CS/HB 165

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 audits and investigations to specified persons
7or entities if such findings are not exempt from
8disclosure; requiring responses to findings within 20
9working days; requiring agencies under the Governor to
10notify the Chief Inspector General of inspector general
11appointments and terminations; prohibiting agency staff
12from preventing or prohibiting the inspector general from
13initiating, carrying out, or completing any audit or
14investigation; requiring audits to be conducted in
15accordance with the current International Standards for
16the Professional Practice of Internal Auditing; requiring
17the inspector general of each state agency to report
18certain written complaints to the agency head, and for
19agencies under the Governor, to the agency head and the
20Chief Inspector General; providing an effective date.
21
22Be It Enacted by the Legislature of the State of Florida:
23
24     Section 1.  Section 20.055, Florida Statutes, is amended to
25read:
26     20.055  Agency inspectors general.--
27     (1)  For the purposes of this section:
28     (a)  "State agency" means each department created pursuant
29to this chapter, and also includes the Executive Office of the
30Governor, the Department of Military Affairs, the Fish and
31Wildlife Conservation Commission, the Office of Insurance
32Regulation of the Financial Services Commission, the Office of
33Financial Regulation of the Financial Services Commission, the
34Public Service Commission, the Board of Governors of the State
35University System, and the state courts system.
36     (b)  "Agency head" means the Governor, a Cabinet officer, a
37secretary as defined in s. 20.03(5), or an executive director as
38defined in s. 20.03(6). It also includes the chair of the Public
39Service Commission, the Director of the Office of Insurance
40Regulation of the Financial Services Commission, the Director of
41the Office of Financial Regulation of the Financial Services
42Commission, and the Chief Justice of the State Supreme Court.
43     (c)  "Individuals substantially affected" means natural
44persons who have established a real and sufficiently immediate
45injury in fact due to the findings, conclusions, or
46recommendations of a final report of a state agency inspector
47general, who are the subject of the audit or investigation, and
48who do not have or are not currently afforded an existing right
49to an independent review process. Employees of the state,
50including career service, probationary, other personal service,
51Selected Exempt Service, and Senior Management Service
52employees, are not covered by this definition. This definition
53also does not cover former employees of the state if the final
54report of the state agency inspector general relates to matters
55arising during a former employee's term of state employment.
56This definition does not apply to persons who are the subject of
57audits or investigations conducted pursuant to ss. 112.3187-
58112.31895 or s. 409.913 or which are otherwise confidential and
59exempt under s. 119.07.
60     (d)  "Entities contracting with the state" means for-profit
61and not-for-profit organizations or businesses having a legal
62existence, such as corporations or partnerships, as opposed to
63natural persons, which have entered into a relationship with a
64state agency as defined in paragraph (a) to provide for
65consideration certain goods or services to the state agency or
66on behalf of the state agency. The relationship may be evidenced
67by payment by warrant or purchasing card, contract, purchase
68order, provider agreement, or other such mutually agreed upon
69relationship. This definition does not apply to entities which
70are the subject of audits or investigations conducted pursuant
71to ss. 112.3187-112.31895 or s. 409.913 or which are otherwise
72confidential and exempt under s. 119.07.
73     (2)  The Office of Inspector General is hereby established
74in each state agency to provide a central point for coordination
75of and responsibility for activities that promote
76accountability, integrity, and efficiency in government. It
77shall be the duty and responsibility of each inspector general,
78with respect to the state agency in which the office is
79established, to:
80     (a)  Advise in the development of performance measures,
81standards, and procedures for the evaluation of state agency
82programs.
83     (b)  Assess the reliability and validity of the information
84provided by the state agency on performance measures and
85standards, and make recommendations for improvement, if
86necessary, prior to submission of those measures and standards
87to the Executive Office of the Governor pursuant to s.
88216.0166(1).
89     (c)  Review the actions taken by the state agency to
90improve program performance and meet program standards and make
91recommendations for improvement, if necessary.
92     (d)  Provide direction for, supervise, and coordinate
93audits, investigations, and management reviews relating to the
94programs and operations of the state agency, except that when
95the inspector general does not possess the qualifications
96specified in subsection (4), the director of auditing shall
97conduct such audits.
98     (e)  Conduct, supervise, or coordinate other activities
99carried out or financed by that state agency for the purpose of
100promoting economy and efficiency in the administration of, or
101preventing and detecting fraud and abuse in, its programs and
102operations.
103     (f)  Keep such agency head informed concerning fraud,
104abuses, and deficiencies relating to programs and operations
105administered or financed by the state agency, recommend
106corrective action concerning fraud, abuses, and deficiencies,
107and report on the progress made in implementing corrective
108action.
109     (g)  Ensure effective coordination and cooperation between
110the Auditor General, federal auditors, and other governmental
111bodies with a view toward avoiding duplication.
112     (h)  Review, as appropriate, rules relating to the programs
113and operations of such state agency and make recommendations
114concerning their impact.
115     (i)  Ensure that an appropriate balance is maintained
116between audit, investigative, and other accountability
117activities.
118     (j)  Comply with the General Principles and Standards for
119Offices of Inspector General as published and revised by the
120Association of Inspectors General.
121     (3)(a)  The inspector general shall be appointed by the
122agency head. For agencies under the direction of the Governor,
123the appointment shall be made after notifying the Governor and
124the Chief Inspector General in writing, at least 7 days prior to
125an offer of employment, of the agency head's intention to hire
126the inspector general.
127     (b)  Each inspector general shall report to and be under
128the general supervision of the agency head and shall not be
129subject to supervision by any other employee of the state
130agency. The inspector general shall be appointed without regard
131to political affiliation.
132     (c)  An inspector general may be removed from office by the
133agency head. For agencies under the direction of the Governor,
134the agency head shall notify the Governor and the Chief
135Inspector General, in writing, of the intention to terminate the
136inspector general at least 7 days prior to the removal. For
137state agencies under the direction of the Governor and Cabinet,
138the agency head shall notify the Governor and Cabinet in writing
139of the intention to terminate the inspector general at least 7
140days prior to the removal.
141     (d)  The agency head or agency staff shall not prevent or
142prohibit the inspector general or director of auditing from
143initiating, carrying out, or completing any audit or
144investigation.
145     (4)  To ensure that state agency audits are performed in
146accordance with applicable auditing standards, the inspector
147general or the director of auditing within the inspector
148general's office shall possess the following qualifications:
149     (a)  A bachelor's degree from an accredited college or
150university with a major in accounting, or with a major in
151business which includes five courses in accounting, and 5 years
152of experience as an internal auditor or independent postauditor,
153electronic data processing auditor, accountant, or any
154combination thereof. The experience shall at a minimum consist
155of audits of units of government or private business
156enterprises, operating for profit or not for profit; or
157     (b)  A master's degree in accounting, business
158administration, or public administration from an accredited
159college or university and 4 years of experience as required in
160paragraph (a); or
161     (c)  A certified public accountant license issued pursuant
162to chapter 473 or a certified internal audit certificate issued
163by the Institute of Internal Auditors or earned by examination,
164and 4 years of experience as required in paragraph (a).
165     (5)  In carrying out the auditing duties and
166responsibilities of this act, each inspector general shall
167review and evaluate internal controls necessary to ensure the
168fiscal accountability of the state agency. The inspector general
169shall conduct financial, compliance, electronic data processing,
170and performance audits of the agency and prepare audit reports
171of his or her findings. The scope and assignment of the audits
172shall be determined by the inspector general; however, the
173agency head may at any time direct the inspector general to
174perform an audit of a special program, function, or
175organizational unit. The performance of the audit shall be under
176the direction of the inspector general, except that if the
177inspector general does not possess the qualifications specified
178in subsection (4), the director of auditing shall perform the
179functions listed in this subsection.
180     (a)  Such audits shall be conducted in accordance with the
181current International Standards for the Professional Practice of
182Internal Auditing as and subsequent Internal Auditing Standards
183or Statements on Internal Auditing Standards published by the
184Institute of Internal Auditors, Inc., or, where appropriate, in
185accordance with generally accepted governmental auditing
186standards. All audit reports issued by internal audit staff
187shall include a statement that the audit was conducted pursuant
188to the appropriate standards.
189     (b)  Audit workpapers and reports shall be public records
190to the extent that they do not include information which has
191been made confidential and exempt from the provisions of s.
192119.07(1) pursuant to law. However, when the inspector general
193or a member of the staff receives from an individual a complaint
194or information that falls within the definition provided in s.
195112.3187(5), the name or identity of the individual shall not be
196disclosed to anyone else without the written consent of the
197individual, unless the inspector general determines that such
198disclosure is unavoidable during the course of the audit or
199investigation.
200     (c)  The inspector general and the staff shall have access
201to any records, data, and other information of the state agency
202he or she deems necessary to carry out his or her duties. The
203inspector general is also authorized to request such information
204or assistance as may be necessary from the state agency or from
205any federal, state, or local government entity.
206     (d)  At the conclusion of each audit, the inspector general
207shall submit preliminary findings and recommendations to the
208person responsible for supervision of the program function or
209operational unit who shall respond to any adverse findings
210within 20 working days after receipt of the preliminary
211tentative findings. Such response and the inspector general's
212rebuttal to the response shall be included in the final audit
213report.
214     (e)  At the conclusion of an audit in which the subject of
215the audit is a specific entity contracting with the state or an
216individual substantially affected, if the audit is not
217confidential or otherwise exempt from disclosure by law, the
218inspector general shall, consistent with s. 119.07(1), submit
219the findings to the entity contracting with the state or the
220individual substantially affected, who shall be advised in
221writing that they may submit a written response within 20
222working days after receipt of the findings. The response and the
223inspector general's rebuttal to the response, if any, must be
224included in the final audit report.
225     (f)(e)  The inspector general shall submit the final report
226to the agency head and to the Auditor General.
227     (g)(f)  The Auditor General, in connection with the
228independent postaudit of the same agency pursuant to s. 11.45,
229shall give appropriate consideration to internal audit reports
230and the resolution of findings therein. The Legislative Auditing
231Committee may inquire into the reasons or justifications for
232failure of the agency head to correct the deficiencies reported
233in internal audits that are also reported by the Auditor General
234and shall take appropriate action.
235     (h)(g)  The inspector general shall monitor the
236implementation of the state agency's response to any report on
237the state agency issued by the Auditor General or by the Office
238of Program Policy Analysis and Government Accountability. No
239later than 6 months after the Auditor General or the Office of
240Program Policy Analysis and Government Accountability publishes
241a report on the state agency, the inspector general shall
242provide a written response to the agency head on the status of
243corrective actions taken. The Inspector General shall file a
244copy of such response with the Legislative Auditing Committee.
245     (i)(h)  The inspector general shall develop long-term and
246annual audit plans based on the findings of periodic risk
247assessments. The plan, where appropriate, should include
248postaudit samplings of payments and accounts. The plan shall
249show the individual audits to be conducted during each year and
250related resources to be devoted to the respective audits. The
251Chief Financial Officer, to assist in fulfilling the
252responsibilities for examining, auditing, and settling accounts,
253claims, and demands pursuant to s. 17.03(1), and examining,
254auditing, adjusting, and settling accounts pursuant to s. 17.04,
255may utilize audits performed by the inspectors general and
256internal auditors. For state agencies under the Governor, the
257audit plans shall be submitted to the Governor's Chief Inspector
258General. The plan shall be submitted to the agency head for
259approval. A copy of the approved plan shall be submitted to the
260Auditor General.
261     (j)  Inspector general audit reports distributed to the
262Public Service Commission shall be provided to each member of
263the commission.
264     (6)  In carrying out the investigative duties and
265responsibilities specified in this section, each inspector
266general shall initiate, conduct, supervise, and coordinate
267investigations designed to detect, deter, prevent, and eradicate
268fraud, waste, mismanagement, misconduct, and other abuses in
269state government. For these purposes, each inspector general
270state agency shall:
271     (a)  Receive complaints and coordinate all activities of
272the agency as required by the Whistle-blower's Act pursuant to
273ss. 112.3187-112.31895.
274     (b)  Receive and consider the complaints which do not meet
275the criteria for an investigation under the Whistle-blower's Act
276and conduct, supervise, or coordinate such inquiries,
277investigations, or reviews as the inspector general deems
278appropriate.
279     (c)  Report expeditiously to the Department of Law
280Enforcement or other law enforcement agencies, as appropriate,
281whenever the inspector general has reasonable grounds to believe
282there has been a violation of criminal law.
283     (d)  Conduct investigations and other inquiries free of
284actual or perceived impairment to the independence of the
285inspector general or the inspector general's office. This shall
286include freedom from any interference with investigations and
287timely access to records and other sources of information.
288     (e)  At the conclusion of each investigation in which the
289subject of the investigation is a specific entity contracting
290with the state or an individual substantially affected as
291defined by this section, and if the investigation is not
292confidential or otherwise exempt from disclosure by law, the
293inspector general shall, consistent with s. 119.07(1), submit
294findings to the subject that is a specific entity contracting
295with the state or an individual substantially affected, who
296shall be advised in writing that they may submit a written
297response within 20 working days after receipt of the findings.
298Such response and the inspector general's rebuttal to the
299response, if any, shall be included in the final investigative
300report.
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     (g)  Provide to each member of the Public Service
306Commission inspector general investigative reports distributed
307to the commission.
308     (7)  Each inspector general shall, not later than September
30930 of each year, prepare an annual report summarizing the
310activities of the office during the immediately preceding state
311fiscal year. The final report shall be furnished to the agency
312head. Such report shall include, but need not be limited to:
313     (a)  A description of activities relating to the
314development, assessment, and validation of performance measures.
315     (b)  A description of significant abuses and deficiencies
316relating to the administration of programs and operations of the
317agency disclosed by investigations, audits, reviews, or other
318activities during the reporting period.
319     (c)  A description of the recommendations for corrective
320action made by the inspector general during the reporting period
321with respect to significant problems, abuses, or deficiencies
322identified.
323     (d)  The identification of each significant recommendation
324described in previous annual reports on which corrective action
325has not been completed.
326     (e)  A summary of each audit and investigation completed
327during the reporting period.
328     (8)  The inspector general in each agency shall provide to
329the agency head, upon receipt, all written complaints concerning
330the duties and responsibilities in this section or any
331allegation of misconduct related to the office of the inspector
332general or its employees, if received from subjects of audits or
333investigations who are individuals substantially affected or
334entities contracting with the state, as defined in this section.
335For agencies solely under the direction of the Governor, the
336inspector general shall also provide the complaint to the Chief
337Inspector General.
338     (9)(8)  Each agency inspector general shall, to the extent
339both necessary and practicable, include on his or her staff
340individuals with electronic data processing auditing experience.
341     Section 2.  This act shall take effect July 1, 2008.


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