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Approval of Accounting System Changes

January 14, 1998
M E M O R A N D U M NO. OSC98-1

TO:	Agency Heads
	Agency Chief Fiscal Officers
	Agency Chief Information Officers
	All state Agencies, Universities and Institutions
FROM:	Edward Renfrow State Controller
SUBJECT:	General Statute 143B-426.39 "Approval of Accounting System Changes"

The Office of the State Controller (OSC) is responsible for the uniform North Carolina Accounting System (NCAS) and related subsystems, which maintain complete accounting information on the State of North Carolina government entity. The uniform NCAS includes the financial policies, procedures, and computer software that affect all departments and agencies of the State.

OSC, in accordance with its statutory responsibilities in G.S. 143B-426.39, determines the systems that are to be included in the NCAS. These reviews-to-date have resulted in the current NCAS environment composed of a common central data base of financial and materials management information, a set of primary users (those who use the NCAS policies and procedures in combination with the OSC implemented and maintained GEAC accounting software modules), and a set of secondary users (those who use the NCAS policies and procedures in combination with other software to accomplish the accounting functions required by NCAS).

Numerous agency-level systems, that provide for agency specific accounting and financial management functions and utilize various software, also support the central accounting system. These supporting systems are separately identifiable with their own data entry, processes, outputs, and internal controls. They share, receive, and provide financial information to each other and to the central accounting system. The activities included by such supporting systems range from t he accounting and administrative functions of the agencies to their unique programs and operating functions.

As required by general statutes, the OSC must review and approve any changes to any accounting system or subsystem before they are implemented. This review applies to all State agencies as defined in G.S. 147-64.4(4). OSC reviews the systems according to their: desirability, completeness, suitability for inclusion in the NCAS, and conformity to the prescribed statewide uniform chart of accounts, accounting policies, and accounting procedures. New or replacement systems that are determined to reside on software other than the NCAS primary core software, as they are designed and developed, are to include data structures that mirror those in the NCAS. Some concerns with agency financial system/subsystem changes relate to the desig n of appropriate internal controls, security, data integrity and audit trail features and in the case of subsystems or non-core system users, their interface to the NCAS at an appropriate level of detail to support statewide reporting requirements. The accounting procedures, policies, subsidiary accounts, records, and data in each agency's accounting systems must comply with the standards applicable to NCAS through the use of standard data definitions and uniform data classifications and processing. This will facilitate the access to uniform information across the state enterprise. The NCAS Financial Systems Master Plan Update issued January 31, 1997 documents the components of the NCAS, defines the criteria for inclusion in the NCAS, and clarifies the uniform information requirements. This document along with other NCAS policies and procedures may be accessed through the OSC Internet home page at http://www.osc.state.nc.us/.

Previously, the OSC has utilized an Accounting System Survey Request and Accounting System Inventory forms as a means by which State agencies notified this office of impending changes. We have now replaced these forms with the attached Accounting System Change Notification form. The new form is submitted by the agency chief fiscal officer and is used to forward condensed project information to the OSC. The form provides basic information related to proposed accounting system changes and is used by the OSC to determine if additional OSC involvement is required. The submitting agency will receive an OSC response that specifies initial approval and/or outlines additional documentation requirements.

Through a cooperative effort between State agencies and the OSC, the NCAS has matured into a timely, accurate and complete statewide uniform accounting system. With your help the OSC will continue to assure that statewide financial information is uniformly classified and readily assessable. We appreciate your support for this important State objective. Thank you.

CC:	Honorable Ralph Campbell, State Auditor
	Marvin Dorman, Jr., State Budget & Management
	John Leaston, State Purchase & Contract
	Tom Covington, Legislative Fiscal Research
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