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HB 386

GOVERNMENTAL ACCOUNTING CLASS & COMPENSATION

2025 Regular Session Introduced by Joseph Hernandez

One-time $500,000 to the State Auditor to study classification and pay for audit/accounting staff to improve recruitment and retention.

action postponed indefinitely
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Bill Summary · HB 386

Summary — HB 386: Governmental Accounting Class & Compensation

Status: Action postponed indefinitely
Introduced: November 12, 2024
Subject: State agencies & departments (classification/compensation)
Primary purpose: Fund a targeted class-and-compensation study of governmental audit and accounting positions to evaluate classification and pay structures and inform potential adjustments to improve recruitment and retention.

What the bill would do

  • Appropriates $500,000 from the general fund to the Office of the State Auditor (OSA) to conduct a focused class-and-compensation study covering audit and accounting positions and related classification/salary structures within the agency.
  • Makes the appropriation available for expenditure in fiscal years 2026 through 2028.
  • Any unspent or unencumbered balance at the end of FY2028 would revert to the general fund.
  • Does not include an explicit effective date; if enacted as written it would take effect 90 days after the Legislature adjourns (the fiscal analysis cites June 20, 2025 as the likely effective date).

Key issues and intent

  • OSA reports difficulty recruiting and retaining qualified accountants and auditors amid a nationwide shortage of accountants and competition from other employers (including other state agencies and private sector firms).
  • OSA audit positions often have specific mandatory education and certification requirements (e.g., CPA, specified accounting credits, audit experience) but are classified and compensated at the same levels as less specialized accounting roles in other agencies, reducing competitiveness.
  • The study is intended to assess whether current classifications and pay bands align with duties and market conditions and to recommend adjustments (if warranted) to improve parity with public accounting peers and bolster staffing capacity.

Fiscal impact

  • One-time (nonrecurring) appropriation: $500,000 from the general fund (FY2026 appropriation), available through FY2028.
  • No ongoing recurring appropriation is specified; implementing any recommended, long-term compensation changes would require future legislative appropriations.
  • The Legislative Finance Committee notes concurrent statewide reviews of compensation/classification (by LFC, Department of Finance & Administration, State Personnel Office) that could affect or reduce the need for agency-specific measures.

Who would be affected

  • Primary: Office of the State Auditor — staffing, hiring, classification, and pay practices for auditor/accountant positions.
  • Secondary: State Personnel Office, Department of Finance & Administration, Legislative Finance Committee — for coordination/implementation and any statewide policy interactions.
  • Indirect: Potential impact on audit capacity and timeliness of statutory audits if recruitment/retention problems are addressed (or persist).

Performance & administrative considerations

  • OSA argues misclassification and pay-band rules (including an anticipated pay-band reversion) undermine ability to keep CPAs/auditors.
  • The bill is intended to help OSA meet strategic goals around recruitment and retention; OSA also suggested an alternative (reclassifying some audit positions to governor‑exempt status) as a possible route to more competitive pay.
  • The study’s recommendations, if adopted, could improve OSA’s ability to fulfill statutory audit responsibilities but might require additional funding or personnel-system changes.

Procedural/timeline notes

  • Appropriation would be available FY2026–FY2028.
  • No immediate recurring funds are authorized for implementing compensation changes — those would require separate future action.
  • Current procedural status (per the information provided): action postponed indefinitely.

Compiled from official sources — confirm details with the bill’s official record.

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