H. B. 2718
(By Mr. Speaker, Mr. Kiss)
[Introduced January 28, 2003; referred to the
Committee on Government Organization.]
A BILL to amend and reenact section four, article two, chapter four
of the code of West Virginia, one thousand nine hundred
thirty-one, as amended; and to amend and reenact section
seven, article nine, chapter six of said code, all relating to
requiring audits of state and local governmental entities to
identify property in flood hazard zones and to confirm
sufficiency of flood insurance to avoid reduction in disaster
relief from federal agencies in the event of flood damage.
Be it enacted by the Legislature of West Virginia:
That section four, article two, chapter four of the code of
West Virginia, one thousand nine hundred thirty-one, as amended, be
amended and reenacted; and that section seven, article nine,
chapter six of said code be amended and reenacted, all to read as
follows:
CHAPTER 4. THE LEGISLATURE.
ARTICLE 2. LEGISLATIVE AUDITOR; POWERS; FUNCTIONS; DUTIES;
COMPENSATION.
§4-2-4. Duties of auditor; filing reports.
(a) It is the duty of the legislative auditor to compile
fiscal information for the Senate and the House of Delegates, to
make a continuous audit and analysis of the state budget, revenues
and expenditures, during and between sessions of the Legislature,
to make post audits of the revenues and expenditures of the
spending units of the state government, at least once every two
years, if practicable, to report any misapplication of state funds
or erroneous, extravagant or unlawful expenditures by any spending
unit, to ascertain facts and to make recommendations to the
Legislature concerning post-audit findings, the revenues and
expenditures of the state and of the organization and functions of
the state and its spending units.
(b) The legislative auditor may collect, and the department,
agency or board shall pay, any or all of the costs associated with
conducting the post audits from the department, agency or board
being audited, when necessary and desirable. The legislative
auditor shall render to the department, agency or board liable for
the costs a statement of the costs as soon after the costs were
incurred as practicable, and it is the duty of the department,
agency or board to pay promptly in the manner that other claims and
accounts are paid. All money received by the legislative auditor from this source shall be expended only for the purpose of covering
the costs associated with such services, unless otherwise directed
by the Legislature.
(c) Any audit of a governmental entity undertaken pursuant to
the provisions of this article shall include the following:
(1) Identification of all property located in a federal flood
hazard zone eligible for flood insurance from the National Flood
Insurance Program (NFIP); and
(2) Confirmation of sufficient flood insurance to avoid a
reduction in disaster relief from the Federal Emergency Management
Agency (FEMA) or other federal agency in the event of flood damage.
(c) (d) A copy of each report of audit when completed and
certified shall be filed in the office of the department of finance
and administration as a public record and a copy shall be filed
with the attorney general for any action he or she may consider
necessary.
CHAPTER 6. GENERAL PROVISIONS RESPECTING OFFICERS.
ARTICLE 9. SUPERVISION OF PUBLIC OFFICES.
§6-9-7. Examinations into affairs of local public offices;
penalties.
(a) The chief inspector has the power by himself or herself,
or by any person appointed, designated or approved by the chief
inspector to perform the service, to examine into all financial
affairs of every local governmental office or political subdivision and all boards, commissions, authorities, agencies or other offices
created under authority thereof. An examination shall be made
annually, if required, to comply with the Single Audit Act and when
otherwise required by law or contract. When that act does not
apply, unless otherwise required by law or by contract the
examination shall be made at least once a year, if practicable.
Furthermore, the chief inspector shall furnish annually to the
Legislature a list of each local government office or political
subdivision and all boards, commissions, authorities, agencies or
other offices created under authority thereof and the year of its
most recent completed audit.
(b) When required for compliance with regulations for federal
funds received or expended by county boards of education the chief
inspector or his or her designee, including any certified public
accountant approved by the chief inspector shall conduct and issue
an audit report within the time specified in controlling federal
regulations. Examinations of other local governments shall be
conducted and audit or review reports issued in accordance with
uniform procedures of the chief inspector.
(c) A county board of education may elect, by the first day of
May of the fiscal year to be audited, to have its annual
examination performed by a certified public accountant approved by
the chief inspector to perform the examinations. When this
election is made, a copy of the order of the county board making the election shall be filed with the chief inspector and the state
board of school finance. The county board of education is allowed
to contract with any certified public accountant on the chief
inspector's then current list of approved certified public
accountants, unless the state board of school finance or the
prosecuting attorney of the county in which the board is located
timely submits to the chief inspector a written request for the
examination to be performed by the chief inspector or a person
appointed by the chief inspector, or the chief inspector determines
that a special or unusual situation exists. The county board shall
follow the audit bid procurement procedures established by the
chief inspector in obtaining the audit.
(d) The chief inspector shall, at least annually, prepare a
list of certified public accountants approved by the chief
inspector to perform examinations of local governments. Names
shall be added to or deleted from that list in accordance with
uniform procedures of the chief inspector. When each list or
updated list is issued, the chief inspector shall promptly file a
copy of the list in the state register and send a copy to the state
board of education, the state board of school finance and to local
governments who request a copy.
(e) A county board of education, when procuring the services
of a certified public accountant on the chief inspector's list,
shall follow the procurement standards prescribed by the grants management common rule, OMB Circular A-102 "Grants and Cooperative
Agreements with State and Local Governments" in effect for the
fiscal year being examined, or in any replacement circular or
regulation of the office of management and budget and in addition
shall follow those standards as determined by the office of chief
inspector.
(f) The approved independent certified public accountant
making examinations under this section shall comply with
requirements of this section applicable to examinations performed
by the chief inspector, including applicable requirements of the
federal government and uniform procedures of the chief inspector
applicable to examinations of county boards of education.
(1) Upon completion of the certified public accountant's
examination and audit or review report, the certified public
accountant shall promptly send two copies of the certified report
to the county board of education who shall file one copy with the
federal audit clearing house. The certified public accountant
shall send one copy of the certified report to the state board of
school finance, and one copy to the chief inspector.
(2) If any examination discloses misfeasance, malfeasance or
nonfeasance in office on the part of any public officer or
employee, the certified public accountant shall submit his or her
recommendation to the chief inspector regarding the legal action
the approved certified public accountant considers appropriate, including, but not limited to, whether criminal prosecution or
civil action to effect restitution is appropriate, and three
additional copies of the certified audit report. After review of
the recommendations and the audit report, the chief inspector shall
proceed as provided in subsection (n) of this section. For
purposes of this section and section thirteen, article nine-b,
chapter eighteen of this code, a certified audit report of an
approved certified public accountant shall be treated in the same
manner as a report of the chief inspector.
(g) On every examination, inquiry shall be made as to the
financial conditions and resources of the agency having
jurisdiction over the appropriations and levies disbursed by the
office and whether the requirements of the constitution and
statutory laws of the state and the ordinances and orders of the
agency have been properly complied with and also inquire into the
methods and accuracy of the accounts and such other matters of
audit and accounting as the chief inspector may prescribe.
(h) A local government office that is subject to separate
examination under this section by the chief inspector may elect to
have a review performed to satisfy the annual examination
requirement if it is not subject to a single audit requirement
under federal regulations or if it is not otherwise required by law
or contract to undergo an annual audit and its expenditures from
all sources are less than three hundred thousand dollars during the fiscal year for which the election is made:
Provided, That an
audit must be performed at least once every three years by the
chief inspector and shall be performed whenever during the course
of a review the chief inspector determines that special or unusual
circumstances warrant making an audit.
(i) When not required to have an audit by then existing
federal regulations or by any law or contract provision and the
financial affairs of a local government are not examined annually
but are examined on a biennial or other periodic basis, the chief
inspector or his or her designee may, in his or her discretion,
after making an audit of one of the fiscal years, make a review of
the years remaining to be examined.
(j) The chief inspector or any authorized assistant may issue
subpoenas and compulsory process, direct the service thereof by any
sheriff, compel the attendance of witnesses and the production of
books and papers at any designated time and place, selected in
their respective county, and administer oaths.
(k) If any person refuses to appear before the chief inspector
or his or her authorized assistant when required to do so, refuses
to testify on any matter or refuses to produce any books or papers
in his or her possession or under his or her control, he or she is
guilty of a misdemeanor and, upon conviction thereof, shall be
fined not more than one hundred dollars and imprisoned in the
county or regional jail not more than six months.
(l) A person convicted of willful false swearing in an
examination is guilty of a misdemeanor and, upon conviction
thereof, shall be fined not more than one hundred dollars and
imprisoned in the county or regional jail not more than six months.
(m) Except as otherwise provided in this section, a copy of
the certified report of each examination shall be filed in the
office of the commissioner, chief inspector with the governing body
of the local government and with other offices as prescribed in
uniform procedures of the chief inspector.
(n) If any examination discloses misfeasance, malfeasance or
nonfeasance in office on the part of any public officer or
employee, a certified copy of the report shall be filed by the
chief inspector with the proper legal authority of the agency, the
prosecuting attorney of the county wherein the agency is located
and with the attorney general for such legal action as is proper.
At the time the certified audit report is filed, the chief
inspector shall notify the proper legal authority of the agency,
the prosecuting attorney and the attorney general in writing of his
or her recommendation as to the legal action that the chief
inspector considers proper, whether criminal prosecution or civil
action to effect restitution, or both.
(o) If the proper legal authority or prosecuting attorney,
within nine months of receipt of the certified audit report and
recommendations, refuses, neglects or fails to take efficient legal action by a civil suit to effect restitution or by prosecuting
criminal proceedings to a final conclusion, in accordance with the
recommendations, the chief inspector may institute the necessary
proceedings or participate therein and prosecute the proceedings in
any court of the state to a final conclusion.
(p) A local government that is not a county board of education
may elect, by the first day of May of the fiscal year to be
audited, to have its annual examination performed by a certified
public accountant approved by the chief inspector to perform the
examinations. When this election is made, a copy of the order of
the governing body making the election shall be filed with the
chief inspector. An electing local government is allowed to
contract with any certified public accountant on the chief
inspector's then current list of approved certified public
accountants, unless the prosecuting attorney of the county in which
the local government is located timely submits to the chief
inspector a written request for the examination to be performed by
the chief inspector or a person appointed by the chief inspector,
or the chief inspector determines that a special or unusual
situation exists:
Provided, That no less than once every
three-year period the audit of a local government shall be
performed by the office of chief inspector. The local government
shall follow the audit bid procurement procedures established by
the chief inspector in obtaining the audit:
Provided,
however, That the chief inspector may elect to conduct the audit of a local
unit of government with one or more members of his or her audit
staff where, in the opinion of the chief inspector, a special or
unusual situation exists.
(q) Any audit of a governmental entity undertaken pursuant to
the provisions of this article shall include the following:
(1) Identification of all property located in a federal flood
hazard zone eligible for flood insurance from the National Flood
Insurance Program (NFIP); and
(2) Confirmation of sufficient flood insurance to avoid a
reduction in disaster relief from the Federal Emergency Management
Agency (FEMA) or other federal agency in the event of flood damage.
NOTE: The purpose of this bill is to require audits of state
and local governmental entities to identify property in flood
hazard zones and to confirm sufficiency of flood insurance to avoid
reduction in disaster relief from federal agencies in the event of
flood damage.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
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