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28	28	STATE OF OKLAHOMA
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30	30	2nd Session of the 58th Legislature (2022)
31	31
32	32	HOUSE BILL 3778 By: Roberts (Sean)
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38	38	AS INTRODUCED
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40	40	An Act relating to audits of nonappropriated
41	41	agencies; amending 74 O.S. 2021, Section 212, which
42	42	relates to the State Auditor and Inspector; modifying
43	43	requirements for frequenc y of audits of
44	44	nonappropriated agencies; requiring schedule for
45	45	audits; and providing an effec tive date.
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50	50	BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
51	51	SECTION 1. AMENDATORY 74 O.S. 2021, Section 212, is
52	52	amended to read as follows:
53	53	Section 212. A. STATE TREASURER AND OKLAHOMA TAX COMMISSION
54	54	1. The State Treasurer shall prepare annual financial
55	55	statements in accordance with the reporting requ irements set forth
56	56	by the Governmental Accounting Standards Board (GASB). The State
57	57	Treasurer shall pres cribe and implement sound internal control,
58	58	accounting and recordkeeping practices consistent with and to
59	59	facilitate compliance with all reporting requ irements as set forth
60	60	by law.
61	61	2. The annual financial statements of the State Treasurer shall
62	62	be delivered by the State Treasurer to the State Auditor and
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89	89	Inspector within ninety (90) calendar days after the close of the
90	90	state fiscal year.
91	91	3. The State Auditor and Inspector shall perform an audit of
92	92	the annual financial statements of the State Treasurer for each
93	93	state fiscal year. Such audits shall be conducted in accordance
94	94	with auditing standards generally accepted in the United States and
95	95	the standards applicable to financial audits contained in Government
96	96	Auditing Standards, latest revised edition, issu ed by the
97	97	Comptroller General of the United States. The State Auditor and
98	98	Inspector shall complete the audits not later than ninety (90)
99	99	calendar days after the financial statements are delivered to the
100	100	State Auditor and Inspector. The annual audit repor ts and related
101	101	financial statements shall be delivered by the State Auditor and
102	102	Inspector to the Governor, President Pro Tempore of the Senate, and
103	103	Speaker of the House of Representatives. The annual audit report
104	104	and related financial statements of the St ate Treasurer shall also
105	105	be delivered to the Attorney General and the members of the Cash
106	106	Management and Investment Oversight Commission created by Sec tion
107	107	71.1 of Title 62 of the Oklahoma Statutes. The State Auditor and
108	108	Inspector shall conduct unannounce d cash audits of the State
109	109	Treasury at least once each quarter.
110	110	4. The audit of the Tax Commission shall be an operational
111	111	audit performed annually. To the extent of the amount included in
112	112	the Tax Commission's appropriation, the Tax Commission shall pay the
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139	139	expenses of the audit including personal services, equipment and
140	140	supplies, from the appropriation.
141	141	B. STATE AGENCIES
142	142	1. Except as otherwise provi ded by law, and except as provided
143	143	by paragraph 5 of this subsection, the State Auditor and Inspector
144	144	shall audit at least once every two (2) fiscal years the books and
145	145	accounts of all state agencies whose duty it is to collect, disburse
146	146	or manage funds of the st ate. The State Auditor and Inspector shall
147	147	audit a state agency each fiscal year if that state ag ency is
148	148	required to be audited on an annual basis pursuant to the federal
149	149	Single Audit Act of 1984, as amended, 31 U.S.C., Section 7501 et
150	150	seq. If the state agency is audited only once every two (2) fiscal
151	151	years, the audit shall cover both fiscal years.
152	152	2. Except as otherwise provided by law, the scope of audits
153	153	performed by the State Auditor and Inspector shall include all funds
154	154	collected, disbursed, or mana ged by a state agency including, but
155	155	not limited to, all special, revolving, depository, canteen, or
156	156	other nonstate funds.
157	157	3. As used in this section, "state agency" means every agency,
158	158	board, or commission included in the primary government of the State
159	159	of Oklahoma. For purposes of this paragraph, the p rimary government
160	160	of the State of Oklahoma incl udes all agencies, boards, and
161	161	commissions included in the primary government in the State of
162	162	Oklahoma Comprehensive Annual Financial Report. The agencies,
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189	189	boards, and commissions included in the primary gove rnment of the
190	190	State of Oklahoma shall be determ ined using criteria set by the
191	191	Governmental Accounting Standards Board.
192	192	4. As used in this subsection, "audit" means any of the
193	193	following:
194	194	a. "financial audit", which means an audit of financial
195	195	statements in order to express an opinion on the
196	196	fairness with which they are presented in conformity
197	197	with generally accepted accounting principles or any
198	198	other comprehensive basis of accounting, as defined by
199	199	the American Institute of Certified Public
200	200	Accountants' Professional Standards, latest revised
201	201	edition. Financial audits must be conducted in
202	202	accordance with auditing standards generally accepted
203	203	in the United States and the standards applicable to
204	204	financial audits contained in Government Auditing
205	205	Standards, latest revised edition, issued by the
206	206	Comptroller General of the United States,
207	207	b. "operational audit", which means an audit conducted in
208	208	accordance with applicable Government Auditing
209	209	Standards, the purpose o f which is to evaluate
210	210	management's performance in administering assigned
211	211	responsibilities in acco rdance with applicable laws,
212	212	administrative rules, and other policies and
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239	239	guidelines and to determine the extent to which the
240	240	internal control, as designed an d placed in operation,
241	241	promotes and encourages the achievement of
242	242	management's control objectives in the categories of
243	243	compliance, reliability of financial records and
244	244	reports, and safeguarding of assets,
245	245	c. "performance audit", which means an audit of a
246	246	program, activity, or function of a state agency
247	247	conducted in accordance with applicable Government
248	248	Auditing Standards. The term includes, but is not
249	249	limited to, an audit to assess program, activity, or
250	250	function effectiveness, economy and efficiency,
251	251	internal control, or compliance,
252	252	d. "special or investigative audit", which means an audit
253	253	with respect to a particular situation which may be,
254	254	but is not required to be, conducted in accordance
255	255	with applicable Government Auditing Standards, and
256	256	e. any other type of engagement conducted in accordance
257	257	with Government Auditing Standards.
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259	259	5. Every nonappropriated state governmental entity shall be
260	260	audited at least once every four (4) years. The State Auditor and
261	261	Inspector shall determine the total number of non appropriated state
262	262	governmental entities and shal l establish an audit schedule so tha t
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289	289	approximately twenty-five percent (25%) of the nonappropriated
290	290	agencies are audited each year.
291	291	C. GUBERNATORIAL REQUEST
292	292	Whenever called upon to do so by the Governor, it shall be the
293	293	duty of the State Auditor and Inspector to examine the books and
294	294	accounts of any officer of the state or any of the officer 's
295	295	predecessors. The cost of the audit shall be borne by the entity to
296	296	be audited.
297	297	D. COUNTY TREASURER
298	298	The State Auditor and Inspector shall examine without notice all
299	299	books and accounts of each county treasurer of the state twice each
300	300	year.
301	301	E. DISTRICT ATTORNEYS
302	302	1. The State Auditor and Inspector shall annually audit the
303	303	books and accounts of the several offices of the district attorneys
304	304	of this state. The audits shall be reported in separate reports for
305	305	each entity. The audit may include, but shall not be limited to,
306	306	the audit of the financial records, performance measures, and
307	307	compliance with state or federal st atutes and rules, an d compliance
308	308	with any regulations of state or federal programs. The expense o f
309	309	the audits shall be paid by the entity audited.
310	310	2. The State Auditor and Inspector shall examine and file a
311	311	report of the accounts established within the o ffice of each
312	312	district attorney for bogus check programs, drug task force
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339	339	programs, child support collection programs, and any other programs
340	340	receiving any nonstate funds. The reports shall be filed with the
341	341	President Pro Tempore of the Senate, the Speake r of the House of
342	342	Representatives, and the Executive Coordinator of the District
343	343	Attorneys Council.
344	344	F. DEPARTMENT OF CORRECTIONS
345	345	The State Auditor and Inspec tor shall perform an annual audit,
346	346	as defined in paragraph 4 of subsection B of this section, of t he
347	347	books and accounts of the Department of Corrections. The scope of
348	348	the audit shall be determine d by the State Auditor and Inspector
349	349	using a risk-based approach. The audit may include, but shall not
350	350	be limited to, the audit of the financial records, per formance
351	351	measures, and compliance with any state or federal statutes and
352	352	rules, and compliance wit h any regulations of state or federal
353	353	programs. The expense of the audits shall be paid by the Department
354	354	of Corrections.
355	355	G. OKLAHOMA EMPLOYEES INSURANCE AN D BENEFITS BOARD
356	356	The State Auditor and Inspector shall cause to be audited the
357	357	books and accounts of the office of the Oklahoma Employees Insurance
358	358	and Benefits Board. The audit may include, but shall not be limited
359	359	to, the audit of the financial records, performance measures,
360	360	compliance with any state or federal statutes and rules, and
361	361	compliance with any regulations of state programs. The audit shall
362	362	be contracted out to private audit firms. The cost of the audit
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389	389	shall be borne by the Oklahoma Employee s Insurance and Bene fits
390	390	Board.
391	391	H. DISTRICT ATTORNEY REQUEST
392	392	Whenever called upon to do so by any of the several district
393	393	attorneys of the state, it shall be the duty of the State Auditor
394	394	and Inspector to examine the books and accounts of any officer of
395	395	any public entity. T he cost of the audit shall be borne by the
396	396	entity audited.
397	397	I. COUNTY OFFICERS BY REQUEST
398	398	Upon request of the county commissioners of any county or the
399	399	Governor, the State Auditor and Inspector shall examine the books
400	400	and accounts of all or any of the offi cers or custodians of the
401	401	various funds of the county; and payment for such ex amination shall
402	402	be made by the county so examined.
403	403	J. AUDITORS
404	404	The State Auditor and Inspector shall have power to employ
405	405	auditors. No auditor shall examine the books or records of the
406	406	county of the auditor 's residence in counties of under two hundred
407	407	thousand (200,000) population according to the most recent Fed eral
408	408	Decennial Census. The State Auditor and Inspector may employ on an
409	409	as-needed basis only, leg al counsel to carry out the statutory
410	410	duties of the Office of the State Auditor and Inspector.
411	411	K. EXAMINATION OF LEVIES
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438	438	It shall be the duty of the State Aud itor and Inspector to
439	439	examine all levies to raise public revenue to see that they are made
440	440	according to law and consti tutional provisions. The State Auditor
441	441	and Inspector shall have the power to order all excessive or
442	442	erroneous lines (levies) to be correc ted by the proper officers, and
443	443	shall report any irregularities to the Governor, the Speaker of th e
444	444	House of Representatives and the President Pro Tempore of the
445	445	Senate.
446	446	L. PETITION AUDITS
447	447	1. The State Auditor and Inspector shall audit the books and
448	448	records of any subdivision of the State of Oklahoma upon petition
449	449	signed by the requisite number of vo ters registered in t he
450	450	subdivision and meeting the requirements set out in this subsection.
451	451	2. The petition must contain the number of signatures
452	452	equivalent to ten percent (10%) of the registered voters of the
453	453	subdivision as determined by the county elect ion board or, if the
454	454	county election board determines that the number of registered
455	455	voters in the subdivision cannot be determined due to boundary lines
456	456	not conforming to precinct lines, the required number of petitioners
457	457	shall be twenty-five percent (25%) of the total number of persons
458	458	voting in the last general election. If the subdivision is a publ ic
459	459	trust, the required number of petitioners shall be the sa me as those
460	460	required for an audit of its beneficiary. The appropriate county
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487	487	election board shall provide the number of signatures so required
488	488	upon request.
489	489	3. The petition shall be in the form of an affidavit wherein
490	490	the signatory shall declare upon oat h or affirmation that the
491	491	information given is true and correct and that he or she is a
492	492	citizen of the entity to be audited. The petition shall clearly
493	493	state that falsely signing shall constitute perjury. It shall
494	494	include the signature of the individual, the name of the signatory
495	495	in printed form, the individual 's residential address, the date of
496	496	signing, the public enti ty to be audited and the anticipated range
497	497	of the cost of the audit provided b y the State Auditor and
498	498	Inspector.
499	499	4. Any person desiring t o petition for an audit shall list the
500	500	areas, items or concerns they want to be audited, and reque st from
501	501	the State Auditor and Inspector the anticipated range of cost of the
502	502	audit. Within thirty (30) days from the receipt of the request, the
503	503	State Auditor and Inspector shall mail a petition form to the person
504	504	requesting the information which shall st ate the anticipated range
505	505	of the cost and the items or concerns to be audited. The
506	506	circulators of the petition shall have thirty (30) days from the
507	507	date the petition is mailed by the State Auditor and Inspector to
508	508	obtain the requisite number of signatures and return it to the State
509	509	Auditor and Inspector.
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536	536	5. Upon collection of the required number of s ignatures, the
537	537	person desiring the audit shall present the s igned petitions to the
538	538	State Auditor and Inspector. Within thirty (30) days of receipt of
539	539	the petitions, the State Au ditor and Inspector shall present the
540	540	petitions to the county election board l ocated in the county in
541	541	which the subdivision is located.
542	542	6. The county election board shall determine whether the
543	543	signers of the petition are registered vot ers of the county in which
544	544	the subdivision to be audited is located and whether the petition
545	545	has the requisite number of signatures of such registered voters.
546	546	The county election board shall certify the petition as having the
547	547	required number of signatures or as failing to have the required
548	548	number of signatures and return it to the State Auditor and
549	549	Inspector.
550	550	7. The cost of the audit shall be borne by the pub lic entity
551	551	audited. Upon notification by the State Auditor and Inspector of
552	552	receipt of the petiti on, certified by the county election board as
553	553	having the required number of signatures, the public entity shall
554	554	encumber funds in an amount specified by the S tate Auditor and
555	555	Inspector, which shall be within the range of anticipated cost
556	556	stated on the petition from any funds not otherwise specifically
557	557	appropriated or allocated. Payment for the audit f rom such
558	558	encumbered funds shall be made as work progresses, and final payment
559	559	shall be made on or before its publication.
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586	586	8. The names of the signers of any petition shall be
587	587	confidential and neither the State Auditor and Inspector, the county
588	588	election board nor the county treasurer may release them to any
589	589	other person or entity except upon an order from a court of
590	590	competent jurisdiction.
591	591	M. PENALTIES FOR NON PAYMENT
592	592	Except as otherwise provided by law, the cost of any services
593	593	provided by the State Audito r and Inspector or as specified in an
594	594	audit contract shall b e borne by the entity or fund audited and
595	595	shall be due and payable upon receipt of progress billin g during the
596	596	course of an audit. Any such costs not paid within ninety (90) days
597	597	of the date of receipt of billing shall incur a penalty of Ten
598	598	Dollars ($10.00) per day for each day from the date of receipt of
599	599	billing.
600	600	SECTION 2. This act shall become effect ive November 1, 2022.
601	601
602	602	58-2-10004 MAH 01/10/22

Oklahoma 2022 Regular Session

Oklahoma House Bill HB3778 Compare Versions