accounting reconciliation and other fiscal services to the Virginia Racing Commission and the Board of Accountancy.
DOA was among the first agencies to adopt an administrative service bureau that supports the routine technical aspects of administrative operations for more than one agency. To accomplish this, the DOA administrative services staff adopted a customer oriented approach to their work which emphasized quality attention to service needs regardless of whether the service was for DOA or another supported agency.
In order to provide uniform accounting procedures for state government, DOA publishes the Commonwealth Accounting Policies and Procedures Manual (CAPP). The CAPP is a four volume set of prescribed accounting practices which is used by all agencies of state government. A publications unit manages the frequent revisions to the CAPP which are required by changes in state or federal law, generally accepted accounting principals, or administrative policy. Starting in FY 2003, DOA discontinued printing the CAPP manual, but is still updated regularly and posted on the internet.
DOA also publishes other documents, such as the Quarterly Report and the popular annual report. The publishing unit utilizes the DOA Web Page as a means of making DOA publications electronically accessible in lieu of printing. This technique significantly reduces the production and distribution costs for DOA, particularly for very lengthy publications such as the Comprehensive Annual Financial Report (CAFR).
Administrative Services also processes Line of Duty claims for the Commonwealth. DOA is responsible for making lump sum payments to the beneficiaries of certain public safety personnel (e.g., police, fire, rescue) who die from work-related causes and an increasing number of monthly payments for health insurance for disabled public safety personnel injured in the line of duty and their spouses and dependents.
Code § 2.2-814 requires the Comptroller be served for claims against the Commonwealth whenever the specific responsible state official cannot be determined.
DOA’s public records unit is the official repository for all documents pertaining to cash deposit and disbursement transactions, unless that responsibility has been delegated by the Comptroller pursuant to the decentralization initiative described earlier. The public records unit has been steadily reduced in size as decentralization moved forward. However, a residual responsibility will remain for the storage of records pertaining to non-decentralized agencies, including those of elected officials, and for the records generated by DOA’s own central processing activity.
PAYROLL SERVICE BUREAU
DOA operates a payroll service bureau that supports agency level payroll, leave, and certain human resource and benefit data entry activities for over 15,000 employees in 50 agencies. In addition to performing the processing responsibilities for payroll, leave accounting and benefit administration, the Payroll Service Bureau also prepares payroll related reconciliations such as the monthly Healthcare reconciliation, the VRS reconciliation of retirement benefits, the administration of reciprocal taxing for non-Virginia state employees, the Quarterly and Annual Certifications of Taxable Wages and the Leave Liability Attachment to satisfy the financial reporting directive issued by DOA.
To support certain Human Resource policies relevant to payroll, the Bureau prepares and enters the monthly Employee Position Report (EPR) information and maintains the 1,500 Hour Wage Reporting for the participating agencies’ wage employee rolls. It also prepares responses for any CIPPS/PMIS Exceptions that occur as a result of differences detected between PMIS and CIPPS.
SYSTEMS DEVELOPMENT, MAINTENANCE, AND COMPUTER OPERATIONS
DOA management recognizes the increasing value of information generation as a service. Integration between systems continues to increase, particularly between mainframe and desktop processing environments. This functional activity supports the operation of the statewide general ledger system (CARS), the statewide payroll system (CIPPS), and the statewide fixed asset system (FAACS), as well as other related statewide financial information systems.
This area includes the ongoing planning needed to promote the coordinated development and integration of hardware, database systems, application programs, and communications within DOA and between DOA and its customers. All planning is done in conformance with the guidelines of the Virginia Information Technology Agency (VITA). Weekly management status meetings and the annual update to the agency information technology plan are used to support this activity.
DOA transitioned to VITA in July, 2004. At that time the staff associated with the computer operations functions became employees of VITA. DOA continues to monitor the performance of these functions, in conjunction with VITA because they are vital to the operations of our major systems.
The Department of Accounts (DOA) and the Office of the State Comptroller have been in existence since 1928. At its peak in the early 1990’s, DOA employed just fewer than 200 staff and had an operating budget of $13.3 million. DOA currently has 120 filled positions and an operating budget of $11 million for FY2009.
CARS - The Commonwealth Accounting and Reporting System (general ledger system) processes in excess of nine million transactions annually.
FAACS - The Fixed Asset Accounting Control System processes approximately 45,000 transactions annually.
CIPPS - The Central Payroll System supports payments to an average of 90,000 employees each month and 120,000 employees throughout the year. Payline was implemented in July of 2001 - this is a web based system allows employees to access pay information online. As of June, 2009, 77.4% of state employees participated in Payline. 97.2% of Direct Deposit participants have elected to eliminate the printed earnings notice.
In 1995, DOA implemented the use of a purchase card program providing statewide enhanced efficiencies through the consolidation of vendor payments and the reduction in associated costs. The program has grown from $31 million in FY97 (158,000 checks avoided) to over $344 million in FY09 (over 647,000 checks were avoided).
The payroll service bureau serves 50 agencies and produced over 15,000 W-2's for calendar year 2008.
The fiscal service bureau processed over 5,000 vouchers in FY 2009.
Despite the loss of positions from the early 1990's to the present ( 200 staff to 120 in FY 2010), which includes 25 Payroll Service Bureau and Division of State Internal Audit staff in new functions, DOA continues to satisfy mandated State & federal mandates. These include:
Cash Management Improvement Act (CMIA) of 1990
This federal law was imposed to bring equity to intergovernmental cash flows by establishing federal/state agreements regulating interest payment responsibilities. The movement of federal aid payments to the states results in “interest float” benefit to a state. Virginia must conduct detailed analyses to minimize the interest liability owed to the federal government each year.
The Appropriation Act, §4-2.03, requires that DOA develop procedures for a federal Statewide Indirect Cost Allocation Plan (SICAP) which is used to recover allowable indirect and overhead costs for agencies receiving federal grants and contracts. This plan must be developed and audited by the federal government before indirect costs can be recovered. Approval of the plan also allows the purchase of goods and services with federal grant funds from activities accounted for in the Commonwealth’s Internal Service Funds. The process of developing the federal SICAP, along with the companion “full costing” SICAP for general fund recoveries from non-general funded agencies and programs, requires a considerable commitment of resources.
Statewide Single Audit Report
OMB Circular A-133, “Audits of States, Local governments and Non-Profit Organizations” was revised in June 1997. This revision requires that the auditee prepare the “Schedule of Resolution of Prior Year Audit Findings” and the “Schedule of Expenditures of Federal Awards” sections of the Statewide Single Audit Report. The Department of Accounts prepares these statements for the Commonwealth as a whole, in the role of auditee.
State Payroll Operations
Internal Revenue Service regulations dictate tax withholding requirements associated with wage payments and benefits. Compliance with these regulations is required by central and agency users in order to avoid payroll and tax errors that could result in significant IRS penalties. DOA administers the deposit and reporting of payroll taxes on behalf of over 218 state agencies.
This mandate is unusual in that a nonprofit corporation, the Governmental Accounting Standards Board (GASB) promulgates it, rather than a government. GASB is the public sector counterpart to the Financial Accounting Standards Board (FASB) which establishes generally accepted accounting principals for private sector entities. Virginia must comply with GASB standards in order to obtain an unqualified opinion on its audited financial statements. There are presently 56 GASB statements in effect. Complying with GASB standards is complex and resource intensive. However, the benefit of unqualified audit opinions and the Certificate of Excellence in Financial Reporting to the Commonwealth’s bond ratings and general standing in the national financial community is worth the investment.
Finally, DOA is responsible under the Appropriation Act for distributing approximately $950 million to local governments each year as part of the administration of various shared-tax programs provided for in law. This program, referred to in the Appropriation Act as financial assistance to localities, is considered by DOA to be a functional activity.