Senate Bill No. 348
(By Mr. Tomblin, Mr. President)
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[Introduced February 25, 2005; referred to the Committee
on Government Organization; and then to the Committee on
Finance.]
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A BILL to amend and reenact §12-4-14 of the Code of West Virginia,
1931, as amended, relating to persons who receive state funds
or grants; and requiring audits of the funds or grants.
Be it enacted by the Legislature of West Virginia:
That §12-4-14 of the Code of West Virginia, 1931, as amended,
be amended and reenacted to read as follows:
ARTICLE 4. ACCOUNTS, REPORTS AND GENERAL PROVISIONS.
§12-4-14. Audits of persons receiving state funds or grants.
(a)
(1) Any
corporation, association, or other organization
person in West Virginia that is not a local government as defined
in section one-a, article nine, chapter six of this code and which
receives state funds or grants
in the amount of fifteen thousand
dollars or more shall file an audit of the disbursement of
the
funds with the Legislative
auditor's office Auditor in accordance
with the provisions of this section.
(2) (A) The audit is only required to be filed when the total amount of the grant or the aggregate amount of state funds received
from a single state agency in a calendar year is fifteen thousand
dollars or more. An audit shall be filed for each grant a person
receives which is fifteen thousand dollars or more.
(B) A person not required to file an audit under paragraph (A)
of this subdivision is required to file an audit if the person
receives grants or funds from more than one state agency in a
calendar year totaling twenty-five thousand dollars or more.
(C) Notwithstanding the provisions of paragraph (A) of this
subdivision, if the grant received is a grant that the funds from
which are only disbursed by the agency to the grantee upon proof
from the grantee that a reimbursable expenditure was made for a
qualified purpose, no audit is required.
(3) The audit shall be filed within two years of
the end of
the year in which the disbursement of funds or grants by the
grantor
and was made. The audit shall be made by an independent
certified public accountant at the cost of the grantee.
and show
The scope of the audit is limited to showing that the funds or
grants were spent for the purposes intended when the grant was
made.
(4) (A) The state agency administering the funds or grants
shall notify the grantee of the reporting requirements set forth in
this section.
(B) The state agency administering the funds or grants shall, in the manner designated by the Legislative Auditor, notify the
Legislative Auditor of the amount of the grant or funds to be
disbursed and the identity of the grantee or person who is
authorized to receive the funds, within thirty days of making the
grant or authorizing the disbursement of the funds.
(5) (A) A grantee failing to file a required audit within the
two-year
time period
for any state funds or grants disbursed after
the first day of July, two thousand three, is barred from
subsequently receiving state funds or grants until the grantee has
filed the audit and is otherwise in compliance with the provisions
of this section.
(B) All state agencies making grants or disbursing state funds
to persons that may be required to file audits under this section
shall, prior to making grants or disbursing state funds, take
reasonable actions to verify that the person is not barred pursuant
to this subdivision from receiving state funds or grants. The
verification process shall, at a minimum, include:
(i) A requirement that the person seeking the state funds or
grant to provide a sworn statement from an individual authorized to
represent the person that the person has filed all audits required
to be filed under this section; and
(ii) The agency confirming with the Legislative Auditor that
the Legislative Auditor has not identified the person as a person
who has failed to file an audit required under the provisions of this section.
(C) The Legislative Auditor shall maintain a list identifying
persons who have failed to file audits required under this section.
The list may be in the form of a computerized database that may be
accessed by state agencies over the Internet.
(6) For purposes of this section:
(A) "Audit" means a review conducted and prepared by a
certified public accountant evaluating whether the state funds or
grants were spent in accordance with the purposes for which the
funds or grants were intended. This section, by use of the term
"audit" does not require the certified public accountant to perform
a full-scope audit of the grantee or person receiving state funds;
and
(B) "Person" includes any corporation, partnership,
association, individual or other legal entity.
(b) Audits of state funds or grants
under fifteen thousand
dollars not required under the provisions of subsection (a) of this
section may be authorized by the Joint Committee on Government and
Finance to be conducted by the Legislative
auditor's office
Auditor, at no cost to the grantee:
Provided, That volunteer fire
departments satisfy the audit requirements of this section by
submitting a sworn statement of annual expenditures to the
Legislative
auditor's office Auditor, along with a filing fee of
seventy-five dollars, on or before the fourteenth day of February of each year, if the volunteer fire department elects not to be
audited. 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. An
additional filing fee of twenty-five dollars shall be included with
the sworn statement of annual expenditures if the statement is
submitted between the fifteenth day of February and the fifteenth
day of March. An additional filing fee of fifty dollars shall be
included with the sworn statement of annual expenditures if the
statement is submitted between the sixteenth day of March and the
fifteenth day of April. If the sworn statement is not submitted on
or before the fifteenth day of April, the volunteer fire department
shall file an audit of the disbursement of funds, made by an
independent certified public accountant, with the Legislative
auditor's office Auditor no later than the first day of July. The
audit shall be made at the cost of the volunteer fire department.
If the audit made by the independent certified public accountant is
not filed with the Legislative Auditor by the first day of July,
the Legislative Auditor shall notify the State Treasurer who shall
withhold payment of one thousand dollars from any amount that would
otherwise be distributed to the fire department under the
provisions of sections fourteen-d and thirty-three, article three,
chapter thirty-three of this code and section sixteen-a, article
twelve of said chapter and 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. If the
volunteer fire department does not timely file a sworn statement of
annual expenditures or an audit of the disbursement of funds, made
by an independent certified public accountant, with the Legislative
auditor's office Auditor for three consecutive years, 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 sections fourteen-d
and thirty-three, article three, chapter thirty-three of this code
and section sixteen-a, article twelve of said chapter and 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.
(c) The
office of the Legislative Auditor may assign an
employee or employees to perform audits at the direction of the
Legislative Auditor of the disbursement of funds or grants 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 sections fourteen-d and thirty-three, article
three, chapter thirty-three of this code and section sixteen-a,
article twelve of said chapter 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.
(d) Filing fees paid by volunteer fire departments pursuant to
this section shall be paid into a special revenue account created
in the State Treasury known as the "Special Legislative Audit
Fund." Expenditures from the fund are authorized to be made by the
Legislative
auditor's office Auditor solely for the purposes of
payment of costs associated with the audits conducted pursuant to
this section. Any person who files a fraudulent sworn statement of
expenditures under this section is guilty of a felony and, upon
conviction thereof, shall be fined not less than one thousand
dollars nor more than five thousand dollars or imprisoned in a state correctional facility for not less than one year nor more
than five years, or both fined and imprisoned.
(e) 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 sections fourteen-d and thirty-three,
article three, chapter thirty-three of this code and section
sixteen-a, article twelve of said chapter. The Auditor shall send
a copy of any such 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.
(f) Any audit submitted pursuant to the provisions of this
section may be filed electronically in accordance with the
provisions of article one, chapter thirty-nine-a of this code.
NOTE: The purpose of this bill is to clarify when audits are
required of state funds or grants.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.