Senate Bill No. 377

(By Senators Sprouse and Ross)

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[Introduced February 2, 1998; referred to the Committee
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A BILL to amend and reenact section ten, article three, chapter five-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended; and to amend and reenact section seven, article nine, chapter six of said code, all relating to requiring all governmental and school board audits to be competitively bid.

Be it enacted by the Legislature of West Virginia:
That section ten, article three, chapter five-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted; and that section seven, article nine, chapter six of said code be amended and reenacted, all to read as follows:
Chapter 5A. DEPARTMENT OF ADMINISTRATION.

ARTICLE 3. PURCHASING DIVISION.
§5A-3-10. Competitive bids; publication of solicitations for sealed bids; purchase of products of nonprofit workshops; employee to assist in dealings with nonprofit workshops.

A purchase of and contract for commodities, printing and services shall be based, whenever possible, on competitive bids.
The director shall solicit sealed bids for the purchase of commodities, and printing and services, including the services of any accountant to audit any agency of state government, which when the prospective purchase of same is estimated to exceed ten thousand dollars. No spending unit shall issue a series of requisitions which would circumvent this ten thousand dollar maximum. The director may permit bids by facsimile transmission machine to be accepted in lieu of sealed bids: Provided, That an original bid is received within two working days following the date specified for bid opening. Bids shall be obtained by public notice. The notice may be published by any advertising medium the director deems advisable. The director may also solicit sealed bids by sending requests by mail to prospective suppliers and by posting notice on a bulletin board in his office: Provided, however, That the director shall, without competitive bidding, purchase commodities and printing produced and offered for sale by nonprofit workshops, as defined in section one, article one of this chapter, which are located in this state: Provided further, That such commodities and printing shall be of a fair market price and of like quality comparable to other commodities and printing otherwise available as determined by the director with the advice of the committee on the purchase of commodities and services from the handicapped.
Toward the end of effecting the making of contracts for commodities and printing of nonprofit workshops, the director shall employ a person whose responsibilities in addition to other duties shall be to identify all commodities and printing available for purchase from such nonprofit workshops, to evaluate the need of the state for such commodities and printing to coordinate the various nonprofit workshops in their production efforts and to make available to such workshops information about available opportunities within state government for purchase of commodities or printing which might be produced and sold by such workshops. Funds to employ such a person shall be included annually in the budget.
CHAPTER 6. GENERAL PROVISIONS RESPECTING OFFICERS.

ARTICLE 9. SUPERVISION OF PUBLIC OFFICES.
§6-9-7. Examinations into affairs of local public officers.

(a) The chief inspector shall have power by himself or herself, or by any person appointed by him or her to perform the service, to examine into all financial affairs of every local governmental office or political subdivision and all boards, commissions, authorities, agencies or other offices created under authority thereof and shall make an examination at least once a year, if practicable: Provided, That in the event the chief inspector elects to hire a private accountant to examine such financial affairs at a projected cost greater than five thousand dollars, he or she shall solicit sealed bids for such accounting services: Provided, however, That sealed bids shall be obtained by public notice which shall be published by Class III advertisement in a newspaper of general circulation within the county wherein such services are to be used: Provided further, That when required for compliance with regulations for federal funds received by county boards of education, the chief inspector shall conduct the audits of all county boards of education within twelve months after the end of the fiscal year and issue the reports within thirty days after completion of the audit work or assign the work to a certified public accountant in a timely manner so that the work is completed within the specified time limits. On every examination, inquiry shall be made as to the financial conditions and resources of the agency having jurisdiction over the appropriations and levies disbursed by the office and whether the requirements of the constitution and statutory laws of the state and the ordinances and orders of the agency have been properly complied with and also inquire into the methods and accuracy of the accounts and such other matters of audit and accounting as the chief inspector may prescribe. He or she or any authorized assistant may issue subpoenas and compulsory process, direct the service thereof by any sheriff, compel the attendance of witnesses and the production of books and papers at any designated time and place, selected in their respective county, and administer oaths. If any person refuses to appear before the chief inspector or his or her authorized assistant when required to do so, refuses to testify on any matter or refuses to produce any books or papers in his or her possession or under his or her control, he or she is guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than one hundred dollars and imprisoned in the county jail not more than six months. A person convicted of willful false swearing in an examination is guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than one hundred dollars and imprisoned in the county jail not more than six months. A report of each examination shall be made in duplicate, one copy to be filed in the office of the state tax commissioner and one in the auditing department of the agency. If any examination discloses misfeasance, malfeasance or nonfeasance in office on the part of any public officer or employee, a certified copy of the report shall be filed with the proper legal authority of the agency, the prosecuting attorney of the county wherein the agency is located and with the attorney general for such legal action as is proper. At the time of the filing of such certified audit, the chief inspector shall notify the proper legal authority, the prosecuting attorney and the attorney general in writing of his or her recommendation as to the legal action that the chief inspector considers proper, whether criminal prosecution or civil action to effect restitution, or both. If the proper legal authority or prosecuting attorney, within nine months of the receipt of the certified audit and recommendations, refuses, neglects or fails to take efficient legal action by a civil suit to effect restitution or by prosecuting criminal proceedings to a final conclusion, in accordance with the recommendations, the chief inspector may institute the necessary proceedings or participate therein and prosecute the proceedings in any court of the state to a final conclusion.
(b) When requested by the governing body of a municipality, the chief inspector shall take bids on the audit of that municipality, and, if he or she finds that a reputable certified public accountant or registered public accountant outside the state tax department can conduct the audit at a cost lower than if the department did it, and if the accountant meets all criteria set forth by the chief inspector, he or she shall contract with the accountant for the audit: Provided, That the chief inspector may elect to conduct the audit of a municipality with one or more members of his or her audit staff where, in the opinion of the chief inspector, a special or unusual situation exists.



NOTE: The purpose of this bill is to require all governmental and school board audits to be competitively bid.

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