CS/CS/HB 1033

1
A bill to be entitled
2An act relating to agency inspectors general; amending s.
320.055, F.S.; providing definitions; requiring agency
4inspectors general to comply with certain principles and
5standards; requiring an inspector general to submit
6findings of an audit to specified persons or entities;
7requiring agencies under the Governor to notify the Chief
8Inspector General of inspector general appointments and
9terminations; prohibiting agency staff from preventing or
10prohibiting the inspector general from initiating,
11carrying out, or completing any audit or investigation;
12requiring audits to be conducted in accordance with the
13current International Standards for the Professional
14Practice of Internal Auditing; requiring the inspector
15general of each state agency to report certain written
16complaints to the Chief Inspector General; requiring the
17Chief Inspector General to fulfill certain duties and
18responsibilities; requiring a state agency to reimburse
19legal fees and costs that are incurred by certain
20individuals and entities under certain conditions;
21providing an effective date.
22
23Be It Enacted by the Legislature of the State of Florida:
24
25     Section 1.  Section 20.055, Florida Statutes, is amended to
26read:
27     20.055  Agency inspectors general.--
28     (1)  For the purposes of this section:
29     (a)  "State agency" means each department created pursuant
30to this chapter, and also includes the Executive Office of the
31Governor, the Department of Military Affairs, the Fish and
32Wildlife Conservation Commission, the Office of Insurance
33Regulation of the Financial Services Commission, the Office of
34Financial Regulation of the Financial Services Commission, the
35Public Service Commission, and the state courts system.
36     (b)  "Agency head" means a public official such as the
37Governor, a Cabinet officer, a secretary as defined in s.
3820.03(5), or an executive director as defined in s. 20.03(6). It
39also includes the chair of the Public Service Commission, the
40Director of the Office of Insurance Regulation of the Financial
41Services Commission, the Director of the Office of Financial
42Regulation of the Financial Services Commission, and the Chief
43Justice of the State Supreme Court. The term does not include
44the head of, or an officer of, a private entity operating as a
45for-profit or not-for-profit entity.
46     (c)  "Individuals substantially affected" means natural
47persons who have established a real and sufficiently immediate
48injury in fact due to the findings, conclusions, or
49recommendations of a final report of a state agency inspector
50general, who are the subject of the audit or investigation, and
51who do not have or are not currently afforded an existing right
52to an independent review process. Employees of the state,
53including career service, probationary, other personal service,
54Selected Exempt Service, and Senior Management Service
55employees, are not covered by this definition. This definition
56also does not cover former employees of the state if the final
57report of the state agency inspector general relates to matters
58arising during the former employee's term of state employment.
59     (d)  "Entities contracting with the state" means for-profit
60and not-for-profit organizations or businesses having a legal
61existence, such as corporations or partnerships, as opposed to
62natural persons, that have entered into a relationship with a
63state agency as defined in paragraph (a) to provide for
64consideration certain goods or services to the state agency or
65on behalf of the state agency. The relationship may be evidenced
66by payment by warrant or purchasing card, contract, purchase
67order, provider agreement, or other such mutually agreed upon
68relationship.
69     (e)  "Additional material relevant" means evidence
70submitted to the state agency inspector general prior to release
71of the final report that likely would have affected the
72investigative findings. Such evidence is not merely cumulative
73of evidence considered by the state agency inspector general
74and, to be relevant, must tend to prove or disprove the matters
75at issue in the investigation. Newly discovered evidence may be
76considered if it was discovered subsequent to the agency
77inspector general's final report, and the agency inspector
78general has affirmatively refused to reopen the investigation
79despite such evidence. Such evidence shall not have been
80withheld from the state agency inspector general during the
81original investigation.
82     (f)  "Original investigation" means an official
83investigative review by a state agency inspector general of
84information relative to suspected violations of any law, rule,
85or agency policy resulting in written findings.
86     (2)  The Office of Inspector General is hereby established
87in each state agency to provide a central point for coordination
88of and responsibility for activities that promote
89accountability, integrity, and efficiency in government. It
90shall be the duty and responsibility of each inspector general,
91with respect to the state agency in which the office is
92established, to:
93     (a)  Advise in the development of performance measures,
94standards, and procedures for the evaluation of state agency
95programs.
96     (b)  Assess the reliability and validity of the information
97provided by the state agency on performance measures and
98standards, and make recommendations for improvement, if
99necessary, prior to submission of those measures and standards
100to the Executive Office of the Governor pursuant to s.
101216.0166(1).
102     (c)  Review the actions taken by the state agency to
103improve program performance and meet program standards and make
104recommendations for improvement, if necessary.
105     (d)  Provide direction for, supervise, and coordinate
106audits, investigations, and management reviews relating to the
107programs and operations of the state agency, except that when
108the inspector general does not possess the qualifications
109specified in subsection (4), the director of auditing shall
110conduct such audits.
111     (e)  Conduct, supervise, or coordinate other activities
112carried out or financed by that state agency for the purpose of
113promoting economy and efficiency in the administration of, or
114preventing and detecting fraud and abuse in, its programs and
115operations.
116     (f)  Keep such agency head informed concerning fraud,
117abuses, and deficiencies relating to programs and operations
118administered or financed by the state agency, recommend
119corrective action concerning fraud, abuses, and deficiencies,
120and report on the progress made in implementing corrective
121action.
122     (g)  Ensure effective coordination and cooperation between
123the Auditor General, federal auditors, and other governmental
124bodies with a view toward avoiding duplication.
125     (h)  Review, as appropriate, rules relating to the programs
126and operations of such state agency and make recommendations
127concerning their impact.
128     (i)  Ensure that an appropriate balance is maintained
129between audit, investigative, and other accountability
130activities.
131     (j)  Comply with the General Principles and Standards for
132Offices of Inspector General as published and revised by the
133Association of Inspectors General.
134     (3)(a)  The inspector general shall be appointed by the
135agency head. For agencies under the direction of the Governor,
136the appointment shall be made after notifying the Governor and
137the Chief Inspector General in writing, at least 7 days prior to
138an offer of employment, of the agency head's intention to hire
139the inspector general.
140     (b)  Each inspector general shall report to and be under
141the general supervision of the agency head and shall not be
142subject to supervision by any other employee of the state
143agency. The inspector general shall be appointed without regard
144to political affiliation.
145     (c)  An inspector general may be removed from office by the
146agency head. For agencies under the direction of the Governor,
147the agency head shall notify the Governor and the Chief
148Inspector General, in writing, of the intention to terminate the
149inspector general at least 7 days prior to the removal. For
150state agencies under the direction of the Governor and Cabinet,
151the agency head shall notify the Governor and Cabinet in writing
152of the intention to terminate the inspector general at least 7
153days prior to the removal.
154     (d)  The agency head or agency staff shall not prevent or
155prohibit the inspector general or director of auditing from
156initiating, carrying out, or completing any audit or
157investigation.
158     (4)  To ensure that state agency audits are performed in
159accordance with applicable auditing standards, the inspector
160general or the director of auditing within the inspector
161general's office shall possess the following qualifications:
162     (a)  A bachelor's degree from an accredited college or
163university with a major in accounting, or with a major in
164business which includes five courses in accounting, and 5 years
165of experience as an internal auditor or independent postauditor,
166electronic data processing auditor, accountant, or any
167combination thereof. The experience shall at a minimum consist
168of audits of units of government or private business
169enterprises, operating for profit or not for profit; or
170     (b)  A master's degree in accounting, business
171administration, or public administration from an accredited
172college or university and 4 years of experience as required in
173paragraph (a); or
174     (c)  A certified public accountant license issued pursuant
175to chapter 473 or a certified internal audit certificate issued
176by the Institute of Internal Auditors or earned by examination,
177and 4 years of experience as required in paragraph (a).
178     (5)  In carrying out the auditing duties and
179responsibilities of this act, each inspector general shall
180review and evaluate internal controls necessary to ensure the
181fiscal accountability of the state agency. The inspector general
182shall conduct financial, compliance, electronic data processing,
183and performance audits of the agency and prepare audit reports
184of his or her findings. The scope and assignment of the audits
185shall be determined by the inspector general; however, the
186agency head may at any time direct the inspector general to
187perform an audit of a special program, function, or
188organizational unit. The performance of the audit shall be under
189the direction of the inspector general, except that if the
190inspector general does not possess the qualifications specified
191in subsection (4), the director of auditing shall perform the
192functions listed in this subsection.
193     (a)  Such audits shall be conducted in accordance with the
194current International Standards for the Professional Practice of
195Internal Auditing as and subsequent Internal Auditing Standards
196or Statements on Internal Auditing Standards published by the
197Institute of Internal Auditors, Inc., or, where appropriate, in
198accordance with generally accepted governmental auditing
199standards. All audit reports issued by internal audit staff
200shall include a statement that the audit was conducted pursuant
201to the appropriate standards.
202     (b)  Audit workpapers and reports shall be public records
203to the extent that they do not include information which has
204been made confidential and exempt from the provisions of s.
205119.07(1) pursuant to law. However, when the inspector general
206or a member of the staff receives from an individual a complaint
207or information that falls within the definition provided in s.
208112.3187(5), the name or identity of the individual shall not be
209disclosed to anyone else without the written consent of the
210individual, unless the inspector general determines that such
211disclosure is unavoidable during the course of the audit or
212investigation.
213     (c)  The inspector general and the staff shall have access
214to any records, data, and other information of the state agency
215he or she deems necessary to carry out his or her duties. The
216inspector general is also authorized to request such information
217or assistance as may be necessary from the state agency or from
218any federal, state, or local government entity.
219     (d)  At the conclusion of each audit, the inspector general
220shall submit preliminary findings and recommendations to the
221person responsible for supervision of the program function or
222operational unit who shall respond to any adverse findings
223within 20 working days after receipt of the tentative findings.
224Such response and the inspector general's rebuttal to the
225response shall be included in the final audit report.
226     (e)  At the conclusion of an audit in which the results of
227the audit are published and disbursed and the subject of the
228audit is a specific, singular entity contracting with the state,
229the inspector general shall submit findings to the subject who
230shall respond to any adverse findings within 20 working days.
231Such response and the inspector general's rebuttal to the
232response, if any, shall be included in the final audit report.
233     (f)(e)  The inspector general shall submit the final report
234to the agency head and to the Auditor General.
235     (g)(f)  The Auditor General, in connection with the
236independent postaudit of the same agency pursuant to s. 11.45,
237shall give appropriate consideration to internal audit reports
238and the resolution of findings therein. The Legislative Auditing
239Committee may inquire into the reasons or justifications for
240failure of the agency head to correct the deficiencies reported
241in internal audits that are also reported by the Auditor General
242and shall take appropriate action.
243     (h)(g)  The inspector general shall monitor the
244implementation of the state agency's response to any report on
245the state agency issued by the Auditor General or by the Office
246of Program Policy Analysis and Government Accountability. No
247later than 6 months after the Auditor General or the Office of
248Program Policy Analysis and Government Accountability publishes
249a report on the state agency, the inspector general shall
250provide a written response to the agency head on the status of
251corrective actions taken. The Inspector General shall file a
252copy of such response with the Legislative Auditing Committee.
253     (i)(h)  The inspector general shall develop long-term and
254annual audit plans based on the findings of periodic risk
255assessments. The plan, where appropriate, should include
256postaudit samplings of payments and accounts. The plan shall
257show the individual audits to be conducted during each year and
258related resources to be devoted to the respective audits. The
259Chief Financial Officer, to assist in fulfilling the
260responsibilities for examining, auditing, and settling accounts,
261claims, and demands pursuant to s. 17.03(1), and examining,
262auditing, adjusting, and settling accounts pursuant to s. 17.04,
263may utilize audits performed by the inspectors general and
264internal auditors. For state agencies under the Governor, the
265audit plans shall be submitted to the Governor's Chief Inspector
266General. The plan shall be submitted to the agency head for
267approval. A copy of the approved plan shall be submitted to the
268Auditor General.
269     (6)  In carrying out the investigative duties and
270responsibilities specified in this section, each inspector
271general shall initiate, conduct, supervise, and coordinate
272investigations designed to detect, deter, prevent, and eradicate
273fraud, waste, mismanagement, misconduct, and other abuses in
274state government. For these purposes, each inspector general
275state agency shall:
276     (a)  Receive complaints and coordinate all activities of
277the agency as required by the Whistle-blower's Act pursuant to
278ss. 112.3187-112.31895.
279     (b)  Receive and consider the complaints which do not meet
280the criteria for an investigation under the Whistle-blower's Act
281and conduct, supervise, or coordinate such inquiries,
282investigations, or reviews as the inspector general deems
283appropriate.
284     (c)  Report expeditiously to the Department of Law
285Enforcement or other law enforcement agencies, as appropriate,
286whenever the inspector general has reasonable grounds to believe
287there has been a violation of criminal law.
288     (d)  Conduct investigations and other inquiries free of
289actual or perceived impairment to the independence of the
290inspector general or the inspector general's office. This shall
291include freedom from any interference with investigations and
292timely access to records and other sources of information.
293     (e)  At the conclusion of each investigation in which the
294subject of the investigation is a specific entity contracting
295with the state or an individual substantially affected by the
296findings, conclusions, and recommendations, consistent with
297chapter 119, submit findings to the subject who shall respond to
298any adverse findings within 10 days. Such response and the
299inspector general's rebuttal to the response, if any, shall be
300included in the final investigative report.
301     (f)(e)  Submit in a timely fashion final reports on
302investigations conducted by the inspector general to the agency
303head, except for whistle-blower's investigations, which shall be
304conducted and reported pursuant to s. 112.3189.
305     (7)  Each inspector general shall, not later than September
30630 of each year, prepare an annual report summarizing the
307activities of the office during the immediately preceding state
308fiscal year. The final report shall be furnished to the agency
309head. Such report shall include, but need not be limited to:
310     (a)  A description of activities relating to the
311development, assessment, and validation of performance measures.
312     (b)  A description of significant abuses and deficiencies
313relating to the administration of programs and operations of the
314agency disclosed by investigations, audits, reviews, or other
315activities during the reporting period.
316     (c)  A description of the recommendations for corrective
317action made by the inspector general during the reporting period
318with respect to significant problems, abuses, or deficiencies
319identified.
320     (d)  The identification of each significant recommendation
321described in previous annual reports on which corrective action
322has not been completed.
323     (e)  A summary of each audit and investigation completed
324during the reporting period.
325     (8)  The inspector general in each agency under the
326Governor's jurisdiction shall timely report to the Chief
327Inspector General all written complaints received concerning the
328duties and responsibilities outlined in this section or any
329misconduct alleged related to the office of the inspector
330general or its employees.
331     (9)  For agencies under the Governor's jurisdiction, the
332Chief Inspector General in the Executive Office of the Governor,
333as defined in s. 14.32, shall:
334     (a)  Receive and consider all complaints against offices of
335inspectors general or their employees and conduct, supervise, or
336coordinate such inquiries, investigations, or reviews as the
337Chief Inspector General considers appropriate.
338     (b)  Develop policies and procedures for reviewing
339complaints against a state agency office of inspector general or
340its employees, including, but not limited to, complaints
341regarding misconduct, failure to properly follow professional
342standards, or any other violation of agency policy, rule, or law
343that is consistent with the definitions in this section and s.
34414.32. The policies and procedures must identify exemptions from
345this process, including, but not limited to, whistle-blower
346investigations conducted in accordance with ss. 112.3187-
347112.31895. These policies and procedures must afford entities
348contracting with state agencies, and individuals substantially
349affected by the findings, conclusions, and recommendations, a
350meaningful opportunity to express their complaint and present
351additional material relevant to the original investigation.
352Policies and procedures specified herein shall not be subject to
353rulemaking under chapter 120.
354     (c)  Distribute the report of any investigation conducted
355or supervised by the Chief Inspector General to the office of
356the inspector general of the state agency, the agency head of
357the subject's employing agency, and the person that filed the
358complaint against the office of inspector general of the state
359agency or its employees.
360     (10)  If a state agency inspector general's reported
361adverse findings regarding entities contracting with state
362agencies and individuals substantially affected by the findings,
363conclusions, and recommendations are determined to be not
364substantially justified by the Chief Inspector General, the
365agency shall reimburse reasonable legal fees and costs not to
366exceed $50,000 specifically associated with filing and pursuing
367the complaints, which are incurred by the entities contracting
368with state agencies and individuals substantially affected by
369the findings, conclusions, and recommendations.
370     (11)(8)  Each agency inspector general shall, to the extent
371both necessary and practicable, include on his or her staff
372individuals with electronic data processing auditing experience.
373     Section 2.  This act shall take effect July 1, 2007.


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