ARIZONA
HOUSE OF REPRESENTATIVES
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HB 2021: JLAC; auditor general |
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PRIME SPONSOR: Representative Allen J, LD 15 BILL STATUS: Caucus & COW |
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Relating to audit and review requirements
of the OAG, COR and JLAC.
Provisions
1. Requires the President of the Senate and Speaker of the House, rather than JLAC, to:
a. Designate the chairman of each COR and assign agencies to their respective CORs for performance review; and
b. Receive the following reports and assign them to the appropriate COR:
i. The annual report of the Arizona Game and Fish Commission;
ii. The report required by a person or Legislator examining factors for assessing the impact of a Legislative proposal for mandated health coverage; and
iii. The report required a person that advocates a Legislative proposal that would mandate that an insurer or self-insured employer deem that a disease or condition has arisen out of employment or substantially modifies a statute that establishes a presumption of compensability. (Sec; 1-4, 15)
2. Removes the requirement that the COR provide a copy of its written report of recommendations to JLAC after receiving reports relating to presumption of compensability and mandated health coverage. (Sec. 2, 3, 4)
3. Requires JLAC to meet annually, rather than quarterly. (Sec. 6)
4. Removes the requirement that an OAG performance audit include all of the following, and instead permits the audit to address one or more of the following:
a. Whether the audited agency is using its resources in an economical and efficient manner;
b. Causes of any inefficiencies or uneconomic practices;
c. Whether desired results are being achieved; or
d. Whether established objectives are being met. (Sec. 5)
5. Makes the following changes relating to the powers and duties of the OAG;
a. Requires annual, rather than biennial, financial and compliance audits of financial transactions and accounts kept by state agencies subject to federal single audit requirements;
b. Removes the requirement that the OAG submit an annual report to the Governor and JLAC;
c. Allows the OAG, AS RESOURCES ALLOW, to conduct an investigation RELATED TO ALLEGATIONS OF FINANCIAL WRONGDOING of a STATE AGENCY OR political subdivision THAT IS FUNDED BY TAX REVENUE:
i. In connection with an authorized audit; AND
ii. On request of a public officer, sheriff, county attorney, municipal prosecutor, the AG OR THEIR DESIGNEE REGARDING AN OPEN INVESTIGATION.
d. Requires an audit to be conducted by the OAG on any county's transportation excise tax after its first 5 years, rather than first 10 years;
e. Removes the requirement that performance audits of school district spending conducted by the OAG include whether the district receive monies from the Arizona Structured English Immersion Fund and the Statewide Compensatory Instruction Fund;
f. Requires school districts to submit a status report on the implementation of any recommendations made at the request of the OAG within a two-year period, rather than every six months; and
g. Removes the requirement to review a school district's progress with implementation of any recommendations every six months. (Sec. 8) (GOV)
6. Requires the Joint Legislative Budget Committee to notify all Members of the Legislature of the cost of conducting any special audit authorized by Legislation based on information provided by the OAG.
a. Specifies that the cost must be provided before the measure is scheduled for 3rd Read in the House or origin, in the House in which the special audit provision was added or before the measure is scheduled for final passage if the audit was added in a Conference Committee. (Sec. 8)
7. Requires the county treasurer that approved a transportation excise tax to:
a. Cooperate with and provide necessary information to the OAG; and
b. Reimburse the OAG for the cost of conducting the excise tax study or performance audit on Highway User Revenue Fund monies received by a county, city or town. (Sec. 8)
8. Permits the OAG to:
a. Interview employees in the performance of its official functions; and
b. Attend executive sessions of any entity subject to open meeting requirements. (Sec. 9)
9. Classifies knowingly obstructing or misleading the OAG in the execution of its duties as a Class 2 misdemeanor (4 months/ $750 plus surcharges). (Sec. 9)
10. Requires all officers of a public body or state contractors to afford reasonable and needed facilities for OAG staff and make records available. (Sec. 9)
11. Requires the AG to supervise the prosecution of any person who violates requirements for cooperation with the OAG. (Sec. 9)
12. Permits the Audit Services Revolving Fund to be comprised of monies received from performing performance audits of federal funds, counties for which the OAG conducts transportation excise tax audits and any other authorized statutory source. (Sec. 10)
13. Removes the requirement that the OAG uniform expenditure reporting system for community college districts include:
a. A reconciliation of the total expenditures reported within the financial statements to the total expenditures reported within the limitation report; nad
b. The requirement that total budget expenditures, exclusions from local revenues and amounts be broken down by fund. (Sec. 11)
14. Requires the OAG to conduct financial statement audits, rather than financial and compliance audits of counties and community colleges and requires the audits to:
a. Include, for counties that must comply with federal single audit requirements, compliance audits of financial transactions and applicable accounts;
b. Be conducted in accordance with generally accepted auditing standards; and
c. Include tests of accounting records and other auditing procedures as may be considered necessary. (Sec. 13)
15. Repeals the requirement that: county, community college and school district officers afford reasonable and needed facilities to the OAG, make returns and exhibits to the OAG and applicable penalties. (Sec. 14)
16. Modifies the factors the COR must consider and the written statement prepared by an agency during a sunset review in the following manner:
a. Removes the requirement that the COR consider the extent to which:
i. The agency services the entire state, rather than specific interest;
ii. The AG or other applicable agency has the authority to prosecute actions;
iii. The agency has used private contractors in the performance of its duties as compared to other states and how more effective use of private contractors could be accomplished;
b. Requires the COR to consider the extent to which:
i. The agency's key objectives and purposes duplicate the objectives and purposes of other governmental agencies;
ii. The agency has established safeguards against possible conflicts of interest;
iii. Statutory changes are necessary for the agency to better fulfil its objectives and purposes and eliminate responsibilities that are no longer necessary.
c. Requires the written statement, rather than COR factors, to include the extent to which the agency creates unexpected negative consequences that might require additional review by the COR, including:
i. Increasing the price of goods or affecting the availability of services;
ii. Limiting the ability of individuals and businesses to operate efficiently; and
iii. Increasing the cost of government.
d. Requires the COR factors, rather than the written statement, to include the extent to which the agency's objectives and purposes duplicate the functions of other state agencies; and
e. Removes the requirement that the agency statement contain:
i. An identification of the problem or needs that he agency is intended to address; and
ii. A statement of the agency's agenda.
f. Requires the agency statement to contain f the extent to which the agency has addressed deficiencies in its enabling statute. (Sec. 16)
17. Requires the OAG, rather than JLAC, to conduct a review at least every 10 years of the Arizona Department of Education's programs and activities, the programs and commissions within the judiciary and state universities. (Sec. 17)
18. Defines political subdivision. (Sec. 5)
19. Makes technical and conforming changes. (5, 7-10, 12, 13, 15-17)
Current Law
JLAC is a committee consisting of members of the Legislature appointed by the Speaker of the House and President of the Senate. JLAC is required to oversee all audit functions of the legislature and state agencies, including, sunset, performance, special and other audits (A.R.S. § 41-1279). Each standing committee of both legislative houses is required to appoint a subcommittee of five members. This subcommittee jointly constitutes a COR in its respective subject area. When an agency goes through the sunset review process, the COR is required to hold a public hearing to consider multiple factors relating to the agency and receive public testimony. After the hearing, the COR must issue a final sunset review report, which must include a written statement, containing recommendations of whether the agency should be continued, revised, consolidated or terminated (A.R.S. § 41-2954). The OAG is required to complete a number of performance, sunset, financial, compliance and other audits pursuant to A.R.S. § 41-1279.03. The OAG is required to issue a list of all agencies scheduled for termination in the preceding 20 months and recommend review by either the OAG or a COR.
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Fifty-third Legislature HB 2021
Second Regular Session Version 2: Caucus & COW
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