House Bill No. 356
Introduced By _______________________________________________________________________________
A Bill for an Act entitled: "An Act prohibiting the department of public health and human services from encumbering funds; amending section
17-1-102, MCA; and providing an effective date."
Be it enacted by the Legislature of the State of Montana:
Section 1. Section 17-1-102, MCA, is amended to read:
"17-1-102. Uniform accounting system and expenditure control. (1) The department shall establish a system of
financial control so that the functioning of the various
agencies of the state agencies may be improved, duplications
duplication of work by different state agencies and employees may be eliminated, public service may be improved, and the
cost of government may be reduced.
(2) The department shall prescribe and install uniform accounting and reporting for all state agencies and institutions,
showing the receipt, use, and disposition of all public money and property in accordance with generally accepted
,. and The department shall develop plans for improvements and economies in the organization and
operation of state agencies and institutions, which must be submitted to the respective heads of state agencies and
institutions. Copies of all plans must be delivered to the governor, and additional copies must be retained in the office of
the department for inspection by the members of the legislature.
(3) The uniform accounting and reporting system must contain three levels of expenditure. The first level must include general categories, such as personal services, operating expenses, equipment, capital outlay, local assistance, grants, benefits and claims, transfers, and debt service. The second level of expenditure must include specific categories of expenditures within each first-level category. The third level of expenditure must include specific items of expenditure within each category of the second level.
(4) The department shall examine all financial affairs of each state agency and institution for the purpose of developing plans for improvements and economies in the organization and operation of the state agencies and institutions and for the purpose of enabling the department to properly perform any of the duties imposed upon the department by this part.
All Except as provided in subsection (5)(b), all state agencies, including units of the university system but excluding
community colleges, shall input all necessary transactions to the accounting system prescribed in subsection (2) before the
accounts are closed at the end of the fiscal year in order to present the receipt, use, and disposition of all money and
property for which the state agency is accountable in accordance with generally accepted accounting principles , except that
for. For budgetary control purposes, encumbrances that are required by generally accepted accounting principles to be
reported as a reservation of fund balance must be recorded as expenditures and liabilities on the accounting records.
(b) The department of public health and human services may not encumber funds or reserve a fund balance under subsection (5)(a)."
NEW SECTION. Section 2. Effective date. [This act] is effective July 1, 1997.