Bill Text: AZ HB2525 | 2016 | Fifty-second Legislature 2nd Regular | Introduced
Bill Title: Counties; annual audits
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2016-01-26 - Referred to House CMA Committee [HB2525 Detail]
Download: Arizona-2016-HB2525-Introduced.html
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REFERENCE TITLE: counties; annual audits |
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State of Arizona House of Representatives Fifty-second Legislature Second Regular Session 2016
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HB 2525 |
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Introduced by Representative Thorpe
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AN ACT
amending title 11, chapter 4, article 3, Arizona Revised Statutes, by adding section 11‑666; amending sections 41‑1279.07 and 41‑1279.21, Arizona Revised Statutes; relating to county audits.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Title 11, chapter 4, article 3, Arizona Revised Statutes, is amended by adding section 11-666, to read:
A. The board of supervisors of each county may cause an audit to be made by a certified public accountant or public accountant who is currently licensed by the Arizona state board of accountancy and who is not an employee of the county. Audits shall be made for each fiscal year for all counties.
B. The audit and the audit report shall include all of the accounts and funds of the county, including operating, special, utility, debt, trust and pension, and all other monies or property for which the county, or any department or officer of the county, is responsible either directly or indirectly. The audits shall be made in accordance with generally accepted auditing standards. The consequent audit report shall contain financial statements that are in conformity with generally accepted government accounting principles and set forth the financial position and results of the operations for each fund and account of the county. The audit report shall also include the following:
1. The professional opinion of the accountant or accountants with respect to the financial statements or, if an opinion cannot be expressed, a declaration of the reasons an opinion cannot be expressed.
2. A determination as to whether Arizona highway user revenue fund monies received by the county pursuant to title 28, chapter 18, article 2 and any other dedicated state transportation revenues received by the county are being used solely for the authorized transportation purposes.
C. The audit shall begin as soon as possible after the close of the fiscal year, although interim auditing may be performed during the year or years under audit.
D. At least four copies of the audit report shall be signed by the auditor and filed with the county. The county shall immediately do the following:
1. Make one copy of the report a public record that is open to the public for inspection.
2. File one copy of the report with the auditor general pursuant to section 41‑1279.07.
3. Submit one copy of the report to the secretary of state.
E. The expense of the audit shall be paid by the county for which the audit is made.
Sec. 2. Section 41-1279.07, Arizona Revised Statutes, is amended to read:
41-1279.07. Uniform expenditure reporting system; reports by counties, community college districts, cities and towns; certification and attestation; assistance by auditor general; violation; classification
A. The auditor general shall prescribe a uniform expenditure reporting system for all political subdivisions subject to the constitutional expenditure limitations prescribed by article IX, sections 20 and 21, Constitution of Arizona. The system shall include:
1. For counties:
(a) An annual expenditure limitation report that includes at least the following information:
(i) The expenditure limitation established for the reporting fiscal year by the economic estimates commission.
(ii) Total expenditures, by fund, for the reporting fiscal year.
(iii) Total exclusions from local revenues, as defined by article IX, section 20, Constitution of Arizona, by fund, for the reporting fiscal year.
(iv) Total amounts, by fund, of expenditures subject to the expenditure limitation for the reporting fiscal year.
(b) Annual financial statements prepared in accordance with generally accepted accounting principles.
(c) A reconciliation of the total expenditures reported within the financial statements to the total expenditures stated within the expenditure limitation report.
2. For community college districts:
(a) An annual budgeted expenditure limitation report that includes at least the following information:
(i) The expenditure limitation established for the reporting fiscal year by the economic estimates commission.
(ii) Total budgeted expenditures, by fund, for the reporting fiscal year.
(iii) Total exclusions from local revenues, as defined by article IX, section 21, Constitution of Arizona, by fund, for the reporting fiscal year.
(iv) Total amounts, by fund, of budgeted expenditures subject to the expenditure limitation for the reporting fiscal year.
(b) Annual financial statements prepared in accordance with generally accepted accounting principles.
(c) A reconciliation of the total expenditures reported within the financial statements to the total expenditures reported within the expenditure limitation report.
3. For cities and towns:
(a) An annual expenditure limitation report that includes at least the following information:
(i) The expenditure limitation established for the reporting fiscal year by the economic estimates commission and, if applicable, the voter approved alternative expenditure limitation.
(ii) Total expenditures, by fund, for the reporting fiscal year.
(iii) Total exclusions from local revenues, as defined by article IX, section 20, Constitution of Arizona, by fund, for the reporting fiscal year or, if applicable, the total exclusions from the voter approved alternative expenditure limitation.
(iv) Total amounts, by fund, of expenditures subject to the expenditure limitation for the reporting fiscal year.
(b) Financial statements prepared in accordance with generally accepted accounting principles.
(c) A reconciliation of the total expenditures reported within the financial statements to the total expenditures reported within the expenditure limitation report.
B. The auditor general shall provide detailed instructions for completion and submission of the reports described in subsection A of this section. The auditor general shall prescribe definitions for terms utilized in and the form of the reports described in subsection A of this section. The reports described in subsection A of this section are required of counties and community college districts beginning with fiscal year 1981‑1982. The reports described in subsection A of this section are required of cities and towns beginning with the fiscal year the political subdivision is subject to the expenditure limitation. The annual reporting requirements also apply to political subdivisions subject to an alternative expenditure limitation enacted pursuant to article IX, section 20, subsection (9), Constitution of Arizona.
C. The reports described in subsection A of this section must be filed with the auditor general within nine months after the close of each fiscal year.
D. The auditor general or a certified public accountant or public accountant performing the annual audit required pursuant to sections 41‑1279.21 and section 9‑481, 11‑666 or 41-1279.21 shall attest to the expenditure limitation reports and financial statements for counties, community college districts and cities. The certified public accountant or public accountant performing the annual or biennial audit required pursuant to section 9‑481 shall attest to the expenditure limitation reports and financial statements for towns.
E. Each political subdivision shall provide to the auditor general by July 31 each year the name of the chief fiscal officer designated by the governing board of the political subdivision to submit the current fiscal year's expenditure limitation report. The political subdivision shall notify the auditor general of any changes of individuals designated to file the required reports. The designated chief fiscal officer shall certify to the accuracy of the annual expenditure limitation report.
F. The auditor general shall prescribe forms for the uniform reporting system and may provide assistance to individuals, certified public accountants or public accountants responsible for attesting to the expenditure limitation reports and financial statements.
G. A chief fiscal officer, designated pursuant to subsection E of this section, who subsequent to July 1, 1983 refuses to file the reports required by this section within the prescribed time periods or who intentionally files erroneous reports is guilty of a class 1 misdemeanor. A city or town exceeding the expenditure limitation prescribed or authorized pursuant to article IX, section 20, Constitution of Arizona, for any fiscal year, without authorization pursuant to such section, shall have the amount specified in subsection H of this section of its allocations of the state income tax, distributed pursuant to section 43‑206, withheld and redistributed to other cities and towns in the same manner as determined pursuant to that section, except that the population of the city or town exceeding the expenditure limitation shall not be included in the computation, and the city or town exceeding the expenditure limitation shall not be entitled to share in the redistribution. A community college district exceeding the expenditure limitation prescribed pursuant to article IX, section 21, Constitution of Arizona, for any fiscal year, without authorization pursuant to such section or section 15‑1471, shall have the amount specified in subsection H of this section of its allocations of state aid, distributed pursuant to section 15‑1466, withheld.
H. The auditor general shall hold a hearing to determine if any political subdivision has exceeded the expenditure limitations prescribed pursuant to article IX, sections 20 and 21, Constitution of Arizona. If a county has exceeded the expenditure limitations prescribed pursuant to article IX, section 20, Constitution of Arizona, without authorization pursuant to that section, the auditor general shall notify the board of supervisors of the county to reduce the allowable levy of primary property taxes of the county pursuant to section 42‑17051, subsection C. If any political subdivision other than a county has exceeded the expenditure limitations prescribed pursuant to article IX, sections 20 and 21, Constitution of Arizona, without authorization, the auditor general shall notify the state treasurer to withhold a portion of the political subdivision's allocations of the revenues described in subsection G of this section for the fiscal year subsequent to the auditor general's hearing as follows:
1. If the excess expenditures are less than five percent of the limitation, an amount equal to the excess expenditures.
2. If the excess expenditures are equal to or greater than five percent but less than ten percent of the limitation, or are less than five percent of the limitation but it is at least the second consecutive instance of excess expenditures, an amount equal to triple the excess expenditures.
3. If the excess expenditures are equal to or greater than ten percent of the limitation, an amount equal to five times the excess expenditures or one‑third of the allocation of the revenues described in subsection G of this section, whichever is less.
I. A county, city or town is not deemed to have exceeded the expenditure limitation if the county, city or town makes expenditures for capital improvements from utility revenues pursuant to title 9, chapter 5, article 3 or from excise taxes levied by the county, city or town for a specific purpose and the county, city or town repays the expenditure from the proceeds of bonds or other lawful long‑term obligations before the hearing required by subsection H of this section.
Sec. 3. Heading change
The article heading of title 41, chapter 7, article 10.2, Arizona Revised Statutes, is changed from "POST AUDIT OF COUNTIES, COMMUNITY COLLEGE DISTRICTS AND SCHOOL DISTRICTS" to "POSTAUDIT OF COUNTIES, COMMUNITY COLLEGE DISTRICTS AND SCHOOL DISTRICTS".
Sec. 4. Section 41-1279.21, Arizona Revised Statutes, is amended to read:
41-1279.21. Powers and duties of auditor general relating to counties, school districts and community colleges
A. In addition to other powers and duties prescribed by law, the auditor general shall:
1. In concurrence with a county that does not cause an audit to be conducted pursuant to section 11‑666, conduct or cause to be conducted annual financial and compliance audits of financial transactions and accounts kept by or for all counties that county. Each the county shall provide financial information for inclusion in the annual audit that verifies that highway user revenue fund monies received by the county pursuant to title 28, chapter 18, article 2 and any other dedicated state transportation revenues received by the county are being used solely for the authorized transportation purposes.
2. Perform procedural reviews for school districts that are not required to comply with the single audit act of 1984 (P.L. 98‑502) at times determined by the auditor general. These reviews may include evaluation of administrative and accounting internal controls and reports on such reviews.
3. Conduct or cause to be conducted annual audits of financial transactions and accounts kept by or for community college districts.
4. Approve contracts for financial and compliance auditing services except if specific statutory authority is otherwise provided. The auditor general shall ensure that such contract audits are conducted in accordance with generally accepted governmental auditing standards and shall determine if such audits meet minimum audit standards prescribed by the auditor general. An audit shall not be accepted as meeting the requirements of this paragraph until it has been approved by the auditor general.
5. Order and enforce a correct and uniform system of accounting by county, community college district and school district officers and instruct them in the proper mode of keeping accounts of their offices.
6. Require of county treasurers and custodians of county, community college district or school district funds, as often as the auditor general deems necessary, a verified statement of their accounts.
7. Report to the committee and to the attorney general the refusal or neglect of any county, community college district or school district officer to conform to rules and regulations of the auditor general's office.
8. Report to the committee and to the governor the result of the auditor general's examinations of county, community college district and school district offices as often as required by public interest.
B. The auditor general may adopt rules providing for disapproving contracts, and suspending or debarring any contractor providing financial and compliance auditing services to a school district based upon applicable standards similar to those adopted by this state under section 41‑2613.
C. Notwithstanding any other law, the disapproval of a contract or the suspension or debarment may be appealed to the superior court pursuant to title 12, chapter 7, article 6.
