Introduced Version
SENATE BILL No. 221
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 5-2-4-1; IC 5-11; IC 36-2-9-2.5.
Synopsis: State board of accounts. Adds the director of the special
investigations department of the state board of accounts (state board)
to the definition of "criminal justice agency" for purposes of collecting
criminal intelligence information. Limits the authority of the director
of the special investigations department to investigations involving
public monies that are the subject of financial examinations undertaken
by the state board. Provides that an internal audit or risk assessment
conducted by or on behalf of the state shall remain confidential, and
that the state and other individuals may not divulge information related
to an internal audit or risk assessment unless required to do so in
accordance with a judicial order. Provides an exception allowing the
state and other individuals to divulge information related to an internal
audit or risk assessment to: (1) the state examiner; (2) the director of
the office of management and budget; (3) an external auditor, in
accordance with professional auditing standards; or (4) any other
individual for any reason that constitutes good cause as determined by
the state examiner and approved by the director of the office of
management and budget. Provides that if a majority of a governing
body is present during an exit conference, or any conference initiated
by the state examiner to discuss an examination status, the governing
body shall be considered in an executive session. Requires an
individual elected to the office of county auditor to annually certify
completion of the individual's training requirements and file the
certification with the state board.
Effective: July 1, 2024.
Bassler
January 9, 2024, read first time and referred to Committee on Tax and Fiscal Policy.
2024 IN 221—LS 6397/DI 134 Introduced
Second Regular Session of the 123rd General Assembly (2024)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in this style type. Also, the
word NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
between statutes enacted by the 2023 Regular Session of the General Assembly.
SENATE BILL No. 221
A BILL FOR AN ACT to amend the Indiana Code concerning state
and local administration.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 5-2-4-1, AS AMENDED BY P.L.27-2010,
2 SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3 JULY 1, 2024]: Sec. 1. As used in this chapter, unless the context
4 otherwise requires:
5 (1) "Criminal history information" means information collected
6 by criminal justice agencies or individuals consisting of
7 identifiable descriptions and notations of arrests, detentions,
8 indictments, informations, or other formal criminal charges, and
9 any disposition arising therefrom, sentencing, correctional
10 supervision, and release.
11 (2) "Criminal intelligence information" means information on
12 identifiable individuals compiled in an effort to anticipate,
13 prevent, or monitor possible criminal activity, including terrorist
14 activity. "Criminal intelligence information" does not include
15 criminal investigative information, which is information on
16 identifiable individuals compiled in the course of the
17 investigation of specific criminal acts.
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1 (3) "Criminal justice agency" means any agency or department of
2 any level of government which performs as its principal function
3 the apprehension, prosecution, adjudication, incarceration, or
4 rehabilitation of criminal offenders, or location of parents with
5 child support obligations under 42 U.S.C. 653. The term includes
6 the following:
7 (A) A nongovernmental entity that performs as its principal
8 function the:
9 (i) apprehension, prosecution, adjudication, incarceration, or
10 rehabilitation of criminal offenders; or
11 (ii) location of parents with child support obligations under
12 42 U.S.C. 653;
13 under a contract with an agency or department of any level of
14 government.
15 (B) The department of homeland security. and
16 (C) The Indiana intelligence fusion center established by
17 IC 10-11-9-2.
18 (D) The director of the special investigations department
19 of the state board of accounts. The authority of the
20 director as a criminal justice agency under this clause is
21 limited to investigations involving public monies under
22 IC 5-11-1-9.
23 SECTION 2. IC 5-11-1-28, AS AMENDED BY THE TECHNICAL
24 CORRECTIONS BILL OF THE 2024 GENERAL ASSEMBLY, IS
25 AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2024]:
26 Sec. 28. (a) The bureau of motor vehicles (IC 9-14-7-1), office of the
27 secretary of family and social services (IC 12-8-1.5-1), and department
28 of state revenue (IC 6-8.1-2-1) shall each annually:
29 (1) have performed by an internal auditor:
30 (A) an internal audit; and
31 (B) a review of internal control systems;
32 of the agency; and
33 (2) have the internal auditor report the results of the internal audit
34 and review to an examiner designated by the state examiner to
35 receive the results.
36 (b) The examiner designated under subsection (a) shall, not later
37 than September 1 of each year:
38 (1) compile a final report of the results of the internal audits and
39 reviews performed and reported under subsection (a); and
40 (2) submit a copy of the final report to the following:
41 (A) The governor.
42 (B) The auditor of state comptroller.
2024 IN 221—LS 6397/DI 134 3
1 (C) The chairperson of the audit committee, in an electronic
2 format under IC 5-14-6.
3 (D) The director of the office of management and budget.
4 (E) The legislative council, in an electronic format under
5 IC 5-14-6.
6 (c) An internal audit or risk assessment conducted by or on
7 behalf of the state shall remain confidential, except as provided in
8 subsection (e).
9 (d) Except as provided in subsection (e), or in accordance with
10 a judicial order:
11 (1) the state;
12 (2) an employee of the state;
13 (3) a former employee of the state;
14 (4) counsel to the state;
15 (5) an agent of the state; or
16 (6) any other person;
17 may not divulge information related to any internal audit or risk
18 assessment conducted by or on behalf of the state.
19 (e) Notwithstanding subsection (d), an entity or individual listed
20 in subsection (d) may divulge information related to an internal
21 audit or risk assessment conducted by or on behalf of the state to:
22 (1) the state examiner or the state examiner's designee;
23 (2) the director of the office of management and budget or the
24 director of the office of management and budget's designee;
25 (3) an external auditor, in accordance with professional
26 auditing standards; or
27 (4) any other individual for any reason that constitutes good
28 cause as determined by the state examiner and approved by
29 the director of the office of management and budget.
30 SECTION 3. IC 5-11-5-1, AS AMENDED BY P.L.59-2023,
31 SECTION 12, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
32 JULY 1, 2024]: Sec. 1. (a) Whenever an examination is made under
33 this article, a report of the examination shall be made. The report must
34 include a list of findings and shall be signed and verified by the
35 examiner making the examination. A finding that is critical of an
36 examined entity must be based upon one (1) of the following:
37 (1) Failure of the entity to observe a uniform compliance
38 guideline established under IC 5-11-1-24(a).
39 (2) Failure of the entity to comply with a specific law.
40 A report that includes a finding that is critical of an examined entity
41 must designate the uniform compliance guideline or the specific law
42 upon which the finding is based. Except as provided in subsection (g),
2024 IN 221—LS 6397/DI 134 4
1 the state board of accounts may issue confidential management letters,
2 based on professional auditing standards, to an audited entity (as
3 defined in section 1.5(a) of this chapter) in a situation involving
4 noncompliance that does not result in the establishment of a corrective
5 action plan but that must be brought to the attention of the audited
6 entity's governing body. If issues addressed in the confidential
7 management letter become part of a finding in the subsequent audit
8 period, it shall be noted in the public report. The state examiner shall
9 file one (1) copy of the report with the entity examined, one (1) copy
10 in an electronic format on a public website, and one (1) copy in an
11 electronic format under IC 5-14-6 with the legislative services agency,
12 as staff to the audit committee and the general assembly. A report is
13 open to public inspection at all reasonable times after it is filed. If an
14 examination discloses malfeasance, misfeasance, or nonfeasance in
15 office or of any officer or employee, a copy of the report, signed and
16 verified, shall be placed by the state examiner with the attorney general
17 and the inspector general. The attorney general shall diligently institute
18 and prosecute civil proceedings against the persons or entities charged
19 in such report, or upon the officer's or employee's official bond, or both,
20 and against any other proper person that will secure to the state or to
21 the proper municipality the recovery of any funds misappropriated,
22 diverted, or unaccounted for.
23 (b) Before an examination report is signed, verified, and filed as
24 required by subsection (a), the officer or the chief executive officer of
25 the state office, municipality, or entity examined must have an
26 opportunity to review the report and to file with the state examiner a
27 written response to that report. If a written response is filed, it becomes
28 a part of the examination report that is signed, verified, and filed as
29 required by subsection (a). As part of the review of the examination
30 report, the state examiner shall hold a gathering of the officer or chief
31 executive officer of the state office, municipality, or entity examined,
32 any employees or agents of the state office, municipality, or entity
33 examined who are requested to attend by the officer or chief executive
34 officer of the state office, municipality, or entity examined, and the
35 members of the legislative and fiscal bodies of the municipality or
36 entity examined. Such a gathering is referred to as an "exit conference"
37 for purposes of this subsection. The following apply to an exit
38 conference:
39 (1) All information discussed and materials presented or delivered
40 by any person during an exit conference are confidential and may
41 not be discussed or shared publicly until the earliest of the
42 occurrences set forth in subsection (g). However, the information
2024 IN 221—LS 6397/DI 134 5
1 discussed and materials presented or delivered during an exit
2 conference may be shared with an officer, employee, consultant,
3 adviser, or attorney of the officer or chief executive officer of the
4 state office, municipality, or entity examined who was not present
5 at the exit conference. An individual with whom information and
6 materials are shared must maintain the confidentiality of the
7 information and materials as provided in this subdivision until the
8 earliest of the occurrences set forth in subsection (g).
9 (2) An individual attending an exit conference may not
10 electronically record the exit conference.
11 (3) If a majority of a governing body (as defined in
12 IC 5-14-1.5-2(b)) is present during an exit conference, or any
13 conference initiated by the state examiner to discuss an
14 examination status, the governing body shall be considered in an
15 executive session under IC 5-14-1.5. However, the governing
16 body has no obligation to give notice as prescribed by
17 IC 5-14-1.5-5 when it participates in the exit conference or any
18 conference initiated by the state examiner to discuss an
19 examination status.
20 (4) If the state examiner determines after the exit conference that
21 additional actions must be undertaken by a deputy examiner, field
22 examiner, or private examiner with respect to information
23 discussed or materials presented at the exit conference, the state
24 examiner may call for an additional exit conference to be held.
25 (c) If an examination report shows or discloses the commission of
26 a crime by any person, it is the duty of the state examiner to transmit
27 and present the examination report to the prosecuting attorney of the
28 county in which the crime was committed. The state examiner shall
29 furnish to the prosecuting attorney all evidence at the state examiner's
30 command necessary in the investigation and prosecution of the crime.
31 (d) If, during an examination under this article, a deputy examiner,
32 field examiner, or private examiner acting as an agent of the state
33 examiner determines that the following conditions are satisfied, the
34 examiner shall report the determination to the state examiner:
35 (1) A substantial amount of public funds has been
36 misappropriated or diverted.
37 (2) The deputy examiner, field examiner, or private examiner
38 acting as an agent of the state examiner has a reasonable belief
39 that the malfeasance or misfeasance that resulted in the
40 misappropriation or diversion of the public funds was committed
41 by the officer or an employee of the office or entity.
42 (e) After receiving a preliminary report under subsection (d), the
2024 IN 221—LS 6397/DI 134 6
1 state examiner may provide a copy of the report to the attorney general.
2 The attorney general may institute and prosecute civil proceedings
3 against the persons or entities charged in such report, or upon the
4 officer's or employee's official bond, or both, and against any other
5 proper person that will secure to the state or to the proper municipality
6 the recovery of any funds misappropriated, diverted, or unaccounted
7 for.
8 (f) In an action under subsection (e), the attorney general may attach
9 the defendant's property under IC 34-25-2.
10 (g) Except as permitted in this section, the information and materials
11 that are part of an exit conference under subsection (b), and the results
12 of an examination or investigation, including a preliminary report
13 under subsection (d), are confidential until the occurrence of the
14 earliest of the following:
15 (1) The final report is made public under subsection (a).
16 (2) The attorney general institutes an action under subsection (e)
17 on the basis of the preliminary report.
18 (3) The results of an examination or investigation are published
19 by direction of the state examiner or any court.
20 (h) Except as permitted in this section, an individual, a public
21 agency (as defined in IC 5-14-3-2), a public employee, a public official,
22 or an employee or officer of a contractor or subcontractor of a public
23 agency that knowingly or intentionally discloses information in
24 violation of subsection (b) or (g), regardless of whether the information
25 is received orally or by any other means, is subject to the following:
26 (1) A public agency (as defined in IC 5-14-3-2), a public
27 employee, a public official, or an employee or officer of a
28 contractor or subcontractor of a public agency commits a Class A
29 infraction under IC 5-14-3-10.
30 (2) If the disclosure is by a person who is not described in
31 subdivision (1), the person commits a Class A infraction.
32 (i) Unless in accordance with a judicial order or as otherwise
33 provided in this section, the state board of accounts or its employees,
34 former employees, counsel, or agents, or any other person may not
35 divulge the examination workpapers and investigation records of a
36 deputy examiner, a field examiner, or a private examiner acting as an
37 agent of the state examiner, except to:
38 (1) employees and members of the state board of accounts;
39 (2) the audit committee;
40 (3) law enforcement officers, the attorney general, a prosecuting
41 attorney, or any other legal representative of the state in any
42 action with respect to the misappropriation or diversion of public
2024 IN 221—LS 6397/DI 134 7
1 funds;
2 (4) an authorized representative of the United States;
3 (5) a successor examiner or auditor, in accordance with applicable
4 professional auditing standards; or
5 (6) another individual for any other factor that constitutes good
6 cause as set forth in criteria established by the state examiner and
7 approved by the audit committee.
8 (j) An individual described in subsection (i)(3) or (i)(4) who
9 receives examination workpapers and investigation records described
10 in subsection (i) may divulge the workpapers and records in any action
11 with respect to the misappropriation or diversion of public funds.
12 SECTION 4. IC 36-2-9-2.5, AS AMENDED BY P.L.257-2019,
13 SECTION 104, IS AMENDED TO READ AS FOLLOWS
14 [EFFECTIVE JULY 1, 2024]: Sec. 2.5. (a) As used in this section,
15 "training courses" refers to training courses related to the office of
16 county auditor that are compiled or developed by the Association of
17 Indiana Counties and approved by the state board of accounts.
18 (b) An individual elected to the office of county auditor shall
19 complete at least:
20 (1) fifteen (15) hours of training courses within one (1) year; and
21 (2) forty (40) hours of training courses within three (3) years;
22 after the individual is elected to the office of county auditor.
23 (c) An individual first elected to the office of county auditor shall
24 complete five (5) hours of newly elected official training courses before
25 the individual first takes the office of county auditor. A training course
26 that an individual completes under this subsection shall be counted
27 toward the requirements under subsection (b).
28 (d) An individual shall fulfill the training requirements established
29 by subsection (b) for each term to which the individual is elected as
30 county auditor.
31 (e) The failure of an individual to complete the training required by
32 this section does not prevent the individual from taking an office to
33 which the individual was elected.
34 (f) This subsection applies only to an individual appointed to fill a
35 vacancy in the office of county auditor. An individual described in this
36 subsection may, but is not required to, take training courses required by
37 subsection (b). If an individual described in this subsection takes a
38 training course required by subsection (b) for an elected county auditor,
39 the county shall pay for the training course as if the individual had been
40 an elected county auditor.
41 (g) An individual elected to the office of county auditor shall
42 annually certify completion of the requirements described in
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1 subsection (b). The certification must be in the form and content
2 prescribed by the state examiner and filed electronically in the
3 manner prescribed under IC 5-14-3.8-7.
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