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H.B. 71 Enrolled

                 

IMPLEMENTATION AND AUDIT OF BEST PRACTICES

                 
IN NEW PROGRAMS AND AGENCIES

                 
2000 GENERAL SESSION

                 
STATE OF UTAH

                 
Sponsor: Lloyd W. Frandsen

                  AN ACT RELATING TO THE LEGISLATURE; AMENDING THE RESPONSIBILITIES OF
                  THE LEGISLATIVE AUDITOR GENERAL; REQUIRING A REPORT TO THE
                  APPROPRIATE LEGISLATIVE INTERIM COMMITTEE AND LEGISLATIVE
                  APPROPRIATION SUBCOMMITTEE; PROVIDING OVERSIGHT DUTIES TO THOSE
                  COMMITTEES; AND PROVIDING AN EFFECTIVE DATE.
                  This act affects sections of Utah Code Annotated 1953 as follows:
                  AMENDS:
                      36-12-15, as last amended by Chapter 228, Laws of Utah 1992
                  ENACTS:
                      36-24-101, Utah Code Annotated 1953
                  Be it enacted by the Legislature of the state of Utah:
                      Section 1. Section 36-12-15 is amended to read:
                       36-12-15. Office of Legislative Auditor General established -- Qualifications --
                  Powers, functions, and duties.
                      (1) There is created an Office of Legislative Auditor General as a permanent staff office
                  for the Legislature.
                      (2) The legislative auditor general shall be a licensed certified public accountant or certified
                  internal auditor with at least five years experience in the auditing or public accounting profession,
                  or the equivalent, prior to appointment.
                      (3) The legislative auditor general shall appoint and develop a professional staff within
                  budget limitations.
                      (4) (a) The Office of the Legislative Auditor General shall exercise the constitutional
                  authority provided in Article VI, Sec. 33, Utah Constitution.
                      (b) Under the direction of the legislative auditor general, the office shall:


                      (i) conduct comprehensive and special purpose audits, examinations, and reviews of any
                  entity that receives public funds; [and]
                      (ii) prepare and submit a written report on each audit, examination, or review to the
                  Legislative Management Committee, the audit subcommittee, and to all members of the Legislature
                  within 75 days after the audit or examination is completed[.]; and
                      (iii) as provided in Section 36-24-101 :
                      (A) monitor all new programs and agencies created during each Annual General Session or
                  Special Session of the Legislature;
                      (B) provide each new program and agency created with a list of best practices in setting up
                  their program or agency, including:
                      (I) policies;
                      (II) performance measures; and
                      (III) data collection;
                      (C) send each new program and agency:
                      (I) within one year after its creation, a survey instrument requesting a self evaluation that
                  includes policies, performance measures, and data collection;
                      (II) within two years after its creation, a survey instrument requesting a self evaluation that
                  includes policies, performance measures, and data collection; and
                      (D) (I) using the new program or agency's response to the self evaluation survey instruments,
                  recommend to the legislative audit subcommittee that the office conduct an audit of those new
                  programs and agencies created on which questions have arisen as a result of the response to the
                  survey instrument and provide a limited scope audit report on those new programs or agencies on
                  which it receives direction to audit to the legislative interim committee and to the legislative
                  appropriations subcommittee with oversight responsibility for that program or agency on or before
                  the November interim meeting; and
                      (II) include within this limited scope audit report a recommendation as to whether the
                  program or agency is fulfilling its statutory guidelines and directives.
                      (5) The audit, examination, or review of any entity that receives public funds may include a

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                  determination of any or all of the following:
                      (a) the honesty and integrity of all its fiscal affairs;
                      (b) the accuracy and reliability of its financial statements and reports;
                      (c) whether or not its financial controls are adequate and effective to properly record and
                  safeguard its acquisition, custody, use, and accounting of public funds;
                      (d) whether or not its administrators have faithfully adhered to legislative intent;
                      (e) whether or not its operations have been conducted in an efficient, effective, and cost
                  efficient manner;
                      (f) whether or not its programs have been effective in accomplishing intended objectives; and
                      (g) whether or not its management control and information systems are adequate and
                  effective.
                      (6) The Office of Legislative Auditor General may:
                      (a) obtain access to all records, documents, and reports of any entity that receives public
                  funds necessary to the scope of its duties, according to the procedures contained in Title 36, Chapter
                  14, Legislative Subpoena Powers;
                      (b) establish policies, procedures, methods, and standards of audit work for the office and
                  staff;
                      (c) prepare and submit each audit report without interference from any source relative to the
                  content of the report, the conclusions reached in the report, or the manner of disclosing the results
                  of his findings; and
                      (d) prepare and submit the annual budget request for the office.
                      (7) To preserve the professional integrity and independence of the office:
                      (a) no legislator or public official may urge the appointment of any person to the office; and
                      (b) the legislative auditor general may not be appointed to serve on any board, authority,
                  commission, or other agency of the state during his term as legislative auditor general.
                      (8) The following records in the custody or control of the legislative auditor general shall be
                  protected records under Title 63, Chapter 2, Government Records Access and Management Act:
                      (a) Records that would disclose information relating to allegations of personal misconduct,

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                  gross mismanagement, or illegal activity of a past or present governmental employee if the
                  information or allegation cannot be corroborated by the legislative auditor general through other
                  documents or evidence, and the records relating to the allegation are not relied upon by the legislative
                  auditor general in preparing a final audit report.
                      (b) Records and audit workpapers to the extent they would disclose the identity of a person
                  who during the course of a legislative audit, communicated the existence of any waste of public funds,
                  property, or manpower, or a violation or suspected violation of a law, rule, or regulation adopted
                  under the laws of this state, a political subdivision of the state, or any recognized entity of the United
                  States, if the information was disclosed on the condition that the identity of the person be protected.
                      (c) Prior to the time that an audit is completed and the final audit report is released, records
                  or drafts circulated to a person who is not an employee or head of a governmental entity for their
                  response or information.
                      (d) Records that would disclose an outline or part of any audit survey plans or audit program.
                      (e) Requests for audits, if disclosure would risk circumvention of an audit.
                      (f) The provisions of Subsections (8)(a), (b), and (c) do not prohibit the disclosure of records
                  or information that relate to a violation of the law by a governmental entity or employee to a
                  government prosecutor or peace officer.
                      (g) The provisions of this section do not limit the authority otherwise given to the legislative
                  auditor general to classify a document as public, private, controlled, or protected under Title 63,
                  Chapter 2, Government Records Access and Management Act.
                      (9) The legislative auditor general shall:
                      (a) be available to the Legislature and to its committees for consultation on matters relevant
                  to areas of his professional competence;
                      (b) conduct special audits as requested by the Legislative Management Committee;
                      (c) report immediately in writing to the Legislative Management Committee through its audit
                  subcommittee any apparent violation of penal statutes disclosed by the audit of a state agency and
                  furnish to the Legislative Management Committee all information relative to the apparent violation;
                      (d) report immediately in writing to the Legislative Management Committee through its audit

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                  subcommittee any apparent instances of malfeasance or nonfeasance by a state officer or employee
                  disclosed by the audit of a state agency; and
                      (e) make any recommendations to the Legislative Management Committee through its audit
                  subcommittee with respect to the alteration or improvement of the accounting system used by any
                  entity that receives public funds.
                      (10) (a) Prior to each annual general session, the legislative auditor general shall prepare a
                  summary of the audits conducted and of actions taken based upon them during the preceding year.
                      (b) This report shall also set forth any items and recommendations that are important for
                  consideration in the forthcoming session, together with a brief statement or rationale for each item
                  or recommendation.
                      (c) The legislative auditor general shall deliver the report to the Legislature and to the
                  appropriate committees of the Legislature.
                      (11) (a) No person or entity may:
                      (i) interfere with a legislative audit, examination, or review of any entity conducted by the
                  office; or
                      (ii) interfere with the office relative to the content of the report, the conclusions reached in
                  the report, or the manner of disclosing the results and findings of the office.
                      (b) Any person or entity that violates the provisions of this Subsection (11) is guilty of a class
                  B misdemeanor.
                      Section 2. Section 36-24-101 is enacted to read:
                 
CHAPTER 24. LEGISLATIVE REVIEW OF NEW PROGRAMS OR AGENCIES

                      36-24-101. Review of new programs and agencies.
                      (1) When legislation is passed that creates a new program or agency, the legislative sponsor
                  shall consider providing that the funding for the first fiscal year should be nonlapsing, with the option
                  of continuing those nonlapsing monies for an additional year.
                      (2) The legislative interim committee with oversight responsibility for the new program or
                  agency:
                      (a) shall hear the limited scope audit report prepared by the Office of Legislative Auditor

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                  General as provided in Section 36-12-15 on or before the committee's November meeting;
                      (b) shall review each new program or agency on which it receives a report to assure that it
                  is being implemented in a manner consistent with its statutory directive;
                      (c) shall determine whether the statutory directive is being followed and whether any change
                  in law is necessary and if a change in law is necessary, make that recommendation to the Legislature;
                  and
                      (d) may request the Office of Legislative Auditor General to conduct a more in-depth review
                  of the program or agency.
                      (3) The legislative appropriations subcommittee with oversight responsibility for the new
                  program or agency:
                      (a) shall hear the limited scope audit report prepared by the Office of Legislative Auditor
                  General as provided in Section 36-12-15 on or before the committee's November meeting;
                      (b) shall review each new program or agency on which it receives a report to determine
                  whether the agency is appropriately using the funds provided; and
                      (c) may request the Office of Legislative Auditor General to conduct a more in-depth review
                  of the program or agency.
                      Section 3. Effective date.
                      This act takes effect on July 1, 2000.

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