Regular Session 2019-2020 House Bill 0093 P.N. 0095

PRINTER'S NO. 95

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

Session of

2019

INTRODUCED BY GROVE, RYAN, GREINER, BERNSTINE, JAMES, KAUFFMAN,

STAATS, IRVIN, METCALFE, DUSH, ROTHMAN, COX, KEEFER, SIMMONS,

ZIMMERMAN, STRUZZI, B. MILLER, GLEIM, SCHEMEL, JONES, GILLEN

AND HERSHEY, JANUARY 28, 2019

REFERRED TO COMMITTEE ON FINANCE, JANUARY 28, 2019

AN ACT

Amending Title 72 (Taxation and Fiscal Affairs) of the

Pennsylvania Consolidated Statutes, providing for preliminary

provisions; for taxation; and for fiscal affairs and for

Commonwealth budget procedures; establishing the Joint

Revenue Estimation Committee and the Performance-based

Incentive Account; and making related repeals.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Title 72 of the Pennsylvania Consolidated

Statutes is amended by adding parts to read:

PART I

PRELIMINARY PROVISIONS

(Reserved)

PART II

TAXATION

Chapter

17. (Reserved)

CHAPTER 17

(Reserved)

PART III

FISCAL AFFAIRS

Chapter

100. Commonwealth Budget Procedures

CHAPTER 100

COMMONWEALTH BUDGET PROCEDURES

Subchapter

A. General Provisions

B. Office of the Budget

C. Budget Procedures

D. Performance, Transparency and Accountability-based

Budgeting

E. Expenditures and Lapsed Funds

F. Cost Savings and Performance-based Incentive Account

G . Implementation

SUBCHAPTER A

GENERAL PROVISIONS

Sec.

10001. Scope of chapter.

10002. Definitions.

10003. Applicability of chapter .

§ 10001. Scope of chapter.

The chapter relates to State measurement for accountable,

responsive and transparent (SMART) budgeting for the

Commonwealth.

§ 10002. Definitions.

The following words and phrases when used in this chapter

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Committee." The Joint Revenue Estimation Committee

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established in section 10026 (relating to revenue estimates).

"Continuous improvement process system." A system that may

involve any of the following strategies:

(1) Developing a process map that describes the lean

government principles or another widely accepted business

process improvement system by which an executive agency

engages in specific activities that have the purpose of

increasing efficiency and eliminating waste in the processes

used to deliver goods and services to taxpayers and customers

of the Commonwealth. The term includes the measurement of the

outcomes regarding increased efficiency and the elimination

of waste and procedures by which the executive agency

produces goods or serves its customers.

(2) Engaging in specific activities to rapidly improve

the executive agency's processes that will increase value or

decrease staff time, inventory, defects, overproduction,

complexity, delays or excessive movement.

(3) Involving executive agency employees at all levels

to map the executive agency's processes and recommend

improvements, with specific importance placed on the

involvement of executive agency employees closest to the

customer or end user of the State government product or

service.

(4) Providing the means to measure each process in order

to demonstrate the effectiveness of each process or process

improvement.

(5) Training executive agency employees to mentor and

train other executive agency employees in continuous

improvement process system methodologies.

"Executive agency." Any of the following:

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(1) The Governor's Office.

(2) A department, board, commission, authority or other

agency of the Commonwealth that is subject to the policy

supervision and control of the Governor.

(3) The Office of Lieutenant Governor.

(4) An independent department.

(5) An independent agency.

"Fiscal year." The period beginning on July 1 of each

calendar year and ending on June 30 of the next calendar year.

"Independent agency." A board, commission, authority or

other agency of the Commonwealth that is not subject to the

policy supervision and control of the Governor. The term does

not include:

(1) a court or agency of the unified judicial system; or

(2) the General Assembly or an agency of the General

Assembly.

"Independent department." Any of the following:

(1) The Department of the Auditor General.

(2) The Treasury Department.

(3) The Office of Attorney General.

(4) A board or commission of an entity under paragraph

(1), (2) or (3).

"Performance evaluation." A regular review of an executive

agency's outcomes compared to its published performance goals. A

performance evaluation shall be based on actual historical

information.

"Performance goal." A specific, quantifiable goal related to

a performance measure adopted by an executive agency.

"Performance management system." A formal system of managing

the processes and operations of executive agencies.

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"Performance measure." A quantitative indicator used to

assess the operational performance of an executive agency under

a published performance plan. A performance measure must:

(1) Apply to activities directly under the influence of

the executive agency.

(2) Demonstrate the executive agency's efficiency and

effectiveness in delivering goods or services to customers

and taxpayers.

(3) Be reasonably understandable to the public.

"Performance plan." A document prepared by an executive

agency as part of a performance management system. A performance

plan must incorporate the impact of management strategies and

continuous improvement process system activities on the costs

and efficiency of delivering goods and services to taxpayers and

customers of the State government. An executive agency shall

coordinate performance plans to ensure a continuity of programs

affecting similar constituencies.

"Process map." A written or visual presentation that

describes the steps involved in producing a product or service

from beginning to end.

"Secretary." The Secretary of the Budget.

"Strategic plan." A systemic process of envisioning a

desired future and translating the vision into broadly defined

goals or objectives and a sequence of steps to achieve them.

§ 10003. Applicability of chapter .

This chapter shall not apply to any of the following:

(1) A court or agency of the unified judicial system.

(2) The General Assembly or an agency of the General

Assembly.

(3) A political subdivision.

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(4) A municipal authority or other local authority.

(5) An agency of an entity under paragraph (3) or (4).

SUBCHAPTER B

OFFICE OF THE BUDGET

Sec.

10011. Administration of office.

10012. Duties of office generally.

10013. Appointment of secretary.

10014. Salary of secretary.

10015. Program evaluation.

10016. Audit functions.

10017. Fiscal note.

§ 10011. Administration of office.

The Office of the Budget shall be an administrative agency

within the Governor's Office.

§ 10012. Duties of office generally.

The Office of the Budget shall:

(1) Continue to exercise the powers and perform the

duties vested in and imposed upon the secretary.

(2) Be centrally concerned with the development of the

budget request of the Governor and with the decisions

necessary to allocate revenues among the various Commonwealth

programs.

§ 10013. Appointment of secretary.

The Governor shall appoint a Secretary of the Budget to serve

at the pleasure of the Governor.

§ 10014. Salary of secretary.

(a) Amount.--The annual salary of the secretary shall be

$160,000 or at such higher level as is established by the

Governor with the approval of the Executive Board.

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(b) Definition.--As used in this section, the term

"Executive Board" is as described in section 204 of the act of

April 9, 1929 (P.L.177, No.175), known as The Administrative

Code of 1929.

§ 10015. Program evaluation.

The secretary shall have the power and duty to initiate and

conduct, under the direction of the Governor, evaluations of the

effectiveness and management efficiency of programs supported by

an agency subject to the policy supervision and control of the

Governor, including federally funded programs and State-funded

programs, and to direct, coordinate, assist or advise the agency

in the conduct of evaluations of the agency's programs or

programs which the agency supports. The secretary shall also

prepare reports detailing the results of program evaluations

conducted by the secretary for distribution to the Governor, the

Independent Fiscal Office, the General Assembly, interested

agencies and the general public.

§ 10016. Audit functions.

The secretary shall initiate and conduct, under the direction

of the Governor, audits of the programs supported by an agency

subject to the policy supervision and control of the Governor,

including federally funded programs and State-funded programs.

The audits shall comply with the Single Audit Act of 1984 (31

U.S.C. § 7501 et seq.) and the Office of Management and Budget

Circular A-133 and any other Federal requirements for a

Statewide single audit. The secretary shall also prepare reports

detailing the results of audits conducted by the secretary for

distribution to the Governor, the Independent Fiscal Office, the

members of the General Assembly, interested agencies and the

general public.

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§ 10017. Fiscal note.

(a) Preparation.--The Office of the Budget shall prepare a

fiscal note for regulatory actions and administrative procedures

of each executive agency receiving money from the State

Treasury. The fiscal note shall state whether the proposed

action or procedure causes a loss of revenue or an increase in

the cost of programs to the Commonwealth or its political

subdivisions.

(b) Publication.--Any regulatory action or administrative

procedure that requires a fiscal note shall be transmitted to

the Legislative Reference Bureau for publication in the

Pennsylvania Bulletin at the same time that the proposed change

is advertised.

information:

(1) The designation of the fund out of which the

appropriation providing for expenditures for the action or

procedure shall be made.

(2) The projected cost of the action or procedure during

the fiscal year in which it is implemented and for each of

the five succeeding fiscal years.

(3) The projected loss of revenue associated with the

action or procedure during the fiscal year in which it is

implemented and for each of the five succeeding fiscal years.

(4) The fiscal history of the action or procedure for

which expenditures are to be made.

(5) The line item, if any, of the General Appropriation

Act or other appropriation act out of which expenditures or

losses of Commonwealth funds shall occur as a result of the

action or procedure.

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(6) Any recommendation of the secretary and the reason

for the recommendation.

SUBCHAPTER C

BUDGET PROCEDURES

Sec.

10021. Submission of budget information.

10022. Mid-year budget review.

10023. Balanced budget presentation.

10024. Performance hearing.

10025 . Annual performance plans.

10026 . Revenue estimates.

§ 10021. Submission of budget information.

(a) Commencement.--On July 1 of each year, the secretary

shall begin the process of obtaining and preparing the pertinent

financial and program information regarding the next fiscal year

for review by the Governor and the General Assembly.

(b) Request for information.--

(1) Not later than August 1 of each year, the secretary

shall distribute the proper instructions and blanks necessary

to the preparation of the budget requests.

(2) The request for information under paragraph (1)

shall contain a notice that the blanks shall be returned with

the information desired not later than October 1 of the same

year.

(3) The request for information under paragraph (1)

shall be distributed to the following:

(i) Each executive agency.

(ii) The Chief Clerk of the Senate.

(iii) The Chief Clerk of the House of

Representatives.

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(iv) The State court administrator.

(v) Each institution or other agency that desires

State appropriations.

(1) The information requested by the secretary under

subsection (b) shall be returned no later than October 1 of

the same year that the request was made.

(2) An executive agency and the State court

administrator shall designate a person to return the

information.

(3) An executive agency and the State court

administrator shall provide the same information submitted to

the secretary to a member of the General Assembly.

(d) Additional information.--In addition to the other

information submitted under this section, an executive agency

shall also submit the following to the secretary , the

Independent Fiscal Office and the General Assembly:

(1) A performance plan aligned with the executive

agency's strategic plan .

(2) An update on its continuous improvement process

system, including a detailed report on anticipated savings

reflected by line item .

(3) A strategic plan .

(4) A written statement that describes the following:

(i) The purposes of each program to be funded.

(ii) The expected levels of activity of each program

to be funded.

(iii) The expected levels of accomplishment

regarding each program to be funded.

(iv) The measures to be used to determine the extent

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that each program to be funded has achieved its stated

purposes.

(v) Each executive agency's reduction of all program

expenditures by 100% from the immediate prior fiscal year

and the rebuilding of its budget by the following

criteria:

(A) Justified mandated expenses.

(B) Performance criteria for executive agency

programs.

(e) Publication of information.--Upon receipt of a

performance plan of an executive agency, the secretary shall

make the performance plan readily accessible on the Office of

the Budget's publicly accessible Internet website.

(f) Further inquiry and investigation.--The secretary may

make further inquiries and investigations regarding the

financial needs, expenditures, revenues, expected levels of

program activities and accomplishments or other relevant matters

of any entity receiving money from the State Treasury.

(g) Determination by Governor.--After providing an entity

the opportunity to be heard regarding the information submitted

under this section, the Governor may approve, disapprove or

alter a budget request.

(h) Basis for appropriations.--Before December 16 of each

year, the secretary shall submit to the Governor in writing the

information provided under this section, along with any

additional information requested by the Governor, as the basis

for the Governor's requests for appropriations for the next

fiscal year.

§ 10022. Mid-year budget review.

(a) Review.--No later than December 16 of each year, the

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Governor and secretary shall provide the members of the General

Assembly with a review on the budget for the current fiscal

year. This review shall include, but is not limited to, the

following:

(1) Changes in current revenue projections from the

enactment of the General Appropriation Act for the

immediately prior fiscal year.

(2) State expenditures for the current fiscal year and

anticipated overages and lapses from the enactment of the

General Appropriation Act for the immediately prior fiscal

year.

(3) Reviews under this subsection shall specifically

include the following:

(i) Anticipated increases or decreases in programs,

including the specific policy, statute, Federal law,

Federal regulation, executive agency contract, executive

agency contract amendment, executive agency guideline,

executive agency approved entitlement, court case or

executive order which is the basis of the anticipated

increases or decreases.

(ii) The results or anticipated results of employee

union negotiations for salaries, wages and other

benefits.

(iii) The statistics involved in preliminary

forecasts of the major programs mandated by statute,

including, but not limited to, education subsidies,

public assistance programs, debt service and forecasts of

revenue.

(iv) The top five cost-drivers of the budget and any

executive agency recommendations to mitigate these costs.

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(v) Status on the cash flow of the General Fund.

(vi) Other appropriate budget information.

(b) Briefing by Governor.--

(1) In December of each year, the Governor shall meet

with the following:

(i) The chairperson and minority chairperson of the

Appropriations Committee of the Senate.

(ii) The chairperson and minority chairperson of the

Appropriations Committee of the House of Representatives.

(iii) The officers of the General Assembly.

(2) During the meeting under this subsection, the

Governor shall brief the individuals under paragraph (1) on

the issues foreseen as being imminent in the budget for the

next fiscal year. The Governor and individuals shall exchange

views on the issues before the budget is formally presented

to the General Assembly. The individuals shall also inform

the Governor of financial matters which should be considered

in the budget.

Senate and the Appropriations Committee of the House of

Representatives shall form a joint committee to conduct a joint

hearing to review the midyear status of the finances of the

Commonwealth. The following shall be members of the joint

committee:

(1) The chairperson and minority chairperson of the

Appropriations Committee of the Senate.

(2) The chairperson and minority chairperson of the

Appropriations Committee of the House of Representatives.

(3) Three members of the Appropriations Committee of the

Senate appointed by the chairperson of the Appropriations

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Committee of the Senate.

(4) Two members of the Appropriations Committee of the

Senate appointed by the minority chairperson of the

Appropriations Committee of the Senate.

(5) Three members of the Appropriations Committee of the

House of Representatives appointed by the chairperson of the

Appropriations Committee of the House of Representatives.

(6) Two members of the Appropriations Committee of the

House of Representatives appointed by the minority

chairperson of the Appropriations Committee of the House of

Representatives.

§ 10023. Balanced budget presentation.

(a) Contents of submission.--Subject to subsection (h), the

Governor shall submit to the Independent Fiscal Office and the

General Assembly copies of original agency budget requests, all

subsequent revised agency budget requests, a State budget and

program, and financial plans that include the following:

(1) A balanced operating budget for the next fiscal year

specifying the following in detail:

(i) The amounts recommended by the Governor to be

appropriated to the General Assembly, the Judicial

Department, each executive agency and institutions and

other agencies within this Commonwealth, and for all

public purposes, classified by department or agency and

by program.

(ii) The estimated revenues or receipts from each

source and an estimated amount to be raised by taxation

or otherwise, including proposals for new revenues and

receipts.

(2) A capital budget for the next fiscal year specifying

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capital projects to be financed from the proceeds of

obligations of the Commonwealth or its agencies or

authorities or from operating funds.

(3) Program and financial plans for not less than the

immediately prior fiscal year, the current fiscal year and

the next four fiscal years, which shall include the following

for each fiscal year:

(i) Actual or estimated operating expenditures

classified by department or agency and by program, in

reasonable detail, and actual or estimated revenue by

major categories from existing and additional sources.

(ii) Clearly stated purposes of each program in

terms of desired accomplishments.

(iii) Measures used to determine to what extent each

program has achieved its stated purposes.

(iv) Actual and estimated levels of accomplishment

for each program and actual and estimated levels of

program activities and their associated costs.

(v) Clearly stated purposes for each recommended new

or revised program, measures to be used to determine

whether each new or revised program has achieved its

purpose, estimated levels of additional or new

accomplishment of each new or revised program, estimated

levels of additional activities for each program and

their associated costs.

(vi) Use of Federal funds, including requirements by

the Federal Government attached to those funds, the cost

in State dollars to meet those requirements and

recommendations to mitigate Federal mandates at a lower

cost to the Commonwealth .

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(vii) Cross references to performance measures used

to determine funding levels.

(4) Specific reasons that program increases or decreases

are occurring, including recommendations to eliminate or

reduce program increases.

(b) Program evaluation.--The budget shall include the

results of any program evaluation report or audit findings

completed by the Office of the Budget , the Independent Fiscal

Office or the Department of the Auditor General in the fiscal

year preceding the year in which the budget request is made. The

results of any evaluation report and its recommendations shall

be concisely summarized and included in the budget

documentation.

(1) When the secretary identifies a new or expanded

program by criteria used in the budget instructions, the new

or expanded program shall be displayed and justified as a

separate item in the Governor's budget request.

(2) A new program shall not be considered to be enacted

by the General Assembly in its first year unless it is

specifically referred to or displayed as a line item in an

appropriation bill.

(3) A cost-benefit analysis shall be provided for each

new or expanded program.

(d) Cost breakouts.--The budget shall include for each

executive agency a single, separate line listing the separate

cost for each program. The line item shall include:

(1) Employee salaries.

(2) Health care costs.

(3) Pension costs.

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(4) Lease agreements.

(5) Vehicle, travel and transportation reimbursements.

(6) Consultants.

(7) Augmented employees and staff.

(8) Office supplies.

(9) Information technology.

(10) Telecommunications.

(11) Travel, meals, lodging and similar expenses.

(12) The cost of purchasing new equipment and supplies.

(13) The cost of purchasing material, including

newspapers, magazines, movies, films and tapes.

(e) Performance goals.--The budget shall include a summary

of programs by an executive agency which lists each program, if

it exceeded, met or did not meet its performance goals of the

previous fiscal year and by what percentage the program did or

did not meet its performance goals.

(f) Cash flow.--The budget shall include an analysis of the

cash flow of the General Fund and detail how the budget will

impact the cash flow of the General Fund in the ensuing fiscal

year.

(g) Documentation.--Upon the request of the Independent

Fiscal Office, the chairperson of the Appropriations Committee

of the Senate or the chairperson of the Appropriations Committee

of the House of Representatives , an executive agency shall

provide documentation of any budget request, including revenue

estimates upon which the budget estimate is based.

(h) Timeliness of submission.--The submission under

subsection (a) shall occur:

(1) Subject to paragraph (2), as soon as possible after

the organization of the General Assembly, but not later than

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the first full week in February of each year.

(2) Not later than the first full week in March of the

first year of the first term of the Governor after the

gubernatorial election.

§ 10024. Performance hearing.

(a) Applicability.--This section relates to a performance

hearing by a standing committee to review an executive agency's

proposed performance measures for the next fiscal year.

(b) Frequency.--Each standing committee shall conduct at

least one hearing between October 1 and May 15.

presentation from each executive agency that is assigned to that

standing committee that includes, but is not limited to, the

executive agency's strategic plan and performance plan for the

next fiscal year.

(d) Public testimony.--Each standing committee shall allow

for written public testimony regarding the presentation by an

executive agency.

(e) Liaison.--The head of an executive agency shall serve as

liaison or designate an individual within the executive agency

to serve as liaison with a standing committee. The liaison shall

inform the committee of the executive agency's performance

management system and performance plan.

(f) Recommendations.--After a standing committee holds its

performance hearings, the standing committee may make

recommendations to the members of the General Assembly on

changes to performance data and recommendations for any

incentives or disincentives based on program performance

measures to use in determining the level of appropriations in

the final performance-based budget. By May 30, recommendations

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shall be submitted to the Appropriations Committee of the house

in which the standing committee is making the recommendations

under this subsection.

§ 10025 . Annual performance plans.

(a) Transmittal.--Following the presentation of the budget

under section 10023 (relating to balanced budget presentation),

each executive agency shall transmit its annual performance

report for the current fiscal year to all of the following:

(1) The Independent Fiscal Office.

(2) The General Assembly.

(b) Posting.--After transmitting the annual performance

report under subsection (a), each executive agency shall post

the annual performance report on the executive agency's publicly

accessible Internet website.

of the following:

(1) A summary of the executive agency's submitted

performance plan aligned to the executive agency's strategic

plan .

(2) A brief summary of the executive agency's budget

request.

(3) Performance measurements on how the executive agency

has moved toward meeting performance goals for the current

fiscal year.

(4) How performance plans have been coordinated across

executive agencies to ensure a continuity of services to

residents of this Commonwealth.

(5) Continuous improvement process system efforts from

the current fiscal year and a detailed analysis of cost

savings and service improvement.

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§ 10026 . Revenue estimates.

(a) Committee established.--The Joint Revenue Estimation

Committee is established and shall be convened by the Secretary

of Revenue no later than the first week of February following

the beginning of each legislative session of the General

Assembly.

(b) Membership.--The committee shall be comprised of the

following members:

(1) The secretary.

(2) The Secretary of Revenue.

(3) The chairperson and minority chairperson of the

Appropriations Committee of the Senate.

(4) The chairperson and minority chairperson of the

Appropriations Committee of the House of Representatives.

(5) One resident appointed by the Governor.

(6) One resident appointed by the President pro tempore

of the Senate.

(7) One resident appointed by the Speaker of the House

of Representatives.

(8) One resident appointed by the Minority Leader of the

Senate.

(9) One resident appointed by the Minority Leader of the

House of Representatives.

(10) The Director of the Independent Fiscal Office as an

ex officio member.

the Department of Revenue who shall prepare any documents

requested by a member of the committee.

(d) Meetings.--The committee shall meet at least once a

month to discuss changes in revenue collected by the

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Commonwealth during the current month and fiscal year compared

to the most recently released estimate made by the committee.

(e) Revenue estimates.--Twice each fiscal year, by December

16 and May 15, the committee shall prepare a joint estimate of

revenue for the General Fund. The estimate shall include revenue

the Commonwealth can anticipate collecting for the current

fiscal year and the ensuing fiscal year.

(f) Approval of revenue estimates.--No revenue estimate

shall be approved without being approved by 11 members of the

committee. The following shall apply:

(1) If, prior to final adjournment of any regular

legislative session of the General Assembly, a law is enacted

providing for additional or less money to be deposited into

the General Fund, the committee shall prepare a joint

estimate of those revenues.

(2) The committee may release a revised revenue estimate

90 days following the release of an approved revenue estimate

only if the estimate is approved by 11 members of the

committee.

(g) Submission.--The committee shall submit the revenue

estimates to the Governor, General Assembly, State Treasurer and

Independent Fiscal Office.

(h) Failure to approve estimate.--If the committee fails to

approve a revenue estimate under this section, the Governor and

the General Assembly shall utilize the revenue estimates of the

Independent Fiscal Office for approving General Fund

expenditures.

(i) Initial revenue estimate.--The secretary shall convene

the committee, which shall release a revenue estimate for the

current fiscal year and ensuing fiscal year within 30 days of

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the effective date of this section. If the committee is unable

to agree on a revenue estimate, the Governor and the General

Assembly shall use a revenue estimate from the Independent

Fiscal Office to enact General Fund expenditures for the ensuing

fiscal year.

(j) Report on error rates.--The committee shall provide a

public report on the error rates of the previous fiscal year

revenue estimates no later than October 1 of the following

fiscal year. Revenue error rates for each tax must not be

greater than 3%. If an error rate is greater than 3%, the

committee shall develop a new model to ensure error rates remain

under 3%.

(k) Duty of Governor.--

(1) Prior to signing an appropriation bill or allowing

an appropriation bill to become law without the signature of

the Governor:

(i) the revenue estimates must be completed; and

(ii) the Governor shall line item veto any part of

an appropriations bill that causes total appropriations

to exceed the official estimates plus any unappropriated

surplus.

(2) No subsequent changes in the revenue estimates shall

be made unless changes in statutes affecting revenues and

receipts are enacted.

(l) Duty of General Assembly.--The General Assembly shall

not send a general appropriation bill to the Governor unless the

General Assembly has sent legislation to the Governor providing

for the revenues and augmentations needed to fund the

expenditures in the general appropriation bill.

SUBCHAPTER D

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PERFORMANCE, TRANSPARENCY AND

ACCOUNTABILITY-BASED BUDGETING

Sec.

10031. Performance management systems.

10032. Performance plans.

10033. Performance evaluations.

10034. Performance and forensic audits.

10035. Electronic access of information and Commonwealth

checkbook.

10036. Estimates of current expenditures by certain executive

agencies.

10037. Estimates of current expenditures by independent

departments.

10038. Books and accounts.

10039. Audit of Auditor General records.

§ 10031. Performance management systems.

(a) Development.--

(1) The Governor shall develop components of a

performance management system for managing executive agencies

through instructions issued by the secretary.

(2) The Judicial Department shall develop components of

a performance management system for managing the judicial

branch through instructions issued by the Administrative

Office of Pennsylvania Courts.

(b) Contents.--A performance management system under this

section must address all of the following:

(1) Strategic plans and priorities that are consistent

with the charge of the respective executive agency or entity

within the Judicial Department.

(2) Strategies for enhancing productivity, improving

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efficiency, reducing costs and eliminating waste in the

processes and operations that deliver goods and services to

taxpayers and customers of State government.

(3) Parameters for the development of performance plans.

(4) A continuous improvement process system.

(5) Elements to ensure that employees are appropriately

trained to implement the components under this subsection.

(6) Suggested incentives for exceeding performance goals

and disincentives for not exceeding performance goals.

July 1:

(1) The Governor shall publish the components under

subsection (a)(1).

(2) The Judicial Department shall publish the components

under subsection (a)(2).

(d) Posting.--The secretary and the Administrative Office of

Pennsylvania Courts shall post the instructions under subsection

(a) on its publicly accessible Internet website.

§ 10032. Performance plans.

(a) Development.--By August 1, 2022, and by each subsequent

August 1, each executive agency and the Administrative Office of

Pennsylvania Courts shall develop a performance plan in

accordance with the developed performance management system.

(b) Purpose.--A performance plan shall serve as a guide to

the major functions of an executive agency or the Judicial

Department and as a tool to evaluate performance goals over

time.

the following components regarding the executive agency or

entity within the Judicial Department:

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(1) A statement of its mission or vision.

(2) A description of its major functions.

(3) A strategic plan.

(4) Performance measures for its major functions aligned

to the executive agency's strategic plan . If reasonable and

appropriate, performance measures shall be developed with the

input of its employees.

(5) Performance goals that correspond to its performance

measures and extend to at least three years into the future.

(6) A narrative description of the strategies necessary

to meet the performance goals.

(7) A summary of its most recent performance evaluation.

(d) Revisions.--

(1) An executive agency or the Administrative Office of

Pennsylvania Courts may further refine a performance plan in

the performance management system published under section

10031 (relating to performance management systems).

(2) The secretary or another individual within the

Office of the Budget may not edit a transmitted performance

plan or any information related to the performance plan.

(e) Transmittal.--By August 1, 2022, and by each subsequent

August 1, each completed performance plan shall be transmitted

to the following:

(1) The Governor's Office.

(2) The secretary.

(3) The Independent Fiscal Office.

(4) The General Assembly.

(f) Posting.--By August 1, 2022, and by each subsequent

August 1, each executive agency and the Administrative Office of

Pennsylvania Courts shall post the completed performance plan on

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its publicly accessible Internet website and on the publicly

accessible Internet website of the Office of the Budget.

(g) Retirement systems.--The Public School Employees'

Retirement System and the State Employees' Retirement System

shall comply with the requirements of this section.

§ 10033. Performance evaluations.

(a) Distribution.--An executive agency shall conduct a

performance evaluation and distribute it to the Independent

Fiscal Office and each member of the General Assembly.

(b) Frequency.--A performance evaluation shall be

distributed at least twice each calendar year as defined in the

published performance management system.

conduct a performance check on each executive agency's

performance evaluations on a rolling five-year cycle.

§ 10034. Performance and forensic audits.

(a) Frequency.--The Department of the Auditor General shall,

within existing resources, conduct or cause to be conducted

performance audits of one or more specific programs or services

in at least two executive agencies on an annual basis during the

regular audit of the executive agency.

(b) Selection considerations.--In selecting an executive

agency and a specific program or service for a performance

audit, the Department of the Auditor General shall consider

risk, audit coverage, resources required to conduct the

performance audit and the impact of the audited program or

service on the executive agency's performance-based goals.

selected for audit may include, but is not limited to, a review

of all of the following:

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(1) The integrity of the performance measures audited.

(2) The accuracy and validity of reported results.

(3) The overall cost and effectiveness of the audited

program or service in achieving legislative intent and the

performance goals.

(d) Transmittal.--The Department of the Auditor General

shall transmit electronically each performance audit report for

the immediately prior fiscal year to members of the General

Assembly and the Independent Fiscal Office .

(e) Other reports.--The Department of the Auditor General

shall transmit any other audit report regarding an executive

agency that is deemed relevant for review by a standing

committee with jurisdiction over the executive agency.

(f) Forensic audits.--The Department of the Auditor General

may conduct forensic audits at the expense of the agency under

forensic audit if a prior or current audit shows alleged

criminal action, misappropriation of expenditures, misuse of

expenditures, accounting discrepancies or passage of a

concurrent resolution by the General Assembly.

§ 10035. Electronic access of information and Commonwealth

checkbook.

(a) Electronic access of information.--Except for

confidential information, the Independent Fiscal Office and the

General Assembly shall have access to all information available

on inquiry-only screens through the Integrated Central System

under section 620.1 of the act of April 9, 1929 (P.L.177,

No.175), known as The Administrative Code of 1929.

(b) Commonwealth checkbook.--The Office of the Budget shall

maintain a public version of financial information and

transactions under this chapter, which shall be known as the

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Commonwealth checkbook.

§ 10036. Estimates of current expenditures by certain executive

agencies.

(a) Preparation.--Each executive agency, other than an

independent department, shall from time to time as requested by

the Governor or a member of the General Assembly, prepare an

estimate of the amount of money required and the levels of

activity and accomplishment for each program carried on by the

executive agency during the next month, quarter or other period

as the Governor or member of the General Assembly shall

prescribe.

(b) Inclusion of other funds.--All available Federal funds

and funds from other sources shall be characterized as such and

included in the estimate under subsection (a) before any

expenditures shall be made.

submitted to the secretary for approval or disapproval and the

Appropriations Committee of the Senate and the Appropriations

Committee of the House of Representatives.

(d) Revision.--If the secretary does not approve an estimate

under this section, the estimate shall be revised as necessary

and resubmitted for approval.

(e) Personnel complement level.--The secretary may establish

an authorized personnel complement level in conjunction with the

approved estimate under this section.

(f) Prohibited spending.--After the approval of the estimate

under this section, the executive agency submitting the estimate

may not expend all or part of any appropriation, Federal funds

or funds from other sources except in accordance with the

estimate and any authorized complement level unless the estimate

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is revised with the approval of the secretary and within the

limits appropriated by the General Assembly.

(g) Failure to comply.--

(1) If an executive agency to which this section applies

fails or refuses to submit to the secretary an estimate under

this section, the Governor may notify the State Treasurer in

writing of the failure or refusal.

(2) After receipt of the notice under paragraph (1), the

State Treasurer may not draw any warrant in favor of the

executive agency until the Governor notifies the State

Treasurer in writing that the delinquent executive agency has

furnished the Governor with, and the Governor has approved,

the required estimate.

(h) Disapproval or reduction of appropriated amounts.--

(1) The secretary may not, under the authority granted

under this section, disapprove or reduce any amount

appropriated by the General Assembly for grants or subsidies

without the approval of the Appropriations Committee of the

Senate and the Appropriations Committee of the House of

Representatives.

(2) If the secretary favors the disapproval or reduction

under paragraph (1), the secretary shall give at least 10

days' prior notice to the Independent Fiscal Office, the

chairperson and minority chairperson of the Appropriations

Committee of the Senate and the chairperson and minority

chairperson of the Appropriations Committee of the House of

Representatives.

(3) The notice under paragraph (2) must include all of

the following:

(i) The amount of the appropriation to be

20190HB0093PN0095 - 29 -

disapproved or reduced.

(ii) The reasons that the appropriation should be

disapproved or reduced.

(iii) The estimated impact of the disapproval or

reduction on the programs, services or purposes for which

the appropriation is provided.

§ 10037. Estimates of current expenditures by independent

departments.

(a) Preparation.--Each independent department shall from

time to time as requested by the Governor, prepare an estimate

of the amount of money required for each activity or function to

be carried on by the independent department during the next

month, quarter or other period as the Governor shall prescribe.

(b) Submittal.--The estimate under this section shall be

submitted to the secretary for approval or disapproval and to

the Appropriations Committee of the Senate, the Appropriations

Committee of the House of Representatives and the Independent

Fiscal Office.

§ 10038. Books and accounts.

All books and accounts kept by each executive agency shall be

kept on a fiscal-year basis utilizing the full accrual

accounting method.

§ 10039. Audit of Auditor General records.

The Auditor General and the Department of the Auditor General

shall submit to any accountants appointed by the Governor for

the purpose of making an audit of the affairs of the Auditor

General and the Department of the Auditor General all books,

papers and other records that in any way pertain to that

position and department.

SUBCHAPTER E

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EXPENDITURES AND LAPSED FUNDS

Sec.

10041. Total actual revenues less than total estimated

revenues.

10042. Unexpended appropriations.

10043. Encumbered appropriations.

10044. Budget implementation data.

10045. Revenue data.

10046. Lapsed funds.

10047. Financial reports due to General Assembly.

10048. Disposition of Commonwealth assets.

10049. Tax expenditures.

10050. Special and restricted funds analysis.

§ 10041. Total actual revenues less than total estimated

revenues.

(a) Budgetary reserve.--If the Commonwealth's total actual

revenues are less than the Commonwealth's total estimated

revenues in any given month, the Governor shall place the amount

of appropriations under revenue estimates into budgetary

reserve.

(b) Reduction of line item.--In depositing the amount of

appropriations under revenue estimates under subsection (a), the

Governor shall reduce in the General Appropriation Act each line

item under the policy supervision and control of the Governor

for that fiscal year by the same percentage, excluding debt,

pension payments and court orders.

actual revenues exceed the Commonwealth's total estimated

revenues for two consecutive months, the Governor may remove

appropriations in the budgetary reserve and allocate the

20190HB0093PN0095 - 31 -

appropriations of each line item in the General Appropriation

Act under the policy supervision and control of the Governor for

that fiscal year by the same percentage as long as total actual

revenues continue to exceed the total estimated revenues. Any

appropriations remaining in the budgetary reserve after October

31 of the preceding fiscal year shall expire and lapse to the

General Fund.

§ 10042. Unexpended appropriations.

By May 15 of each year, the Governor shall provide the

Independent Fiscal Office and the General Assembly with a

detailed report on all potential unexpended appropriations for

that fiscal year.

§ 10043. Encumbered appropriations.

By May 15 of each year, the Governor shall provide the

Independent Fiscal Office and the General Assembly with a

detailed report of specific appropriations of the current fiscal

year that may need to be carried over to the next fiscal year.

Each report shall also include the following:

(1) Each c ommitment for the next fiscal year by

appropriation and line item.

(2) The name of the organization to which each

commitment was made.

(3) The total amount expended during the fiscal year for

each commitment.

(4) A description of each commitment or project.

(5) The location of each commitment or project,

including the senatorial district and representative district

in which the commitment or project is located.

(6) The five-year cash flow demonstrating how each

d epartment, board, commission, authority or other agency of

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the Commonwealth that is subject to the policy supervision

and control of the Governor is planning to fund the agency's

commitments.

(7) The date that each encumbrance was approved.

(8) The schedule that each encumbrance is set to be

paid.

(9) The total amount of the encumbrances.

(10) A description of how each executive agency can fund

the encumbrances of the executive agency through budgeted

appropriations and statutory authority.

(11) A statement for each encumbrance as to whether or

not the encumbrance is to be expended by October 31 of that

calendar year and, if the encumbrance is not to be expended

by October 31 of that calendar year, an in-depth explanation

of the reason that the encumbrance will continue beyond

October 31 of that calendar year.

§ 10044. Budget implementation data.

(a) Duty.--The Governor, the Auditor General, the State

Treasurer and the Attorney General shall make monthly

expenditure data available to the Independent Fiscal Office and

each member of the General Assembly.

(b) Timeliness.--Monthly data shall be provided within 15

days after the end of each month.

(1) Monthly data shall be:

(i) prepared in such a way that the last monthly

submission is a summary inclusive of the preceding months

of the fiscal year; and

(ii) able to establish a history of expenditure

file.

20190HB0093PN0095 - 33 -

(2) At the discretion of the chairperson and minority

chairperson of the Appropriations Committee of the Senate and

the chairperson and minority chairperson of the

Appropriations Committee of the House of Representatives,

monthly data may be provided in a computer file.

(3) Monthly data shall be provided by fund,

appropriation, department and organization within each

department and include all of the following:

(i) The number and costs of filled personnel

positions.

(ii) Itemized personnel vacancies and their costs.

(iii) New positions created and their costs.

(iv) Wage and overtime costs.

(v) Allotments and expenditures for itemized

personnel expenses.

(vi) Allotments and expenditures for itemized

operating expenses.

(vii) Allotments and expenditures for itemized fixed

assets.

(viii) The rate of expenditures in appropriations

for major subsidy and grant programs during the month.

(d) Other budgetary data.--Upon the request of the

Independent Fiscal Office or a member of the General Assembly,

the Governor, the Auditor General, the State Treasurer and the

Attorney General shall make available to that office or member

any other budgetary data as may be requested from time to time.

§ 10045. Revenue data.

(a) Duty.--The Governor shall make monthly revenue reports

to the Independent Fiscal Office and the General Assembly.

(b) Contents of report.--A revenue report shall show the

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