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A bill to be entitled

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An act relating to agency inspectors general; amending s.

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20.055, F.S.; providing definitions; requiring agency

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inspectors general to comply with certain principles and

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standards; requiring an inspector general to submit

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findings of an audit to specified persons or entities;

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requiring agencies under the Governor to notify the Chief

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Inspector General of inspector general appointments and

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terminations; prohibiting agency staff from preventing or

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prohibiting the inspector general or director of auditing

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from initiating, carrying out, or completing any audit or

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investigation; requiring audits to be conducted in

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accordance with the current International Standards for

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the Professional Practice of Internal Auditing; requiring

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the inspector general of each state agency to report

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certain written complaints to the Chief Inspector General;

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requiring the Chief Inspector General to fulfill certain

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duties and responsibilities; requiring a state agency to

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reimburse legal fees and costs that are incurred by

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certain individuals and entities under certain conditions;

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providing an effective date.

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Be It Enacted by the Legislature of the State of Florida:

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     Section 1.  Section 20.055, Florida Statutes, is amended to

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read:

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     20.055  Agency inspectors general.--

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     (1)  For the purposes of this section:

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     (a)  "State agency" means each department created pursuant

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to this chapter, and also includes the Executive Office of the

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Governor, the Department of Military Affairs, the Fish and

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Wildlife Conservation Commission, the Office of Insurance

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Regulation of the Financial Services Commission, the Office of

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Financial Regulation of the Financial Services Commission, the

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Public Service Commission, the Board of Governors of the State

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University System, and the state courts system.

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     (b) "Agency head" means a public official such as the

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Governor, a Cabinet officer, a secretary as defined in s.

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20.03(5), or an executive director as defined in s. 20.03(6). It

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also includes the chair of the Public Service Commission, the

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Director of the Office of Insurance Regulation of the Financial

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Services Commission, the Director of the Office of Financial

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Regulation of the Financial Services Commission, and the Chief

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Justice of the State Supreme Court. The term does not include the

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head of, or an officer of, a private entity operating as a for-

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profit or not-for-profit entity.

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     (c) "Individuals substantially affected" means natural

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persons who have established a real and sufficiently immediate

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injury in fact due to the findings, conclusions, or

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recommendations of a final report of a state agency inspector

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general, who are the subject of the audit or investigation, and

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who do not have or are not currently afforded an existing right

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to an independent review process. Employees of the state,

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including career service, probationary, other personal service,

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Selected Exempt Service, and Senior Management Service employees,

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are not covered by this definition. This definition also does not

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cover former employees of the state if the final report of the

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state agency inspector general relates to matters arising during

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a former employee's term of state employment.

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     (d) "Entities contracting with the state" means for-profit

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and not-for-profit organizations or businesses having a legal

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existence, such as corporations or partnerships, as opposed to

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natural persons, that have entered into a relationship with a

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state agency as defined in paragraph (a) to provide for

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consideration certain goods or services to the state agency or on

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behalf of the state agency. The relationship may be evidenced by

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payment by warrant or purchasing card, contract, purchase order,

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provider agreement, or other such mutually agreed upon

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relationship.

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     (e) "Additional material relevant" means evidence submitted

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to the state agency inspector general prior to release of the

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final report which likely would have affected the investigative

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findings. Such evidence is not merely cumulative of evidence

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considered by the state agency inspector general and, to be

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relevant, must tend to prove or disprove the matters at issue in

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the investigation. Newly discovered evidence may be considered if

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it was discovered subsequent to the agency inspector general's

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final report and the agency inspector general has affirmatively

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refused to reopen the investigation despite such evidence. Such

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evidence shall not have been withheld from the state agency

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inspector general during the original investigation.

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     (f) "Original investigation" means an official

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investigative review by a state agency inspector general of

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information relative to suspected violations of any law, rule, or

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agency policy resulting in written findings.

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     (2)  The Office of Inspector General is hereby established

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in each state agency to provide a central point for coordination

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of and responsibility for activities that promote accountability,

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integrity, and efficiency in government. It shall be the duty and

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responsibility of each inspector general, with respect to the

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state agency in which the office is established, to:

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     (a)  Advise in the development of performance measures,

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standards, and procedures for the evaluation of state agency

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programs.

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     (b)  Assess the reliability and validity of the information

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provided by the state agency on performance measures and

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standards, and make recommendations for improvement, if

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necessary, prior to submission of those measures and standards to

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the Executive Office of the Governor pursuant to s. 216.0166(1).

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     (c)  Review the actions taken by the state agency to improve

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program performance and meet program standards and make

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recommendations for improvement, if necessary.

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     (d)  Provide direction for, supervise, and coordinate

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audits, investigations, and management reviews relating to the

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programs and operations of the state agency, except that when the

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inspector general does not possess the qualifications specified

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in subsection (4), the director of auditing shall conduct such

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audits.

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     (e)  Conduct, supervise, or coordinate other activities

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carried out or financed by that state agency for the purpose of

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promoting economy and efficiency in the administration of, or

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preventing and detecting fraud and abuse in, its programs and

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operations.

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     (f)  Keep such agency head informed concerning fraud,

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abuses, and deficiencies relating to programs and operations

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administered or financed by the state agency, recommend

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corrective action concerning fraud, abuses, and deficiencies, and

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report on the progress made in implementing corrective action.

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     (g)  Ensure effective coordination and cooperation between

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the Auditor General, federal auditors, and other governmental

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bodies with a view toward avoiding duplication.

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     (h)  Review, as appropriate, rules relating to the programs

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and operations of such state agency and make recommendations

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concerning their impact.

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     (i)  Ensure that an appropriate balance is maintained

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between audit, investigative, and other accountability

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activities.

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     (j) Comply with the General Principles and Standards for

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Offices of Inspector General as published and revised by the

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Association of Inspectors General.

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     (3)(a)  The inspector general shall be appointed by the

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agency head. For agencies under the direction of the Governor,

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the appointment shall be made after notifying the Governor and

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the Chief Inspector General in writing, at least 7 days prior to

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an offer of employment, of the agency head's intention to hire

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the inspector general.

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     (b)  Each inspector general shall report to and be under the

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general supervision of the agency head and shall not be subject

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to supervision by any other employee of the state agency. The

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inspector general shall be appointed without regard to political

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affiliation.

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     (c)  An inspector general may be removed from office by the

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agency head. For agencies under the direction of the Governor,

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the agency head shall notify the Governor and the Chief Inspector

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General, in writing, of the intention to terminate the inspector

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general at least 7 days prior to the removal. For state agencies

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under the direction of the Governor and Cabinet, the agency head

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shall notify the Governor and Cabinet in writing of the intention

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to terminate the inspector general at least 7 days prior to the

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removal.

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     (d) The agency head or agency staff shall not prevent or

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prohibit the inspector general or director of auditing from

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initiating, carrying out, or completing any audit or

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investigation.

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     (4)  To ensure that state agency audits are performed in

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accordance with applicable auditing standards, the inspector

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general or the director of auditing within the inspector

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general's office shall possess the following qualifications:

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     (a)  A bachelor's degree from an accredited college or

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university with a major in accounting, or with a major in

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business which includes five courses in accounting, and 5 years

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of experience as an internal auditor or independent postauditor,

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electronic data processing auditor, accountant, or any

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combination thereof. The experience shall at a minimum consist of

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audits of units of government or private business enterprises,

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operating for profit or not for profit; or

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     (b)  A master's degree in accounting, business

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administration, or public administration from an accredited

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college or university and 4 years of experience as required in

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paragraph (a); or

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     (c)  A certified public accountant license issued pursuant

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to chapter 473 or a certified internal audit certificate issued

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by the Institute of Internal Auditors or earned by examination,

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and 4 years of experience as required in paragraph (a).

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     (5)  In carrying out the auditing duties and

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responsibilities of this act, each inspector general shall review

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and evaluate internal controls necessary to ensure the fiscal

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accountability of the state agency. The inspector general shall

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conduct financial, compliance, electronic data processing, and

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performance audits of the agency and prepare audit reports of his

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or her findings. The scope and assignment of the audits shall be

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determined by the inspector general; however, the agency head may

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at any time direct the inspector general to perform an audit of a

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special program, function, or organizational unit. The

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performance of the audit shall be under the direction of the

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inspector general, except that if the inspector general does not

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possess the qualifications specified in subsection (4), the

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director of auditing shall perform the functions listed in this

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subsection.

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     (a)  Such audits shall be conducted in accordance with the

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current International Standards for the Professional Practice of

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Internal Auditing as and subsequent Internal Auditing Standards

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or Statements on Internal Auditing Standards published by the

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Institute of Internal Auditors, Inc., or, where appropriate, in

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accordance with generally accepted governmental auditing

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standards. All audit reports issued by internal audit staff shall

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include a statement that the audit was conducted pursuant to the

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appropriate standards.

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     (b)  Audit workpapers and reports shall be public records to

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the extent that they do not include information which has been

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made confidential and exempt from the provisions of s. 119.07(1)

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pursuant to law. However, when the inspector general or a member

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of the staff receives from an individual a complaint or

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information that falls within the definition provided in s.

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112.3187(5), the name or identity of the individual shall not be

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disclosed to anyone else without the written consent of the

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individual, unless the inspector general determines that such

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disclosure is unavoidable during the course of the audit or

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investigation.

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     (c)  The inspector general and the staff shall have access

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to any records, data, and other information of the state agency

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he or she deems necessary to carry out his or her duties. The

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inspector general is also authorized to request such information

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or assistance as may be necessary from the state agency or from

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any federal, state, or local government entity.

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     (d)  At the conclusion of each audit, the inspector general

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shall submit preliminary findings and recommendations to the

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person responsible for supervision of the program function or

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operational unit who shall respond to any adverse findings within

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20 working days after receipt of the tentative findings. Such

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response and the inspector general's rebuttal to the response

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shall be included in the final audit report.

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     (e) At the conclusion of an audit in which the results of

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the audit are published and disbursed and the subject of the

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audit is a specific, singular entity contracting with the state,

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the inspector general shall submit findings to the subject who

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shall respond to any adverse findings within 20 working days.

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Such response and the inspector general's rebuttal to the

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response, if any, shall be included in the final audit report.

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     (f)(e) The inspector general shall submit the final report

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to the agency head and to the Auditor General.

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     (g)(f) The Auditor General, in connection with the

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independent postaudit of the same agency pursuant to s. 11.45,

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shall give appropriate consideration to internal audit reports

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and the resolution of findings therein. The Legislative Auditing

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Committee may inquire into the reasons or justifications for

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failure of the agency head to correct the deficiencies reported

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in internal audits that are also reported by the Auditor General

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and shall take appropriate action.

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     (h)(g) The inspector general shall monitor the

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implementation of the state agency's response to any report on

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the state agency issued by the Auditor General or by the Office

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of Program Policy Analysis and Government Accountability. No

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later than 6 months after the Auditor General or the Office of

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Program Policy Analysis and Government Accountability publishes a

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report on the state agency, the inspector general shall provide a

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written response to the agency head on the status of corrective

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actions taken. The Inspector General shall file a copy of such

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response with the Legislative Auditing Committee.

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     (i)(h) The inspector general shall develop long-term and

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annual audit plans based on the findings of periodic risk

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assessments. The plan, where appropriate, should include

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postaudit samplings of payments and accounts. The plan shall show

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the individual audits to be conducted during each year and

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related resources to be devoted to the respective audits. The

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Chief Financial Officer, to assist in fulfilling the

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responsibilities for examining, auditing, and settling accounts,

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claims, and demands pursuant to s. 17.03(1), and examining,

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auditing, adjusting, and settling accounts pursuant to s. 17.04,

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may utilize audits performed by the inspectors general and

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internal auditors. For state agencies under the Governor, the

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audit plans shall be submitted to the Governor's Chief Inspector

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General. The plan shall be submitted to the agency head for

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approval. A copy of the approved plan shall be submitted to the

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Auditor General.

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     (6)  In carrying out the investigative duties and

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responsibilities specified in this section, each inspector

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general shall initiate, conduct, supervise, and coordinate

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investigations designed to detect, deter, prevent, and eradicate

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fraud, waste, mismanagement, misconduct, and other abuses in

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state government. For these purposes, each inspector general

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state agency shall:

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     (a)  Receive complaints and coordinate all activities of the

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agency as required by the Whistle-blower's Act pursuant to ss.

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112.3187-112.31895.

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     (b)  Receive and consider the complaints which do not meet

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the criteria for an investigation under the Whistle-blower's Act

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and conduct, supervise, or coordinate such inquiries,

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investigations, or reviews as the inspector general deems

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appropriate.

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     (c)  Report expeditiously to the Department of Law

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Enforcement or other law enforcement agencies, as appropriate,

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whenever the inspector general has reasonable grounds to believe

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there has been a violation of criminal law.

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     (d)  Conduct investigations and other inquiries free of

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actual or perceived impairment to the independence of the

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inspector general or the inspector general's office. This shall

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include freedom from any interference with investigations and

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timely access to records and other sources of information.

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     (e) At the conclusion of each investigation in which the

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subject of the investigation is a specific entity contracting

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with the state or an individual substantially affected by the

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findings, conclusions, and recommendations, the inspector general

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shall, consistent with chapter 119, submit findings to the

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subject who shall respond to any adverse findings within 10 days.

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Such response and the inspector general's rebuttal to the

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response, if any, shall be included in the final investigative

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report.

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     (f)(e) Submit in a timely fashion final reports on

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investigations conducted by the inspector general to the agency

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head, except for whistle-blower's investigations, which shall be

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conducted and reported pursuant to s. 112.3189.

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     (7)  Each inspector general shall, not later than September

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30 of each year, prepare an annual report summarizing the

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activities of the office during the immediately preceding state

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fiscal year. The final report shall be furnished to the agency

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head. Such report shall include, but need not be limited to:

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     (a)  A description of activities relating to the

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development, assessment, and validation of performance measures.

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     (b)  A description of significant abuses and deficiencies

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relating to the administration of programs and operations of the

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agency disclosed by investigations, audits, reviews, or other

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activities during the reporting period.

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     (c)  A description of the recommendations for corrective

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action made by the inspector general during the reporting period

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with respect to significant problems, abuses, or deficiencies

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identified.

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     (d)  The identification of each significant recommendation

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described in previous annual reports on which corrective action

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has not been completed.

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     (e)  A summary of each audit and investigation completed

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during the reporting period.

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     (8) The inspector general in each agency under the

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Governor's jurisdiction shall timely report to the Chief

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Inspector General all written complaints received concerning the

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duties and responsibilities outlined in this section or any

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misconduct alleged related to the office of the inspector general

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or its employees.

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     (9) For agencies under the Governor's jurisdiction, the

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Chief Inspector General in the Executive Office of the Governor,

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as defined in s. 14.32, shall:

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     (a) Receive and consider all complaints against offices of

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inspectors general or their employees and conduct, supervise, or

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coordinate such inquiries, investigations, or reviews as the

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Chief Inspector General considers appropriate.

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     (b) Develop policies and procedures for reviewing

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complaints against a state agency office of inspector general or

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its employees, including, but not limited to, complaints

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regarding misconduct, failure to properly follow professional

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standards, or any other violation of agency policy, rule, or law

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which is consistent with the definitions in this section and s.

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14.32. The policies and procedures must identify exemptions from

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this process, including, but not limited to, whistle-blower

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investigations conducted in accordance with ss. 112.3187-

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112.31895. These policies and procedures must afford entities

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contracting with state agencies, and individuals substantially

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affected by the findings, conclusions, and recommendations, a

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meaningful opportunity to express their complaint and present

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additional material relevant to the original investigation.

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Policies and procedures specified herein are not subject to

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rulemaking under chapter 120.

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     (c) Distribute the report of any investigation conducted or

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supervised by the Chief Inspector General to the office of the

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inspector general of the state agency, the agency head of the

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subject's employing agency, and the person that filed the

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complaint against the office of inspector general of the state

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agency or its employees.

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     (10) If a state agency inspector general's reported adverse

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findings regarding entities contracting with state agencies and

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individuals substantially affected by the findings, conclusions,

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and recommendations are determined to be not substantially

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justified after an informal evidentiary hearing by a hearing

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master selected by agreement of the state agency and the Chief

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Inspector General, the agency shall reimburse reasonable legal

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fees and costs not to exceed $50,000 specifically associated with

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filing and pursuing the complaints, which are incurred by the

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entities contracting with state agencies and individuals

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substantially affected by the findings, conclusions, and

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recommendations.

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     (11)(8) Each agency inspector general shall, to the extent

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both necessary and practicable, include on his or her staff

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individuals with electronic data processing auditing experience.

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     Section 2.  This act shall take effect July 1, 2008.