SECTION 1. Section 35-4-27 of the General Laws in Chapter 35-4 entitled “State Funds”
is hereby amended to read as follows:
     35-4-27. Indirect cost recoveries on restricted receipt accounts. – Indirect cost
recoveries of ten percent (10%) of cash receipts shall be transferred from all restricted receipt
accounts, to be recorded as general revenues in the general fund. However, there shall be no
transfer from cash receipts with restrictions received exclusively: (1) from contributions from
non-profit charitable organizations; (2) from the assessment of indirect cost recovery rates on
federal grant funds; or (3) through transfers from state agencies to the department of
administration for the payment of debt service. These indirect cost recoveries shall be applied to
all accounts, unless prohibited by federal law or regulation, court order, or court settlement. The
following restricted receipt accounts shall not be subject to the provisions of this section:
     Executive Office of Health and Human Services
     Organ Transplant Fund
     HIV Care Grant Drug Rebates
     Department of Human Services
     Veterans' home – Restricted account
     Veterans' home – Resident benefits
     Pharmaceutical Rebates Account
     Demand Side Management Grants
     Veteran's Cemetery Memorial Fund
     Donations- New Veterans' Home Construction
     Department of Health
     Providence Water Lead Grant
     Pandemic medications and equipment account
     Miscellaneous Donations/Grants from Non-Profits
     State Loan Repayment Match
     Department of Behavioral Healthcare, Developmental Disabilities and Hospitals
     Eleanor Slater non-Medicaid third-party payor account
     Hospital Medicare Part D Receipts
     RICLAS Group Home Operations
     Commission on the Deaf and Hard of Hearing
     Emergency and public communication access account
     Department of Environmental Management
     National heritage revolving fund
     Environmental response fund II
     Underground storage tanks registration fees
     Rhode Island Historical Preservation and Heritage Commission
     Historic preservation revolving loan fund
     Historic Preservation loan fund – Interest revenue
     Department of Public Safety
     Forfeited property – Retained
     Forfeitures – Federal
     Forfeited property – Gambling
     Donation – Polygraph and Law Enforcement Training
     Rhode Island State Firefighter's League Training Account
     Fire Academy Training Fees Account
     Attorney General
     Forfeiture of property
     Federal forfeitures
     Attorney General multi-state account
     Forfeited property – Gambling
     Department of Administration
     RI Health Benefits Exchange
     Office of Management and Budget
     Information Technology Investment Fund
     Restore and replacement – Insurance coverage
     Convention Center Authority rental payments
     Investment Receipts – TANS
     Car Rental Tax/Surcharge-Warwick Share
     Housing Resources Commission Restricted Account
     Department of Revenue
     Jobs Tax Credit Redemption Fund
     Audit of federal assisted programs
     Department of Children, Youth and Families
     Children's Trust Accounts – SSI
     Military Staff
     RI Military Family Relief Fund
     RI National Guard Counterdrug Program
     Admin. Expenses – State Retirement System
     Retirement – Treasury Investment Options
     Defined Contribution – Administration - RR
     Violent Crimes Compensation – Refunds
     Treasury Research Fellowship
     Business Regulation
     Banking Division Reimbursement Account
     Office of the Health Insurance Commissioner Reimbursement Account
     Securities Division Reimbursement Account
     Commercial Licensing and Racing and Athletics Division Reimbursement Account
     Insurance Division Reimbursement Account
     Historic Preservation Tax Credit Account.
     Arbitration Fund Restricted Receipt Account
     Third Party Grants
     RI Judiciary Technology Surcharge Account
     Department of Elementary and Secondary Education
     Statewide Student Transportation Services Account
     School for the Deaf Fee for Service Account
     Davies Career and Technical School Local Education Aid Account
     Davies – National School Breakfast & Lunch Program
     Department of Labor and Training
     Job Development Fund
     Department of Transportation
     Rhode Island Highway Maintenance Account
     SECTION 2. Section 35-6-1 of the General Laws in Chapter 35-6 entitled “Accounts and
Control” is hereby amended to read as follows:
     35-6-1. Controller – Duties in general. – (a) Within the department of administration
there shall be a controller who shall be appointed by the director of administration pursuant to
chapter 4 of title 36. The controller shall be responsible for accounting and expenditure control
and shall be required to:
     (1) Administer a comprehensive accounting and recording system which will classify the
transactions of the state departments and agencies in accordance with the budget plan;
     (2) Maintain control accounts for all supplies, materials, and equipment for all
departments and agencies except as otherwise provided by law;
     (3) Prescribe a financial, accounting, and cost accounting system for state departments
and agencies;
     (4) Preaudit all state receipts and expenditures;
     (5) Prepare financial statements required by the several departments and agencies, by the
governor, or by the general assembly;
     (6) Approve the orders drawn on the general treasurer; provided, that the preaudit of all
expenditures under authority of the legislative department and the judicial department by the state
controller shall be purely ministerial, concerned only with the legality of the expenditure and
availability of the funds, and in no event shall the state controller interpose his or her judgment
regarding the wisdom or expediency of any item or items of expenditure;
     (7) Prepare and timely file, on behalf of the state, any and all reports required by the
United States, including, but not limited to, the internal revenue service, or required by any
department or agency of the state, with respect to the state payroll; and
     (8) Prepare a preliminary closing statement for each fiscal year. The controller shall
forward the statement to the chairpersons of the house finance committee and the senate finance
committee, with copies to the house fiscal advisor and the senate fiscal and policy advisor, by
September 1 following the fiscal year ending the prior June 30 or thirty (30) days after enactment
of the appropriations act, whichever is later. The report shall include but is not limited to:
     (i) A report of all revenues received by the state in the completed fiscal year, together
with the estimates adopted for that year as contained in the final enacted budget, and together
with all deviations between estimated revenues and actual collections. The report shall also
include cash collections and accrual adjustments;
     (ii) A comparison of actual expenditures with each of the actual appropriations, including
supplemental appropriations and other adjustments provided for in the Rhode Island General
     (iii) A statement of the opening and closing surplus in the general revenue account; and
     (iv) A statement of the opening surplus, activity, and closing surplus in the state budget
reserve and cash stabilization account and the state bond capital fund.
     (b) The controller shall provide supporting information on revenues, expenditures, capital
projects, and debt service upon request of the house finance committee chairperson, senate
finance committee chairperson, house fiscal advisor, or senate fiscal and policy advisor.
     (c) Upon issuance of the audited annual financial statement, the controller shall provide a
report of the differences between the preliminary financial report and the final report as contained
in the audited annual financial statement.
     (d) Upon issuance of the audited financial statement, the controller shall transfer all
general revenues received in the completed fiscal year, net of transfer to the state budget reserve
and cash stabilization account as required by § 35-3-20, in excess of those estimates adopted for
that year as contained in the final enacted budget to the employees' retirement system of the state
of Rhode Island as defined in § 36-8-2.
     (e)(d) The controller shall create a special fund not part of the general fund and shall
deposit amounts equivalent to all deferred contributions under this act into that fund. Any
amounts remaining in the fund on June 15, 2010, shall be transferred to the general treasurer who
shall transfer such amounts into the retirement system as appropriate.
     (f)(e) The controller shall implement a direct deposit payroll system for state employees.
     (i) There shall be no service charge of any type paid by the state employee at any time
which shall decrease the net amount of the employee's salary deposited to the financial institution
of the personal choice of the employee as a result of the use of direct deposit.
     (ii) Employees hired after September 30, 2014, shall participate in the direct deposit
system. At the time the employee is hired, the employee shall identify a financial institution that
will serve as a personal depository agent for the employee.
     (iii) No later than June 30, 2016, each employee hired before September 30, 2014, who is
not a participant in the direct deposit system, shall identify a financial institution that will serve as
a personal depository agent for the employee.
     (iv) The controller shall promulgate rules and regulations as necessary for
implementation and administration of the direct deposit system, which shall include limited
exceptions to required participation.
     SECTION 3. Section 1 shall take effect upon passage. Section 2 shall take effect as of
July 1, 2014.