Senate Bill No. 4006
(By Senators Tomblin, Mr. President, and Sprouse,
By Request of the Executive)
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[Introduced September 7, 2005; referred to the Committee on
Finance.]
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A BILL to
amend and reenact §12-4-14 of the Code of West Virginia,
1931, as amended, relating to accountability of persons
receiving state funds or grants; requiring reports or sworn
statements by volunteer fire departments;
giving Secretary of
the Department of Administration
rule-making authority; and
providing criminal penalties for filing
a fraudulent sworn
statement of expenditures, a fraudulent sworn statement or a
fraudulent report.
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. Accountability of persons receiving state funds or
grants; sworn statements by volunteer fire
departments; criminal penalties.
(a) For the purposes of this section:
(1) "Grantor" means a state spending unit awarding a state
grant.
(2) "Person" includes any corporation, partnership,
association, individual or other legal entity. The term "person"
does not include a state spending unit or a local government as
defined in section one-a, article nine, chapter six of this code.
(3) "Report" means a compliance attestation engagement an
engagement, such as an agreed-upon procedures engagement or other
attestation engagement,
performed and prepared by a certified
public accountant to test whether state grants were spent as
intended. The term "report" does not mean a full-scope audit or
review of the person receiving state funds.
(4)"State grant" means funding provided by a state spending
unit, regardless of the original source of the funds,
to a person
upon application for a specific purpose. The term "state grant"
does not include: (A) Payments for goods and services purchased by
a state spending unit; (B) compensation to state employees and
public officials; (C) reimbursements to state employees and public
officials for travel or incidental expenses; (D) grants of student
aid; (E) government transfer payments; (F) direct benefits provided
under state insurance and welfare programs; (G) funds reimbursed to
a person for expenditures made for qualified purposes when receipts
for the expenditures are required prior to receiving the funds; and (G) (H) retirement benefits. The term "state grant" does not
include formula distributions to volunteer and part-volunteer fire
departments made 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.
(b)(1) Any person who receives one or more state grants a
state grant in the amount of twenty-five thousand dollars or more
in the aggregate in a calendar year shall file with the grantor a
report of the disbursement of the state grant funds. When the
grantor causes an audit to be conducted of the grant funds, the
audit is performed using generally accepted auditing standards and
a copy of the audit is available for public inspection, no report
is required to be filed under this section. An audit performed
that complies with Office of Management and Budget circular A-133,
as published on the twenty-seventh day of June, two thousand three,
and submitted within the period provided in this section may be
substituted for the report.
(2)
Any person who receives a state grant in an amount less
than twenty-five thousand dollars shall file with the grantor a
sworn statement of expenditures made under the grant.
(3) The report Reports and sworn statements of expenditures
required by subdivision subdivisions (1) and (2) of this subsection
shall be filed within two years of the end of the calendar fiscal
year in which the disbursement of state grant funds by the grantor was made. The report shall be made by an independent certified
public accountant at the cost of the person receiving the state
grant.
State grant funds may be used to pay for the report if the
applicable grant provisions allow.
The scope of the report is
limited to showing that the state grant funds were spent for the
purposes intended when the grant was made.
(c)(1) Any person failing to file a required report or sworn
statement of expenditures
within the two-year period provided in
subdivision (2) (3), subsection (b) of this section for any state
grant funds disbursed after the first day of July, two thousand
three, is barred from subsequently receiving state grants until the
person has filed the report and is otherwise in compliance with the
provisions of this section.
(2) Any grantor of a state grant shall report any persons
failing to file a required report or sworn statement of
expenditures
within the required time period provided in
subdivision (2) (3), subsection (b) of this section for any a state
grant disbursed after the first day of July, two thousand three, to
the Legislative Auditor for purposes of debarment from receiving
state grants.
(d)(1) The state agency administering the state grant shall
notify the grantee of the reporting requirements set forth in this
section.
(2) Any state agency administering a state grant shall, in the manner designated by the Legislative Auditor, notify the
Legislative Auditor of the amount of funds to be disbursed, the
identity of the person authorized to receive the funds and the
purpose and nature of the state grant within thirty days of making
the state grant or authorizing the disbursement of the funds.
Provided, That If the state grant was awarded prior to the
effective date of the amendment and reenactment of this section in
the year, two thousand five, the grantor shall provide the
information required by this section within ninety days of the
effective date.
(3) (2) All grantors making awarding state grants that would
be subject to the report requirements of this section shall, prior
to awarding a state grant, take reasonable actions to verify that
the person is not barred from receiving state grants pursuant to
this section. The verification process shall, at a minimum,
include:
(A) A requirement that the person seeking the state grant
provide a sworn statement from an authorized representative that
the person has filed all reports and sworn statements of
expenditures for state grants received as required under this
section; and
(B) Confirmation from the Legislative Auditor by the grantor
that the person has not been identified as one who has failed to
file a report
or sworn statement of expenditures
under this section. Confirmation may be accomplished by accessing the
computerized database provided in subdivision (4) of this
subsection (e) of this section.
(4) The Legislative Auditor shall maintain a list identifying
persons who have failed to file reports required by this section.
The list may be in the form of a computerized database that may be
accessed by state agencies over the Internet.
(e) (3) If any report performed pursuant to the requirements
of this section provides evidence of a reportable condition or
violation, the grantor shall provide a copy of the report to the
Legislative Auditor within thirty days of receipt by the grantor.
(f) (4) The grantor shall maintain copies of reports
and sworn
statements of expenditures
required by this section and make the
reports available for public inspection, as well as for use in
audits and performance reviews of the grantor.
(5) The Secretary of the Department of Administration has
authority to promulgate procedural and interpretive rules and
propose legislative rules for promulgation in accordance with the
provisions of article three, chapter twenty-nine-a of this code to
assist in implementing the provisions of this subsection and
subsections (a), (b) and (c) of this section.
(e)(1) Any state agency administering a state grant shall, in
the manner designated by the Legislative Auditor, notify the
Legislative Auditor of the maximum amount of funds to be disbursed, the identity of the person authorized to receive the funds and the
purpose and nature of the state grant within thirty days of making
the state grant or authorizing the disbursement of the funds,
whichever is later. If the state grant was awarded prior to the
first day of October, two thousand five, the grantor shall provide
the information required by this section by the first day of
December, two thousand five.
(2) The State Treasurer shall provide the Legislative Auditor
the information concerning formula distributions to volunteer and
part-volunteer fire departments, made 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 Legislative Auditor requests and in the manner designated by
the Legislative Auditor.
(3) The Legislative Auditor shall maintain a list identifying
persons who have failed to file reports required by this section.
The list may be in the form of a computerized database that may be
accessed by state agencies over the Internet.
(g) Reports of state grants not required under the provisions
of this section
(f) An audit of state grant funds may be authorized by the
Joint Committee on Government and Finance to be conducted by the
Legislative Auditor at no cost to the grantee at any time.
(h) (g)(1) Volunteer and part-volunteer fire departments may satisfy the report requirements of this section by submitting
receiving formula distributions 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 shall either:
(A) File a report, as defined in
subdivision (3), subsection
(a) of this section with the Legislative Auditor within the same
time frames as are required for sworn statements of annual
expenditures
to be filed under this section. The report shall be
made by an independent certified public accountant at the cost of
the volunteer or part-volunteer fire department.
The scope of the
report is limited to showing that the funds distributed were spent
for authorized purposes; or
(B) File a sworn statement of annual expenditures to with the
Legislative Auditor on or before the fourteenth day of February of
each year. 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.
(2) Volunteer and part-volunteer fire departments electing to
submit the report, instead of submitting a sworn statement of
annual expenditures
, are subject to the same treatment for failing
to timely file the report as a fire department that does not timely
file
a sworn statement of annual expenditures
. If the sworn
statement is not submitted filed on or before the fifteenth day of
May, unless the time period is extended by the Legislative Auditor, the Legislative Auditor may conduct a report an audit of the
volunteer or part-volunteer fire department.
(3) If the sworn statement of annual expenditures is not filed
with the Legislative Auditor by the first day of July, unless the
time period is extended by the Legislative Auditor, 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 report
is complete. Moneys withheld pursuant to this subdivision are to
be deposited in the special revenue account created in the State
Treasury in subdivision (4) of this subsection.
(4) The Legislative Auditor may assign an employee or
employees to perform audits or reviews at the direction of the
Legislative Auditor of the disbursement of state grant funds 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.
(5) 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 the audit to the Legislative Auditor. The Legislative
Auditor may accept an audit performed by the Auditor in lieu of
performing a report an audit under this section.
(6) If the Legislative Auditor is notified by a grantor that
a fire department has failed to file a report or a sworn statement of expenditures for a state grant it received, the Legislative
Auditor shall notify the Treasurer who shall withhold further
distributions to the fire department in the same manner provided in
subdivision (3) of this subsection.
(h) Any report 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.
(i) Any person who files a fraudulent sworn statement of
expenditures under subsection (b) or (g) of this section, a
fraudulent sworn statement under subsection (d) of this section, or
a fraudulent report 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.
(NOTE: The purpose of this bill is to modify W. Va Code
§12-4-14 to:
(1) Clarify the definition of report by specifying that it
means an engagement, such as an agreed-upon procedures engagement
or other attestation engagement;
(2) Change the definition of "state grant" to clarify that it
includes funding provided by a state spending unit, regardless of
the original source of the funds;
(3) Exclude reimbursable type grants from the definition of
state grant;
(4) Exclude formula distributions of insurance tax proceeds to
volunteer and part-volunteer fire departments from the definition
of state grants while still requiring the departments to submit an
annual statement of expenditures or a report;
(5) Require reports on grants of $25,000 or more and sworn
statements of expenditures on grants less than $25,000;
(6) Allow audits performed by state grantors using generally
accepted auditing standards and audits performed that comply with
the federal Office of Management and Budget circular A-133 to be
substituted for a report;
(7) Specify that state grant funds may be used to pay for the
report if the applicable grant provisions allow;
(8) Give the Secretary of the Department of Administration the
authority to institute rules to aid in the section's
implementation;
(9) Extend the time agencies have to notify the Legislative
Auditor of previously awarded grants to December 1, 2005;
(10) Require the State Treasurer to provide the Legislative
Auditor the information concerning formula distributions of
insurance tax proceeds to volunteer and part-volunteer fire
departments; and
(11) Provide that if a fire department elects to submit a
report, instead of submitting a sworn statement of annual
expenditures, it must do so within the same time required for
filing a sworn statement of annual expenditures, and with the same
penalties for late filing.
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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FINANCE COMMITTEE AMENDMENTS
On page two, section fourteen, line twenty-four, by striking
out the word "and";
On page three, section fourteen, line one, after the word
"benefits" by changing the period to a semicolon and inserting the
following: and (I) federal pass-through funds that are subject to
the federal Single Audit Act Amendments of 1996, 31 U.S.C. 7501,
et
seq.";
On page three, section fourteen, line seven, by striking out
the word "twenty-five" and inserting in lieu thereof the word
"fifty";
On page three, section fourteen, line eighteen, by striking
out the word "twenty-five" and inserting in lieu thereof the word
"fifty";
On page four, section fourteen, line ten, by striking out the
word "three" and inserting in lieu thereof the word "five";
And,
On page four, section fourteen, line seventeen, by striking
out the word "three" and inserting in lieu thereof the word "five".