MEETING OF THE
LEGISLATIVE AUDITING STANDING COMMITTEE
HELD OCTOBER 26, 1965 AT 2 P.M. IN THE STATE CAPITOL
Committee Members Present:  Senator Mantes, Chairman
Senator W, Hughes Brockbank
Rep, Ross H„ Plant
Mr o S, Burtell Bunker, Consultant
Committee Members Excused:  Rep, M, James Macfarlane
Invited Guests', Mr. Herbert F, Smart, Director, Department of
Finance
Mr, Mo Fred 01ivers CPA Consultant to the
Department of Finance
Mr, Kenneth Hansen, Assistant Director, Department
of Finance
Senator Mantes thanked those at the meeting for attending and explained that
the officials from the Department of Finance had been asked to meet with the
committee and discuss the progress of the budget examination program, the project to consolidate the various funds as provided by the consolidation act,
the development of implementing a modified accrual basis into our accounting
procedures.
Director Herbert Smart explained to the committee that he had engaged Mr. M,
Fred Oliver, partner of the national firm of Haskins and Sells, known to be
knowledgeable in matters of government and government accounting.  He explained
that he has had Mr. Oliver working with him; that the program to consolidate
funds is moving ahead and, in addition, he has asked Mr, Oliver to analyze the
imprest cash problem which has been called to the attention of this committee
before.
Mr. Smart explained that his department had made tentative plans to adopt a
procedure whereby the imprest cash would be greatly reduced by a direct draft
procedure.  After moving into this proposal, several problems became manifest
and it was determined that no action be made at this time on the imprest cash
until Mr, Oliver has had an opportunity to make a thorough study.  The problem which presented itself was the matter of federal funds which is handled
by the institutions and which restricts the imprest cash to an extent and the
matter of their bond issues on dormitories and stadiums and other facilities
and it was apparant to him that there is a divided responsibility in this
area and that a careful study must be made first,
Mr, Smart reported on the funds consolidation program.  He reported that Mr,
Oliver would give the details concerning the funds consolidation program.
Mr. Smart explained that they are coordinating their efforts with the Little
Hoover Commission in order that what they develop will not be out of step
with the recommendations of the Hoover Commission.
Mr. Smart then explained that in the budget examination program of his
Department that he has endeavored to continue the program without expansion.
He feels that an adequate budget examination program will require more
examiners and that the Department will need further legal authority and
clarification from the Legislature, particularly, in the planning phases.