House Bill 461 First Edition, State Auditor Clarifying Amendments, North Carolina (2021)
Summary
House Bill 461, First Edition, in the General Assembly of North Carolina, Session 2021, with the short title State Auditor Clarifying Amendments (Public). It lists Representatives Howard, Szoka, Setzer, and Bradford as primary sponsors and shows referral on April 1, 2021 to State Government, if favorable, Finance, if favorable, Rules, Calendar, and Operations of the House. Section 1 rewrites § 147-64.2 on legislative policy and intent, Section 2 recodifies a subdivision of § 147-64.4 and rewrites its definitions, and Section 3 rewrites § 147-64.6 on duties and responsibilities. Section 4 states that the act is effective when it becomes law.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Cite this document
“House Bill 461 First Edition, State Auditor Clarifying Amendments, North Carolina (2021).”
Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2021-06-24-461-full-bill-8f15590b44/
, SHA-256 ee04f3bc5e8090b7fecf786fcfa325753ad3b585ee6966c4324bc815f1d87545.Full text
GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2021
H 1
HOUSE BILL 461
Short Title: State Auditor Clarifying Amendments. (Public)
Sponsors: Representatives Howard, Szoka, Setzer, and Bradford (Primary Sponsors).
For a complete list of sponsors, refer to the North Carolina General Assembly web site.
Referred to: State Government, if favorable, Finance, if favorable, Rules, Calendar, and
Operations of the House
April 1, 2021
1 A BILL TO BE ENTITLED
2 AN ACT TO MAKE CLARIFYING AND TECHNICAL CHANGES IN THE STATE
3 AUDITOR STATUTES.
4 The General Assembly of North Carolina enacts:
5 SECTION 1. G.S. 147-64.2 reads as rewritten:
6 "§ 147-64.2. Legislative policy and intent.
7 The General Assembly is ultimately responsible for authorizing the expenditure of public
8 moneys, designating the sources from which moneys may be collected, and shaping the
9 administrative structure to perform the work of government throughout the State, and is held
10 finally accountable for how the funds are spent and what is accomplished with them. The
11 legislature should, therefore, provide the basic direction for audits of State agencies.agencies as
12 defined in G.S. 147-64.4.
13 In the interest of reducing audit overlap and expense at all levels of government, the General
14 Assembly and the Auditor should promote, to the extent possible, coordinated nonduplicating
15 audits of public programs and activities of all governmental levels throughout the State.
16 It is the intent of this Article that all State agencies, and entities supported, partially or
17 entirely, by public funds be subject to audit and investigation under the policy guidance of the
18 Auditor. Such These audits and investigations shall be made to assist in furnishing the General
19 Assembly, the Governor, the executive departments and agencies of the State, the governing
20 bodies and executive departments of the political subdivisions of the State, and the public in
21 general with an independent evaluation of public program performance."
22 SECTION 2.(a) Subdivision (1) of G.S. 147-64.4 is recodified as subdivision (2a)
23 of that section.
24 SECTION 2.(b) G.S. 147-64.4, as amended by subsection (a) of this section, reads
25 as rewritten:
26 "§ 147-64.4. Definitions.
27 The words and phrases used in this Article have the following meanings:following definitions
28 apply in this Article:
29 …
30 (2) "Accounting system". – Accounting system or system of accounting. – The
31 total structure of records and procedures which that discover, record, classify,
32 and report information on the financial position and operating results of a
33 governmental unit State agency or any of its funds, balanced account groups,
34 and organizational components.
*H461-v-1*
General Assembly Of North Carolina Session 2021
1 (2a) "Audit". – Audit. – An independent review or examination of government
2 State agency organizations, programs, activities, and functions. The purpose
3 of an audit is to help ensure full accountability and assist government State
4 agency officials and employees in carrying out their responsibilities. The
5 elements of such an audit are:are as follows:
6 a. Financial and compliance: to determine whether financial operations
7 are properly conducted, whether the financial reports of an audited
8 entity a State agency are presented fairly, and whether the entity State
9 agency has complied with applicable laws and regulations; and,laws.
10 b. Economy and efficiency: to determine whether the entity State agency
11 is managing or utilizing its resources (such as personnel and property)
12 in an economical and efficient manner and the causes of any
13 inefficiencies or uneconomical practices, including inadequacies in
14 laws and regulations, laws, management information systems,
15 administrative policies and procedures, or organizational structures;
16 and,structures.
17 c. Program results: to determine whether the desired results or benefits
18 are being achieved, whether the objectives established by the General
19 Assembly or other another authorizing body are being met, and
20 whether the State agency has considered alternatives which that might
21 yield desired results at lower costs.
22 d. An audit may include all three elements or only one or two. It is not
23 intended or desirable that every audit include all three. Economy and
24 efficiency and program result audits should be selected when their use
25 will meet the needs of expected users of audit results.
26 (3) "Federal agency". – Federal agency. – Any department, agency, or
27 instrumentality of the federal government and any federally owned or
28 controlled corporation.
29 (3a) Investigation. – An independent review or examination of an allegation of an
30 improper governmental activity regarding a State agency organization,
31 program, activity, or function. The purpose of an investigation is to help
32 ensure full accountability and assist State agency officials and employees in
33 carrying out their responsibilities.
34 (4) "State agency". – State agency. – Any department, political subdivision,
35 institution, board, commission, committee, division, bureau, officer, official
36 or any other entity for which the State has oversight responsibility, including
37 but not limited to, any university, mental or specialty hospital, community
38 college, or clerk of court."
39 SECTION 3. G.S. 147-64.6 reads as rewritten:
40 "§ 147-64.6. Duties and responsibilities.
41 (a) General Duty. – It is the policy of the General Assembly to provide for the auditing
42 and investigation of State agencies by the impartial, independent State Auditor.
43 (b) Areas of Examination. – The duties of the Auditor are independently to examine into
44 and make findings of fact on whether State agencies:agencies have done or are doing all of the
45 following:
46 (1) Have established adequate operating and administrative procedures and
47 practices; systems of accounting, reporting reporting, and auditing; and other
48 necessary elements of legislative or management control.
49 (2) Are providing financial and other reports which that disclose fairly,
50 consistently, fully, and promptly all information needed to show the nature
Page 2 House Bill 461-First Edition
General Assembly Of North Carolina Session 2021
1 and scope of programs and activities and have established bases for evaluating
2 the results of such these programs and operations.
3 (3) Are promptly collecting, depositing, and properly accounting for all revenues
4 and receipts arising from their activities.
5 (4) Are conducting programs and activities and expending funds made available
6 in a faithful, efficient, and economical manner in compliance with and in
7 furtherance of applicable laws and regulations of the State, and, if applicable,
8 federal law and regulation.law.
9 (5) Are determining that the authorized activities or programs effectively serve
10 the intent and purpose of the General Assembly and, if applicable, federal law
11 and regulation.law.
12 (6) Are adhering to statutory requirements that include conditions precedent,
13 classifications, and similar eligibility or qualifying standards to assure that
14 statutory intent is carried out while the requirements are in effect.
15 (7) Are not engaging in an improper governmental activity as provided in
16 G.S. 147-64.6B, including misappropriation, mismanagement, waste of State
17 resources, fraud, or a violation of State or federal law.
18 (c) Responsibilities. – The Auditor is responsible for the following acts and activities:
19 (1) Audits made or caused to be made by the Auditor shall be conducted in
20 accordance with generally accepted auditing standards as prescribed by the
21 American Institute of Certified Public Accountants, the United States General
22 Accounting Office, or other professionally recognized accounting
23 standards-setting bodies.
24 (2) Financial and compliance audits may be made at the discretion of the Auditor
25 without advance notice to the organization being audited. Audits of economy
26 and efficiency and program results shall be discussed in advance with the
27 prospective auditee unless an unannounced visit is essential to the audit.
28 (3) The Auditor, on the Auditor's own initiative and as often as the Auditor deems
29 necessary, or as requested by the Governor or the General Assembly, shall, to
30 the extent deemed practicable and consistent with the Auditor's overall
31 responsibility as contained in this act, Article, make or cause to be made audits
32 of all or any part of the activities of the State agencies. Each State agency or
33 department receiving a financial statement audit by the Auditor under this
34 subdivision shall prepare a financial statement and supplementary information
35 in the format required by the Auditor. Financial statements and supplementary
36 information prepared as required by this subdivision shall be completed and
37 submitted to the Auditor not later than 60 days after the deadline for the State
38 agency's or department's Comprehensive Annual Financial Report submission
39 as established by the State Controller.
40 (4) The Auditor, at the Auditor's own discretion, may, in selecting audit areas and
41 in evaluating current audit activity, consider and utilize, in whole or in part,
42 the relevant audit coverage and applicable reports of the audit staffs of the
43 various State agencies, independent contractors, and federal agencies. The
44 Auditor shall coordinate, to the extent deemed practicable, the auditing
45 conducted within the State to meet the needs of all governmental bodies.
46 (5) The Auditor is authorized to may contract with federal audit agencies, or any
47 governmental agency, on a cost reimbursable basis, for the Auditor to perform
48 audits of federal grants and programs administered by the State Departments
49 and institutions State agencies in accordance with agreements negotiated
50 between the Auditor and the contracting federal audit agencies or any
51 governmental agency. In instances where the grantee State agency shall
House Bill 461-First Edition Page 3
General Assembly Of North Carolina Session 2021
1 subgrant subgrants these federal funds to local governments, regional councils
2 of government government, and other local groups or private or semiprivate
3 institutions or agencies, the Auditor shall have the authority to may examine
4 the books and records of these subgrantees to the extent necessary to
5 determine eligibility and proper use in accordance with State and federal laws
6 and regulations.laws.
7 The Auditor shall charge and collect from the contracting federal audit
8 agencies, or any governmental agencies, the actual cost of all the audits of the
9 grants and programs contracted by him the Auditor to do. Amounts collected
10 under these arrangements shall be deposited in the State Treasury and be
11 budgeted in the Department of State Auditor and shall be available to hire
12 sufficient personnel to perform these contracted audits and to pay for related
13 travel, supplies supplies, and other necessary expenses.
14 (6) The Auditor is authorized and directed shall, in the Auditor's reports of audits
15 or reports of special investigations to investigations, make any comments,
16 suggestions, or recommendations the Auditor deems appropriate concerning
17 any aspect of such the State agency's activities and operations.
18 (7) The Auditor may charge and collect from each examining and licensing board
19 the actual cost of each audit of such the board. Costs collected under this
20 subdivision shall be based on the actual expense incurred by the Auditor's
21 office in making such audit the audit, and the affected State agency shall be is
22 entitled to an itemized statement of such the costs. Amounts collected under
23 this subdivision shall be deposited into the general fund General Fund as
24 nontax revenue.
25 (8) The Auditor shall examine as often as may be deemed necessary the accounts
26 kept by the State Treasurer, and if the Auditor discovers any irregularity or
27 deficiency therein, in the accounts, unless the same be irregularity or
28 deficiency is rectified or explained to his the Auditor's satisfaction, report the
29 same forthwith it in writing to the General Assembly, with Assembly and
30 provide a copy of such the report to the Governor and Attorney General. In
31 addition to regular audits, the Auditor shall check the treasury Treasurer's
32 records at the time a new Treasurer assumes office (not to succeed himself or
33 herself), and therein and charge the Treasurer with the balance in the treasury,
34 accounts and shall check the Treasurer's records at the time the Treasurer
35 leaves office to determine that the accounts are in order.
36 (9) The Auditor may examine the accounts and records of any bank or financial
37 institution relating to transactions with the State Treasurer, or with any State
38 agency, or the Auditor may require banks doing business with the State to
39 furnish the Auditor information relating to transactions with the State or State
40 agencies.
41 (10) The Auditor may, as often as the Auditor deems advisable, conduct a detailed
42 review of the bookkeeping and accounting systems in use in the various State
43 agencies which that are supported partially or entirely from State funds. Such
44 These examinations will shall be for the purpose of evaluating the adequacy
45 of systems in use by these agencies and institutions. State agencies. In
46 instances where the Auditor determines that existing systems are outmoded,
47 inefficient, or otherwise inadequate, the Auditor shall recommend changes to
48 the State Controller. The State Controller shall prescribe and supervise the
49 installation of such these changes, as provided in G.S. 143B-426.39(2).
50 (11) The Auditor shall, through appropriate tests, satisfy himself or herself
51 concerning the propriety of the data presented in the Comprehensive Annual
Page 4 House Bill 461-First Edition
General Assembly Of North Carolina Session 2021
1 Financial Report and shall express the appropriate auditor's opinion in
2 accordance with generally accepted auditing standards.
3 (12) The Auditor shall provide a report to the Governor and Attorney General, and
4 other appropriate officials, of such facts as are in the Auditor's possession
5 which that pertain to the apparent violation of penal criminal statutes or
6 apparent instances of malfeasance, misfeasance, or nonfeasance by an officer
7 or employee.
8 (13) At the conclusion of an audit, the Auditor or the Auditor's designated
9 representative shall discuss the audit with the official whose office is subject
10 to audit and submit necessary underlying facts developed for all findings and
11 recommendations which that may be included in the audit report. On audits of
12 economy and efficiency and program results, the auditee's written response
13 shall be included in the final report if received within 15 to 30 days from
14 receipt of the draft report. The length of time shall be determined by the
15 Auditor and shall be commensurate with the number and complexity of the
16 findings.
17 (14) The Auditor shall notify the General Assembly, the Governor, the Chief
18 Executive Officer head of each State agency audited, and other persons as the
19 Auditor deems appropriate appropriate, that an audit report has been
20 published, its subject and title, and the locations, including State libraries, at
21 which the report is available. The Auditor shall then distribute copies of the
22 report only to those who request a report. The copies shall be in written or
23 electronic form, as requested. He The Auditor shall also file a copy of the audit
24 report in the Auditor's office, which will office which shall be a permanent
25 public record. In addition, the Auditor may publish on his or her Web site the
26 Auditor's website any reports from audits of State agencies not directly
27 conducted by the Auditor. Nothing in this subsection shall be construed as
28 authorizing or permitting permits the publication of information whose
29 disclosure is otherwise prohibited by law.
30 (15) It is not the intent of the audit function, nor shall it be so construed, to The
31 audit and investigation function does not infringe upon or deprive the General
32 Assembly and the executive or judicial branches of State government of any
33 rights, powers, or duties vested in or imposed upon them by statute or the
34 Constitution.
35 (16) The Auditor shall be is responsible for receiving reports of allegations of the
36 improper governmental activities as provided in G.S. 147-64.6B. The Auditor
37 shall adopt policies and procedures necessary to provide for the investigation
38 or referral of these allegations.
39 (17) Repealed by Session Laws 2009-136, s. 2, effective June 19, 2009.
40 (18) Repealed by Session Laws 2010-31, s. 6.15(b), effective July 1, 2010.
41 (19) Whenever the Auditor believes that information received or collected by the
42 Auditor may be evidence of a violation of any of the provisions of Chapter
43 138A of the General Statutes, Chapter 120C of the General Statutes, or Article
44 14 of Chapter 120 of the General Statutes, the Auditor shall report that
45 information to the State Ethics Commission and the Secretary of State as
46 appropriate. The Auditor shall be is bound by interpretations issued by the
47 State Ethics Commission as to whether or not any information reported by the
48 Auditor under this subdivision involves or may involve a violation of Chapter
49 138A of the General Statutes, Chapter 120C of the General Statutes, or Article
50 14 of Chapter 120 of the General Statutes. Nothing in this subdivision shall
House Bill 461-First Edition Page 5
General Assembly Of North Carolina Session 2021
1 be construed to limit limits the Auditor's authority under subdivision (1) of
2 this subsection.
3 (20) Whenever the Auditor believes that information received or collected by the
4 Auditor may be evidence of criminal misconduct, the Auditor shall report that
5 information to either the State Bureau of Investigation or the District Attorney
6 district attorney for the county where the alleged misconduct occurred.
7 Nothing in this subdivision shall be construed to limit limits the Auditor's
8 authority under subdivision (1) of this subsection.
9 (21) If an audit or investigation undertaken by the Auditor results in a finding that
10 a private person or entity has received public funds as a result of fraud,
11 misrepresentation, or other deceptive acts or practices while doing business
12 with the State or a political subdivision thereof, a State agency, the Auditor
13 shall submit a detailed written report of the finding, and any additional
14 necessary supporting documentation, to the State Purchasing Officer or the
15 appropriate political subdivision official, as applicable. A report submitted
16 under this subsection may include a recommendation that the private person
17 or entity be debarred from doing business with the State or a political
18 subdivision thereof.State agency.
19 (22) Verification audits for compliance with statutory requirements, with or
20 without advance notice to the organization or State agency being audited,
21 which may be initiated at the discretion of the Auditor or as requested by the
22 Governor or General Assembly.
23 (d) Reports and Work Papers. – The Auditor shall maintain for 10 years a complete file
24 of all audit reports and reports of other examinations, investigations, surveys, and reviews issued
25 under the Auditor's authority. Audit work papers and other evidence and related supportive
26 material directly pertaining to the work of the Auditor's office shall be retained according to an
27 agreement between the Auditor and State Archives. To promote intergovernmental cooperation
28 and avoid unnecessary duplication of audit effort, and notwithstanding the provisions of
29 G.S. 126-24, pertinent work papers and other supportive material related to an audit or
30 investigation made pursuant to this section may be, at the discretion of the Auditor and unless
31 otherwise prohibited by law, made available for inspection by duly authorized representatives of
32 the State and federal government who desire access to and inspection of the records in connection
33 with some matter officially before them, including criminal investigations.
34 Except as provided in this section, or upon an order issued in Wake County Superior Court
35 upon 10 days' notice and hearing finding that access is necessary to a proper administration of
36 justice, audit work papers and related supportive material shall be kept are confidential, including
37 any interpretations, advisory opinions, or other information or materials furnished to or by the
38 State Ethics Commission under this section.
39 (e) Access to Records. – The Auditor may examine the accounts and records of any
40 organization or State agency relating to a verification audit for compliance with a statutory
41 condition precedent, classification, or other similar eligibility or qualifying standard."
42 SECTION 4. This act is effective when it becomes law.
Page 6 House Bill 461-First Edition
File and source
- File
- 2021-06-24_461-Full-Bill.pdf
- Size
- 163,155 bytes
- SHA-256
- ee04f3bc5e8090b7fecf786fcfa325753ad3b585ee6966c4324bc815f1d87545
- Our copy
- 2021-06-24_461-Full-Bill.pdf
- Original
- No public link identified.