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AN ACT relating to the Office of the Auditor of Public Accounts. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
SECTION 1. A NEW SECTION OF KRS CHAPTER 43 IS CREATED TO 3
READ AS FOLLOWS: 4
(1) The Office of Government Efficiency is hereby created as an office within the 5
Auditor of Public Accounts to evaluate and recommend improvements to the 6
efficiency, cost-effectiveness, and performance of state agencies and their 7
programs and operations. 8
(2) The office shall: 9
(a) Conduct performance audits and fiscal and operational reviews of state 10
agencies to identify inefficiencies, waste, compliance with law, and 11
opportunities for cost savings; 12
(b) Develop and recommend best practices for streamlining government 13
operations; and 14
(c) Monitor the implementation of efficiency-related recommendations and 15
report its findings to the Governor and Legislative Research Commission 16
pursuant to KRS 43.090. 17
(3) The Auditor shall submit an annual report by June 30 of each year, detailing the 18
office's findings, recommendations, and cost-saving measures to the Governor 19
and the Legislative Research Commission for referral to appropriate legislative 20
committees. 21
(4) Notwithstanding any provision of KRS Chapter 18A, KRS 64.640, or other statute 22
to the contrary, the Auditor may: 23
(a) Appoint additional classified and unclassified staff as he or she deems 24
necessary to carry out the office's duties, subject to available funds; and 25
(b) Seek additional funding through cost-saving initiatives and efficiency-26
related grants. 27 UNOFFICIAL COPY 25 RS SB 257/GA
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(5) The office shall be funded through appropriations made by the General 1
Assembly, through the Auditor of Public Accounts' billing authority pursuant to 2
KRS 43.050, and through any federal grants obtained for the purpose of 3
government efficiency. 4
SECTION 2. A NEW SECTION OF KRS CHAPTER 43 IS CREATED TO 5
READ AS FOLLOWS: 6
The Office of the Auditor of Public Accounts shall contain the following offices and 7
divisions: 8
(1) The Office of the Deputy Auditor, which shall have the following offices: 9
(a) Office of Local Government Audits; 10
(b) Office of State Government Audits and Technology; 11
(c) Office of Special Investigations; 12
(d) Office of Quality Assurance; and 13
(e) Office of Government Efficiency; 14
(2) The Office of Planning and Management, which shall have the following 15
divisions: 16
(a) Division of Information Technology Services; 17
(b) Division of Financial Management; and 18
(c) Division of Human Resource Administration; 19
(3) The Office of Legal and Records Services, which shall contain the Division of 20
Records Management; and 21
(4) The Commonwealth Office of the Ombudsman, which shall contain the following 22
offices and divisions: 23
(a) Office of Citizen Services and Policy Integrity; 24
(b) Office of Program Performance, which shall contain the: 25
1. Division of Quality Control; and 26
2. Division of Program Access Compliance; 27 UNOFFICIAL COPY 25 RS SB 257/GA
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(c) Office of Professional Integrity and Employee Development; and 1
(d) Office of Policy and Research. 2
Section 3. KRS 43.010 is amended to read as follows: 3
As used in this chapter, unless the context requires otherwise: 4
(1) "Auditor" means the Auditor of Public Accounts. 5
(2) "Budget unit" means a department or other unit of organization for which separate 6
appropriations are made from those for any other organization unit. 7
(3) "State agency" means any state officer, cabinet, office, department, board, 8
commission, institution, division, or other person or functional group that is 9
authorized to exercise or does exercise any executive or administrative jurisdiction, 10
powers, duties, rights or obligations of the state government conferred or imposed 11
by law or exercised, performed, or discharged by legal authority in compliance with 12
law. 13
(4) "Writing" or "written" means letters, words, or numbers, or their equivalent, set 14
down by handwriting, typewriting, printing, photostating, photographing, magnetic 15
impulse, mechanical or electronic recording, or other form of data compilation. 16
Section 4. KRS 43.030 is amended to read as follows: 17
(1) The Auditor shall appoint for the duration of his or her own term, subject to 18
removal by the Auditor at any time, one (1) deputy[assistant] auditor[ of public 19
accounts], who shall be a certified public accountant and who has been a citizen and 20
resident of the state for at least two (2) years. Except for the Office of the 21
Ombudsman as established in KRS 43.035, the deputy[assistant] auditor shall have 22
direct supervision over all technical work and technical assistants, and shall 23
otherwise aid the Auditor in the performance of his or her duties, except that the 24
deputy[assistant] auditor[ of public accounts] may exercise a full or partial recusal 25
from this supervision requirement in regard to the consulting function authorized in 26
KRS 43.050 if needed to comply with the professional standards of accountancy. If 27 UNOFFICIAL COPY 25 RS SB 257/GA
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the Auditor is absent or is rendered incapable of performing his or her duties, or if a 1
vacancy in the office occurs, the deputy[assistant] auditor shall perform the duties 2
of Auditor until the necessity therefor ceases to exist. He or she shall take the 3
constitutional oath. 4
(2) The Auditor may employ other subordinate personnel subject to the provisions of 5
KRS 12.060. All employees with status as defined in KRS 18A.005 who are 6
operating under the authority of the deputy auditor and engaged in auditing or 7
investigations that are required to be performed in accordance with generally 8
accepted government auditing standards shall possess a minimum of a four (4) 9
year college degree. No less than ninety percent (90%) of all employees engaged in 10
financial auditing or financial investigations required to be performed in 11
accordance with generally accepted government auditing standards shall have 12
twenty (20) semester hours or thirty (30) quarter hours of accounting, or alternately, 13
shall be a certified public accountant. Not more than two (2) persons charged with 14
the conduct of audits and investigations may substitute year-for-year responsible 15
experience acceptable to the Personnel Cabinet for the required college education 16
and accounting hours. 17
(3) The Auditor and his or her sureties are liable on his or her official bond for the acts 18
of the deputy[assistant] auditor and clerks. 19
(4) Nothing in this section shall be deemed to affect the provisions of KRS 11.090 or 20
other legislation authorizing audits. 21
Section 5. KRS 43.050 is amended to read as follows: 22
(1) The Auditor constitutes an agency independent of the administrative departments 23
enumerated in KRS 12.020, it being the policy of the General Assembly to provide 24
for the independent auditing of the accounts, financial transactions, and 25
performance of all spending agencies of the state through a disinterested auditor, 26
who is entirely independent of the state administration whose affairs he is called 27 UNOFFICIAL COPY 25 RS SB 257/GA
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upon to audit. 1
(2) The Auditor may: 2
(a) Audit annually, and at such other times as may be deemed expedient, the 3
accounts of all state agencies, all private and semiprivate agencies receiving 4
state aid or having responsibility for the handling of any state funds, the 5
accounts, records, and transactions of the budget units, and the general 6
accounts of the state; 7
(b) Make a complete audit and verification of all moneys handled for the account 8
of the state government by local officials charged with the collection of fees 9
or other money for or on behalf of the state, when an audit is demanded in 10
writing by the Legislative Research Commission, the secretary of the Finance 11
and Administration Cabinet, or the Governor, and may make an audit when it 12
is not so demanded; 13
(c) Examine periodically the performance, management, conduct, and condition 14
of all asylums, prisons, institutions for the intellectually disabled, and 15
eleemosynary institutions; public works owned, operated, or partly owned by 16
the state, or in the conduct or management of which the state has any financial 17
interest or legal power; and state agencies. The examinations shall give 18
special attention to the faithful and economical application of any money 19
appropriated by the state to the institution, public works, or state agency 20
examined, or of any money in which the state has an interest; 21
(d) Examine annually the management and condition of the offices of the Finance 22
and Administration Cabinet, the State Treasurer, and the chief state school 23
officer, to determine whether the laws regulating their duties are being fully 24
complied with, and all money received by them for the state fully accounted 25
for; 26
(e) Examine, at least biennially, the Finance and Administration Cabinet's 27 UNOFFICIAL COPY 25 RS SB 257/GA
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compliance with this section and KRS 48.111 and 56.800 to 56.823. Within 1
sixty (60) days of the completion of each examination, the Auditor shall 2
report his findings and recommendations to the Capital Projects and Bond 3
Oversight Committee; 4
(f) Audit periodically all state revenue collections, and, if he finds that 5
collections are not being satisfactorily made, report that fact to the authority 6
whose duty it is to make the collections; 7
(g) Make special audits and investigations when requested[required] by the 8
Governor; 9
(h) Investigate the means of accounting for, controlling, and insuring the safe 10
custody of all property of the state, and verify the existence and condition of 11
such property charged to, or held in the custody of any state agency; 12
(i) Audit the statements of financial condition and operations of the state 13
government, and certify in writing the results of the audit and examination 14
with the comments he deems necessary for the information of the General 15
Assembly; 16
(j) Report immediately in writing to the Governor, the Legislative Research 17
Commission, and the secretary of the Finance and Administration Cabinet, 18
any unauthorized, illegal, irregular, or unsafe handling or expenditure of state 19
funds, or other improper practice of financial administration, or evidence that 20
any such handling, expenditure, or practice is contemplated, and any 21
obstruction of the Auditor or his or her agents during the conduct of any audit 22
or investigation of a state agency; and 23
(k) Assist the Legislative Research Commission at hearings and investigations 24
conducted by it and cooperate with the Legislative Research Commission in 25
the preparation of its reports to the General Assembly. 26
(3) The Auditor may investigate and examine into the conduct of all state and county 27 UNOFFICIAL COPY 25 RS SB 257/GA
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officers who are authorized to receive, collect, or disburse any money for the state, 1
or who manage or control any property belonging to the state or in which the state 2
is interested, or who make estimates or records that are used as a basis by any state 3
agency in the disbursement of public funds. 4
(4) The Auditor may conduct a special audit or examination of a city government or 5
any of its agencies or departments. 6
(5) Except where otherwise provided, any expenses incurred by the Auditor for audits, 7
examinations, investigations, or reviews shall be charged to the entity that is the 8
subject of the audit, examination, investigation, or review. The Auditor shall 9
maintain a record of all time expenses for each audit, examination, investigation, or 10
review. 11
(6) The Auditor may provide consulting services, in accordance with auditing standards 12
generally accepted in the United States and government auditing standards, to state 13
or local government entities and associations of such entities, including special 14
purpose governmental entities, and may charge a mutually agreed upon rate for 15
those services, including: 16
(a) Providing training and technical presentations; 17
(b) Developing audit guides applicable to those entities; 18
(c) Developing question and answer documents to promote understanding of 19
technical issues or standards; and 20
(d) Collaborating with other professional organizations to advance auditing of 21
government entities and programs. 22
(7) The Auditor shall not be responsible for the keeping of any accounts of the state, 23
except accounts relating to his or her own operations. The Auditor shall not be 24
responsible for the collection of any money due the state, or for the handling or 25
custody of any state funds or property except in the process of counting and 26
verifying the amounts of the funds or property in the course of the audits provided 27 UNOFFICIAL COPY 25 RS SB 257/GA
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for in this section. 1
Section 6. KRS 43.080 is amended to read as follows: 2
(1) (a) The Auditor and his or her authorized agents shall have access at all times to 3
and may at any time examine any and all information, including but not 4
limited to books, accounts, reports, vouchers, correspondence files, records, 5
information technology systems, databases, premises, money, and property 6
of any state agency or budget unit, which the Auditor or agents deem 7
necessary to properly audit, investigate, examine, or review the state agency 8
or budget unit. 9
(b) Every officer or employee of any state[ such] agency or budget unit having 10
such records or property in his or her possession or under his or her control 11
shall permit access to and examination of them upon the request of the 12
Auditor or any agent authorized by him or her to make such request. 13
(c) Every officer or employee of any state agency or budget unit shall be 14
allowed to participate in interviews outside the presence of any supervisor, 15
official, or counsel representing that or any other agency or unit and shall 16
not be retaliated against for doing so. 17
(2) The Auditor and his or her assistants shall have access at all times to the premises, 18
papers, books and records of the asylums, prisons, institutions for the intellectually 19
disabled and eleemosynary institutions, and public works that he or she is 20
authorized to examine, and of any county officer who receives or disburses county 21
funds. 22
(3) The Auditor and his or her authorized agents may administer oaths, issue 23
subpoenas, issue subpoenas duces tecum, and compel the attendance of witnesses 24
and the production of testimony and evidence relating to any subject under audit, 25
examination, investigation, or review by them[may require information on oath 26
from any person touching any matters relative to any account that the Auditor is 27 UNOFFICIAL COPY 25 RS SB 257/GA
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required to state, audit or settle. The Auditor may administer the oath himself, or 1
have it done by any officer authorized to administer an oath]. 2
(4) (a) The Auditor and his or her authorized agents may petition a Circuit Court 3
having jurisdiction over the matter, officer, or employee for injunctive or 4
other relief to enforce compliance with this section, including but not 5
limited to obedience as to process or investigative demands issued under it, 6
and may recover all costs, including attorney's fees, of bringing and 7
enforcing the action[assistants may issue process and compel the attendance 8
of witnesses before them, and administer oaths and compel witnesses to 9
testify in any of the investigations the Auditor is authorized to make]. 10
(b) Upon petition, a Circuit Court may grant a protective order staying the 11
enforcement of any unlawful process issued under this section. 12
Section 7. KRS 43.990 is amended to read as follows: 13
(1) Any officer who prevents, attempts to prevent or obstructs an examination by the 14
Auditor, under the provisions of paragraph (c) of subsection (2) of KRS 43.050, or 15
of subsection (3) of KRS 43.050, into his or her official conduct, or the conduct or 16
condition of the office in his or her charge or with which he or she is connected, 17
except when the office constitutes a state agency, is guilty of a high misdemeanor, 18
and, upon conviction on indictment in the Franklin Circuit Court, shall be fined five 19
hundred dollars ($500) and removed by the Governor. Any person, other than an 20
officer, who prevents, attempts to prevent or obstructs such an examination shall be 21
fined one thousand dollars ($1,000). 22
(2) If the Auditor fails or refuses without good cause to perform the duties imposed 23
upon him or her by KRS 43.060, he or she shall be fined not less than two hundred 24
and fifty dollars ($250) nor more than one thousand dollars ($1,000) for each 25
offense. 26
(3) Any county officer who prevents, attempts to prevent or obstructs an examination 27 UNOFFICIAL COPY 25 RS SB 257/GA
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by the Auditor, under KRS 43.070, into his or her official conduct, or the conduct 1
or condition of the office in his or her charge or with which he or she is connected, 2
is guilty of a high misdemeanor, and shall, upon indictment and conviction in the 3
Franklin Circuit Court, be fined five hundred dollars ($500). Any person, other than 4
a county officer, who prevents, attempts to prevent or obstructs such an 5
examination shall be fined one thousand dollars ($1,000). 6
(4) Any officer or other person who fails or refuses to permit the access and 7
examination provided for in subsection (1) of KRS 43.080, or who interferes with 8
such examination, shall be fined not less than one hundred dollars ($100), or 9
imprisoned in the county jail for not less than one (1) month nor more than twelve 10
(12) months, or both. Each refusal by an officer shall constitute a separate offense. 11
(5) Any person who has custody of any premises, papers, books or records of an 12
asylum, prison, institution for the intellectually disabled or eleemosynary institution 13
or public works, other than a state agency, that the Auditor is authorized to examine 14
under paragraph (c) of subsection (2) of KRS 43.050, under subsection (3) of KRS 15
43.050, and under subsection (2) of KRS 43.080, who fails or refuses, when called 16
upon by the Auditor for that purpose, to permit him or her to inspect any of such 17
premises, papers, books or records, shall, upon conviction on indictment in the 18
Franklin Circuit Court, be fined not more than five hundred dollars ($500) and be 19
subject to removal by the Governor. 20
(6) Any person who refuses to be sworn when required by the Auditor to be sworn for 21
the purpose mentioned in subsection (3) of KRS 43.080, or who fails, without legal 22
excuse, to attend or testify, shall be fined not more than one hundred dollars 23
($100). 24
(7) In the case of disobedience of a subpoena or subpoena duces tecum or a refusal 25
to testify as required pursuant to KRS 43.080(3), the Circuit Court having 26
jurisdiction of the person who refused to be sworn or to whom the subpoena or 27 UNOFFICIAL COPY 25 RS SB 257/GA
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subpoena duces tecum was issued, may adjudge the person guilty of contempt of 1
court and punish him or her as provided by law in other contempt cases[Any 2
witness called by the Auditor under subsection (4) of KRS 43.080 who fails, 3
without legal excuse, to attend or testify shall be fined not more than two hundred 4
and fifty dollars ($250)]. 5
Section 8. There is hereby appropriated Restricted Funds in the amount of 6
$4,861,500 in fiscal year 2025-2026 to the Auditor of Public Accounts to fund the Office 7
of Government Efficiency established in Section 1 of this Act. 8