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H.B. 102

             1     

PUBLIC MENTAL HEALTH AND SUBSTANCE

             2     
ABUSE SYSTEM REFORM

             3     
1999 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Sponsor: Nora B. Stephens

             6      AN ACT RELATING TO THE PUBLIC MENTAL HEALTH AND SUBSTANCE ABUSE
             7      SYSTEMS; INCREASING ACCOUNTABILITY, RESPONSIBILITY, AND LIABILITY OF
             8      COUNTY GOVERNING BODIES WITH REGARD TO PUBLIC FUNDS; DEFINING PUBLIC
             9      FUNDS; PROVIDING CONTRACT AND AUDIT REQUIREMENTS; INCREASING
             10      AUTHORITY AND RESPONSIBILITY OF THE DIVISIONS OF MENTAL HEALTH AND
             11      SUBSTANCE ABUSE OVER SPECIFIED FEDERAL AND STATE FUNDS ALLOCATED
             12      FOR LOCAL MENTAL HEALTH AND SUBSTANCE ABUSE PROGRAMS AND SERVICES;
             13      MAKING TECHNICAL CORRECTIONS; AND PROVIDING AN EFFECTIVE DATE.
             14      This act affects sections of Utah Code Annotated 1953 as follows:
             15      AMENDS:
             16          17A-1-403, as last amended by Chapter 30, Laws of Utah 1992
             17          17A-3-602, as enacted by Chapter 181, Laws of Utah 1990
             18          17A-3-701, as last amended by Chapter 30, Laws of Utah 1992
             19          62A-1-111, as last amended by Chapters 34 and 254, Laws of Utah 1998
             20          62A-8-101, as last amended by Chapter 227, Laws of Utah 1993
             21          62A-8-103, as last amended by Chapter 68, Laws of Utah 1997
             22          62A-8-104, as last amended by Chapter 181, Laws of Utah 1990
             23          62A-8-109, as enacted by Chapter 1, Laws of Utah 1988
             24          62A-8-112, as enacted by Chapter 181, Laws of Utah 1990
             25          62A-12-101, as last amended by Chapter 227, Laws of Utah 1993
             26          62A-12-102, as last amended by Chapter 181, Laws of Utah 1990
             27          62A-12-102.5, as renumbered and amended by Chapter 181, Laws of Utah 1990


             28          62A-12-105, as last amended by Chapter 30, Laws of Utah 1992
             29          62A-12-289, as last amended by Chapter 13, Laws of Utah 1998
             30          67-3-1, as last amended by Chapter 169, Laws of Utah 1997
             31          76-8-401, as last amended by Chapter 232, Laws of Utah 1995
             32          76-8-402, as last amended by Chapter 232, Laws of Utah 1995
             33          76-8-404, as last amended by Chapter 232, Laws of Utah 1995
             34      ENACTS:
             35          17A-3-603.5, Utah Code Annotated 1953
             36          17A-3-703, Utah Code Annotated 1953
             37          62A-8-110.1, Utah Code Annotated 1953
             38          62A-12-289.1, Utah Code Annotated 1953
             39      REPEALS AND REENACTS:
             40          62A-8-110.5, as enacted by Chapter 181, Laws of Utah 1990
             41      REPEALS:
             42          17A-3-612, as renumbered and amended by Chapter 186, Laws of Utah 1990
             43      Be it enacted by the Legislature of the state of Utah:
             44          Section 1. Section 17A-1-403 is amended to read:
             45           17A-1-403. Applicability to special districts -- Exceptions.
             46          This part applies to all special districts under Subsection 17A-1-404 (19) except the
             47      following districts which are specifically excluded from this part:
             48          (1) redevelopment agencies created under Chapter 2, Part [11 or] 12;
             49          (2) public transit districts created under Chapter 2, Part 10;
             50          (3) health departments created under Title 26A, Chapter 1; and
             51          [(4) mental health districts created under Chapter 3, Part 6; and]
             52          [(5)] (4) entities created under Title 11, Chapter 13, Interlocal Cooperation Act, unless the
             53      entity is also a mental health district created under Chapter 3, Part 6.
             54          Section 2. Section 17A-3-602 is amended to read:
             55           17A-3-602. Local mental health authorities -- Responsibilities.
             56          (1) All county governing bodies in this state are local mental health authorities. Within
             57      legislative appropriations and county matching funds required by this section, under the policy
             58      direction of the [board] state Board of Mental Health and the administrative direction of the


             59      [division] Division of Mental Health within the Department of Human Services, local mental
             60      health authorities shall provide mental health services to persons within their respective counties.
             61      Two or more county governing bodies may join to provide mental health prevention and treatment
             62      services.
             63          (2) The governing bodies may establish acceptable ways of apportioning the cost of mental
             64      health services. Any agreement for joint mental health services may designate the treasurer of one
             65      of the participating counties as the custodian of moneys available for those joint services, and that
             66      the designated treasurer, or other disbursing officer, may make payments from those moneys for
             67      such purposes upon audit of the appropriate auditing officer or officers representing the
             68      participating counties. The agreement may provide for:
             69          (a) joint operation of services and facilities or for operation of services and facilities under
             70      contract by one participating local mental health authority for other participating local mental
             71      health authorities; and
             72          (b) allocation of appointments of members of the mental health advisory council between
             73      or among participating counties.
             74          (3) (a) All county governing bodies, as local mental health authorities, are accountable to
             75      the Department of Human Services, the Department of Health, and the state with regard to the use
             76      of state and federal funds received from those departments for mental health services, regardless
             77      of whether the services are provided by a private contract provider.
             78          (b) A local mental health authority shall comply, and require compliance by its contract
             79      provider, with all directives issued by the Department of Human Services and the Department of
             80      Health regarding the use and expenditure of state and federal funds received from those
             81      departments for the purpose of providing mental health programs and services. The Department
             82      of Human Services and Department of Health shall ensure that those directives are not duplicative
             83      or conflicting, and shall consult and coordinate with local mental health authorities with regard to
             84      programs and services.
             85          [(3)] (4) Local mental health authorities shall:
             86          (a) review and evaluate mental health needs and services;
             87          (b) annually prepare and submit to the division a plan for mental health funding and
             88      service delivery. The plan shall include[,] services for adults, youth, and children, including, but
             89      [is] not limited to, the following:


             90          (i) inpatient care and services;
             91          (ii) residential care and services;
             92          [(iii) day treatment and psychosocial rehabilitation;]
             93          [(iv)] (iii) outpatient care and services;
             94          [(v)] (iv) 24-hour crisis care and services;
             95          [(vi) outreach care and services;]
             96          [(vii) follow-up care and services;]
             97          [(viii) screening for referral services;]
             98          (v) psychotropic medication management;
             99          (vi) psychosocial rehabilitation including vocational training and skills development;
             100          (vii) case management;
             101          (viii) community supports including in-home services, housing, family support services,
             102      and respite services; and
             103          (ix) consultation and education services, including but not limited to, case consultation,
             104      collaboration with other service agencies, public education, and public information; [and]
             105          [(x) case management;]
             106          (c) establish and maintain, either directly or by contract, programs licensed under Title
             107      62A, Chapter 2, Licensure of Programs and Facilities;
             108          (d) appoint directly or by contract a full-time or part-time director for mental health
             109      programs and prescribe his duties;
             110          (e) provide input and comment on new and revised policies established by the [board] state
             111      Board of Mental Health;
             112          (f) establish [or] and require [contractors] contract providers to establish administrative,
             113      clinical, personnel, financial, and management policies regarding mental health services and
             114      facilities, in accordance with the policies of the [board] state Board of Mental Health, the Division
             115      of Mental Health, and state and federal law;
             116          (g) establish mechanisms [to provide] allowing for direct citizen input; [and]
             117          (h) annually contract with the Division of Mental Health to provide mental health
             118      programs and services in accordance with the provisions of Title 62A, Chapter 12, Mental Health;
             119          [(h)] (i) comply with all applicable state and federal statutes, policies, audit requirements,
             120      contract requirements, and any directives resulting from those audits[,] and contract requirements;


             121          [(i)] (j) provide funding equal to at least 20% of the state funds that it receives to fund
             122      services described in the plan; and
             123          [(j)] (k) comply with the requirements and procedures of Title 11, Chapter 13, Interlocal
             124      Cooperation Act, [and with the requirements and procedures of] Title 51, Chapter 2, Audits of
             125      Political Subdivisions, Interlocal Organizations and Other Local Entities, and Title 17A, Chapter
             126      1, Part 4, Uniform Fiscal Procedures for Special Districts Act.
             127          [(4)] (5) Before disbursing any public funds, local mental health authorities shall require
             128      that all entities that receive any public funds from a local mental health authority agree in writing
             129      that:
             130          (a) the division may examine the entity's financial records; [and]
             131          (b) the county auditor may examine and audit the entity's financial records [if requested
             132      to do so by the local mental health authority.]; and
             133          (c) the entity will comply with the provisions of Subsection (3)(b).
             134          [(5)] (6) Local mental health authorities may receive property, grants, gifts, supplies,
             135      materials, contributions, and any benefit derived therefrom, for mental health services. If those
             136      gifts are conditioned upon their use for a specified service or program, they shall be so used.
             137          (7) (a) For purposes of this section "public funds" means the same as that term is defined
             138      in Section 17A-3-603.5 .
             139          (b) Nothing in this section limits or prohibits an organization exempt under Section
             140      501(c)(3), Internal Revenue Code, from using public funds for any business purpose or in any
             141      financial arrangement that is otherwise lawful for that organization.
             142          Section 3. Section 17A-3-603.5 is enacted to read:
             143          17A-3-603.5. Responsibility for oversight of public funds -- Mental health programs
             144      and services.
             145          (1) As used in this section, "public funds" means federal monies received from the
             146      Department of Human Services or the Department of Health, and state monies appropriated by the
             147      Legislature to the Department of Human Services, the Department of Health, a county governing
             148      body, or local mental health authority for the purposes of providing mental health programs or
             149      services. "Public funds" includes those federal and state monies that have been transferred by a
             150      local mental health authority to a private provider under an annual or otherwise ongoing contract
             151      to provide comprehensive mental health programs or services for the local mental health authority.


             152      Those monies maintain the nature of "public funds" while in the possession of the private entity
             153      that has an annual or otherwise ongoing contract with a local mental health authority to provide
             154      comprehensive mental health programs or services for the local mental health authority.
             155          (2) Each local mental health authority is responsible for oversight of all public funds
             156      received by it, to determine that those public funds are utilized in accordance with federal and state
             157      law, the rules and policies of the Department of Human Services and the Department of Health,
             158      and the provisions of any contract between the local mental health authority and the Department
             159      of Human Services, the Department of Health, or a private provider. That oversight includes
             160      requiring that neither the contract provider, as described in Subsection (1), nor any of its
             161      employees:
             162          (a) violate any applicable federal or state criminal law;
             163          (b) knowingly violate, on more than one occasion, any applicable rule or policy of the
             164      Department of Human Services or Department of Health, or any provision of contract between the
             165      local mental health authority and the Department of Human Services, the Department of Health,
             166      or the private provider;
             167          (c) knowingly keep any false account or make any false entry or erasure in any account of
             168      or relating to the public funds;
             169          (d) fraudulently alter, falsify, conceal, destroy, or obliterate any account of or relating to
             170      public funds;
             171          (e) fail to ensure competent oversight for lawful disbursement of public funds;
             172          (f) appropriate public funds for an unlawful use or for a use that is not in compliance with
             173      contract provisions; or
             174          (g) knowingly or intentionally use public funds unlawfully or in violation of a
             175      governmental contract provision, or in violation of state policy.
             176          (3) Nothing in this section limits or prohibits an organization exempt under Section
             177      501(c)(3), Internal Revenue Code, from using public funds for any business purpose or in any
             178      financial arrangement that is otherwise lawful for that organization.
             179          (4) A local mental health authority that knew or reasonably should have known of any of
             180      the circumstances described in Subsection (2), and that fails or refuses to take timely corrective
             181      action in good faith shall, in addition to any other penalties provided by law, be required to make
             182      full and complete repayment to the state of all public funds improperly used or expended.


             183          (5) Any public funds required to be repaid to the state by a local mental health authority
             184      pursuant to Subsection (4), based upon the actions or failure of the contract provider, may be
             185      recovered by the local mental health authority from its contract provider, in addition to the local
             186      mental health authority's costs and attorney's fees.
             187          Section 4. Section 17A-3-701 is amended to read:
             188           17A-3-701. Local substance abuse authorities -- Responsibilities.
             189          (1) All county governing bodies in this state are local substance abuse authorities. Within
             190      legislative appropriations and county matching funds required by this section, and under the policy
             191      direction of the [board] state Board of Substance Abuse and the administrative direction of the
             192      [division] Division of Substance Abuse within the Department of Human Services, local substance
             193      abuse authorities shall provide substance abuse services to residents of their respective counties.
             194      Two or more county governing bodies may join to provide substance abuse prevention and
             195      treatment services.
             196          (2) The governing bodies may establish acceptable ways of apportioning the cost of
             197      substance abuse services. Any agreement for joint substance abuse services may designate the
             198      treasurer of one of the participating counties as the custodian of moneys available for those joint
             199      services, and that the designated treasurer, or other disbursing officer, may make payments from
             200      those moneys for such purposes upon audit of the appropriate auditing officer or officers
             201      representing the participating counties. The agreement may provide for joint operation of services
             202      and facilities or for operation of services and facilities under contract by one participating local
             203      substance abuse authority for other participating local substance abuse authorities.
             204          (3) (a) All county governing bodies, as local substance abuse authorities, are accountable
             205      to the Department of Human Services, the Department of Health, and the state with regard to the
             206      use of state and federal funds received from those departments for substance abuse services,
             207      regardless of whether the services are provided by a private contract provider.
             208          (b) A local substance abuse authority shall comply, and require compliance by its contract
             209      provider, with all directives issued by the Department of Human Services and the Department of
             210      Health regarding the use and expenditure of state and federal funds received from those
             211      departments for the purpose of providing substance abuse programs and services. The Department
             212      of Human Services and Department of Health shall ensure that those directives are not duplicative
             213      or conflicting, and shall consult and coordinate with local substance abuse authorities with regard


             214      to programs and services.
             215          [(3)] (4) Local substance abuse authorities shall:
             216          (a) review and evaluate substance abuse prevention and treatment needs and services;
             217          (b) annually prepare and submit a plan to the division for funding and service delivery; the
             218      plan shall include, but is not limited to, primary prevention, targeted prevention, early intervention,
             219      and treatment services;
             220          (c) establish and maintain, either directly or by contract, programs licensed under Title
             221      62A, Chapter 2;
             222          (d) appoint directly or by contract, a full or part time director for substance abuse
             223      programs, and prescribe his duties;
             224          (e) provide input and comment on new and revised policies established by the [board] state
             225      Board of Substance Abuse;
             226          (f) establish [or] and require [contractors] contract providers to establish administrative,
             227      clinical, personnel, financial, and management policies regarding substance abuse services and
             228      facilities, in accordance with the policies of the [board] state Board of Substance Abuse, and state
             229      and federal law;
             230          (g) establish mechanisms [to provide] allowing for direct citizen input;
             231          (h) annually contract with the Division of Substance Abuse to provide substance abuse
             232      programs and services in accordance with the provisions of Title 62A, Chapter 8, Substance
             233      Abuse;
             234          [(h)] (i) comply with all applicable state and federal statutes, policies, audit requirements,
             235      contract requirements, and any directives resulting from those audits and contract requirements;
             236          [(i)] (j) promote or establish programs for the prevention of substance abuse within the
             237      community setting through community-based prevention programs;
             238          [(j)] (k) provide funding equal to at least 20% of the state funds that it receives to fund
             239      services described in the plan; and
             240          [(k)] (l) comply with the requirements and procedures of Title 11, Chapter 13, Interlocal
             241      Cooperation Act, [and with the requirements and procedures of] Title 51, Chapter 2, Audits of
             242      Political Subdivisions, Interlocal Organizations and Other Local Entities, and Title 17A, Chapter
             243      1, Part 4, Uniform Fiscal Procedures for Special Districts Act.
             244          [(4)] (5) Before disbursing any public funds, local substance abuse authorities shall require


             245      that all entities that receive any public funds from a local substance abuse authority agree in
             246      writing that:
             247          (a) the division may examine the entity's financial records; [and]
             248          (b) the county auditor may examine and audit the entity's financial records [if requested
             249      to do so by the local substance abuse authority.]; and
             250          (c) the entity will comply with the provisions of Subsection (3)(b).
             251          [(5)] (6) Local substance abuse authorities may receive property, grants, gifts, supplies,
             252      materials, contributions, and any benefit derived therefrom, for substance abuse services. If those
             253      gifts are conditioned upon their use for a specified service or program, they shall be so used.
             254          (7) (a) For purposes of this section "public funds" means the same as that term is defined
             255      in Section 17A-3-703 .
             256          (b) Nothing in this section limits or prohibits an organization exempt under Section
             257      501(c)(3), Internal Revenue Code, from using public funds for any business purpose or in any
             258      financial arrangement that is otherwise lawful for that organization.
             259          Section 5. Section 17A-3-703 is enacted to read:
             260          17A-3-703. Responsibility for oversight of public funds -- Substance abuse programs
             261      and services.
             262          (1) As used in this section, "public funds" means federal monies received from the
             263      Department of Human Services or the Department of Health, and state monies appropriated by the
             264      Legislature to the Department of Human Services, the Department of Health, a county governing
             265      body, or local substance abuse authority for the purposes of providing substance abuse programs
             266      or services. "Public funds" includes those federal and state monies that have been transferred by
             267      a local substance abuse authority to a private provider under an annual or otherwise ongoing
             268      contract to provide comprehensive substance abuse programs or services for the local substance
             269      abuse authority. Those monies maintain the nature of "public funds" while in the possession of
             270      the private entity that has an annual or otherwise ongoing contract with a local substance abuse
             271      authority to provide comprehensive substance abuse programs or services for the local substance
             272      abuse authority.
             273          (2) Each local substance abuse authority is responsible for oversight of all public funds
             274      received by it, to determine that those public funds are utilized in accordance with federal and state
             275      law, the rules and policies of the Department of Human Services and the Department of Health,


             276      and the provisions of any contract between the local substance abuse authority and the Department
             277      of Human Services, the Department of Health, or a private provider. That oversight includes
             278      requiring that neither the contract provider, as described in Subsection (1), nor any of its
             279      employees:
             280          (a) violate any applicable federal or state criminal law;
             281          (b) knowingly violate, on more than one occasion, any applicable rule or policy of the
             282      Department of Human Services or Department of Health, or any provision of contract between the
             283      local substance abuse authority and the Department of Human Services, the Department of Health,
             284      or the private provider;
             285          (c) knowingly keep any false account or make any false entry or erasure in any account of
             286      or relating to the public funds;
             287          (d) fraudulently alter, falsify, conceal, destroy, or obliterate any account of or relating to
             288      public funds;
             289          (e) fail to ensure competent oversight for lawful disbursement of public funds;
             290          (f) appropriate public funds for an unlawful use or for a use that is not in compliance with
             291      contract provisions; or
             292          (g) knowingly or intentionally use public funds unlawfully or in violation of a
             293      governmental contract provision, or in violation of state policy.
             294          (3) Nothing in this section limits or prohibits an organization exempt under Section
             295      501(c)(3), Internal Revenue Code, from using public funds for any business purpose or in any
             296      financial arrangement that is otherwise lawful for that organization.
             297          (4) A local substance abuse authority that knew or reasonably should have known of any
             298      of the circumstances described in Subsection (2), and that fails or refuses to take timely corrective
             299      action in good faith shall, in addition to any other penalties provided by law, be required to make
             300      full and complete repayment to the state of all public funds improperly used or expended.
             301          (5) Any public funds required to be repaid to the state by a local substance abuse authority
             302      pursuant to Subsection (4), based upon the actions or failure of the contract provider, may be
             303      recovered by the local substance abuse authority from its contract provider, in addition to the local
             304      substance abuse authority's costs and attorney's fees.
             305          Section 6. Section 62A-1-111 is amended to read:
             306           62A-1-111. Department authority.


             307          The department has authority, in addition to all other authority and responsibility granted
             308      to it by law, to:
             309          (1) adopt rules, not inconsistent with law, as the department may consider necessary or
             310      desirable for providing social services to the people of this state;
             311          (2) establish and manage client trust accounts in the department's institutions and
             312      community programs, at the request of the client or his legal guardian or representative, or in
             313      accordance with federal law;
             314          (3) purchase, as authorized or required by law, services that the department is responsible
             315      to provide for legally eligible persons;
             316          (4) conduct adjudicative proceedings for clients and providers in accordance with the
             317      procedures of Title 63, Chapter 46b, Administrative Procedures Act;
             318          (5) establish eligibility standards for its programs, not inconsistent with state or federal law
             319      or regulations;
             320          (6) take necessary steps, including legal action, to recover money or the monetary value
             321      of services provided to a recipient who was not eligible;
             322          (7) set and collect fees for its services;
             323          (8) license agencies, facilities, and programs, except as otherwise allowed, prohibited, or
             324      limited by law;
             325          (9) acquire, manage, and dispose of any real or personal property needed or owned by the
             326      department, not inconsistent with state law;
             327          (10) receive gifts, grants, devises, and donations; gifts, grants, devises, donations, or the
             328      proceeds thereof, may be credited to the program designated by the donor, and may be used for the
             329      purposes requested by the donor, as long as the request conforms to state and federal policy; all
             330      donated funds shall be considered private, nonlapsing funds and may be invested under guidelines
             331      established by the state treasurer;
             332          (11) accept and employ volunteer labor or services; the department is authorized to
             333      reimburse volunteers for necessary expenses, when the department considers that reimbursement
             334      to be appropriate;
             335          (12) carry out the responsibility assigned in the Workforce Services Plan by the State
             336      Council on Workforce Services;
             337          (13) carry out the responsibility assigned by Section 9-4-802 with respect to coordination


             338      of services for the homeless;
             339          (14) carry out the responsibility assigned by Section 62A-5a-105 with respect to
             340      coordination of services for handicapped students;
             341          (15) provide training and educational opportunities for its staff;
             342          (16) collect child support payments and any other monies due to the department;
             343          [(17) examine and audit the expenditures of any public funds provided to local substance
             344      abuse authorities, local mental health authorities, local area agencies established under Chapter 3,
             345      and any agency or organization that contracts with or receives funds from those authorities or
             346      agencies. Those local authorities, area agencies, and any person or entity that contracts with or
             347      receives funds from those authorities or area agencies, shall provide the department with any
             348      information it deems necessary to complete its audit;]
             349          [(18)] (17) apply the provisions of Title 78, Chapter 45, Uniform Civil Liability for
             350      Support Act, to parents whose child lives out of the home in a department licensed or certified
             351      setting;
             352          [(19)] (18) establish policy and procedures in cases where the department is given custody
             353      of a minor by the juvenile court pursuant to Section 78-3a-118 ; any policy and procedures shall
             354      include:
             355          (a) designation of interagency teams for each juvenile court district in the state;
             356          (b) delineation of assessment criteria and procedures;
             357          (c) minimum requirements, and timeframes, for the development and implementation of
             358      a collaborative service plan for each minor placed in department custody; and
             359          (d) provisions for submittal of the plan and periodic progress reports to the court; [and]
             360          [(20)] (19) carry out the responsibilities assigned to it by statute[.]; and
             361          (20) examine and audit the expenditures of any public funds provided to local substance
             362      abuse authorities, local mental health authorities, local area agencies on aging, and any person,
             363      agency, or organization that contracts with or receives funds from those authorities or agencies.
             364      Those local authorities, area agencies, and any person or entity that contracts with or receives funds
             365      from those authorities or area agencies, shall provide the department with any information the
             366      department considers necessary. The department is further authorized to issue directives resulting
             367      from any examination or audit to local authorities, area agencies, and persons or entities that
             368      contract with or receive funds from those authorities with regard to any public funds. If the


             369      department determines that it is necessary to withhold funds from a local mental health authority
             370      or local substance abuse authority based on failure to comply with state or federal law, policy, or
             371      contract provisions, it may take steps necessary to ensure continuity of services. For purposes of
             372      this Subsection (20) "public funds" means the same as that term is defined in Sections 62A-8-101
             373      and 62A-12-101 .
             374          Section 7. Section 62A-8-101 is amended to read:
             375           62A-8-101. Definitions.
             376          As used in this chapter:
             377          (1) "Board" means the Board of Substance Abuse established in accordance with Section
             378      62A-1-105 .
             379          (2) "Director" means the director of the Division of Substance Abuse.
             380          (3) "Division" means the Division of Substance Abuse established in Section 62A-8-103 .
             381          (4) "Local substance abuse authority" means a county legislative body.
             382          (5) (a) "Public funds" means federal monies received from the Department of Human
             383      Services or the Department of Health, and state monies appropriated by the Legislature to the
             384      Department of Human Services, the Department of Health, a county governing body, or local
             385      substance abuse authority for the purposes of providing substance abuse programs or services.
             386      "Public funds" includes those federal and state monies that have been transferred by a local
             387      substance abuse authority to a private provider under an annual or otherwise ongoing contract to
             388      provide comprehensive substance abuse programs or services for the local substance abuse
             389      authority. Those monies maintain the nature of "public funds" while in the possession of the
             390      private entity that has an annual or otherwise ongoing contract with a local substance abuse
             391      authority to provide comprehensive substance abuse programs or services for the local substance
             392      abuse authority.
             393          (b) This definition of "public funds" does not limit or prohibit an organization exempt
             394      under Section 501(c)(3), Internal Revenue Code, from using public funds for any business purpose
             395      or in any financial arrangement that is otherwise lawful for that organization.
             396          Section 8. Section 62A-8-103 is amended to read:
             397           62A-8-103. Division -- Creation -- Responsibilities.
             398          (1) There is created the Division of Substance Abuse within the department, under the
             399      administration and general supervision of the executive director, and, with regard to its programs,


             400      under the policy direction of the board. The division is the substance abuse authority for this state.
             401          (2) The division shall:
             402          (a) educate the general public regarding the nature and consequences of substance abuse
             403      by promoting school and community-based prevention programs;
             404          (b) render support and assistance to public schools through approved school-based
             405      substance abuse education programs aimed at prevention of substance abuse;
             406          (c) promote or establish programs for the prevention of substance abuse within the
             407      community setting through community-based prevention programs;
             408          (d) promote or establish cooperative relationships with courts, hospitals, clinics, medical
             409      and social agencies, public health authorities, law enforcement agencies, education and research
             410      organizations, and other related groups;
             411          (e) provide consultation and other assistance to public and private agencies and groups;
             412          (f) cooperate and assist other organizations and private treatment centers for substance
             413      abusers, by providing them with essential materials for furthering programs of prevention and
             414      rehabilitation of actual and potential substance abusers;
             415          (g) promote or conduct research on substance abuse issues, and submit to the governor and
             416      the Legislature recommendations for changes in policy and legislation;
             417          (h) receive [and disburse state and federal], distribute, and provide direction over public
             418      funds for substance abuse services;
             419          (i) consult and coordinate with local substance abuse authorities regarding substance abuse
             420      programs and services;
             421          [(i)] (j) promote or establish programs for education and certification of instructors to
             422      educate persons convicted of driving under the influence of alcohol or drugs or driving with any
             423      measurable controlled substance in the body;
             424          [(j)] (k) monitor and evaluate programs provided by local substance abuse authorities[,
             425      and];
             426          (l) examine expenditures of any local, state, and federal funds;
             427          (m) monitor the expenditure of public funds by:
             428          (i) local substance abuse authorities; and
             429          (ii) in counties where they exist, the private contract provider that has an annual or
             430      otherwise ongoing contract to provide comprehensive substance abuse programs or services for


             431      the local substance abuse authority;
             432          [(k)] (n) contract with local substance abuse authorities to provide a comprehensive
             433      continuum of services in accordance with board and division policy, contract provisions, and the
             434      local plan;
             435          [(l)] (o) contract with private and public entities for special statewide or nonclinical
             436      services according to board and division policy;
             437          [(m)] (p) review and approve [plans submitted by] each local substance abuse [authorities]
             438      authority's plan in order to assure:
             439          (i) a statewide comprehensive continuum of substance abuse services; and
             440          (ii) appropriate expenditure of public funds;
             441          (q) review and make recommendations regarding each local substance abuse authority's
             442      contract with its provider of substance abuse programs and services to assure compliance with state
             443      and federal law and policy;
             444          [(n)] (r) monitor and assure compliance with board and division policy and contract
             445      requirements; and
             446          [(o)] (s) withhold funds from local substance abuse authorities and public and private
             447      providers for contract noncompliance, failure to comply with division directives regarding the use
             448      of public funds, or for misuse of public funds or monies.
             449          (3) (a) The division may refuse to contract with and may pursue its legal remedies against
             450      any local substance abuse authority that fails, or has failed, to expend public funds in accordance
             451      with state law, policy, contract provisions, or directives issued in accordance with state law.
             452          (b) The division may withhold funds from a local substance abuse authority if the
             453      authority's contract with its provider of substance abuse services fails to comply with state and
             454      federal law or policy.
             455          (4) Before reissuing or renewing a contract with any local substance abuse authority, the
             456      division shall review and determine whether the local substance abuse authority is complying with
             457      its oversight and management responsibilities described in Sections 17A-3-701 and 17A-3-703 .
             458      Nothing in this Subsection (4) may be used as a defense to the responsibility and liability described
             459      in Section 17A-3-703 .
             460          [(3)] (5) In carrying out its duties and responsibilities, the division may not duplicate
             461      treatment or educational facilities that exist in other divisions or departments of the state, but shall


             462      work in conjunction with those divisions and departments in rendering the treatment or educational
             463      services that those divisions and departments are competent and able to provide.
             464          [(4)] (6) (a) The division may accept in the name of and on behalf of the state donations,
             465      gifts, devises, or bequests of real or personal property or services to be used as specified by the
             466      donor.
             467          (b) Those donations, gifts, devises, or bequests shall be used by the division in performing
             468      its powers and duties. Any money so obtained shall be considered private nonlapsing funds and
             469      shall be deposited into an interest-bearing expendable trust fund to be used by the division for
             470      substance abuse services. The state treasurer may invest the fund and all interest shall remain with
             471      the fund.
             472          (7) The division shall annually review with each local substance abuse authority the
             473      authority's statutory and contract responsibilities regarding:
             474          (a) the use of public funds;
             475          (b) oversight responsibilities regarding public funds; and
             476          (c) governance of substance abuse programs and services.
             477          Section 9. Section 62A-8-104 is amended to read:
             478           62A-8-104. Authority to assess fees.
             479          (1) The division may, with the approval of the Legislature, the executive director, and the
             480      board, establish fee schedules and assess fees for services rendered by the division.
             481          (2) Fees shall be charged for substance abuse treatment services, but services may not be
             482      refused to any person because of his [ability or] inability to pay.
             483          Section 10. Section 62A-8-109 is amended to read:
             484           62A-8-109. Formula for allocation of funds to local substance abuse authorities.
             485          (1) The board shall establish, by rule, a formula for allocating funds to local substance
             486      abuse authorities through contracts, to provide substance abuse prevention and treatment services
             487      in accordance with the provisions of this chapter and of Title 17A, Chapter 3, Part 7, Local
             488      Substance Abuse Authorities. That formula shall provide for allocation of funds based on need.
             489      Determination of need shall be based on population unless the board establishes, by valid and
             490      accepted data, that other defined factors are relevant and reliable indicators of need. The formula
             491      shall include a differential to compensate for additional costs of providing services in rural areas.
             492          (2) The formula established under Subsection (1) [shall be in effect on or before July 1,


             493      1990, and] applies to all state and federal funds appropriated by the Legislature to the division for
             494      local substance abuse authorities, but does not apply to:
             495          (a) funds that local substance abuse authorities receive from sources other than the
             496      division;
             497          (b) funds that local substance abuse authorities receive from the division to operate a
             498      specific program within its jurisdiction which is available to all residents of the state;
             499          (c) funds that local substance abuse authorities receive from the division to meet a need
             500      that exists only within that local area; and
             501          (d) funds that local substance abuse authorities receive from the division for research
             502      projects.
             503          (3) Contracts with local substance abuse authorities shall provide that the division may
             504      withhold funds otherwise allocated pursuant to this section to cover the costs of audits, attorneys'
             505      fees, and other expenditures associated with reviewing the expenditure of public funds by a local
             506      substance abuse authority or its contract provider, if there has been an audit finding or judicial
             507      determination that public funds have been misused by the local substance abuse authority or its
             508      contract provider.
             509          Section 11. Section 62A-8-110.1 is enacted to read:
             510          62A-8-110.1. Responsibilities of the Division of Substance Abuse.
             511          (1) It is the responsibility of the division to assure that the requirements of this part are met
             512      and applied uniformly by local substance abuse authorities across the state.
             513          (2) Since it is the division's responsibility to contract with, review, approve, and oversee
             514      local substance abuse authority plans, and to withhold funds from local substance abuse authorities
             515      and public and private providers for contract noncompliance or misuse of public funds, the
             516      division shall:
             517          (a) require each local substance abuse authority to submit its plan to the division by May
             518      1 of each year;
             519          (b) conduct an annual program audit and review of each local substance abuse authority
             520      in the state, and its contract provider; and
             521          (c) provide a written report to the Health and Human Services Interim Committee on July
             522      1, 1999, and each year thereafter, and provide an oral report to that committee, as requested. That
             523      report shall provide information regarding:


             524          (i) the annual audit and review;
             525          (ii) the financial expenditures of each local substance abuse authority and its contract
             526      provider;
             527          (iii) the status of each local authority's and its contract provider's compliance with its plan,
             528      state statutes, and with the provisions of the contract awarded; and
             529          (iv) whether audit guidelines established pursuant to Section 62A-8-110.5 and Subsection
             530      67-3-1 (2)(o) provide the division with sufficient criteria and assurances of appropriate
             531      expenditures of public funds.
             532          (3) The annual audit and review described in Subsection (2)(b) shall, in addition to items
             533      determined by the division to be necessary and appropriate, include a review and determination
             534      regarding whether public funds allocated to local substance abuse authorities are consistent with
             535      services rendered and outcomes reported by it or its contract provider, and whether each local
             536      substance abuse authority is exercising sufficient oversight and control over public funds allocated
             537      for substance abuse programs and services.
             538          (4) The Legislature may refuse to appropriate funds to the division upon the division's
             539      failure to comply with the provisions of this part.
             540          Section 12. Section 62A-8-110.5 is repealed and reenacted to read:
             541          62A-8-110.5. Contracts for substance abuse services provided by local substance
             542      abuse authorities.
             543          When the division contracts with a local substance abuse authority to provide substance
             544      abuse programs and services in accordance with the provision of this chapter and Title 17A,
             545      Chapter 3, Part 7, Local Substance Abuse Authorities, it shall ensure that those contracts include
             546      at least the following provisions:
             547          (1) that an independent auditor shall conduct any audit of the local substance abuse
             548      authority or its contract provider's programs or services, pursuant to the provisions of Title 51,
             549      Chapter 2;
             550          (2) in addition to the requirements described in Title 51, Chapter 2, the division:
             551          (a) shall prescribe guidelines and procedures, in accordance with those formulated by the
             552      state auditor pursuant to Section 67-3-1 , for auditing the compensation and expenses of officers,
             553      directors, and specified employees of the private contract provider, to assure the state that no
             554      personal benefit is gained from travel or other expenses; and


             555          (b) may prescribe specific items to be addressed by that audit, depending upon the
             556      particular needs or concerns relating to the local substance abuse authority or contract provider at
             557      issue;
             558          (3) the local substance abuse authority or its contract provider shall invite and include all
             559      funding partners in its auditor's pre- and exit conferences;
             560          (4) each member of the local substance abuse authority shall annually certify that he has
             561      received and reviewed the independent audit and has participated in a formal interview with the
             562      provider's executive officers;
             563          (5) requested information and outcome data will be provided to the division in the manner
             564      and within the time lines defined by the division; and
             565          (6) all audit reports by state or county persons or entities concerning the local substance
             566      abuse authority or its contract provider shall be provided to the executive director of the
             567      department, the local substance abuse authority, and members of the contract provider's governing
             568      board.
             569          Section 13. Section 62A-8-112 is amended to read:
             570           62A-8-112. Receipt of funds.
             571          Local substance abuse authorities and entities that contract with these authorities to provide
             572      substance abuse services may receive funds made available by federal, state, or local health,
             573      substance abuse, education, welfare, or other agencies, in accordance with the provisions of this
             574      chapter and Title 17A, Chapter 3, Part 7.
             575          Section 14. Section 62A-12-101 is amended to read:
             576           62A-12-101. Definitions.
             577          As used in this chapter:
             578          (1) "Board" means the Board of Mental Health established in accordance with Sections
             579      62A-1-105 and 62A-1-107 .
             580          (2) "Director" means the director of the Division of Mental Health.
             581          (3) "Division" means the Division of Mental Health.
             582          (4) "Local mental health authority" means a county legislative body.
             583          (5) (a) "Public funds" means federal monies received from the Department of Human
             584      Services or the Department of Health, and state monies appropriated by the Legislature to the
             585      Department of Human Services, the Department of Health, a county governing body, or local


             586      mental health authority for the purposes of providing mental health programs or services. "Public
             587      funds" includes those federal and state monies that have been transferred by a local mental health
             588      authority to a private provider under an annual or otherwise ongoing contract to provide
             589      comprehensive mental health programs or services for the local mental health authority. Those
             590      monies maintain the nature of "public funds" while in the possession of the private entity that has
             591      an annual or otherwise ongoing contract with a local mental health authority to provide
             592      comprehensive mental health programs or services for the local mental health authority.
             593          (b) This definition of "public funds" does not limit or prohibit an organization exempt
             594      under Section 501(c)(3), Internal Revenue Code, from using public funds for any business purpose
             595      or in any financial arrangement that is otherwise lawful for that organization.
             596          [(5)] (6) "Severe mental disorder" means schizophrenia, major depression, bipolar
             597      disorders, delusional disorders, psychotic disorders, and other mental disorders as defined by the
             598      board.
             599          Section 15. Section 62A-12-102 is amended to read:
             600           62A-12-102. Division of Mental Health -- Creation -- Responsibilities.
             601          (1) There is created the Division of Mental Health within the department, under the
             602      administration and general supervision of the executive director, and, with regard to its programs,
             603      under the policy direction of the board. The division is the mental health authority for this state.
             604          (2) The division shall:
             605          (a) collect and disseminate information pertaining to mental health;
             606          (b) develop, administer, and supervise a comprehensive state mental health program;
             607          (c) provide direction over the state hospital including approval of its budget, administrative
             608      policy, and coordination of services with local service plans;
             609          (d) promote and establish cooperative relationships with courts, hospitals, clinics, medical
             610      and social agencies, public health authorities, law enforcement agencies, education and research
             611      organizations, and other related groups;
             612          (e) receive [and], distribute [state and federal], and provide direction over public funds for
             613      mental health services;
             614          (f) consult and coordinate with local mental health authorities regarding mental health
             615      programs and services;
             616          [(f)] (g) monitor and evaluate programs provided by local mental health authorities[, and]


             617      with public funds;
             618          (h) examine expenditures of any local, state, and federal funds;
             619          (i) monitor the expenditure of public funds by local mental health authorities and their
             620      contract providers;
             621          [(g)] (j) contract with local mental health authorities to provide or arrange for a
             622      comprehensive continuum of services in accordance with board and division policy, contract
             623      provisions, and the local plan;
             624          [(h)] (k) contract with private and public entities for special statewide or nonclinical
             625      services in accordance with board and division policy;
             626          [(i)] (l) review and approve each local mental health [authority plans and in order]
             627      authority's plan, to assure:
             628          (i) a statewide comprehensive continuum of mental health services; and
             629          (ii) appropriate expenditure of public funds;
             630          (m) review and make recommendations regarding each local mental health authority's
             631      contract with its provider of mental health programs and services to assure compliance with state
             632      and federal law and policy;
             633          [(j)] (n) promote or conduct research on mental health issues and submit any
             634      recommendations for changes in policy and legislation to the Legislature and the governor;
             635          [(k)] (o) withhold funds from local mental health authorities and public and private
             636      providers for contract noncompliance, failure to comply with division directives regarding the use
             637      of public funds, or for misuse of public funds or monies;
             638          [(l)] (p) cooperate with other state, county, nonprofit, and other private entities to prevent
             639      duplication of services;
             640          [(m)] (q) monitor and assure compliance with board and division policy and contract
             641      requirements; and
             642          [(n)] (r) perform such other acts as are necessary to promote mental health in the state.
             643          (3) (a) The division may refuse to contract with and may pursue its legal remedies against
             644      any local mental health authority that fails, or has failed, to expend public funds in accordance with
             645      state law, policy, contract provisions, or directives issued in accordance with state law.
             646          (b) The division may withhold funds from a local mental health authority if the authority's
             647      contract with its provider of mental health programs and services fails to comply with state and


             648      federal law or policy.
             649          (4) Before reissuing or renewing a contract with any local mental health authority, the
             650      division shall review and determine whether the local mental health authority is complying with
             651      its oversight and management responsibilities described in Sections 17A-3-602 and 17A-3-603.5 .
             652      Nothing in this Subsection (4) may be used as a defense to the responsibility and liability described
             653      in Section 17A-3-603.5 .
             654          [(3)] (5) (a) The division may accept, in the name of and on behalf of the state, donations,
             655      gifts, devises, or bequests of real or personal property or services to be used as specified by the
             656      donor.
             657          (b) Those donations, gifts, devises, or bequests shall be used by the division in the
             658      performance of its powers and duties. Any money so obtained shall be considered private
             659      nonlapsing funds and shall be deposited into an interest-bearing expendable trust fund to be used
             660      by the division for mental health services. The state treasurer may invest the fund and all interest
             661      shall remain with the fund.
             662          (6) The division shall annually review with each local mental health authority the
             663      authority's statutory and contract responsibilities regarding:
             664          (a) the use of public funds;
             665          (b) oversight responsibilities regarding public funds; and
             666          (c) governance of mental health programs and services.
             667          Section 16. Section 62A-12-102.5 is amended to read:
             668           62A-12-102.5. Fees for mental health services.
             669          (1) The division may, with the approval of the Legislature, the executive director, and the
             670      board establish fee schedules and assess fees for services rendered by the division.
             671          (2) Fees shall be charged for mental health services, but services may not be refused to any
             672      person because of his [ability or] inability to pay. Any person who is unable to obtain private care
             673      for financial, geographical, or other sufficient reason may be accepted for community mental
             674      health services.
             675          Section 17. Section 62A-12-105 is amended to read:
             676           62A-12-105. Allocation of funds to local mental health authorities -- Formula.
             677          (1) The board shall establish, by rule, a formula for allocating funds to local mental health
             678      authorities through contracts, to provide mental health services in accordance with [Section


             679      17A-3-606 ] the provisions of this chapter and of Title 17A, Chapter 3, Part 6, Local Mental Health
             680      Authorities. That formula shall provide for allocation of funds based on need. Determination of
             681      need shall be based on population, unless the board establishes, by valid and accepted data, that
             682      other defined factors are relevant and reliable indicators of need. The formula shall include a
             683      differential to compensate for additional costs of providing services in rural areas.
             684          (2) The formula established under Subsection (1) [shall be in effect on or before July 1,
             685      1990, and] applies to all state and federal funds appropriated by the Legislature to the division for
             686      local mental health authorities, but does not apply to:
             687          (a) funds that local mental health authorities receive from sources other than the division;
             688          (b) funds that local mental health authorities receive from the division to operate a specific
             689      program within its jurisdiction that is available to all residents of the state;
             690          (c) funds that local mental health authorities receive from the division to meet a need that
             691      exists only within the jurisdiction of that local mental health authority; and
             692          (d) funds that local mental health authorities receive from the division for research
             693      projects.
             694          (3) Contracts with local mental health authorities shall provide that the division may
             695      withhold funds otherwise allocated pursuant to this section to cover the costs of audits, attorneys'
             696      fees, and other expenses associated with reviewing the expenditure of public funds by a local
             697      mental health authority or its contract provider, if there has been an audit finding or judicial
             698      determination that public funds have been misused by the local mental health authority or its
             699      contract provider.
             700          Section 18. Section 62A-12-289 is amended to read:
             701           62A-12-289. Responsibilities of the Division of Mental Health.
             702          (1) It is the responsibility of the division to assure that the requirements of this part are met
             703      and applied uniformly by local mental health authorities across the state.
             704          (2) Since it is the division's responsibility, under Section 62A-12-102 , to contract with,
             705      review, [and] approve, and oversee local mental health authority plans, and to withhold funds from
             706      local mental health authorities and public and private providers for contract noncompliance or
             707      misuse of public funds, the division shall:
             708          (a) require each local mental health authority to submit its plan to the division by May 1
             709      of each year;


             710          [(b) forward a copy of each local mental health authority's written plan to the Office of
             711      Legislative Research and General Counsel, for review by the Health and Human Services Interim
             712      Committee, within ten days after receiving the plan;]
             713          [(c)] (b) conduct an annual program audit and review of each local mental health authority
             714      in the state, and its contract provider; and
             715          [(d)] (c) provide a written report to the Health and Human Services Interim Committee on
             716      July 1, 1996, and each year thereafter, and provide an oral report to that committee, as [scheduled]
             717      requested. That report shall provide information regarding:
             718          (i) the annual [program] audit[,] and review;
             719          (ii) the financial [status] expenditures of each local mental health authority and its contract
             720      provider[,];
             721          (iii) the status of each local authority's and its contract provider's compliance with its plan,
             722      state statutes, and with the provisions of the contract awarded[.]; and
             723          (iv) whether audit guidelines established pursuant to Subsection 62A-12-289.1 (2)(a) and
             724      Subsection 67-3-1 (2)(o) provide the division with sufficient criteria and assurances of appropriate
             725      expenditures of public funds.
             726          (3) The annual audit and review described in Subsection (2)(b) shall, in addition to items
             727      determined by the division to be necessary and appropriate, include a review and determination
             728      regarding whether public funds allocated to local mental health authorities are consistent with
             729      services rendered and outcomes reported by it or its contract provider, and whether each local
             730      mental health authority is exercising sufficient oversight and control over public funds allocated
             731      for mental health programs and services.
             732          (4) The Legislature may refuse to appropriate funds to the division upon the division's
             733      failure to comply with the provisions of this part.
             734          Section 19. Section 62A-12-289.1 is enacted to read:
             735          62A-12-289.1. Contracts with local mental health authorities -- Provisions.
             736          When the division contracts with a local mental health authority to provide mental health
             737      programs and services in accordance with the provision of this chapter and Title 17A, Chapter 3,
             738      Part 6, it shall ensure that those contracts include at least the following provisions:
             739          (1) that an independent auditor shall conduct any audit of the local mental health authority
             740      or its contract provider's programs or services, pursuant to the provisions of Title 51, Chapter 2;


             741          (2) in addition to the requirements described in Title 51, Chapter 2, the division:
             742          (a) shall prescribe guidelines and procedures, in accordance with those formulated by the
             743      state auditor pursuant to Section 67-3-1 , for auditing the compensation and expenses of officers,
             744      directors, and specified employees of the private contract provider, to assure the state that no
             745      personal benefit is gained from travel or other expenses; and
             746          (b) may prescribe specific items to be addressed by that audit, depending upon the
             747      particular needs or concerns relating to the local mental health authority or contract provider at
             748      issue;
             749          (3) the local mental health authority or its contract provider shall invite and include all
             750      funding partners in its auditor's pre- and exit conferences;
             751          (4) each member of the local mental health authority shall annually certify that he has
             752      received and reviewed the independent audit and has participated in a formal interview with the
             753      provider's executive officers;
             754          (5) requested information and outcome data will be provided to the division in the manner
             755      and within the time lines defined by the division;
             756          (6) all audit reports by state or county persons or entities concerning the local mental
             757      health authority or its contract provider shall be provided to the executive director of the
             758      department, the local mental health authority, and members of the contract provider's governing
             759      board; and
             760          (7) the local mental health authority or its contract provider will offer and provide mental
             761      health services to residents who are indigent and who meet state criteria for serious and persistent
             762      mental illness or severe emotional disturbance.
             763          Section 20. Section 67-3-1 is amended to read:
             764           67-3-1. Functions and duties.
             765          (1) (a) The state auditor shall be the auditor of public accounts and as such shall be
             766      independent of any executive or administrative officers of the state.
             767          (b) He is not limited in the selection of his personnel or in the determination of the
             768      reasonable and necessary expenses of his office.
             769          (2) The state auditor shall:
             770          (a) examine and certify annually in respect to each fiscal year, financial statements
             771      showing the condition of the state's finances, the revenues received or accrued, expenditures paid


             772      or accrued, and the amount of unexpended or unencumbered balances of the appropriations to the
             773      agencies, departments, divisions, commissions, and institutions and the cash balances of the funds
             774      in the custody of the state treasurer. The Division of Finance shall prepare the foregoing financial
             775      statements and other reports in accordance with legal requirements and generally-accepted
             776      accounting principles for the state auditor's examination and certification, as requested and not
             777      later than 60 days following such requests or the end of each fiscal year. The auditor shall file the
             778      statements with the governor and the Legislature[.];
             779          (b) (i) audit each permanent fund, each special fund, the General Fund, and the accounts
             780      of any department of state government or any independent agency or public corporation on a
             781      regular basis as the auditor shall determine necessary or upon request of the governor or the
             782      Legislature. These audits are to be performed in accordance with generally accepted auditing
             783      standards and other auditing procedures as promulgated by recognized authoritative bodies. The
             784      audits shall be conducted to determine honesty and integrity in fiscal affairs, accuracy and
             785      reliability of financial statements, effectiveness and adequacy of financial controls, and compliance
             786      with the law, as the auditor shall determine necessary[.];
             787          (ii) in the event that any state entity receives federal funding, the audit shall be performed
             788      in accordance with federal audit requirements under the direction of the state auditor. The costs
             789      of the federal compliance portion of the audit may be paid from an appropriation to the state
             790      auditor from the General Fund. If an appropriation is not provided, or if the federal government
             791      does not specifically provide for payment of audit costs, the costs of the federal compliance
             792      portions of the audit shall be allocated on the basis of the percentage that each state entity's federal
             793      funding bears to the total federal funds received by the state. The allocation shall be adjusted to
             794      reflect any reduced audit time required to audit funds passed through the state to local governments
             795      and to reflect any reduction in audit time obtained through the use of internal auditors working
             796      under the direction of the state auditor[.];
             797          (c) present to the governor on October 1st of each year and to the Legislature on the first
             798      day of each annual general session, a statement of his appropriation expenditures segregated as to
             799      cost of salaries, travel, office and other expenses, and capital outlay for equipment, together with
             800      his recommendations as to new legislation and a complete record of the accomplishments of his
             801      office for the preceding year[.];
             802          (d) issue subpoenas requiring any person who has had financial transactions with the state


             803      to appear before him and to answer under oath, orally or in writing, as to any facts concerning
             804      these transactions; and for the purpose of obtaining any such facts the state auditor is empowered
             805      to administer oaths[.];
             806          (e) require, in his discretion, all persons who have had the disposition or management of
             807      any property of this state to render statements regarding it to him, and each of these persons must
             808      render the statements at such times and in such form as the auditor may require[.];
             809          (f) except where otherwise provided by law, institute suits in relation to the assessment,
             810      collection, and payment of its revenues against persons who by any means have become entrusted
             811      with public monies or property and have failed to pay over or deliver the same and against all
             812      debtors of the state, all of which suits of the courts of the county in which the seat of government
             813      may be located shall have jurisdiction without regard to the residence of the defendants[.];
             814          (g) authenticate with his official seal all copies of papers issued from his office as he
             815      considers necessary[.];
             816          (h) collect and pay into the state treasury all fees received by him[.];
             817          (i) perform the duties of a member of all boards of which he is or may be made a member
             818      by the constitution or laws of the state, and such other duties as are prescribed by the constitution
             819      and by law[.];
             820          (j) stop the payment of the salary of any state official or state employee who refuses to
             821      settle his accounts or render such statements as may be required with respect to the custody and
             822      disposition of public funds or other state property or who refuses, neglects, or ignores the
             823      instruction of the state auditor or any controlling board or department head with respect to the
             824      manner of keeping prescribed accounts or funds or who fails to correct any delinquencies,
             825      improper procedures, and errors brought to his attention[.];
             826          (k) establish accounting systems, methods, and forms for public accounts in all taxing units
             827      of the state in the interest of uniformity, efficiency, and economy[.];
             828          (l) superintend the contractual auditing of all state accounts[.];
             829          (m) withhold state allocated funds or the disbursement of property taxes from any state
             830      taxing unit, if necessary, to ensure that officials and employees in those taxing units of the state
             831      comply with state laws and procedures in the budgeting, expenditures, and financial reporting of
             832      public funds. Except as otherwise specified in the law, funds may not be withheld until a taxing
             833      unit has received formal written notice of noncompliance from the auditor and has been given 60


             834      days to make the specified corrections[.];
             835          (n) withhold the disbursement of tax monies from any county, if necessary, to ensure that
             836      officials and employees in the county comply with Section 59-2-303.1 . For purposes of this
             837      subsection, funds may not be withheld until a county has received formal written notice of
             838      noncompliance from the auditor and has been given 60 days to make the specified corrections[.];
             839      and
             840          (o) establish audit guidelines and procedures for audits of local mental health and
             841      substance abuse authorities and their contract providers, conducted pursuant to Title 17A, Chapter
             842      3, Parts 6 and 7, Title 62A, Chapters 8 and 12, and Title 51, Chapter 2. Those guidelines and
             843      procedures shall be established for the purpose of providing assurances to the state that:
             844          (i) state and federal funds appropriated to local mental health authorities are used for
             845      mental health purposes;
             846          (ii) a private provider under an annual or otherwise ongoing contract to provide
             847      comprehensive mental health programs or services for a local mental health authority is in
             848      compliance with state and local contract requirements, and state and federal law;
             849          (iii) state and federal funds appropriated to local substance abuse authorities are used for
             850      substance abuse programs and services; and
             851          (iv) a private provider under an annual or otherwise ongoing contract to provide
             852      comprehensive substance abuse programs or services for a local substance abuse authority is in
             853      compliance with state and local contract requirements, and state and federal law.
             854          (3) The state auditor may not audit work he performed before becoming state auditor. In
             855      the event that the state auditor has previously been a responsible official in state government whose
             856      work has not yet been audited, the Legislature shall designate how such work shall be audited and
             857      shall provide additional funding for such audits, if necessary.
             858          (4) The following records in the custody or control of the state auditor shall be protected
             859      records under Title 63, Chapter 2, Government Records Access and Management Act:
             860          (a) records that would disclose information relating to allegations of personal misconduct,
             861      gross mismanagement, or illegal activity of a past or present governmental employee if the
             862      information or allegation cannot be corroborated by the state auditor through other documents or
             863      evidence, and the records relating to the allegation are not relied upon by the state auditor in
             864      preparing a final audit report;


             865          (b) records and audit workpapers to the extent they would disclose the identity of a person
             866      who during the course of an audit, communicated the existence of any waste of public funds,
             867      property, or manpower, or a violation or suspected violation of a law, rule, or regulation adopted
             868      under the laws of this state, a political subdivision of the state, or any recognized entity of the
             869      United States, if the information was disclosed on the condition that the identity of the person be
             870      protected;
             871          (c) prior to the time that an audit is completed and the final audit report is released, records
             872      or drafts circulated to a person who is not an employee or head of a governmental entity for their
             873      response or information;
             874          (d) records that would disclose an outline or part of any audit survey plans or audit
             875      program;
             876          (e) requests for audits, if disclosure would risk circumvention of an audit;
             877          (f) the provisions of Subsections (a), (b), and (c) do not prohibit the disclosure of records
             878      or information that relate to a violation of the law by a governmental entity or employee to a
             879      government prosecutor or peace officer; and
             880          (g) the provisions of this section do not limit the authority otherwise given to the state
             881      auditor to classify a document as public, private, controlled, or protected under Title 63, Chapter
             882      2, Government Records Access and Management Act.
             883          Section 21. Section 76-8-401 is amended to read:
             884           76-8-401. "Public monies" and "public officer" defined.
             885          As used in this title:
             886          (1) "Public monies" [means] and "public funds" [as defined in Section 51-7-3 ] mean
             887      monies, funds, and accounts, regardless of the source from which they are derived, that are owned,
             888      held, or administered by the state or any of its boards, commissions, institutions, departments,
             889      divisions, agencies, bureaus, laboratories, or other similar instrumentalities, or any county, city,
             890      school district, political subdivision, or other public body. "Public monies" also includes monies,
             891      funds, or accounts that have been transferred by any of those public entities to a private contract
             892      provider of programs or services. Those monies, funds, or accounts maintain the nature of public
             893      monies while in the possession of the private entity that has contracted with a public entity to
             894      provide programs or services.
             895          (2) "Public officer" means:


             896          (a) all elected officials of the state, a political subdivision of the state, a county, town, city,
             897      precinct, or district;
             898          (b) a person appointed to or serving an unexpired term of an elected office;
             899          (c) a judge of a court of record and not of record including justice court judges; and
             900          (d) a member of the Board of Pardons and Parole.
             901          Section 22. Section 76-8-402 is amended to read:
             902           76-8-402. Misusing public monies.
             903          (1) Every public officer of this state or a political subdivision, or of any county, city, town,
             904      precinct, or district of this state, and every other person charged, either by law or under contract,
             905      with the receipt, safekeeping, transfer [or], disbursement, or use of public monies commits an
             906      offense if the officer or other charged person:
             907          (a) appropriates the money or any portion of it to his own use or benefit or to the use or
             908      benefit of another without authority of law;
             909          (b) loans or transfers the money or any portion of it without authority of law;
             910          (c) fails to keep the money in his possession until disbursed or paid out by authority of
             911      law;
             912          (d) unlawfully deposits the money or any portion in any bank or with any other person;
             913          (e) knowingly keeps any false account or makes any false entry or erasure in any account
             914      of or relating to the money;
             915          (f) fraudulently alters, falsifies, conceals, destroys, or obliterates any such account;
             916          (g) willfully refuses or omits to pay over, on demand, any public monies in his hands, upon
             917      the presentation of a draft, order, or warrant drawn upon such monies by competent authority;
             918          (h) willfully omits to transfer the money when the transfer is required by law; or
             919          (i) willfully omits or refuses to pay over, to any officer or person authorized by law to
             920      receive it, any money received by him under any duty imposed by law so to pay over the same.
             921          (2) A violation of Subsection (1) is a felony of the third degree, except it is a felony of the
             922      second degree if:
             923          (a) the value of the money exceeds $5,000;
             924          (b) the amount of the false account exceeds $5,000;
             925          (c) the amount falsely entered exceeds $5,000;
             926          (d) the amount that is the difference between the original amount and the fraudulently


             927      altered amount exceeds $5,000; or
             928          (e) the amount falsely erased, fraudulently concealed, destroyed, obliterated, or falsified
             929      in the account exceeds $5,000.
             930          (3) In addition to the penalty described in Subsection (2), a public officer who violates
             931      Subsection (1) is subject to the penalties described in Section 76-8-404 .
             932          Section 23. Section 76-8-404 is amended to read:
             933           76-8-404. Making profit from or misusing public monies -- Knowledge of another's
             934      profit or misuse -- Disqualification from office -- Criminal penalty.
             935          A public officer, regardless of whether or not the officer receives, safekeeps, transfers,
             936      disburses, or has a fiduciary relationship with public monies, who [shall make] makes a profit from
             937      or out of public monies, or [shall use the same] who uses public monies in a manner or for a
             938      purpose not authorized by law, is guilty of a felony as provided in Section 76-8-402 and shall, in
             939      addition to the punishment provided by law, be disqualified to hold public office.
             940          Section 24. Repealer.
             941          This act repeals:
             942          Section 17A-3-612, Continuation of existing services or facilities.
             943          Section 25. Effective date.
             944          This act takes effect on July 1, 1999.




Legislative Review Note
    as of 1-20-99 1:49 PM


A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel


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