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Introduced Version House Bill 2779 History

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hb2779 intr
H. B. 2779


(By Mr. Speaker, Mr. Kiss)
[Introduced
March 1, 2005 ; referred to the
Committee on the Judiciary then Finance.]




A BILL to amend and reenact §12-4-14 of the Code of West Virginia, 1931, as amended, relating to persons who receive state funds or grants; and requiring audits of the funds or grants.

Be it enacted by the Legislature of West Virginia:
That §12-4-14 of the Code of West Virginia, 1931, as amended, be amended and reenacted to read as follows:
ARTICLE 4. ACCOUNTS, REPORTS AND GENERAL PROVISIONS.
§12-4-14. Audits of persons receiving state funds or grants.

(a) (1) Any corporation, association, or other organization person in West Virginia that is not a local government as defined in section one-a, article nine, chapter six of this code and which receives state funds or grants in the amount of fifteen thousand dollars or more shall file an audit of the disbursement of the funds with the Legislative auditor's office Auditor in accordance with the provisions of this section.
(2) (A) The audit is only required to be filed when the total amount of the grant or the aggregate amount of state funds received from a single state agency in a calendar year is fifteen thousand dollars or more. An audit shall be filed for each grant a person receives which is fifteen thousand dollars or more.
(B) A person not required to file an audit under paragraph (A) of this subdivision is required to file an audit if the person receives grants or funds from more than one state agency in a calendar year totaling twenty-five thousand dollars or more.
(C) Notwithstanding the provisions of paragraph (A) of this subdivision, if the grant received is a grant that the funds from which are only disbursed by the agency to the grantee upon proof from the grantee that a reimbursable expenditure was made for a qualified purpose, no audit is required.
(3) The audit shall be filed within two years of the end of the year in which the disbursement of funds or grants by the grantor and was made. The audit shall be made by an independent certified public accountant at the cost of the grantee. and show The scope of the audit is limited to showing that the funds or grants were spent for the purposes intended when the grant was made.
(4) (A) The state agency administering the funds or grants shall notify the grantee of the reporting requirements set forth in this section.
(B) The state agency administering the funds or grants shall, in the manner designated by the Legislative Auditor, notify the Legislative Auditor of the amount of the grant or funds to be disbursed and the identity of the grantee or person who is authorized to receive the funds, within thirty days of making the grant or authorizing the disbursement of the funds.

(5) (A) A grantee failing to file a required audit within the two-year time period for any state funds or grants disbursed after the first day of July, two thousand three, is barred from subsequently receiving state funds or grants until the grantee has filed the audit and is otherwise in compliance with the provisions of this section.
(B) All state agencies making grants or disbursing state funds to persons that may be required to file audits under this section shall, prior to making grants or disbursing state funds, take reasonable actions to verify that the person is not barred pursuant to this subdivision from receiving state funds or grants. The verification process shall, at a minimum, include:
(i) A requirement that the person seeking the state funds or grant to provide a sworn statement from an individual authorized to represent the person that the person has filed all audits required to be filed under this section; and
(ii) The agency confirming with the Legislative Auditor that the Legislative Auditor has not identified the person as a person who has failed to file an audit required under the provisions of this section.
(C) The Legislative Auditor shall maintain a list identifying persons who have failed to file audits required under this section. The list may be in the form of a computerized database that may be accessed by state agencies over the Internet.
(6) For purposes of this section:
(A) "Audit" means a review conducted and prepared by a certified public accountant evaluating whether the state funds or grants were spent in accordance with the purposes for which the funds or grants were intended. This section, by use of the term "audit" does not require the certified public accountant to perform a full-scope audit of the grantee or person receiving state funds; and
(B) "Person" includes any corporation, partnership, association, individual or other legal entity.

(b) Audits of state funds or grants under fifteen thousand dollars not required under the provisions of subsection (a) of this section may be authorized by the Joint Committee on Government and Finance to be conducted by the Legislative auditor's office Auditor, at no cost to the grantee: Provided, That volunteer fire departments satisfy the audit requirements of this section by submitting a sworn statement of annual expenditures to the Legislative auditor's office Auditor, along with a filing fee of seventy-five dollars, on or before the fourteenth day of February of each year, if the volunteer fire department elects not to be audited. The sworn statement of expenditures shall be signed by the chief or director of the volunteer fire department, and shall be made under oath and acknowledged before a notary public. An additional filing fee of twenty-five dollars shall be included with the sworn statement of annual expenditures if the statement is submitted between the fifteenth day of February and the fifteenth day of March. An additional filing fee of fifty dollars shall be included with the sworn statement of annual expenditures if the statement is submitted between the sixteenth day of March and the fifteenth day of April. If the sworn statement is not submitted on or before the fifteenth day of April, the volunteer fire department shall file an audit of the disbursement of funds, made by an independent certified public accountant, with the Legislative auditor's office Auditor no later than the first day of July. The audit shall be made at the cost of the volunteer fire department. If the audit made by the independent certified public accountant is not filed with the Legislative Auditor by the first day of July, the Legislative Auditor shall notify the State Treasurer who shall withhold payment of one thousand dollars from any amount that would otherwise be distributed to the fire department under the provisions of sections fourteen-d and thirty-three, article three, chapter thirty-three of this code and section sixteen-a, article twelve of said chapter and pay the amount withheld to the fund from which it was distributed to be redistributed the following year pursuant to the applicable provisions of those sections. If the volunteer fire department does not timely file a sworn statement of annual expenditures or an audit of the disbursement of funds, made by an independent certified public accountant, with the Legislative auditor's office Auditor for three consecutive years, the Legislative Auditor shall notify the State Treasurer who shall withhold payment of any amount that would otherwise be distributed to the fire department under the provisions of sections fourteen-d and thirty-three, article three, chapter thirty-three of this code and section sixteen-a, article twelve of said chapter and pay the amount withheld to the fund from which it was distributed to be redistributed the following year pursuant to the applicable provisions of those sections.
(c) The office of the Legislative Auditor may assign an employee or employees to perform audits at the direction of the Legislative Auditor of the disbursement of funds or grants to volunteer fire departments. The volunteer fire department shall cooperate with the Legislative Auditor, the Legislative Auditor's employees and the State Auditor in performing their duties under this section. If the Legislative Auditor determines a volunteer fire department is not cooperating, the Legislative Auditor shall notify the State Treasurer who shall withhold payment of any amount that would otherwise be distributed to the fire department under the provisions of sections fourteen-d and thirty-three, article three, chapter thirty-three of this code and section sixteen-a, article twelve of said chapter until the Legislative Auditor informs the Treasurer that the fire department has cooperated as required by this section. The State Treasurer shall pay the amount withheld into a special revenue account hereby created in the State Treasury and designated the "Volunteer Fire Department Audit Account". If, after one year from payment of the amount withheld into the special revenue account, the Legislative Auditor informs the State Treasurer of continued noncooperation by the fire department, the State Treasurer shall pay the amount withheld to the fund from which it was distributed to be redistributed the following year pursuant to the applicable provisions of those sections.
(d) Filing fees paid by volunteer fire departments pursuant to this section shall be paid into a special revenue account created in the State Treasury known as the "Special Legislative Audit Fund." Expenditures from the fund are authorized to be made by the Legislative auditor's office Auditor solely for the purposes of payment of costs associated with the audits conducted pursuant to this section. Any person who files a fraudulent sworn statement of expenditures under this section is guilty of a felony and, upon conviction thereof, shall be fined not less than one thousand dollars nor more than five thousand dollars or imprisoned in a state correctional facility for not less than one year nor more than five years, or both fined and imprisoned.
(e) Whenever the State Auditor performs an audit of a volunteer fire department for any purpose the Auditor shall also conduct an audit of other state funds received by the fire department pursuant to sections fourteen-d and thirty-three, article three, chapter thirty-three of this code and section sixteen-a, article twelve of said chapter. The Auditor shall send a copy of any such audit to the Legislative Auditor. The Legislative Auditor may accept an audit performed by the Auditor in lieu of performing an audit under this section.
(f) Any audit submitted pursuant to the provisions of this section may be filed electronically in accordance with the provisions of article one, chapter thirty-nine-a of this code.



NOTE: The purpose of this bill is to clarify when audits are required of state funds or grants.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.
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