25.314.33 100th Legislative Session 61
2025 South Dakota Legislature
Senate Bill 61
ENROLLED
AN ACT
ENTITLED An Act to modify the authority of the Board of Internal Control.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
Section 1. That § 1-56-1 be AMENDED:
1-56-1. Terms used in this chapter mean:
(1) "Board," the State Board of Internal Control;
(2) "Code of conduct," a set of ethical principles and guidelines that constitutes
appropriate behavior within a state agency;
(3) "Internal control," a process that integrates the plans, activities, policies, attitudes,
procedures, systems, resources, and efforts of a state agency and that is designed
to provide reasonable assurance that the state agency will achieve its objectives
and missions and to detect and prevent financial malfeasance;
(4) "Internal control officer," the individual designated by each state agency to oversee
the implementation, monitoring, and reporting of internal control systems in
accordance with the board's guidelines and standards;
(5) "Pass-through grant," a grant awarded by a federal entity to a state agency and
transferred or passed to a sub-recipient by the state;
(6) "State agency," any constitutional officer, the Board of Regents, and any
department, division, bureau, board, commission, committee, authority, or agency
under the authority of the Governor;
(7) "Sub-recipient," an entity that expends a pass-through grant.
Section 2. That § 1-56-2 be AMENDED:
1-56-2. There is hereby created a State Board of Internal Control that consists of:
(1) Four individuals representing state agencies under the control of the Governor,
appointed by the Governor; 25.314.33 2 61
SB61 ENROLLED
(2) The commissioner of the Bureau of Finance and Management, who serves as the
chair;
(3) The state auditor; and
(4) An individual appointed by the executive director of the Board of Regents.
Each individual appointed by the Governor serves a three-year term, provided that
the initial appointments are for staggered terms. Any four of the seven members
constitutes a quorum.
Section 3. That § 1-56-3 be AMENDED:
1-56-3. The board may promulgate rules, pursuant to chapter 1-26, to implement,
manage, and provide oversight of a system of internal control in accordance with internal
control standards.
Section 4. That § 1-56-6 be AMENDED:
1-56-6. The board shall:
(1) Establish and maintain guidelines for an effective system of internal control to be
implemented by state agencies that is in accordance with internal control
standards;
(2) Establish and maintain a code of conduct for use by state agencies;
(3) Establish and maintain a conflict-of-interest policy for use by state agencies;
(4) Evaluate and test the effectiveness of internal controls in state agencies;
(5) Access all relevant records, data, and documents from state agencies to carry out
the board's responsibilities; and
(6) Review and assess whether internal controls are working as intended and make
recommendations for improvements.
Section 5. That § 1-56-8 be AMENDED:
1-56-8. Each state agency shall designate an internal control officer. The internal
control officer shall ensure the agency complies with the provisions of this chapter. Two
or more agencies may agree to designate a single individual as the internal control officer
for the agencies participating in the agreement. The board shall make available to each
internal control officer guidelines and standards that the state agency shall implement and
comply. The board may take other actions as necessary to carry out the pur pose and
intent of this chapter. 25.314.33 3 61
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Section 6. That a NEW SECTION be added to chapter 1-56:
Each state agency shall conduct an annual review of the agency's documented risk
and control matrix to assess the adequacy and effectiveness of the agency's internal
controls and risk mitigation strategies.
Following the review, each state agency shall submit the results to the Board of
Internal Control, including any updates to the agency's risk and control matrix.
Section 7. On July 1, 2025, the term of the individual appointed to the State Board of Internal
Control by the chief justice of the Supreme Court expires. 25.314.33 4 61
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An Act to modify the authority of the Board of Internal Control.
I certify that the attached Act originated in
the:
Senate as Bill No. 61
Secretary of the Senate
President of the Senate
Attest:
Secretary of the Senate
Speaker of the House
Attest:
Chief Clerk
Senate Bill No. 61
File No. ____
Chapter No. ______
Received at this Executive Office
this _____ day of _____________,
2025 at ____________M.
By
for the Governor
The attached Act is hereby
approved this ________ day of
______________, A.D., 2025
Governor
STATE OF SOUTH DAKOTA ,
ss.
Office of the Secretary of State
Filed ____________, 2025
at _________ o'clock __M.
Secretary of State
By
Asst. Secretary of State