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General Assembly Substitute Bill No. 961
January Session, 2019
AN ACT CONCERNING TH E AUDIT OF MUNICIPAL ELECTRIC
ENERGY COOPERATIVES BY THE AUDITORS OF PUBLIC
ACCOUNTS, THE MUNICI PAL ELECTRIC CONSUME R ADVOCATE
AND RECOMMENDATIONS FROM A MUNICIPAL ELE CTRIC ENERGY
COOPERATIVE FORENSIC EXAMINATION.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Section 2-90 of the general statutes is repealed and the 1
following is substituted in lieu thereof (Effective from passage): 2
(a) The Auditors of Public Accounts shall organize the work of their 3
office in such manner as they deem most economical and efficient and 4
shall determine the scope and frequency of any audit they conduct. 5
(b) Said auditors, with the Comptroller, shall, at least annually and 6
as frequently as they deem necessary, audit the books and accounts of 7
the Treasurer, including, but not limited to, trust funds, as defined in 8
section 3-13c, and certify the results to the Governor. The auditors 9
shall, at least annually and as frequently as they deem necessary, audit 10
the books and accounts of the Comptroller and certify the results to the 11
Governor. They shall examine and prepare certificates of audit with 12
respect to the financial statements contained in the annual reports of 13
the Treasurer and Comptroller, which certificates shall be made part of 14
such annual reports. In carrying out their responsibilities under this 15
section, said auditors may retain independent auditors to assist them. 16 Substitute Bill No. 961
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(c) Said auditors shall audit, on a biennial basis if deemed most 17
economical and efficient, or as frequently as they deem necessary, the 18
books and accounts of each officer, department, commission, board 19
and court of the state government, all institutions supported by the 20
state and all public and quasi-public bodies, politic and corporate, 21
created by public or special act of the General Assembly and not 22
required to be audited or subject to reporting requirements, under the 23
provisions of chapter 111. Each such audit may include an examination 24
of performance in order to determine effectiveness in achieving 25
expressed legislative purposes. The auditors shall report their findings 26
and recommendations to the Governor, the State Comptroller and the 27
joint standing committee of the General Assembly having cognizance 28
of matters relating to appropriations and the budgets of state agencies. 29
(d) The Auditors of Public Accounts may enter into such contractual 30
agreements as may be necessary for the discharge of their duties. Any 31
audit or report which is prepared by a person, firm or corporation 32
pursuant to any contract with the Auditors of Public Accounts shall 33
bear the signature of the person primarily responsible for the 34
preparation of such audit or report. As used in this subsection, the 35
term "person" means a natural person. 36
(e) (1) If the Auditors of Public Accounts discover, or if it should 37
come to their knowledge, that any unauthorized, illegal, irregular or 38
unsafe handling or expenditure of state funds or quasi-public agency 39
funds or any breakdown in the safekeeping of any resources of the 40
state or a quasi-public agency has occurred or is contemplated, they 41
shall forthwith report the facts to the Governor, the State Comptroller, 42
the clerk of each house of the General Assembly and the Attorney 43
General, except that if a matter reported to the Auditors of Public 44
Accounts pursuant to section 4-33a is still under investigation by a 45
state or quasi-public agency, the Auditors of Public Accounts may give 46
the agency a reasonable amount of time to conduct such investigation 47
prior to the auditors reporting the matter to said officials. (2) If the 48
Auditors of Public Accounts decide to delay reporting such matter in 49 Substitute Bill No. 961
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accordance with subdivision (1) of this subsection, the auditors shall 50
immediately notify the Attorney General of such decision. (3) Any 51
Auditor of Public Accounts neglecting to make the report required 52
under subdivision (1) of this subsection, or any agent of the auditors 53
neglecting to report to the Auditors of Public Accounts any such 54
matter discovered by such agent or coming to such agent's knowledge, 55
shall be fined not more than one hundred dollars or imprisoned not 56
more than six months, or both. 57
(f) All reports issued or made pursuant to this section shall be 58
retained in the offices of the Auditors of Public Accounts for a period 59
of not less than five years. The auditors shall file one copy of each such 60
report with the State Librarian. 61
(g) Each state agency shall keep its accounts in such form and by 62
such methods as to exhibit the facts required by said auditors and, the 63
provisions of any other general statute notwithstanding, shall make all 64
records and accounts available to them or their agents, upon demand. 65
(h) Where there are statutory requirements of confidentiality with 66
regard to such records and accounts or examinations of 67
nongovernmental entities which are maintained by a state agency, 68
such requirements of confidentiality and the penalties for the violation 69
thereof shall apply to the auditors and to their authorized 70
representatives in the same manner and to the same extent as such 71
requirements of confidentiality and penalties apply to such state 72
agency. In addition, the portion of (1) any audit or report prepared by 73
the Auditors of Public Accounts that concerns the internal control 74
structure of a state information system or the identity of an employee 75
who provides information regarding alleged fraud or weaknesses in 76
the control structure of a state agency that may lead to fraud, or (2) any 77
document that may reveal the identity of such employee, shall not be 78
subject to disclosure under the Freedom of Information Act, as defined 79
in section 1-200. 80
(i) Said auditors shall audit, in accordance with the provisions of 81 Substitute Bill No. 961
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section 10-91g, the records and accounts of any private provider of 82
special education services, as defined in said section. Any private 83
provider of special education services being audited by said auditors 84
shall provide any information said auditors deem necessary to conduct 85
such audit. 86
(j) Said auditors shall audit, in accordance with the provisions of 87
chapter 101a, the records and accounts of any municipal electric 88
energy cooperative, as defined in said chapter. Any municipal electric 89
energy cooperative being audited by said auditors shall provide any 90
information said auditors deem necessary to conduct such audit. 91
Sec. 2. Subsection (a) of section 7-121f of the general statutes is 92
repealed and the following is substituted in lieu thereof (Effective from 93
passage): 94
(a) There is established a Municipal Electric Consumer Advocate to 95
act as an independent advocate for consumer interests in all matters 96
which may affect municipal electric energy cooperative consumers, 97
including, but not limited to, electric rates. Costs related to the 98
Municipal Electric Consumer Advocate, including, but not limited to, 99
hourly fees, [and] necessary expenses and fees for consultants hired by 100
the Municipal Electric Consumer Advocate as needed, shall be paid for 101
by all municipal electric energy cooperatives. The annual amount of 102
such costs (1) for such consultants shall not exceed thirty thousand 103
dollars, and (2) for all other fees and expenses that are not for 104
consultants shall not exceed seventy thousand dollars for the first 105
[year] six years and fifty thousand dollars for each year thereafter, 106
unless there is a demonstration of substantial need made by the 107
Municipal Electric Consumer Advocate and approved by the 108
cooperative utility boards of all municipal electric energy cooperatives. 109
Sec. 3. Subsection (h) of section 7-233c of the general statutes is 110
repealed and the following is substituted in lieu thereof (Effective from 111
passage): 112 Substitute Bill No. 961
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(h) A municipal electric energy cooperative shall cause a forensic 113
examination to be conducted by a certified forensic auditor which shall 114
include a review of the revenue and expenditures of a municipal 115
electric energy cooperative for the preceding five years. The auditor 116
shall submit a report that includes a review of whether such municipal 117
electric energy cooperative's operating procedures conform with the 118
provisions of chapter 101a and the bylaws of the municipal electric 119
energy cooperative, and any recommendations for any corrective 120
actions needed to ensure such conformance. The auditor shall not be 121
required to perform a full financial audit of the five-year period or 122
submit an opinion regarding the financial statements or a management 123
letter. The municipal electric energy cooperative shall incorporate any 124
such recommendations for corrective actions into its operating 125
procedures. The municipal electric energy cooperative shall post on its 126
Internet web site and provide to participants such reports not later 127
than seven days after such reports are received by the municipal 128
electric energy cooperative. Each participant shall post on its Internet 129
web site and provide to the municipality in which it operates such 130
reports not later than five days after such reports are received from the 131
municipal electric energy cooperative. Each such municipality shall 132
post on its Internet web site such reports not later than five days after 133
such reports are received from the participant. 134
Sec. 4. Section 7-233c of the general statutes is amended by adding 135
subsection (k) as follows (Effective from passage): 136
(NEW) (k) (1) The Auditors of Public Accounts shall conduct two 137
audits of each municipal electric energy cooperative in the state. (A) 138
On or before October 1, 2020, the Auditors of Public Accounts shall 139
conduct a financial audit and performance audit of each municipal 140
electric energy cooperative in the state. (B) On or before October 1, 141
2023, the Auditors of Public Accounts shall conduct an audit of each 142
municipal electric energy cooperative in the state, provided (i) if the 143
auditors made any recommendations in an audit of a municipal 144
electric energy cooperative conducted pursuant to subparagraph (A) of 145 Substitute Bill No. 961
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this subdivision, the auditors may, at their discretion, in the audit 146
conducted pursuant to this subparagraph, only review such 147
recommendations for the same such municipal electric energy 148
cooperative, and (ii) if the auditors did not make any 149
recommendations in an audit of a municipal electric energy 150
cooperative conducted pursuant to subparagraph (A) of this 151
subdivision, the auditors shall conduct a financial audit and 152
performance audit for the same such municipal electric energy 153
cooperative. Nothing in this section shall be interpreted to limit the 154
scope of any audit conducted pursuant to this section if additional 155
information becomes available to the auditors during the course of an 156
audit conducted pursuant to subparagraph (B)(i) of this subdivision. 157
The Auditors of Public Accounts, in accordance with the provisions of 158
section 11-4a, shall report their findings to the joint standing 159
committee of the General Assembly having cognizance of matters 160
relating to energy. 161
(2) On two occasions, once on or before October 1, 2020, and once on 162
or before October 1, 2023, each municipal electric energy cooperative in 163
the state shall remit payment to the state in an amount not less than 164
forty thousand dollars for the costs associated with the audits 165
performed pursuant to subdivision (1) of this subsection. 166
This act shall take effect as follows and shall amend the following
sections:
Section 1 from passage 2-90
Sec. 2 from passage 7-121f(a)
Sec. 3 from passage 7-233c(h)
Sec. 4 from passage 7-233c
ET Joint Favorable Subst.
APP Joint Favorable