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Introduced Version Senate Bill 345 History

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WEST virginia legislature

2019 regular session

Introduced

Senate Bill 345

By Senators Carmichael (Mr. President) And Prezioso

[Introduced January 18, 2019; Referred
to the Committee on Government Organization
]

A BILL to amend and reenact §12-4-14 of the Code of West Virginia, 1931, as amended, relating to adding the definition of “grantee” to include state spending units and local governments; and requiring grantees to report state grant spending information to grantors.

Be it enacted by the Legislature of West Virginia:


ARTICLE 4. Accounts, Reports, and general provisions.

§12-4-14. Accountability of persons grantees receiving state funds or grants; sworn statements by volunteer fire departments; criminal penalties.

(a) For the purposes of this section:

(1) “Grantor” means a state spending unit awarding a state grant.

(2) "Person" “Grantee” means any entity receiving a state grant, including a state spending unit, local government, corporation, partnership, association, individual or other legal entity. The term "person" does not include a state spending unit or a local government as defined in section one-a, article nine, chapter six of this code

(3) “Report” means an engagement, such as an agreed-upon procedures engagement or other attestation engagement, performed and prepared by a certified public accountant to test whether state grants were spent as intended. The term "report" does not mean a full-scope audit or review of the person receiving state funds.

(4) “State grant” means funding provided by a state spending unit, regardless of the original source of the funds, to a person grantee upon application for a specific purpose. The term “state grant” does not include: (A) Payments for goods and services purchased by a state spending unit; (B) compensation to state employees and public officials; (C) reimbursements to state employees and public officials for travel or incidental expenses; (D) grants of student aid; (E) government transfer payments; (F) direct benefits provided under state insurance and welfare programs; (G) funds reimbursed to a person for expenditures made for qualified purposes when receipts for the expenditures are required prior to receiving the funds: Provided, That notwithstanding the provisions of this subdivision, funding provided pursuant to §5B-2-12 of this code is included within the term “state grant”; (H) retirement benefits; and (I) federal pass-through funds that are subject to the federal Single Audit Act Amendments of 1996, 31 U.S.C. 7501, et seq. The term “state grant” does not include formula distributions to volunteer and part-volunteer fire departments made pursuant to §33-3-14D, §33-3-33, §33-12C-7 of this code.

(b) (1) Any person grantee who receives one or more state grants in the amount of $50,000 or more in the aggregate in a state's fiscal year shall file with the grantor a report of the disbursement of the state grant funds. When the grantor causes an audit, by an independent certified public accountant, to be conducted of the grant funds, the audit is performed using generally accepted government auditing standards and a copy of the audit is available for public inspection, no report is required to be filed under this section. An audit performed that complies with Office of Management and Budget circular A-133, as published on June 27, 2003, and submitted within the period provided in this section may be substituted for the report.

(2) Any person grantee who receives a state grant in an amount less than $50,000 or who is not required to file a report because an audit has been conducted or substituted as provided by subdivision (1) of this subsection shall file with the grantor a sworn statement of expenditures made under the grant.

(3) Reports and sworn statements of expenditures required by §12-4-14(b)(1) and §12-4-14(b)(2) of this code shall be filed within two years of the end of the person's grantee’s fiscal year in which the disbursement of state grant funds by the grantor was made. The report shall be made by an independent certified public accountant at the cost of the person receiving the state grant grantee. State grant funds may be used to pay for the report if the applicable grant provisions allow. The scope of the report is limited to showing that the state grant funds were spent for the purposes intended when the grant was made.

(c) (1) Any person grantee failing to file a required report or sworn statement of expenditures within the two-year period provided in §12-4-14(b)(3) of this code for state grant funds disbursed after July 1, 2003, is barred from subsequently receiving state grants until the person grantee has filed the report or sworn statement of expenditures and is otherwise in compliance with the provisions of this section.

(2) Any grantor of a state grant shall report any persons grantee failing to file a required report or sworn statement of expenditures within the required period provided in §12-4-14(b)(3) of this code for a state grant disbursed after July 1, 2003, to the Legislative Auditor for purposes of debarment from receiving state grants.

(d) (1) The state agency administering the state grant shall notify the person grantee of the reporting requirements set forth in this section.

(2) All grantors awarding state grants shall, prior to awarding a state grant, take reasonable actions to verify that the person grantee is not barred from receiving state grants pursuant to this section. The verification process shall, at a minimum, include:

(A) A requirement that the person grantee seeking the state grant provide a sworn statement from an authorized representative that the person grantee has filed all reports and sworn statements of expenditures for state grants received as required under this section; and

(B) Confirmation from the Legislative Auditor by the grantor that the person grantee has not been identified as one who has failed to file a report or sworn statement of expenditures under this section. Confirmation may be accomplished by accessing the computerized database provided in §12-4-14(e) of this code.

(3) If any report or sworn statement of expenditures submitted pursuant to the requirements of this section provides evidence of a reportable condition or violation, the grantor shall provide a copy of the report or sworn statement of expenditures to the Legislative Auditor within 30 days of receipt by the grantor.

(4) The grantor shall maintain copies of reports and sworn statements of expenditures required by this section and make the reports or sworn statements of expenditures available for public inspection, as well as for use in audits and performance reviews of the grantor.

(5) The Secretary of the Department of Administration has authority to promulgate procedural and interpretive rules and propose legislative rules for promulgation in accordance with the provisions of §29A-3-1 et seq. of this code to assist in implementing the provisions of subsections §12-4-14(a) through §12-4-14(d) of this code.

(e) (1) Any state agency administering a state grant shall, in the manner designated by the Legislative Auditor, notify the Legislative Auditor of the maximum amount of funds to be disbursed, the identity of the person  authorized to receive the funds, the person 's grantee’s fiscal year and federal employer identification number and the purpose and nature of the state grant within 30 days of making the state grant or authorizing the disbursement of the funds, whichever is later. If the state grant was awarded prior to October 1, 2005, the grantor shall provide the information required by this section by December 1, 2005.

(2) The State Treasurer shall provide the Legislative Auditor the information concerning formula distributions to volunteer and part-volunteer fire departments, made pursuant to §33-3-14D, §33-3-33, §33-12C-7 of this code, the Legislative Auditor requests and in the manner designated by the Legislative Auditor.

(3) The Legislative Auditor shall maintain a list identifying persons grantees who have failed to file reports and sworn statements required by this section. The list may be in the form of a computerized database that may be accessed by state agencies over the Internet.

(f) An audit of state grant funds may be authorized at any time by the Joint Committee on Government and Finance to be conducted by the Legislative Auditor at no cost to the grantee.

(g) (1) Volunteer and part-volunteer fire departments receiving formula distributions pursuant to §33-3-14D, §33-3-33, §33-12C-7 of this code shall either:

(A) File a report, as defined in §12-4-14(a)(3) of this code with the Legislative Auditor within the same time frames as are required for sworn statements of annual expenditures to be filed under this section. The report shall be made by an independent certified public accountant at the cost of the volunteer or part-volunteer fire department. The scope of the report is limited to showing that the funds distributed were spent for authorized purposes; or

(B) File a sworn statement of annual expenditures with the Legislative Auditor on or before February 14 of each year. The sworn statement of expenditures shall be signed by the chief or director of the volunteer fire department and shall be made under oath and acknowledged before a notary public.

(2) If the sworn statement or report required by this subsection is not filed on or before May 15, unless the time period is extended by the Legislative Auditor, the Legislative Auditor may conduct an audit of the volunteer or part-volunteer fire department.

(3) If the sworn statement of annual expenditures or report required by this subsection is not filed with the Legislative Auditor by July 1, unless the time period is extended by the Legislative Auditor, the Legislative Auditor shall notify the State Treasurer who shall withhold payment of any amount that would otherwise be distributed to the fire department under the provisions of §33-3-14D, §33-3-33, §33-12C-7 of this code until the report is complete. Moneys withheld pursuant to this subdivision are to be deposited in the special revenue account created in the State Treasury in §12-4-14(g)(4) of this code.

(4) The Legislative Auditor may assign an employee or employees to perform audits or reviews at the direction of the Legislative Auditor of the disbursement of state grant funds to volunteer fire departments. The volunteer fire department shall cooperate with the Legislative Auditor, the Legislative Auditor's employees and the State Auditor in performing their duties under this section. If the Legislative Auditor determines a volunteer fire department is not cooperating, the Legislative Auditor shall notify the State Treasurer who shall withhold payment of any amount that would otherwise be distributed to the fire department under the provisions of §33-3-14D, §33-3-33, §33-12C-7 of this code until the Legislative Auditor informs the Treasurer that the fire department has cooperated as required by this section. The State Treasurer shall pay the amount withheld into a special revenue account hereby created in the State Treasury and designated the “Volunteer Fire Department Audit Account”. If, after one year from payment of the amount withheld into the special revenue account, the Legislative Auditor informs the State Treasurer of continued noncooperation by the fire department, the State Treasurer shall pay the amount withheld to the fund from which it was distributed to be redistributed the following year pursuant to the applicable provisions of those sections.

(5) Whenever the State Auditor performs an audit of a volunteer fire department for any purpose the Auditor shall also conduct an audit of other state funds received by the fire department pursuant to §33-3-14D, §33-3-33, §33-12C-7 of this code. The Auditor shall send a copy of the audit to the Legislative Auditor. The Legislative Auditor may accept an audit performed by the Auditor in lieu of performing an audit under this section.

(6) If the Legislative Auditor is notified by a grantor that a fire department has failed to file a report or a sworn statement of expenditures for a state grant it received, the Legislative Auditor shall notify the Treasurer who shall withhold further distributions to the fire department in the same manner provided in §12-4-14(g)(3) of this code.

(h) Any report submitted pursuant to the provisions of this section may be filed electronically in accordance with the provisions of §39A-1-1 et seq. of this code.

(i) Any person grantee who files a fraudulent sworn statement of expenditures under §12-4-14(b) or §12-4-14(g) of this code, a fraudulent sworn statement under §12-4-14(d) of this code or a fraudulent report under this section is guilty of a felony and, upon conviction thereof, shall be fined not less than $1,000 nor more than $5,000 or imprisoned in a state correctional facility for not less than one year nor more than five years, or both fined and imprisoned.

 

NOTE: The purpose of this bill is to add the definition of grantee to include state spending units and local governments and to require grantees to report state grant spending information to grantors.

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

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