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ENROLLED
Senate Bill No. 4006
(By Senators Tomblin, Mr. President, and Sprouse,
By Request of the Executive)
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[Passed September 13, 2005; in effect from passage.]
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AN ACT to amend and reenact §12-4-14 of the Code of West Virginia,
1931, as amended, relating to accountability of persons
receiving state funds or grants; requiring reports or sworn
statements for certain state funds or grants;
giving Secretary
of the Department of Administration
rule-making authority;
providing for the barring of persons from receiving state
grants or funds; providing for the submission of information
on sworn statements or reports to the Legislative Auditor;
authorizing the Legislative Auditor to perform audits in
certain circumstances; requiring the Legislative Auditor to
inform the State Treasurer if certain reports or sworn
statements are not submitted within a certain period; and
providing criminal penalties for filing
a fraudulent sworn
statement of expenditures, a fraudulent sworn statement or a
fraudulent report.
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. Accountability of persons 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" includes any 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
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 section twelve, article two, chapter
five-b 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 sections fourteen-d and thirty-three, article three,
chapter thirty-three of this code and section seven, article
twelve-c of said chapter.
(b) (1) Any person who receives one or more state grants in
the amount of fifty thousand dollars 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 the
twenty-seventh day of June, two thousand three, and submitted
within the period provided in this section may be substituted for
the report.
(2)
Any person who receives a state grant in an amount less
than fifty thousand dollars 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
subdivisions (1) and (2) of this subsection shall be filed within
two years of the end of the person'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.
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 failing to file a required report or sworn
statement of expenditures
within the two-year period provided in
subdivision (3), subsection (b) of this section for state grant
funds disbursed after the first day of July, two thousand three, is barred from subsequently receiving state grants until the person
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
failing to file a required report or sworn statement of
expenditures
within the required period provided in subdivision
(3), subsection (b) of this section for a state grant disbursed
after the first day of July, two thousand three, to the Legislative
Auditor for purposes of debarment from receiving state grants.
(d) (1) The state agency administering the state grant shall
notify the 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 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 seeking the state grant
provide a sworn statement from an authorized representative that
the person 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 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 subsection (e) of this section.
(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 thirty 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 article three, chapter twenty-nine-a of this code to
assist in implementing the provisions of subsections (a), (b), (c)
and (d) of this section.
(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 fiscal year and federal employer identification number and
the purpose and nature of the state grant within thirty days of making the state grant or authorizing the disbursement of the
funds, whichever is later. If the state grant was awarded prior to
the first day of October, two thousand five, the grantor shall
provide the information required by this section by the first day
of December, two thousand five.
(2) The State Treasurer shall provide the Legislative Auditor
the information concerning formula distributions to volunteer and
part-volunteer fire departments, made pursuant to sections
fourteen-d and thirty-three, article three, chapter thirty-three of
this code and section seven, article twelve-c of said chapter, the
Legislative Auditor requests and in the manner designated by the
Legislative Auditor.
(3) The Legislative Auditor shall maintain a list identifying
persons 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 sections fourteen-d and
thirty-three, article three, chapter thirty-three of this code and
section seven, article twelve-c of said chapter shall either:
(A) File a report, as defined in
subdivision (3), subsection
(a) of this section 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 the fourteenth day of February 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 the fifteenth day of May,
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 the first day of July, 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 sections fourteen-d and thirty-three, article
three, chapter thirty-three of this code and section seven, article
twelve-c of said chapter 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
subdivision (4) of this subsection.
(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 sections fourteen-d and thirty-three, article
three, chapter thirty-three of this code and section seven, article
twelve-c 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.
(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 sections fourteen-d and thirty-three,
article three, chapter thirty-three of this code and section seven,
article twelve-c of said chapter. 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
subdivision (3) of this subsection.
(h) Any report 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.
(i) Any person who files a fraudulent sworn statement of expenditures under subsection (b) or (g) of this section, a
fraudulent sworn statement under subsection (d) of this section or
a fraudulent report 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.