CS/HB 1033

1
A bill to be entitled
2An act relating to agency inspectors general; amending s.
320.055, F.S.; revising and providing definitions;
4providing duties of agency inspectors general relating to
5issues of deficiencies, abuses, or fraud by entities
6contracting with the state; requiring agency inspectors
7general to adopt certain principles and standards;
8requiring agencies under the Governor to notify the Chief
9Inspector General of inspector general appointments and
10terminations; prohibiting agency staff from preventing or
11prohibiting the inspector general from initiating,
12carrying out, or completing any audit or investigation;
13requiring audits to be conducted in accordance with the
14current International Standards for the Professional
15Practice of Internal Auditing; requiring the inspectors
16general to submit preliminary audit findings and
17recommendations to the entity; requiring the entity to
18respond within a specified time; requiring the response
19and any rebuttal to be included in the final report;
20requiring inspectors general to examine certain
21complaints; requiring inspectors general to employ only
22trained and experienced investigators; requiring the Chief
23Inspector General to adopt certain rules and procedures;
24providing exemptions from the review process for certain
25investigations; providing an effective date.
26
27Be It Enacted by the Legislature of the State of Florida:
28
29     Section 1.  Section 20.055, Florida Statutes, is amended to
30read:
31     20.055  Agency inspectors general.--
32     (1)  For the purposes of this section:
33     (a)  "State agency" means each department created pursuant
34to this chapter, and also includes the Executive Office of the
35Governor, the Department of Military Affairs, the Fish and
36Wildlife Conservation Commission, the Office of Insurance
37Regulation of the Financial Services Commission, the Office of
38Financial Regulation of the Financial Services Commission, the
39Public Service Commission, and the state courts system.
40     (b)  "Agency head" means a public official that includes
41the Governor, a Cabinet officer, a secretary as defined in s.
4220.03(5), or an executive director as defined in s. 20.03(6). It
43also includes the chair of the Public Service Commission, the
44Director of the Office of Insurance Regulation of the Financial
45Services Commission, the Director of the Office of Financial
46Regulation of the Financial Services Commission, and the Chief
47Justice of the State Supreme Court. The term does not include
48the head of, or an officer of, a private entity operating as a
49for-profit or not-for-profit entity.
50     (c)  "Entities contracting with the state" means for-profit
51and not-for-profit organizations or businesses that have a legal
52existence, such as corporations or partnerships, as opposed to
53natural persons, that have entered into a relationship with a
54state agency as defined in paragraph (a) to provide for
55consideration certain goods or services to the state agency or
56on behalf of the state agency. The relationship may be evidenced
57by payment by warrant or purchasing card, contract, purchase
58order, provider agreement, or other such mutually agreed upon
59relationship.
60     (d)  "Individuals substantially affected" means natural
61persons who have established a real and sufficiently immediate
62injury in fact due to the findings, conclusions, or
63recommendations of a final report of a state agency inspector
64general and who do not have or are not currently afforded an
65existing right to an independent review process. Employees of
66the state, including career service, probationary, other
67personal service, Selected Exempt Service, and Senior Management
68Service employees, are not covered by this definition. This
69definition also does not cover former employees of the state
70when the final report of the state agency inspector general
71relates to matters arising during the former employee's term of
72state employment.
73     (e)  "Additional material relevant" means evidence
74submitted to the state agency inspector general prior to release
75of the final report that likely would have affected the
76investigative findings. Such evidence is not merely cumulative
77of evidence considered by the state agency inspector general
78and, to be relevant, must tend to prove or disprove the matters
79at issue in the investigation. Newly discovered evidence may be
80considered if it was discovered subsequent to the agency
81inspector general's final report and the agency inspector
82general has affirmatively refused to reopen the investigation
83despite such evidence. Such evidence shall not have been
84withheld from the state agency inspector general during the
85original investigation.
86     (f)  "Original investigation" means an official
87investigative review by a state agency inspector general of
88information relative to suspected violations of any law, rule,
89or agency policy resulting in written findings.
90     (2)  The Office of Inspector General is hereby established
91in each state agency to provide a central point for coordination
92of and responsibility for activities that promote
93accountability, integrity, and efficiency in government. It
94shall be the duty and responsibility of each inspector general,
95with respect to the state agency in which the office is
96established, to:
97     (a)  Advise in the development of performance measures,
98standards, and procedures for the evaluation of state agency
99programs.
100     (b)  Assess the reliability and validity of the information
101provided by the state agency on performance measures and
102standards, and make recommendations for improvement, if
103necessary, prior to submission of those measures and standards
104to the Executive Office of the Governor pursuant to s.
105216.0166(1).
106     (c)  Review the actions taken by the state agency to
107improve program performance and meet program standards and make
108recommendations for improvement, if necessary.
109     (d)  Provide direction for, supervise, and coordinate
110audits, investigations, and management reviews relating to the
111programs and operations of the state agency, except that when
112the inspector general does not possess the qualifications
113specified in subsection (4), the director of auditing shall
114conduct such audits.
115     (e)  Conduct, supervise, or coordinate other activities
116carried out or financed by that state agency for the purpose of
117promoting economy and efficiency in the administration of, or
118preventing and detecting fraud and abuse in, its programs and
119operations.
120     (f)  Keep such agency head informed concerning fraud,
121abuses, and deficiencies relating to programs and operations
122administered or financed by the state agency, recommend
123corrective action concerning fraud, abuses, and deficiencies,
124and report on the progress made in implementing corrective
125action.
126     (g)  Notify entities contracting with the state of reported
127deficiencies, abuses, or fraud; recommend a corrective plan of
128action; specify a timeframe for implementing the corrective
129plan; and report on the progress made implementing the
130corrective plan.
131     (h)(g)  Ensure effective coordination and cooperation
132between the Auditor General, federal auditors, and other
133governmental bodies with a view toward avoiding duplication.
134     (i)(h)  Review, as appropriate, rules relating to the
135programs and operations of such state agency and make
136recommendations concerning their impact.
137     (j)(i)  Ensure that an appropriate balance is maintained
138between audit, investigative, and other accountability
139activities.
140     (k)  Adopt the current Association of Inspectors General
141Principles and Standards for Offices of Inspector General for
142meeting the duties and responsibilities pursuant to this
143section.
144     (3)(a)  The inspector general shall be appointed by the
145agency head. For agencies under the direction of the Governor,
146the appointment shall be made after notifying the Governor and
147the Chief Inspector General in writing, at least 7 days prior to
148an offer of employment, of the agency head's intention to hire
149the inspector general.
150     (b)  Each inspector general shall report to and be under
151the general supervision of the agency head and shall not be
152subject to supervision by any other employee of the state
153agency. The inspector general shall be appointed without regard
154to political affiliation.
155     (c)  An inspector general may be removed from office by the
156agency head. For agencies under the direction of the Governor,
157the agency head shall notify the Governor and the Chief
158Inspector General, in writing, of the intention to terminate the
159inspector general at least 7 days prior to the removal. For
160state agencies under the direction of the Governor and Cabinet,
161the agency head shall notify the Governor and Cabinet in writing
162of the intention to terminate the inspector general at least 7
163days prior to the removal.
164     (d)  The agency head or agency staff shall not prevent or
165prohibit the inspector general or director of auditing from
166initiating, carrying out, or completing any audit or
167investigation.
168     (4)  To ensure that state agency audits are performed in
169accordance with applicable auditing standards, the inspector
170general or the director of auditing within the inspector
171general's office shall possess the following qualifications:
172     (a)  A bachelor's degree from an accredited college or
173university with a major in accounting, or with a major in
174business which includes five courses in accounting, and 5 years
175of experience as an internal auditor or independent postauditor,
176electronic data processing auditor, accountant, or any
177combination thereof. The experience shall at a minimum consist
178of audits of units of government or private business
179enterprises, operating for profit or not for profit; or
180     (b)  A master's degree in accounting, business
181administration, or public administration from an accredited
182college or university and 4 years of experience as required in
183paragraph (a); or
184     (c)  A certified public accountant license issued pursuant
185to chapter 473 or a certified internal audit certificate issued
186by the Institute of Internal Auditors or earned by examination,
187and 4 years of experience as required in paragraph (a).
188     (5)  In carrying out the auditing duties and
189responsibilities of this act, each inspector general shall
190review and evaluate internal controls necessary to ensure the
191fiscal accountability of the state agency. The inspector general
192shall conduct financial, compliance, electronic data processing,
193and performance audits of the agency and prepare audit reports
194of his or her findings. The scope and assignment of the audits
195shall be determined by the inspector general; however, the
196agency head may at any time direct the inspector general to
197perform an audit of a special program, function, or
198organizational unit. The performance of the audit shall be under
199the direction of the inspector general, except that if the
200inspector general does not possess the qualifications specified
201in subsection (4), the director of auditing shall perform the
202functions listed in this subsection.
203     (a)  Such audits shall be conducted in accordance with the
204current International Standards for the Professional Practice of
205Internal Auditing as and subsequent Internal Auditing Standards
206or Statements on Internal Auditing Standards published by the
207Institute of Internal Auditors, Inc., or, where appropriate, in
208accordance with generally accepted governmental auditing
209standards. All audit reports issued by internal audit staff
210shall include a statement that the audit was conducted pursuant
211to the appropriate standards.
212     (b)  Audit workpapers and reports shall be public records
213to the extent that they do not include information which has
214been made confidential and exempt from the provisions of s.
215119.07(1) pursuant to law. However, when the inspector general
216or a member of the staff receives from an individual a complaint
217or information that falls within the definition provided in s.
218112.3187(5), the name or identity of the individual shall not be
219disclosed to anyone else without the written consent of the
220individual, unless the inspector general determines that such
221disclosure is unavoidable during the course of the audit or
222investigation.
223     (c)  The inspector general and the staff shall have access
224to any records, data, and other information of the state agency
225he or she deems necessary to carry out his or her duties. The
226inspector general is also authorized to request such information
227or assistance as may be necessary from the state agency or from
228any federal, state, or local government entity.
229     (d)  At the conclusion of each audit, the inspector general
230shall submit preliminary findings and recommendations to the
231person responsible for supervision of the program function or
232operational unit who shall respond to any adverse findings
233within 20 working days after receipt of the tentative findings.
234Such response and the inspector general's rebuttal to the
235response shall be included in the final audit report.
236     (e)  At the conclusion of any audit of a program or
237contract that involves an entity contracting with the state, the
238inspector general shall submit preliminary findings and
239recommendations to the entity. The entity must respond to any
240adverse findings within 20 working days after receiving the
241preliminary findings of the inspector general. The response, and
242the inspector general's rebuttal, if any, must be included in
243the final report.
244     (f)(e)  The inspector general shall submit the final report
245to the agency head and to the Auditor General.
246     (g)(f)  The Auditor General, in connection with the
247independent postaudit of the same agency pursuant to s. 11.45,
248shall give appropriate consideration to internal audit reports
249and the resolution of findings therein. The Legislative Auditing
250Committee may inquire into the reasons or justifications for
251failure of the agency head to correct the deficiencies reported
252in internal audits that are also reported by the Auditor General
253and shall take appropriate action.
254     (h)(g)  The inspector general shall monitor the
255implementation of the state agency's response to any report on
256the state agency issued by the Auditor General or by the Office
257of Program Policy Analysis and Government Accountability. No
258later than 6 months after the Auditor General or the Office of
259Program Policy Analysis and Government Accountability publishes
260a report on the state agency, the inspector general shall
261provide a written response to the agency head on the status of
262corrective actions taken. The Inspector General shall file a
263copy of such response with the Legislative Auditing Committee.
264     (i)(h)  The inspector general shall develop long-term and
265annual audit plans based on the findings of periodic risk
266assessments. The plan, where appropriate, should include
267postaudit samplings of payments and accounts. The plan shall
268show the individual audits to be conducted during each year and
269related resources to be devoted to the respective audits. The
270Chief Financial Officer, to assist in fulfilling the
271responsibilities for examining, auditing, and settling accounts,
272claims, and demands pursuant to s. 17.03(1), and examining,
273auditing, adjusting, and settling accounts pursuant to s. 17.04,
274may utilize audits performed by the inspectors general and
275internal auditors. For state agencies under the Governor, the
276audit plans shall be submitted to the Governor's Chief Inspector
277General. The plan shall be submitted to the agency head for
278approval. A copy of the approved plan shall be submitted to the
279Auditor General.
280     (6)  In carrying out the investigative duties and
281responsibilities specified in this section, each inspector
282general shall initiate, conduct, supervise, and coordinate
283investigations designed to detect, deter, prevent, and eradicate
284fraud, waste, mismanagement, misconduct, and other abuses in
285state government. For these purposes, each inspector general
286state agency shall:
287     (a)  Receive complaints and coordinate all activities of
288the agency as required by the Whistle-blower's Act pursuant to
289ss. 112.3187-112.31895.
290     (b)  Receive and examine consider the complaints that which
291do not meet the criteria for an investigation under the Whistle-
292blower's Act, or are reported by an entity contracting with the
293state, and conduct, supervise, or coordinate such inquiries,
294investigations, or reviews as the inspector general deems
295appropriate.
296     (c)  Report expeditiously to the Department of Law
297Enforcement or other law enforcement agencies, as appropriate,
298whenever the inspector general has reasonable grounds to believe
299there has been a violation of criminal law.
300     (d)  Conduct investigations and other inquiries free of
301actual or perceived impairment to the independence of the
302inspector general or the inspector general's office. This shall
303include freedom from any interference with investigations and
304timely access to records and other sources of information.
305     (e)  Employ only trained and experienced investigators.
306     (f)(e)  Submit in a timely fashion final reports on
307investigations conducted by the inspector general to the agency
308head, except for whistle-blower's investigations, which shall be
309conducted and reported pursuant to s. 112.3189.
310     (7)  Each inspector general shall, not later than September
31130 of each year, prepare an annual report summarizing the
312activities of the office during the immediately preceding state
313fiscal year. The final report shall be furnished to the agency
314head. Such report shall include, but need not be limited to:
315     (a)  A description of activities relating to the
316development, assessment, and validation of performance measures.
317     (b)  A description of significant abuses and deficiencies
318relating to the administration of programs and operations of the
319agency disclosed by investigations, audits, reviews, or other
320activities during the reporting period.
321     (c)  A description of the recommendations for corrective
322action made by the inspector general during the reporting period
323with respect to significant problems, abuses, or deficiencies
324identified.
325     (d)  The identification of each significant recommendation
326described in previous annual reports on which corrective action
327has not been completed.
328     (e)  A summary of each audit and investigation completed
329during the reporting period.
330     (8)  The Chief Inspector General in the Executive Office of
331the Governor, as defined in s. 14.32, shall:
332     (a)  Adopt rules to specify the conditions and procedures
333for reviewing a final investigative report by the inspector
334general of an agency under the jurisdiction of the Governor. The
335conditions and procedures must include provisions related to:
336     1.  Offering entities contracting with state agencies and
337individuals substantially affected by the findings, conclusions,
338and recommendations a meaningful opportunity to challenge in
339writing the findings, conclusions, and recommendations contained
340in an agency inspector general's final investigative report or
341to seek review by the Chief Inspector General under the process
342described in this subsection.
343     2.  Identifying the entities and individuals allowed to
344submit a written response.
345     3.  Identifying the circumstances under which the entity's
346or individual's response must be attached to the agency
347inspector general's final report.
348     4.  Providing a review process that allows entities and
349individuals substantially affected by the findings, conclusions,
350and recommendations of an agency inspector general final
351investigative report to present to the Chief Inspector General,
352or a designee, any additional material relevant to the final
353investigative report. The review process must provide that if an
354administrative law judge of the Division of Administrative
355Hearings within the Department of Management Services determines
356that the material or evidence submitted by the individual
357substantially affected proves that the individual or entity
358contracting with the state has been wrongly accused by a state
359agency in a criminal investigation, the administrative law judge
360shall order the state agency to pay the outstanding balance owed
361and the expenses incurred to defend against the wrongful
362accusation. The administrative law judge determination required
363under this subparagraph shall be pursuant to a hearing conducted
364by the Division of Administrative Hearings within the Department
365of Management Services, and any such order shall constitute a
366final order.
367     5.  Allowing the Chief Inspector General to independently
368investigate the agency inspector general's final report and the
369original investigation.
370     6.  Adopting special conditions for whistle-blower
371investigations in accordance with ss. 112.3187-112.31895.
372     7.  Providing exemptions from the review process for the
373following categories of investigations:
374     a.  Matters under active criminal investigation.
375     b.  Matters that are under review by a grand jury.
376     c.  Instances where an individual substantially affected or
377an adverse party has filed a civil suit against the state, the
378state agency, or the agency head for matters that were the
379subject of the initial agency inspector general report or
380matters reasonably connected with the initial agency inspector
381general investigation.
382     8.  Providing definitions of terms related to the review
383process.
384     (b)  Ensure that policies and procedures adopted pursuant
385to this subsection are consistent with the recommendations
386contained in the report of the Council on State Agency
387Inspectors General dated December 19, 2006.
388
389Nothing provided in this subsection shall be construed to limit
390the jurisdiction of an agency inspector general defined in this
391section or the Chief Inspector General as defined in s. 14.32.
392     (9)(8)  Each agency inspector general shall, to the extent
393both necessary and practicable, include on his or her staff
394individuals with electronic data processing auditing experience.
395     Section 2.  This act shall take effect July 1, 2007.


CODING: Words stricken are deletions; words underlined are additions.