Bill Text: FL S7014 | 2019 | Regular Session | Enrolled
Bill Title: Government Accountability
Spectrum: Committee Bill
Status: (Passed) 2019-04-29 - Chapter No. 2019-15, companion bill(s) passed, see HB 861 (Ch. 2019-56) [S7014 Detail]
Download: Florida-2019-S7014-Enrolled.html
ENROLLED 2019 Legislature CS for SB 7014 20197014er 1 2 An act relating to government accountability; amending 3 s. 11.40, F.S.; specifying that the Governor, the 4 Commissioner of Education, or the designee of the 5 Governor or of the commissioner, may notify the 6 Legislative Auditing Committee of an entity’s failure 7 to comply with certain auditing and financial 8 reporting requirements; amending s. 11.45, F.S.; 9 revising definitions and defining the terms “abuse,” 10 “fraud,” and “waste”; excluding water management 11 districts from certain audit requirements; removing a 12 cross-reference; authorizing the Auditor General to 13 conduct audits of tourist development councils and 14 county tourism promotion agencies; revising reporting 15 requirements applicable to the Auditor General; 16 amending s. 11.47, F.S.; specifying that any person 17 who willfully fails or refuses to provide access to an 18 employee, officer, or agent of an entity under audit 19 is subject to a penalty; amending s. 28.35, F.S.; 20 revising reporting requirements applicable to the 21 Florida Clerks of Court Operations Corporation; 22 amending s. 43.16, F.S.; revising the responsibilities 23 of the Justice Administrative Commission, each state 24 attorney, each public defender, the criminal conflict 25 and civil regional counsel, the capital collateral 26 regional counsel, and the Guardian Ad Litem Program, 27 to include the establishment and maintenance of 28 certain internal controls; amending ss. 129.03, 29 129.06, and 166.241, F.S.; requiring counties and 30 municipalities to maintain certain budget documents on 31 the entities’ websites for a specified period; 32 amending s. 215.86, F.S.; revising the purposes for 33 which management systems and internal controls must be 34 established and maintained by each state agency and 35 the judicial branch; amending s. 215.97, F.S.; 36 revising certain audit threshold requirements; 37 amending s. 215.985, F.S.; revising the requirements 38 for a monthly financial statement provided by a water 39 management district; amending s. 218.31, F.S.: 40 revising the definition of the term “financial audit”; 41 amending s. 218.32, F.S.; authorizing the Department 42 of Financial Services to request additional 43 information from a local governmental entity in 44 preparation of an annual report; requiring a local 45 governmental entity to respond to such requests within 46 a specified timeframe; requiring the department to 47 notify the Legislative Auditing Committee of 48 noncompliance; amending s. 218.33, F.S.; requiring 49 local governmental entities to establish and maintain 50 internal controls to achieve specified purposes; 51 amending s. 218.391, F.S.; revising membership, and 52 restrictions thereof, for an auditor selection 53 committee; prescribing requirements and procedures for 54 selecting an auditor if certain conditions exist; 55 amending s. 373.536, F.S.; deleting obsolete language; 56 requiring water management districts to maintain 57 certain budget documents on the districts’ websites 58 for specified periods; amending s. 1001.42, F.S.; 59 authorizing additional internal audits as directed by 60 the district school board; amending s. 1002.33, F.S.; 61 revising the responsibilities of the governing board 62 of a charter school to include the establishment and 63 maintenance of internal controls; amending s. 1002.37, 64 F.S.; requiring completion of an annual financial 65 audit of the Florida Virtual School; specifying audit 66 requirements; requiring an audit report to be 67 submitted to the board of trustees of the Florida 68 Virtual School and the Auditor General; deleting 69 obsolete provisions; amending s. 1010.01, F.S.; 70 requiring each school district, Florida College System 71 institution, and state university to establish and 72 maintain certain internal controls; creating ss. 73 1012.8551 and 1012.915, F.S.; specifying applicable 74 standards as to employee background screening and 75 investigations of Florida College System and State 76 University System personnel, respectively; amending s. 77 218.503, F.S.; conforming provisions and cross 78 references to changes made by the act; providing a 79 declaration of important state interest; providing an 80 effective date. 81 82 Be It Enacted by the Legislature of the State of Florida: 83 84 Section 1. Subsection (2) of section 11.40, Florida 85 Statutes, is amended to read: 86 11.40 Legislative Auditing Committee.— 87 (2) Following notification by the Auditor General, the 88 Department of Financial Services,orthe Division of Bond 89 Finance of the State Board of Administration, the Governor or 90 his or her designee, or the Commissioner of Education or his or 91 her designee of the failure of a local governmental entity, 92 district school board, charter school, or charter technical 93 career center to comply with the applicable provisions within s. 94 11.45(5)-(7), s. 218.32(1), s. 218.38, or s. 218.503(3), the 95 Legislative Auditing Committee may schedule a hearing to 96 determine if the entity should be subject to further state 97 action. If the committee determines that the entity should be 98 subject to further state action, the committee shall: 99 (a) In the case of a local governmental entity or district 100 school board, direct the Department of Revenue and the 101 Department of Financial Services to withhold any funds not 102 pledged for bond debt service satisfaction which are payable to 103 such entity until the entity complies with the law. The 104 committee shall specify the date that such action mustshall105 begin, and the directive must be received by the Department of 106 Revenue and the Department of Financial Services 30 days before 107 the date of the distribution mandated by law. The Department of 108 Revenue and the Department of Financial Services may implement 109the provisions ofthis paragraph. 110 (b) In the case of a special district created by: 111 1. A special act, notify the President of the Senate, the 112 Speaker of the House of Representatives, the standing committees 113 of the Senate and the House of Representatives charged with 114 special district oversight as determined by the presiding 115 officers of each respective chamber, the legislators who 116 represent a portion of the geographical jurisdiction of the 117 special district, and the Department of Economic Opportunity 118 that the special district has failed to comply with the law. 119 Upon receipt of notification, the Department of Economic 120 Opportunity shall proceed pursuant to s. 189.062 or s. 189.067. 121 If the special district remains in noncompliance after the 122 process set forth in s. 189.0651, or if a public hearing is not 123 held, the Legislative Auditing Committee may request the 124 department to proceed pursuant to s. 189.067(3). 125 2. A local ordinance, notify the chair or equivalent of the 126 local general-purpose government pursuant to s. 189.0652 and the 127 Department of Economic Opportunity that the special district has 128 failed to comply with the law. Upon receipt of notification, the 129 department shall proceed pursuant to s. 189.062 or s. 189.067. 130 If the special district remains in noncompliance after the 131 process set forth in s. 189.0652, or if a public hearing is not 132 held, the Legislative Auditing Committee may request the 133 department to proceed pursuant to s. 189.067(3). 134 3. Any manner other than a special act or local ordinance, 135 notify the Department of Economic Opportunity that the special 136 district has failed to comply with the law. Upon receipt of 137 notification, the department shall proceed pursuant to s. 138 189.062 or s. 189.067(3). 139 (c) In the case of a charter school or charter technical 140 career center, notify the appropriate sponsoring entity, which 141 may terminate the charter pursuant to ss. 1002.33 and 1002.34. 142 Section 2. Subsection (1), paragraph (j) of subsection (2), 143 paragraph (u) of subsection (3), and paragraph (i) of subsection 144 (7) of section 11.45, Florida Statutes, are amended, and 145 paragraph (x) is added to subsection (3) of that section, to 146 read: 147 11.45 Definitions; duties; authorities; reports; rules.— 148 (1) DEFINITIONS.—As used in ss. 11.40-11.51, the term: 149 (a) “Abuse” means behavior that is deficient or improper 150 when compared with behavior that a prudent person would consider 151 a reasonable and necessary operational practice given the facts 152 and circumstances. The term includes the misuse of authority or 153 position for personal gain. 154 (b)(a)“Audit” means a financial audit, operational audit, 155 or performance audit. 156 (c)(b)“County agency” means a board of county 157 commissioners or other legislative and governing body of a 158 county, however styled, including that of a consolidated or 159 metropolitan government, a clerk of the circuit court, a 160 separate or ex officio clerk of the county court, a sheriff, a 161 property appraiser, a tax collector, a supervisor of elections, 162 or any other officer in whom any portion of the fiscal duties of 163 a body or officer expressly stated in this paragraph arethe164above are under lawseparately placed by law. 165 (d)(c)“Financial audit” means an examination of financial 166 statements in order to express an opinion on the fairness with 167 which they are presented in conformity with generally accepted 168 accounting principles and an examination to determine whether 169 operations are properly conducted in accordance with legal and 170 regulatory requirements. Financial audits must be conducted in 171 accordance with auditing standards generally accepted in the 172 United States and government auditing standardsas adopted by173the Board of Accountancy. When applicable, the scope of 174 financial audits mustshallencompass the additional activities 175 necessary to establish compliance with the Single Audit Act 176 Amendments of 1996, 31 U.S.C. ss. 7501-7507, and other 177 applicable federal law. 178 (e) “Fraud” means obtaining something of value through 179 willful misrepresentation, including, but not limited to, 180 intentional misstatements or intentional omissions of amounts or 181 disclosures in financial statements to deceive users of 182 financial statements, theft of an entity’s assets, bribery, or 183 the use of one’s position for personal enrichment through the 184 deliberate misuse or misapplication of an organization’s 185 resources. 186 (f)(d)“Governmental entity” means a state agency, a county 187 agency, or any other entity, however styled, that independently 188 exercises any type of state or local governmental function. 189 (g)(e)“Local governmental entity” means a county agency, 190 municipality, tourist development council, county tourism 191 promotion agency, or special district as defined in s. 189.012. 192 The term, butdoes not include any housing authority established 193 under chapter 421. 194 (h)(f)“Management letter” means a statement of the 195 auditor’s comments and recommendations. 196 (i)(g)“Operational audit” means an audit whose purpose is 197 to evaluate management’s performance in establishing and 198 maintaining internal controls, including controls designed to 199 prevent and detect fraud, waste, and abuse, and in administering 200 assigned responsibilities in accordance with applicable laws, 201 administrative rules, contracts, grant agreements, and other 202 guidelines. Operational audits must be conducted in accordance 203 with government auditing standards. Such audits examine internal 204 controls that are designed and placed in operation to promote 205 and encourage the achievement of management’s control objectives 206 in the categories of compliance, economic and efficient 207 operations, reliability of financial records and reports, and 208 safeguarding of assets, and identify weaknesses in those 209 internal controls. 210 (j)(h)“Performance audit” means an examination of a 211 program, activity, or function of a governmental entity, 212 conducted in accordance with applicable government auditing 213 standards or auditing and evaluation standards of other 214 appropriate authoritative bodies. The term includes an 215 examination of issues related to: 216 1. Economy, efficiency, or effectiveness of the program. 217 2. Structure or design of the program to accomplish its 218 goals and objectives. 219 3. Adequacy of the program to meet the needs identified by 220 the Legislature or governing body. 221 4. Alternative methods of providing program services or 222 products. 223 5. Goals, objectives, and performance measures used by the 224 agency to monitor and report program accomplishments. 225 6. The accuracy or adequacy of public documents, reports, 226 or requests prepared under the program by state agencies. 227 7. Compliance of the program with appropriate policies, 228 rules, or laws. 229 8. Any other issues related to governmental entities as 230 directed by the Legislative Auditing Committee. 231 (k)(i)“Political subdivision” means a separate agency or 232 unit of local government created or established by law and 233 includes, but is not limited to, the following and the officers 234 thereof: authority, board, branch, bureau, city, commission, 235 consolidated government, county, department, district, 236 institution, metropolitan government, municipality, office, 237 officer, public corporation, town, or village. 238 (l)(j)“State agency” means a separate agency or unit of 239 state government created or established by law and includes, but 240 is not limited to, the following and the officers thereof: 241 authority, board, branch, bureau, commission, department, 242 division, institution, office, officer, or public corporation, 243 as the case may be, except any such agency or unit within the 244 legislative branch of state government other than the Florida 245 Public Service Commission. 246 (m) “Waste” means the act of using or expending resources 247 unreasonably, carelessly, extravagantly, or for no useful 248 purpose. 249 (2) DUTIES.—The Auditor General shall: 250 (j) Conduct audits of local governmental entities when 251 determined to be necessary by the Auditor General, when directed 252 by the Legislative Auditing Committee, or when otherwise 253 required by law. No later than 18 months after the release of 254 the audit report, the Auditor General shall perform such 255 appropriate followup procedures as he or she deems necessary to 256 determine the audited entity’s progress in addressing the 257 findings and recommendations contained within the Auditor 258 General’s previous report. The Auditor General shall notify each 259 member of the audited entity’s governing body and the 260 Legislative Auditing Committee of the results of his or her 261 determination. For purposes of this paragraph, local 262 governmental entities do not include water management districts. 263 264 The Auditor General shall perform his or her duties 265 independently but under the general policies established by the 266 Legislative Auditing Committee. This subsection does not limit 267 the Auditor General’s discretionary authority to conduct other 268 audits or engagements of governmental entities as authorized in 269 subsection (3). 270 (3) AUTHORITY FOR AUDITS AND OTHER ENGAGEMENTS.—The Auditor 271 General may, pursuant to his or her own authority, or at the 272 direction of the Legislative Auditing Committee, conduct audits 273 or other engagements as determined appropriate by the Auditor 274 General of: 275 (u) The Florida Virtual Schoolpursuant to s. 1002.37. 276 (x) Tourist development councils and county tourism 277 promotion agencies. 278 (7) AUDITOR GENERAL REPORTING REQUIREMENTS.— 279 (i) The Auditor General shall annually transmit by July 15, 280 to the President of the Senate, the Speaker of the House of 281 Representatives, and the Department of Financial Services, a 282 list of all school districts, charter schools, charter technical 283 career centers, Florida College System institutions, state 284 universities, and local governmental entitieswater management285districtsthat have failed to comply with the transparency 286 requirements as identified in the audit reports reviewed 287 pursuant to paragraph (b) and those conducted pursuant to 288 subsection (2). 289 Section 3. Subsection (3) of section 11.47, Florida 290 Statutes, is amended to read: 291 11.47 Penalties; failure to make a proper audit or 292 examination; making a false report; failure to produce documents 293 or information.— 294 (3) Any person who willfully fails or refuses to provide 295 access to an employee, officer, or agent of an entity subject to 296 an audit or to furnish or produce any book, record, paper, 297 document, data, or sufficient information necessary to a proper 298 audit or examination which the Auditor General or the Office of 299 Program Policy Analysis and Government Accountability is by law 300 authorized to perform commitsshall be guilty ofa misdemeanor 301 of the first degree, punishable as provided in s. 775.082 or s. 302 775.083. 303 Section 4. Paragraph (d) of subsection (2) of section 304 28.35, Florida Statutes, is amended to read: 305 28.35 Florida Clerks of Court Operations Corporation.— 306 (2) The duties of the corporation shall include the 307 following: 308 (d) Developing and certifying a uniform system of workload 309 measures and applicable workload standards for court-related 310 functions as developed by the corporation and clerk workload 311 performance in meeting the workload performance standards. These 312 workload measures and workload performance standards shall be 313 designed to facilitate an objective determination of the 314 performance of each clerk in accordance with minimum standards 315 for fiscal management, operational efficiency, and effective 316 collection of fines, fees, service charges, and court costs. The 317 corporation shall develop the workload measures and workload 318 performance standards in consultation with the Legislature. When 319 the corporation finds a clerk has not met the workload 320 performance standards, the corporation shall identify the nature 321 of each deficiency and any corrective action recommended and 322 taken by the affected clerk of the court. For quarterly periods 323 ending on the last day of March, June, September, and December 324 of each year, the corporation shall notify the Legislature of 325 any clerk not meeting workload performance standards and provide 326 a copy of any corrective action plans. Such notifications must 327 be submitted no later than 45 days after the end of the 328 preceding quarterly period. As used in this subsection, the 329 term: 330 1. “Workload measures” means the measurement of the 331 activities and frequency of the work required for the clerk to 332 adequately perform the court-related duties of the office as 333 defined by the membership of the Florida Clerks of Court 334 Operations Corporation. 335 2. “Workload performance standards” means the standards 336 developed to measure the timeliness and effectiveness of the 337 activities that are accomplished by the clerk in the performance 338 of the court-related duties of the office as defined by the 339 membership of the Florida Clerks of Court Operations 340 Corporation. 341 Section 5. Present subsections (6) and (7) of section 342 43.16, Florida Statutes, are renumbered as subsections (7) and 343 (8), respectively, and a new subsection (6) is added to that 344 section, to read: 345 43.16 Justice Administrative Commission; membership, powers 346 and duties.— 347 (6) The commission, each state attorney, each public 348 defender, the criminal conflict and civil regional counsel, the 349 capital collateral regional counsel, and the Guardian Ad Litem 350 Program shall establish and maintain internal controls designed 351 to: 352 (a) Prevent and detect fraud, waste, and abuse as defined 353 in s. 11.45(1). 354 (b) Promote and encourage compliance with applicable laws, 355 rules, contracts, grant agreements, and best practices. 356 (c) Support economical and efficient operations. 357 (d) Ensure reliability of financial records and reports. 358 (e) Safeguard assets. 359 Section 6. Paragraph (c) of subsection (3) of section 360 129.03, Florida Statutes, is amended to read: 361 129.03 Preparation and adoption of budget.— 362 (3) The county budget officer, after tentatively 363 ascertaining the proposed fiscal policies of the board for the 364 next fiscal year, shall prepare and present to the board a 365 tentative budget for the next fiscal year for each of the funds 366 provided in this chapter, including all estimated receipts, 367 taxes to be levied, and balances expected to be brought forward 368 and all estimated expenditures, reserves, and balances to be 369 carried over at the end of the year. 370 (c) The board shall hold public hearings to adopt tentative 371 and final budgets pursuant to s. 200.065. The hearings shall be 372 primarily for the purpose of hearing requests and complaints 373 from the public regarding the budgets and the proposed tax 374 levies and for explaining the budget and any proposed or adopted 375 amendments. The tentative budget must be posted on the county’s 376 official website at least 2 days before the public hearing to 377 consider such budget and must remain on the website for at least 378 45 days. The final budget must be posted on the website within 379 30 days after adoption and must remain on the website for at 380 least 2 years. The tentative budgets, adopted tentative budgets, 381 and final budgets shall be filed in the office of the county 382 auditor as a public record. Sufficient reference in words and 383 figures to identify the particular transactions mustshallbe 384 made in the minutes of the board to record its actions with 385 reference to the budgets. 386 Section 7. Paragraph (f) of subsection (2) of section 387 129.06, Florida Statutes, is amended to read: 388 129.06 Execution and amendment of budget.— 389 (2) The board at any time within a fiscal year may amend a 390 budget for that year, and may within the first 60 days of a 391 fiscal year amend the budget for the prior fiscal year, as 392 follows: 393 (f) Unless otherwise prohibited by law, if an amendment to 394 a budget is required for a purpose not specifically authorized 395 in paragraphs (a)-(e), the amendment may be authorized by 396 resolution or ordinance of the board of county commissioners 397 adopted following a public hearing. 398 1. The public hearing must be advertised at least 2 days, 399 but not more than 5 days, before the date of the hearing. The 400 advertisement must appear in a newspaper of paid general 401 circulation and must identify the name of the taxing authority, 402 the date, place, and time of the hearing, and the purpose of the 403 hearing. The advertisement must also identify each budgetary 404 fund to be amended, the source of the funds, the use of the 405 funds, and the total amount of each fund’s appropriations. 406 2. If the board amends the budget pursuant to this 407 paragraph, the adopted amendment must be posted on the county’s 408 official website within 5 days after adoption and must remain on 409 the website for at least 2 years. 410 Section 8. Subsections (3) and (5) of section 166.241, 411 Florida Statutes, are amended to read: 412 166.241 Fiscal years, budgets, and budget amendments.— 413 (3) The tentative budget must be posted on the 414 municipality’s official website at least 2 days before the 415 budget hearing, held pursuant to s. 200.065 or other law, to 416 consider such budget and must remain on the website for at least 417 45 days. The final adopted budget must be posted on the 418 municipality’s official website within 30 days after adoption 419 and must remain on the website for at least 2 years. If the 420 municipality does not operate an official website, the 421 municipality must, within a reasonable period of time as 422 established by the county or counties in which the municipality 423 is located, transmit the tentative budget and final budget to 424 the manager or administrator of such county or counties who 425 shall post the budgets on the county’s website. 426 (5) If the governing body of a municipality amends the 427 budget pursuant to paragraph (4)(c), the adopted amendment must 428 be posted on the official website of the municipality within 5 429 days after adoption and must remain on the website for at least 430 2 years. If the municipality does not operate an official 431 website, the municipality must, within a reasonable period of 432 time as established by the county or counties in which the 433 municipality is located, transmit the adopted amendment to the 434 manager or administrator of such county or counties who shall 435 post the adopted amendment on the county’s website. 436 Section 9. Section 215.86, Florida Statutes, is amended to 437 read: 438 215.86 Management systems and controls.—Each state agency 439 and the judicial branch as defined in s. 216.011 shall establish 440 and maintain management systems and internal controls designed 441 to: 442 (1) Prevent and detect fraud, waste, and abuse as defined 443 in s. 11.45(1).that444 (2) Promote and encourage compliance with applicable laws, 445 rules, contracts, and grant agreements.;446 (3) Support economical andeconomic,efficient, and447effectiveoperations.;448 (4) Ensure reliability of financial records and reports.;449 (5) Safeguardand safeguarding ofassets.Accounting450systems and procedures shall be designed to fulfill the451requirements of generally accepted accounting principles.452 Section 10. Paragraph (a) of subsection (2) of section 453 215.97, Florida Statutes, is amended to read: 454 215.97 Florida Single Audit Act.— 455 (2) As used in this section, the term: 456 (a) “Audit threshold” means the threshold amount used to 457 determine when a state single audit or project-specific audit of 458 a nonstate entity shall be conducted in accordance with this 459 section. Each nonstate entity that expends a total amount of 460 state financial assistance equal to or in excess of $750,000 in 461 any fiscal year of such nonstate entity shall be required to 462 have a state single audit,or a project-specific audit,for such 463 fiscal year in accordance with the requirements of this section. 464Every 2 years the Auditor General,After consulting with the 465 Executive Office of the Governor, the Department of Financial 466 Services, and all state awarding agencies, the Auditor General 467 shall periodically review the threshold amount for requiring 468 audits under this section and may recommend any appropriate 469 statutory change to revise the threshold amount in the annual 470 report submitted to the Legislature pursuant to s. 11.45(7)(h) 471adjust such threshold amount consistent with the purposes of472this section. 473 Section 11. Subsection (11) of section 215.985, Florida 474 Statutes, is amended to read: 475 215.985 Transparency in government spending.— 476 (11) Each water management district shall provide a monthly 477 financial statement in the form and manner prescribed by the 478 Department of Financial Services to the district’sitsgoverning 479 board and make such monthly financial statement available for 480 public access on its website. 481 Section 12. Subsection (17) of section 218.31, Florida 482 Statutes, is amended to read: 483 218.31 Definitions.—As used in this part, except where the 484 context clearly indicates a different meaning: 485 (17) “Financial audit” means an examination of financial 486 statements in order to express an opinion on the fairness with 487 which they are presented in conformity with generally accepted 488 accounting principles and an examination to determine whether 489 operations are properly conducted in accordance with legal and 490 regulatory requirements. Financial audits must be conducted in 491 accordance with auditing standards generally accepted in the 492 United States and government auditing standardsas adopted by493the Board of Accountancy and as prescribed by rules promulgated494by the Auditor General. When applicable, the scope of financial 495 audits mustshallencompass the additional activities necessary 496 to establish compliance with the Single Audit Act Amendments of 497 1996, 31 U.S.C. ss. 7501-7507, and other applicable federal law. 498 Section 13. Subsection (2) of section 218.32, Florida 499 Statutes, is amended to read: 500 218.32 Annual financial reports; local governmental 501 entities.— 502 (2) The department shall annually by December 1 file a 503 verified report with the Governor, the Legislature, the Auditor 504 General, and the Special District Accountability Program of the 505 Department of Economic Opportunity showing the revenues, both 506 locally derived and derived from intergovernmental transfers, 507 and the expenditures of each local governmental entity, regional 508 planning council, local government finance commission, and 509 municipal power corporation that is required to submit an annual 510 financial report. In preparing the verified report, the 511 department may request additional information from the local 512 governmental entity. The information requested must be provided 513 to the department within 45 days after the request. If the local 514 governmental entity does not comply with the request, the 515 department shall notify the Legislative Auditing Committee, 516 which may take action pursuant to s. 11.40(2). The report must 517 include, but is not limited to: 518 (a) The total revenues and expenditures of each local 519 governmental entity that is a component unit included in the 520 annual financial report of the reporting entity. 521 (b) The amount of outstanding long-term debt by each local 522 governmental entity. For purposes of this paragraph, the term 523 “long-term debt” means any agreement or series of agreements to 524 pay money, which, at inception, contemplate terms of payment 525 exceeding 1 year in duration. 526 Section 14. Present subsection (3) of section 218.33, 527 Florida Statutes, is renumbered as subsection (4), and a new 528 subsection (3) is added to that section, to read: 529 218.33 Local governmental entities; establishment of 530 uniform fiscal years and accounting practices and procedures.— 531 (3) Each local governmental entity shall establish and 532 maintain internal controls designed to: 533 (a) Prevent and detect fraud, waste, and abuse as defined 534 in s. 11.45(1). 535 (b) Promote and encourage compliance with applicable laws, 536 rules, contracts, grant agreements, and best practices. 537 (c) Support economical and efficient operations. 538 (d) Ensure reliability of financial records and reports. 539 (e) Safeguard assets. 540 Section 15. Subsections (2), (3), and (4) of section 541 218.391, Florida Statutes, are amended, and subsection (9) is 542 added to that section, to read: 543 218.391 Auditor selection procedures.— 544 (2) The governing body of achartercounty, municipality, 545 special district, district school board, charter school, or 546 charter technical career center shall establish an auditor 547 selectionauditcommittee. 548 (a) The auditor selection committee for aEach noncharter549 county mustshall establish an audit committee that, at a 550 minimum,shallconsist of each of the county officers elected 551 pursuant to the county charter or s. 1(d), Art. VIII of the 552 State Constitution,or their respective designees adesignee,553 and one member of the board of county commissioners or its 554 designee. 555 (b) The auditor selection committee for a municipality, 556 special district, district school board, charter school, or 557 charter technical career center must consist of at least three 558 members. One member of the auditor selection committee must be a 559 member of the governing body of an entity specified in this 560 paragraph, who shall serve as the chair of the committee. 561 (c) An employee, a chief executive officer, or a chief 562 financial officer of the county, municipality, special district, 563 district school board, charter school, or charter technical 564 career center may not serve as a member of an auditor selection 565 committee established under this subsection; however, an 566 employee, a chief executive officer, or a chief financial 567 officer of the county, municipality, special district, district 568 school board, charter school, or charter technical career center 569 may serve in an advisory capacity. 570 (d) The primary purpose of the auditor selectionaudit571 committee is to assist the governing body in selecting an 572 auditor to conduct the annual financial audit required in s. 573 218.39; however, theauditcommittee may serve other audit 574 oversight purposes as determined by the entity’s governing body. 575 The public mayshallnot be excluded from the proceedings under 576 this section. 577 (3) The auditor selectionauditcommittee shall: 578 (a) Establish factors to use for the evaluation of audit 579 services to be provided by a certified public accounting firm 580 duly licensed under chapter 473 and qualified to conduct audits 581 in accordance with government auditing standards as adopted by 582 the Florida Board of Accountancy. Such factors shall include, 583 but are not limited to, ability of personnel, experience, 584 ability to furnish the required services, and such other factors 585 as may be determined by the committee to be applicable to its 586 particular requirements. 587 (b) Publicly announce requests for proposals. Public 588 announcements must include, at a minimum, a brief description of 589 the audit and indicate how interested firms can apply for 590 consideration. 591 (c) Provide interested firms with a request for proposal. 592 The request for proposal shall include information on how 593 proposals are to be evaluated and such other information the 594 committee determines is necessary for the firm to prepare a 595 proposal. 596 (d) Evaluate proposals provided by qualified firms. If 597 compensation is one of the factors established pursuant to 598 paragraph (a), it shall not be the sole or predominant factor 599 used to evaluate proposals. 600 (e) Rank and recommend in order of preference no fewer than 601 three firms deemed to be the most highly qualified to perform 602 the required services after considering the factors established 603 pursuant to paragraph (a). If fewer than three firms respond to 604 the request for proposal, the committee shall recommend such 605 firms as it deems to be the most highly qualified. 606 (4) The governing body shall inquire of qualified firms as 607 to the basis of compensation, select one of the firms 608 recommended by the auditor selectionauditcommittee, and 609 negotiate a contract, using one of the following methods: 610 (a) If compensation is not one of the factors established 611 pursuant to paragraph (3)(a) and not used to evaluate firms 612 pursuant to paragraph (3)(e), the governing body shall negotiate 613 a contract with the firm ranked first. If the governing body is 614 unable to negotiate a satisfactory contract with that firm, 615 negotiations with that firm shall be formally terminated, and 616 the governing body shall then undertake negotiations with the 617 second-ranked firm. Failing accord with the second-ranked firm, 618 negotiations shall then be terminated with that firm and 619 undertaken with the third-ranked firm. Negotiations with the 620 other ranked firms shall be undertaken in the same manner. The 621 governing body, in negotiating with firms, may reopen formal 622 negotiations with any one of the three top-ranked firms, but it 623 may not negotiate with more than one firm at a time. 624 (b) If compensation is one of the factors established 625 pursuant to paragraph (3)(a) and used in the evaluation of 626 proposals pursuant to paragraph (3)(d), the governing body shall 627 select the highest-ranked qualified firm or must document in its 628 public records the reason for not selecting the highest-ranked 629 qualified firm. 630 (c) The governing body may select a firm recommended by the 631 audit committee and negotiate a contract with one of the 632 recommended firms using an appropriate alternative negotiation 633 method for which compensation is not the sole or predominant 634 factor used to select the firm. 635 (d) In negotiations with firms under this section, the 636 governing body may allow a designee to conduct negotiations on 637 its behalf. 638 (9) If the entity fails to select the auditor in accordance 639 with the requirements of subsections (3)-(6), the entity must 640 again perform the auditor selection process in accordance with 641 this section to select an auditor to conduct audits for 642 subsequent fiscal years. 643 Section 16. Paragraph (e) of subsection (4), paragraph (d) 644 of subsection (5), and paragraph (d) of subsection (6) of 645 section 373.536, Florida Statutes, are amended to read: 646 373.536 District budget and hearing thereon.— 647 (4) BUDGET CONTROLS; FINANCIAL INFORMATION.— 648 (e)By September 1, 2012,Each district shall provide a 649 monthly financial statement in the form and manner prescribed by 650 the Department of Financial Services to the district’s governing 651 board and make such monthly financial statement available for 652 public access on its website. 653 (5) TENTATIVE BUDGET CONTENTS AND SUBMISSION; REVIEW AND 654 APPROVAL.— 655 (d) Each district shall, by August 1 of each year, submit 656 for review a tentative budget and a description of any 657 significant changes from the preliminary budget submitted to the 658 Legislature pursuant to s. 373.535 to the Governor, the 659 President of the Senate, the Speaker of the House of 660 Representatives, the chairs of all legislative committees and 661 subcommittees having substantive or fiscal jurisdiction over 662 water management districts, as determined by the President of 663 the Senate or the Speaker of the House of Representatives, as 664 applicable, the secretary of the department, and the governing 665 body of each county in which the district has jurisdiction or 666 derives any funds for the operations of the district. The 667 tentative budget must be posted on the district’s official 668 website at least 2 days before budget hearings held pursuant to 669 s. 200.065 or other law and must remain on the website for at 670 least 45 days. 671 (6) FINAL BUDGET; ANNUAL AUDIT; CAPITAL IMPROVEMENTS PLAN; 672 WATER RESOURCE DEVELOPMENT WORK PROGRAM.— 673 (d) The final adopted budget must be posted on the water 674 management district’s official website within 30 days after 675 adoption and must remain on the website for at least 2 years. 676 Section 17. Paragraph (l) of subsection (12) of section 677 1001.42, Florida Statutes, as amended by chapter 2018-5, Laws of 678 Florida, is amended to read: 679 1001.42 Powers and duties of district school board.—The 680 district school board, acting as a board, shall exercise all 681 powers and perform all duties listed below: 682 (12) FINANCE.—Take steps to assure students adequate 683 educational facilities through the financial procedure 684 authorized in chapters 1010 and 1011 and as prescribed below: 685 (l) Internal auditor.—May or, in the case of a school 686 district receiving annual federal, state, and local funds in 687 excess of $500 million, shall employ an internal auditor. The 688 scope of the internal auditor shall not be restricted and shall 689 include every functional and program area of the school system. 690 1. The internal auditor shall perform ongoing financial 691 verification of the financial records of the school district, a 692 comprehensive risk assessment of all areas of the school system 693 every 5 years, and other audits and reviews as the district 694 school board directs for determining: 695 a. The adequacy of internal controls designed to prevent 696 and detect fraud, waste, and abuse as defined in s. 11.45(1). 697 b. Compliance with applicable laws, rules, contracts, grant 698 agreements, district school board-approved policies, and best 699 practices. 700 c. The efficiency of operations. 701 d. The reliability of financial records and reports. 702 e. The safeguarding of assets. 703 f. Financial solvency. 704 g. Projected revenues and expenditures. 705 h. The rate of change in the general fund balance. 706 2. The internal auditor shall prepare audit reports of his 707 or her findings and report directly to the district school board 708 or its designee. 709 3. Any person responsible for furnishing or producing any 710 book, record, paper, document, data, or sufficient information 711 necessary to conduct a proper audit or examination which the 712 internal auditor is by law authorized to perform is subject to 713 the provisions of s. 11.47(3) and (4). 714 Section 18. Paragraph (j) of subsection (9) of section 715 1002.33, Florida Statutes, is amended to read: 716 1002.33 Charter schools.— 717 (9) CHARTER SCHOOL REQUIREMENTS.— 718 (j) The governing body of the charter school shall be 719 responsible for: 720 1. Establishing and maintaining internal controls designed 721 to: 722 a. Prevent and detect fraud, waste, and abuse as defined in 723 s. 11.45(1). 724 b. Promote and encourage compliance with applicable laws, 725 rules, contracts, grant agreements, and best practices. 726 c. Support economical and efficient operations. 727 d. Ensure reliability of financial records and reports. 728 e. Safeguard assets. 729 2.1.Ensuring that the charter school has retained the 730 services of a certified public accountant or auditor for the 731 annual financial audit, pursuant to s. 1002.345(2), who shall 732 submit the report to the governing body. 733 3.2.Reviewing and approving the audit report, including 734 audit findings and recommendations for the financial recovery 735 plan. 736 4.a.3.a.Performing the duties in s. 1002.345, including 737 monitoring a corrective action plan. 738 b. Monitoring a financial recovery plan in order to ensure 739 compliance. 740 5.4.Participating in governance training approved by the 741 department which must include government in the sunshine, 742 conflicts of interest, ethics, and financial responsibility. 743 Section 19. Present subsections (6) through (10) of section 744 1002.37, Florida Statutes, are renumbered as subsections (7) 745 through (11), respectively, present subsection (6) is amended, 746 and a new subsection (6) is added to that section, to read: 747 1002.37 The Florida Virtual School.— 748 (6) The Florida Virtual School shall have an annual 749 financial audit of its accounts and records conducted by an 750 independent auditor who is a certified public accountant 751 licensed under chapter 473. The independent auditor shall 752 conduct the audit in accordance with rules adopted by the 753 Auditor General pursuant to s. 11.45 and, upon completion of the 754 audit, shall prepare an audit report in accordance with such 755 rules. The audit report must include a written statement by the 756 board of trustees describing corrective action to be taken in 757 response to each of the independent auditor’s recommendations 758 included in the audit report. The independent auditor shall 759 submit the audit report to the board of trustees and the Auditor 760 General no later than 9 months after the end of the preceding 761 fiscal year. 762 (7)(6)The board of trustees shall annually submit to the 763 Governor, the Legislature, the Commissioner of Education, and 764 the State Board of Education the audit report prepared pursuant 765 to subsection (6) and a complete and detailed report setting 766 forth: 767 (a) The operations and accomplishments of the Florida 768 Virtual School within the state and those occurring outside the 769 state as Florida Virtual School Global. 770 (b) The marketing and operational plan for the Florida 771 Virtual School and Florida Virtual School Global, including 772 recommendations regarding methods for improving the delivery of 773 education through the Internet and other distance learning 774 technology. 775 (c) The assets and liabilities of the Florida Virtual 776 School and Florida Virtual School Global at the end of the 777 fiscal year. 778(d)A copy of an annual financial audit of the accounts and779records of the Florida Virtual School and Florida Virtual School780Global, conducted by an independent certified public accountant781and performed in accordance with rules adopted by the Auditor782General.783 (d)(e)Recommendations regarding the unit cost of providing 784 services to students through the Florida Virtual School and 785 Florida Virtual School Global. In order to most effectively 786 develop public policy regarding any future funding of the 787 Florida Virtual School, it is imperative that the cost of the 788 program is accurately identified. The identified cost of the 789 program must be based on reliable data. 790 (e)(f)Recommendations regarding an accountability 791 mechanism to assess the effectiveness of the services provided 792 by the Florida Virtual School and Florida Virtual School Global. 793 Section 20. Subsection (5) is added to section 1010.01, 794 Florida Statutes, to read: 795 1010.01 Uniform records and accounts.— 796 (5) Each school district, Florida College System 797 institution, and state university shall establish and maintain 798 internal controls designed to: 799 (a) Prevent and detect fraud, waste, and abuse as defined 800 in s. 11.45(1). 801 (b) Promote and encourage compliance with applicable laws, 802 rules, contracts, grant agreements, and best practices. 803 (c) Support economical and efficient operations. 804 (d) Ensure reliability of financial records and reports. 805 (e) Safeguard assets. 806 Section 21. Section 1012.8551, Florida Statutes, is created 807 to read: 808 1012.8551 Employee background screening and investigations 809 for Florida College System personnel.—Section 110.1127 applies 810 to each institution in the Florida College System. Each 811 institution must designate the positions subject to background 812 screening and investigation pursuant to that section. 813 Section 22. Section 1012.915, Florida Statutes, is created 814 to read: 815 1012.915 Employee background screening and investigations 816 for State University System personnel.—Section 110.1127 applies 817 to each institution in the State University System. Each 818 institution must designate the positions subject to background 819 screening and investigation pursuant to that section. 820 Section 23. Subsection (3) of section 218.503, Florida 821 Statutes, is amended to read: 822 218.503 Determination of financial emergency.— 823 (3) Upon notification that one or more of the conditions in 824 subsection (1) have occurred or will occur if action is not 825 taken to assist the local governmental entity or district school 826 board, the Governor or his or her designee shall contact the 827 local governmental entity or the Commissioner of Education or 828 his or her designee shall contact the district school board, as 829 appropriate, to determine what actions have been taken by the 830 local governmental entity or the district school board to 831 resolve or prevent the condition. The information requested must 832 be provided within 45 days after the date of the request. If the 833 local governmental entity or the district school board does not 834 comply with the request, the Governor or his or her designee or 835 the Commissioner of Education or his or her designee shall 836 notifythe members ofthe Legislative Auditing Committee, which 837whomay take action pursuant to s. 11.40(2)11.40. The Governor 838 or the Commissioner of Education, as appropriate, shall 839 determine whether the local governmental entity or the district 840 school board needs state assistance to resolve or prevent the 841 condition. If state assistance is needed, the local governmental 842 entity or district school board is considered to be in a state 843 of financial emergency. The Governor or the Commissioner of 844 Education, as appropriate, has the authority to implement 845 measures as set forth in ss. 218.50-218.504 to assist the local 846 governmental entity or district school board in resolving the 847 financial emergency. Such measures may include, but are not 848 limited to: 849 (a) Requiring approval of the local governmental entity’s 850 budget by the Governor or approval of the district school 851 board’s budget by the Commissioner of Education. 852 (b) Authorizing a state loan to a local governmental entity 853 and providing for repayment of same. 854 (c) Prohibiting a local governmental entity or district 855 school board from issuing bonds, notes, certificates of 856 indebtedness, or any other form of debt until such time as it is 857 no longer subject to this section. 858 (d) Making such inspections and reviews of records, 859 information, reports, and assets of the local governmental 860 entity or district school board as are needed. The appropriate 861 local officials shall cooperate in such inspections and reviews. 862 (e) Consulting with officials and auditors of the local 863 governmental entity or the district school board and the 864 appropriate state officials regarding any steps necessary to 865 bring the books of account, accounting systems, financial 866 procedures, and reports into compliance with state requirements. 867 (f) Providing technical assistance to the local 868 governmental entity or the district school board. 869 (g)1. Establishing a financial emergency board to oversee 870 the activities of the local governmental entity or the district 871 school board. If a financial emergency board is established for 872 a local governmental entity, the Governor shall appoint board 873 members and select a chair. If a financial emergency board is 874 established for a district school board, the State Board of 875 Education shall appoint board members and select a chair. The 876 financial emergency board shall adopt such rules as are 877 necessary for conducting board business. The board may: 878 a. Make such reviews of records, reports, and assets of the 879 local governmental entity or the district school board as are 880 needed. 881 b. Consult with officials and auditors of the local 882 governmental entity or the district school board and the 883 appropriate state officials regarding any steps necessary to 884 bring the books of account, accounting systems, financial 885 procedures, and reports of the local governmental entity or the 886 district school board into compliance with state requirements. 887 c. Review the operations, management, efficiency, 888 productivity, and financing of functions and operations of the 889 local governmental entity or the district school board. 890 d. Consult with other governmental entities for the 891 consolidation of all administrative direction and support 892 services, including, but not limited to, services for asset 893 sales, economic and community development, building inspections, 894 parks and recreation, facilities management, engineering and 895 construction, insurance coverage, risk management, planning and 896 zoning, information systems, fleet management, and purchasing. 897 2. The recommendations and reports made by the financial 898 emergency board must be submitted to the Governor for local 899 governmental entities or to the Commissioner of Education and 900 the State Board of Education for district school boards for 901 appropriate action. 902 (h) Requiring and approving a plan, to be prepared by 903 officials of the local governmental entity or the district 904 school board in consultation with the appropriate state 905 officials, prescribing actions that will cause the local 906 governmental entity or district school board to no longer be 907 subject to this section. The plan must include, but need not be 908 limited to: 909 1. Provision for payment in full of obligations outlined in 910 subsection (1), designated as priority items, which are 911 currently due or will come due. 912 2. Establishment of priority budgeting or zero-based 913 budgeting in order to eliminate items that are not affordable. 914 3. The prohibition of a level of operations which can be 915 sustained only with nonrecurring revenues. 916 4. Provisions implementing the consolidation, sourcing, or 917 discontinuance of all administrative direction and support 918 services, including, but not limited to, services for asset 919 sales, economic and community development, building inspections, 920 parks and recreation, facilities management, engineering and 921 construction, insurance coverage, risk management, planning and 922 zoning, information systems, fleet management, and purchasing. 923 Section 24. The Legislature finds that a proper and 924 legitimate state purpose is served when internal controls are 925 established to prevent and detect fraud, waste, and abuse and to 926 safeguard and account for government funds and property. 927 Therefore, the Legislature determines and declares that this act 928 fulfills an important state interest. 929 Section 25. This act shall take effect July 1, 2019.