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Committee Substitute House Bill 2849 History

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COMMITTEE SUBSTITUTE

FOR

H. B. 2849

(By Delegates Boggs, Swartzmiller, Ferro,

                   Caputo and D. Poling)

 

(Originating in the House Committee on the Judiciary)

[March 29, 2013]

 

A BILL to amend and reenact §6-9-7 and §6-9-9a of the Code of West Virginia, 1931, as amended; and to amend said code by adding thereto a new section, designated §6-9-9b, all relating to the Chief Inspector of Public Offices; authorizing the Chief Inspector to investigate the financial affairs of local governmental offices, political subdivisions, boards, commissions, authorities, agencies and other public entities; clarifying that the Chief Inspector may report to proper legal authority or initiate civil and criminal actions if an investigation discloses misfeasance, malfeasance or nonfeasance; providing for confidentiality of reports until the completion of investigation or adjudication; and providing that working papers of the Chief Inspector Division are confidential.

Be it enacted by the Legislature of West Virginia:

    That §6-9-7 and §6-9-9a of the Code of West Virginia, 1931, as amended, be amended and reenacted; and that said code be amended by adding thereto a new section, designated §6-9-9b, all to read as follows:

ARTICLE 9. SUPERVISION OF LOCAL GOVERNMENT OFFICES.

§6-9-7. Examinations and investigations into affairs of local public offices; penalties.

    (a) (1) The Chief Inspector has the power by himself or herself, or by any person appointed, designated or approved by the chief inspector to perform the service, to examine into all financial affairs of or his or her designee may perform an examination of every local governmental office or political subdivision and all boards, commissions, authorities, agencies or other offices created under authority thereof.

    (2) An examination shall be made annually, if required, to comply with the Single Audit Act and when otherwise required by law or contract.

    (3) When that act does not apply, unless otherwise required by law or by contract, the examination shall be made at least once a year, if practicable.

    (4) Furthermore, The Chief Inspector shall furnish annually to the Legislature a list of each local government office or political subdivision and all boards, commissions, authorities, agencies or other offices created under their authority thereof and the year of its most recent completed audit.

    (5) The Chief Inspector may investigate the financial affairs of every local government office or political subdivision and all boards, commissions, authorities, agencies or other offices created under authority thereof.

    (b) When required for compliance with regulations for federal funds received or expended by County Boards of Education, the Chief Inspector or his or her designee including any certified public accountant approved by the chief inspector shall conduct and issue an audit report within the time specified in controlling federal regulations. Examinations of other local governments shall be conducted and audit or review reports in accordance with uniform procedures of the chief inspector.

    (c) (1) A County Board of Education may elect, by May 1 of the fiscal year to be audited, to have its annual examination performed by a Certified Public Accountant approved by the Chief Inspector to perform the examinations.

    (2) When this election is made, a copy of the order of the county board making the election shall be filed with the Chief Inspector and the State Board of School Finance.

    (3) The County Board of Education is allowed to may contract with any Certified Public Accountant on the Chief Inspector’s then current list of approved Certified Public Accountants, unless:

    (A) The State Board of School Finance or the Prosecuting Attorney of the county in which the board is located timely submits to the Chief Inspector a written request for the examination to be performed by the Chief Inspector or a person appointed by the chief inspector, his or her designee; or

    (B) The Chief Inspector determines that a special or unusual situation exists.

    (4) The county board shall follow the audit bid procurement procedures established by the chief inspector in obtaining the audit.

    (d) The Chief Inspector shall, at least annually, prepare approve and publish a list of Certified Public Accountants approved by the chief inspector to who may perform examinations of local governments, Names shall be added to or deleted from that list and add or delete names in accordance with his or her uniform procedures. of the chief inspector. When each list or updated list is issued, the Chief Inspector shall promptly file post a copy of the list in the State Register and send a copy to the State Board of Education, the State Board of School Finance and to local governments who request a copy on the State Auditor’s website.

    (e) A County Board of Education, when procuring the services of a Certified Public Accountant on the Chief Inspector’s list, shall follow the procurement standards prescribed by the grants management common rule, OMB Circular A-102 "Grants and Cooperative Agreements with State and Local Governments" in effect for the fiscal year being examined, or in any replacement circular or regulation of the Office of Management and Budget, and in addition shall follow those any other standards as determined established by the office of Chief Inspector.

    (f) The approved independent Certified Public Accountant making examinations under this section shall comply with requirements of this section applicable to examinations performed by the Chief Inspector, including applicable requirements of the federal government and uniform procedures of the Chief Inspector applicable to examinations of county Boards of Education.

    (1) Upon completion of the certified public accountant’s examination and audit or review report, the Certified Public Accountant shall promptly send one copy two copies of the certified report to the County Board of Education, who shall file one copy with the Federal Audit Clearing House, The certified public accountant shall send one copy of the certified report to the State Board of School Finance, and one copy to the Chief Inspector.

    (2) (A) If any examination discloses misfeasance, malfeasance or nonfeasance in office on the part of any public officer or employee, the Certified Public Accountant shall submit his or her recommendation to the Chief Inspector regarding the legal action the approved certified public accountant he or she considers appropriate, including, but not limited to, whether criminal prosecution or civil action to effect restitution is appropriate. and three additional copies of the certified audit report.

    (B) After review of the recommendations and the audit report, the Chief Inspector shall proceed as provided in subsection (n) (m) of this section.

    (C) For purposes of this section and section thirteen, article nine-b, chapter eighteen of this code, a certified audit report of an approved Certified Public Accountant shall be treated in the same manner as a report of the Chief Inspector.

    (g) 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. the Chief Inspector, or his or her designee, shall adhere to generally accepted auditing standards issued by the American Institute of Certified Public Accountants; Government Auditing Standards issued by the Comptroller General of the United States and, if applicable, federal guidelines and circulars governing federal financial assistance.

    (h) If a local government office is not subject to a single audit requirement under federal regulations, or if it is not otherwise required by law or contract to undergo an annual audit, and its expenditures from all sources are less than $300,000 during the fiscal year, the Chief Inspector may choose to perform either a review or audit on the local government office and may in his or her discretion determine the frequency of such the review or audit.

    (I) The Chief Inspector 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 counties, and administer oaths.

    (j) 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 $100 and imprisoned confined in jail not more than six months.

    (k) 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 $100 and imprisoned confined in jail not more than six months.

    (l) Except as otherwise provided in this section, a copy of the certified report of each examination shall be filed in the office of the commissioner, chief inspector with the governing body of the local government and with other offices as prescribed in uniform procedures of the Chief Inspector.

    (m) (1) If any examination or investigation discloses misfeasance, malfeasance or nonfeasance in office on the part of any public officer or employee, a certified copy of the report shall be published electronically by the Chief Inspector with notice of the publishing sent in writing to 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.

    (2) At the time the certified audit report is published, the Chief Inspector shall notify the proper legal authority of the agency, 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.

    (n) If the proper legal authority or Prosecuting Attorney, within nine months of receipt of the certified audit or investigative report 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 or participate in the necessary proceedings or participate therein and prosecute the proceedings in any court of the state to a final conclusion.

    (o) (1) A local government that is not a County Board of Education may elect, by May 1 of the fiscal year to be audited, to have its annual examination performed by a Certified Public Accountant approved by the chief inspector to perform the examinations.

    (2) When this election is made, a copy of the order of the governing body making the election shall be filed with the chief inspector.

    (3) An electing local government is allowed to may contract with any Certified Public Accountant on the chief inspector’s then current list of approved Certified Public Accountants, unless:

    (A) The Prosecuting Attorney of the county in which the local government is located timely submits to the chief inspector a written request for the examination to be performed by the Chief Inspector or a person appointed by the chief inspector his or her designee; or

    (B) The Chief Inspector determines that a special or unusual situation exists: Provided, That the audit of a local government may be performed by the Chief Inspector at his or her discretion.

    (4) The local government shall follow the audit bid procurement procedures established by the Chief Inspector in obtaining the audit: Provided, however, That the Chief Inspector may elect to conduct the audit of a local unit of government 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.

§6-9-9a. Public inspection of reports of examinations.

    All reports of examinations and audits of public offices made in accordance with the provisions of section seven of this article, and the copies thereof, when filed in the office of the chief inspector of public offices or in the office of the State Tax Commissioner, shall be public documents and shall be available for public inspection: Provided, That if an examination or investigative report discloses misfeasance, nonfeasance or malfeasance, the report shall remain confidential until such time that the proper legal authority, as described in subsection (m) of section seven of this article, has completed its investigation and/or adjudication of the matter.

§6-9-9b. Confidentiality of audit working papers of chief  inspector.

    (a) The audit working papers created by the Chief Inspector division of the State Auditor’s office during examinations or investigations are confidential and are not public records as that term is defined in section two, article one, chapter twenty-nine-b of this code.

    (b) For the purposes of this section, “audit working papers” include, but are not limited to, the books and records of the entity being audited, intra-agency and inter-agency communications, draft reports and/or summaries, schedules, notes, memoranda, and all other records relating to an examination or investigation.

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