Bill Text: OR SB462 | 2011 | Regular Session | Introduced

---

Bill Title: Relating to audits; declaring an emergency.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Failed) 2011-06-30 - In committee upon adjournment. [SB462 Detail]

Download: Oregon-2011-SB462-Introduced.html

---

     76th OREGON LEGISLATIVE ASSEMBLY--2011 Regular Session

NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .

LC 1102

                         Senate Bill 462

Sponsored by Senator GEORGE (Presession filed.)

                             SUMMARY

The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.

  Directs Joint Legislative Audit Committee to select Legislative
Auditor to serve as director of Government Accountability Office.
Authorizes Legislative Auditor to conduct performance and
management audits of state agencies and programs and other
state-funded programs.
  Modifies membership of Joint Legislative Audit Committee.
  Declares emergency, effective on passage.

                        A BILL FOR AN ACT
Relating to audits; creating new provisions; amending ORS
  171.580, 171.585, 171.590, 184.360, 244.050, 291.100, 291.272
  and 297.050; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:

                               { +
LEGISLATIVE AUDITOR + }

  SECTION 1.  { + As used in sections 1 to 6 of this 2011 Act:
  (1) 'Committee' means the Joint Legislative Audit Committee.
  (2) 'State agency' has the meaning given that term in ORS
291.272. + }
  SECTION 2. { +  (1) The  + }  { +  Joint Legislative Audit
Committee + }  { +  shall select a Legislative Auditor, who shall
serve as the director of the Government Accountability Office.
The Legislative Auditor shall serve at the pleasure of the
committee and under the committee's direction.
  (2) A person selected as Legislative Auditor must have a degree
from an accredited college or university with a major in
accounting or an allied field, and have at least two years
experience in the field of governmental accounting and auditing.
  (3) Pursuant to the policies and directions of the committee,
the Legislative Auditor shall conduct performance and management
audits of state agencies and programs and other state-funded
programs. During sessions of the Legislative Assembly, the
Government Accountability Office shall assist members and
committees in gathering and analyzing information relating to the
performance and management of state agencies.
  (4) Pursuant to the policies and directions of the committee,
the Legislative Auditor may enter into contracts to carry out the
functions of the Government Accountability Office. + }

  SECTION 3.  { + (1) Subject to the approval of the Joint
Legislative Audit Committee, the Legislative Auditor may employ
and fix the compensation of such professional assistants and
clerical and other employees as the Legislative Auditor finds
necessary for the operation of the Government Accountability
Office.
  (2) The committee shall fix the salary of the Legislative
Auditor.
  (3) Subject to the limitations otherwise provided by law for
expenses of state officers, the Legislative Auditor and employees
of the Government Accountability Office shall be reimbursed for
all actual and necessary expenses incurred in performing their
duties. + }
  SECTION 4.  { + (1) Every biennium, the Legislative Auditor
shall conduct audits of at least two agencies identified by the
Joint Legislative Audit Committee. One of the agencies shall be a
large agency, and one of the agencies shall be a small agency, as
described by committee rules.
  (2) The committee may not audit an agency more than once every
four years, unless the committee approves a special audit under
subsection (3) of this section.
  (3) The committee may require the Legislative Auditor to
conduct a special audit at any time that the committee determines
that circumstances exist that require the audit.
  (4) The Legislative Auditor shall make a written report on each
audit conducted by the Legislative Auditor. The Legislative
Auditor shall provide a copy of the report to the audited state
agency, to the Oregon Department of Administrative Services and
to each member of the committee. The reports may include comments
and recommendations. If a report contains recommendations that
have a fiscal impact, the Legislative Auditor shall provide an
estimate of the fiscal impact.
  (5) If at any time the Legislative Auditor has reason to
believe that an officer or employee of a state agency has engaged
in malfeasance, has failed to perform required duties or has
violated a law, the Legislative Auditor shall immediately give
written notice to the Attorney General, to the Governor and to
the members of committee, and shall provide the Attorney General
with all information that the Legislative Auditor has relating to
the matter. + }
  SECTION 5.  { + (1) In conducting an audit under sections 1 to
6 of this 2011 Act:
  (a) The Legislative Auditor may examine and inspect all
accounts, books, records, files, papers and documents of any
public body as defined in ORS 174.109.
  (b) The Legislative Auditor may cause a search to be made of
and extracts to be taken from any account, book, record, file,
paper or document in the custody of any public officer without
paying any fee for the search or extract. Any public officer
having the custody of the account, book, record, file, paper or
document shall make any search requested by the Legislative
Auditor and furnish the extracts as requested.
  (c) The Legislative Auditor may issue subpoenas compelling at a
specified time and place the appearance and sworn testimony of
any person whom the Legislative Auditor reasonably believes may
be able to provide information relating to any audit or other
investigation being undertaken under this section.
  (d) The Legislative Auditor may issue subpoenas duces tecum
compelling the production of any account, book, record, file,
paper, document or other evidence that the Legislative Auditor
reasonably believes may relate to an audit or other investigation
being undertaken under this section.
  (2) If a person fails to comply with any subpoena issued under
subsection (1) of this section, a judge of the circuit court of
any county, on application of the Legislative Auditor, shall
compel obedience by proceedings for contempt as in the case of
disobedience of the requirements of a subpoena issued from the
circuit court. + }
  SECTION 6.  { + Working papers of the Legislative Auditor and
of employees of the Government Accountability Office, including
notes, internal memoranda and records of work performed by the
Legislative Auditor or the employees on audits and other
investigations undertaken under sections 1 to 6 of this 2011 Act,
are not subject to disclosure under ORS 192.410 to 192.505. + }
  SECTION 7. ORS 244.050 is amended to read:
  244.050. (1) On or before April 15 of each year the following
persons shall file with the Oregon Government Ethics Commission a
verified statement of economic interest as required under this
chapter:
  (a) The Governor, Secretary of State, State Treasurer, Attorney
General, Commissioner of the Bureau of Labor and Industries,
Superintendent of Public Instruction, district attorneys and
members of the Legislative Assembly.
  (b) Any judicial officer, including justices of the peace and
municipal judges, except any pro tem judicial officer who does
not otherwise serve as a judicial officer.
  (c) Any candidate for a public office designated in paragraph
(a) or (b) of this subsection.
  (d) The Deputy Attorney General.
  (e) The Legislative Administrator, the Legislative Counsel, the
Legislative Fiscal Officer,  { + the Legislative Auditor, + } the
Secretary of the Senate and the Chief Clerk of the House of
Representatives.
  (f) The Chancellor and Vice Chancellors of the Oregon
University System and the president and vice presidents, or their
administrative equivalents, in each institution under the
jurisdiction of the State Board of Higher Education.
  (g) The following state officers:
  (A) Adjutant General.
  (B) Director of Agriculture.
  (C) Manager of State Accident Insurance Fund Corporation.
  (D) Water Resources Director.
  (E) Director of Department of Environmental Quality.
  (F) Director of Oregon Department of Administrative Services.
  (G) State Fish and Wildlife Director.
  (H) State Forester.
  (I) State Geologist.
  (J) Director of Human Services.
  (K) Director of the Department of Consumer and Business
Services.
  (L) Director of the Department of State Lands.
  (M) State Librarian.
  (N) Administrator of Oregon Liquor Control Commission.
  (O) Superintendent of State Police.
  (P) Director of the Public Employees Retirement System.
  (Q) Director of Department of Revenue.
  (R) Director of Transportation.
  (S) Public Utility Commissioner.
  (T) Director of Veterans' Affairs.
  (U) Executive director of Oregon Government Ethics Commission.
  (V) Director of the State Department of Energy.
  (W) Director and each assistant director of the Oregon State
Lottery.
  (X) Director of the Department of Corrections.
  (Y) Director of the Oregon Department of Aviation.
  (Z) Executive director of the Oregon Criminal Justice
Commission.
  (AA) Director of the Oregon Business Development Department.
  (BB) Director of the Office of Emergency Management.
  (CC) Director of the Employment Department.
  (DD) Chief of staff for the Governor.

  (EE) Administrator of the Office for Oregon Health Policy and
Research.
  (FF) Director of the Housing and Community Services Department.
  (GG) State Court Administrator.
  (HH) Director of the Department of Land Conservation and
Development.
  (II) Board chairperson of the Land Use Board of Appeals.
  (JJ) State Marine Director.
  (KK) Executive director of the Oregon Racing Commission.
  (LL) State Parks and Recreation Director.
  (MM) Public defense services executive director.
  (NN) Chairperson of the Public Employees' Benefit Board.
  (OO) Director of the Department of Public Safety Standards and
Training.
  (PP) Chairperson of the Oregon Student Assistance Commission.
  (QQ) Executive director of the Oregon Watershed Enhancement
Board.
  (RR) Director of the Oregon Youth Authority.
  (SS) Director of the Oregon Health Authority.
  (h) Any assistant in the Governor's office other than personal
secretaries and clerical personnel.
  (i) Every elected city or county official.
  (j) Every member of a city or county planning, zoning or
development commission.
  (k) The chief executive officer of a city or county who
performs the duties of manager or principal administrator of the
city or county.
  (L) Members of local government boundary commissions formed
under ORS 199.410 to 199.519.
  (m) Every member of a governing body of a metropolitan service
district and the executive officer thereof.
  (n) Each member of the board of directors of the State Accident
Insurance Fund Corporation.
  (o) The chief administrative officer and the financial officer
of each common and union high school district, education service
district and community college district.
  (p) Every member of the following state boards and commissions:
  (A) Board of Geologic and Mineral Industries.
  (B) Oregon Business Development Commission.
  (C) State Board of Education.
  (D) Environmental Quality Commission.
  (E) Fish and Wildlife Commission of the State of Oregon.
  (F) State Board of Forestry.
  (G) Oregon Government Ethics Commission.
  (H) Oregon Health Policy Board.
  (I) State Board of Higher Education.
  (J) Oregon Investment Council.
  (K) Land Conservation and Development Commission.
  (L) Oregon Liquor Control Commission.
  (M) Oregon Short Term Fund Board.
  (N) State Marine Board.
  (O) Mass transit district boards.
  (P) Energy Facility Siting Council.
  (Q) Board of Commissioners of the Port of Portland.
  (R) Employment Relations Board.
  (S) Public Employees Retirement Board.
  (T) Oregon Racing Commission.
  (U) Oregon Transportation Commission.
  (V) Wage and Hour Commission.
  (W) Water Resources Commission.
  (X) Workers' Compensation Board.
  (Y) Oregon Facilities Authority.
  (Z) Oregon State Lottery Commission.
  (AA) Pacific Northwest Electric Power and Conservation Planning
Council.
  (BB) Columbia River Gorge Commission.
  (CC) Oregon Health and Science University Board of Directors.
  (DD) Capitol Planning Commission.
  (q) The following officers of the State Treasurer:
  (A) Chief Deputy State Treasurer.
  (B) Chief of staff for the office of the State Treasurer.
  (C) Director of the Investment Division.
  (r) Every member of the board of commissioners of a port
governed by ORS 777.005 to 777.725 or 777.915 to 777.953.
  (s) Every member of the board of directors of an authority
created under ORS 441.525 to 441.595.
  (2) By April 15 next after the date an appointment takes
effect, every appointed public official on a board or commission
listed in subsection (1) of this section shall file with the
Oregon Government Ethics Commission a statement of economic
interest as required under ORS 244.060, 244.070 and 244.090.
  (3) By April 15 next after the filing deadline for the primary
election, each candidate described in subsection (1) of this
section shall file with the commission a statement of economic
interest as required under ORS 244.060, 244.070 and 244.090.
  (4) Within 30 days after the filing deadline for the general
election, each candidate described in subsection (1) of this
section who was not a candidate in the preceding primary
election, or who was nominated for public office described in
subsection (1) of this section at the preceding primary election
by write-in votes, shall file with the commission a statement of
economic interest as required under ORS 244.060, 244.070 and
244.090.
  (5) Subsections (1) to (4) of this section apply only to
persons who are incumbent, elected or appointed public officials
as of April 15 and to persons who are candidates on April 15.
Subsections (1) to (4) of this section also apply to persons who
do not become candidates until 30 days after the filing deadline
for the statewide general election.
  (6) If a statement required to be filed under this section has
not been received by the commission within five days after the
date the statement is due, the commission shall notify the public
official or candidate and give the public official or candidate
not less than 15 days to comply with the requirements of this
section. If the public official or candidate fails to comply by
the date set by the commission, the commission may impose a civil
penalty as provided in ORS 244.350.

                               { +
JOINT LEGISLATIVE AUDIT COMMITTEE + }

  SECTION 8. ORS 171.580 is amended to read:
  171.580.   { - (1) There is created a Joint Legislative Audit
Committee consisting of the cochairs of the Joint Committee on
Ways and Means, members of the House of Representatives appointed
by the Speaker and members of the Senate appointed by the
President. - }
   { +  (1) There is created a Joint Legislative Audit Committee,
consisting of:
  (a) Three members of the Senate appointed by the Senate
Majority Leader;
  (b) Three members of the Senate appointed by the Senate
Minority Leader;
  (c) Three members of the House of Representatives appointed by
the House Majority Leader; and
  (d) Three members of the House of Representatives appointed by
the House Minority Leader.
  (2) Not more than three of the appointees made from each
chamber of the Legislative Assembly may be from the same
political party. + }
    { - (2) - }   { + (3) + } The committee has a continuing
existence and may meet, act and conduct its business during
sessions of the Legislative Assembly or any recess thereof and in
the interim between sessions.
    { - (3) - }   { + (4) + } The term of a member shall expire
upon the convening of the Legislative Assembly in regular session
next following the commencement of the member's term. When a
vacancy occurs in the membership of the committee in the interim
between sessions, until such vacancy is filled, the membership of
the committee shall be considered not to include the vacant
position for the purpose of determining whether a quorum is
present and a quorum is a majority of the remaining members.
    { - (4) - }   { + (5) + } Members of the committee shall
receive an amount equal to that authorized under ORS 171.072 from
funds appropriated to the Legislative Assembly for each day spent
in the performance of their duties as members of the committee or
any subcommittee thereof in lieu of reimbursement for in-state
travel expenses.  However, when engaged in out-of-state travel,
members shall be entitled to receive their actual and necessary
expenses therefor in lieu of the amount authorized by this
subsection. Payment shall be made from funds appropriated to the
 { - Legislative Assembly - }  { + Government Accountability
Office + }.
    { - (5) - }   { + (6) + } The committee may not transact
business unless a quorum is present. A quorum consists of a
majority of committee members from the House of Representatives
and a majority of committee members from the Senate.
    { - (6) - }   { + (7) + } Action by the committee requires
the affirmative vote of a majority of committee members from the
House of Representatives and a majority of committee members from
the Senate.
    { - (7) - }   { + (8) + } The   { - Legislative Fiscal - }
 { + Government Accountability + } Office shall furnish to the
committee such services of personnel and such other facilities as
are necessary to enable the committee to carry out its functions
as directed by law, with such assistance as the Division of
Audits and Oregon Department of Administrative Services can
provide.
  SECTION 9. ORS 171.585 is amended to read:
  171.585. The Joint Legislative Audit Committee shall:
  (1) Review all audits and make recommendations for change or
remediation by the agency or other organization under review to
the Emergency Board, the Joint Ways and Means Committee and other
persons receiving the audit report under ORS 192.245.
  (2) Accept requests for performance and   { - program - }
 { + management + } audits from individual legislators,
legislative committees, the Division of Audits, the Budget and
Management Division and the Legislative Fiscal Office.
    { - (3) In conjunction with the Director of the Division of
Audits, set priorities on the basis of risk assessment for
performance and program audits and program evaluations. - }
    { - (4) - }   { + (3) + } With the advice and assistance of
the   { - Legislative Fiscal Officer, the Administrator of the
Budget and Management Division and the Director of the Division
of Audits - }  { +  Legislative Auditor + }, determine the type
of audit, evaluation or review utilizing criteria to include but
not be limited to the nature and scope of the task, the time
frame involved, necessary professional guidelines, economy,
efficiency, cost and cost responsibility.
    { - (5) - }   { + (4) + } Not later than 12 months after the
issuance of an audit report, review the actions of an agency or
other government organization for compliance with the
recommendations of the audit report.
    { - (6) - }   { + (5) + } Assign tasks to the
 { - Legislative Fiscal Office, the Budget and Management
Division, the Division of Audits or a special task force - }
 { +  Legislative Auditor + }.

    { - (7) - }   { + (6) + } Review state agency performance
measures and make recommendations for change.
  SECTION 10. ORS 291.272 is amended to read:
  291.272. As used in ORS 291.272 to 291.278, unless the context
requires otherwise:
  (1) 'Administrative expenses' has the meaning defined by ORS
291.305.
  (2) 'Department' means the Oregon Department of Administrative
Services.
  (3) 'Governmental service expenses' means the expenses of state
government that are attributable to the operation, maintenance,
administration and support of state government generally, and
includes the following:
  (a) Administrative expenses of the Oregon Department of
Administrative Services supported out of the General Fund.
  (b) Sixty percent of the expenditures of the Legislative
Assembly out of moneys appropriated from the General Fund, and
all of the expenditures incurred in the administration of the
duties of the Emergency Board.
  (c) Sixty percent of the expenditures incurred in the
administration of the duties of the Joint Committee on Ways and
Means and the Emergency Board.
   { +  (d) Sixty percent of the expenditures incurred in the
administration of the duties of the Joint Legislative Audit
Committee. + }
    { - (d) - }   { + (e) + } Sixty percent of the expenditures
incurred out of moneys appropriated from the General Fund in the
administration of the duties of the Legislative Counsel
Committee.
    { - (e) - }   { + (f) + } Expenditures of the Secretary of
State in the administration of the office of the State Archivist,
of historic properties programs, and of the administrative rules
publication program.
    { - (f) - }   { + (g) + } Seventy-five percent of the
administrative expenses of the Office of the Governor incurred
out of moneys appropriated from the General Fund.
  (4) 'State agency' means every state officer, board,
commission, department, institution, branch or agency of the
state government, whose costs are paid wholly or in part from
funds held in the State Treasury, and includes the Legislative
Assembly, the courts and their officers and committees.

                               { +
MISCELLANEOUS + }

  SECTION 11. ORS 171.590 is amended to read:
  171.590. (1) In carrying out specific program evaluations and
reviews, the Legislative Fiscal Office may utilize the services
of the Division of Audits, the Budget and Management Division,
other statutory agencies of the Legislative Assembly and staff of
the substantive committees as necessary.   { - The Division of
Audits shall undertake a performance audit at the direction of
the Joint Legislative Audit Committee and report to the
committee. - }
  (2) The Emergency Board shall make funds available to the
Division of Audits to reimburse it for expenses incurred under
this section for a performance audit.
  SECTION 12. ORS 184.360 is amended to read:
  184.360. (1) As used in this section:
  (a) 'Executive department' has the meaning given that term in
ORS 174.112.
  (b) 'State government' has the meaning given that term in ORS
174.111.
  (2) It is the policy of this state that internal audit
activities within state government be coordinated to promote
effectiveness.
  (3) The Oregon Department of Administrative Services shall
adopt rules setting standards and policies for internal audit
functions within state government. The rules shall include, but
are not limited to:
  (a) Standards for internal audits that are consistent with and
incorporate commonly recognized industry standards and practices;
and
  (b) Policies and procedures that ensure the integrity of the
internal audit process.
  (4) Each agency of the executive department required to have an
internal audit function shall produce a risk assessment of the
entire agency that conforms to audit standards established by
nationally recognized entities such as the United States
Government Accountability Office or the Institute of Internal
Auditors. The agency shall use its risk assessment as the basis
for the selection and performance of at least one internal audit
per calendar year.
  (5) Each agency of the executive department required to have an
internal audit function shall audit a component of its governance
and risk management processes at least once every five years and
file a report with the Oregon Department of Administrative
Services.
  (6) Not later than December 31 of each calendar year, the
Oregon Department of Administrative Services shall prepare and
submit a report to the Joint Legislative Audit Committee.
 { - In the absence of the Joint Legislative Audit Committee, the
department shall submit the report to the Joint Committee on Ways
and Means or the Emergency Board. - }  The report shall describe
internal audit activities that have occurred in state government
during the calendar year in which the report is prepared.
  SECTION 13. ORS 291.100 is amended to read:
  291.100. (1) It is the intent of the Legislative Assembly, in
funding the development and implementation of a new statewide
financial management system, that statewide financial management
systems and policies support program-driven budget planning and
execution, based on timely and accurate statewide managerial cost
accounting information and that such systems support legislative
program evaluation and performance auditing of statewide programs
and services.
  (2) The Oregon Department of Administrative Services shall
devise and supervise statewide financial management systems for
all state agencies by preparing policies and procedures for
implementing and operating financial management systems for all
agencies in state government and measuring implementation. In
order to assure that the state's investment in a modern and
complete statewide financial management system is fully
implemented, every agency and unit of state government shall:
  (a) Cooperate and comply fully with policies and procedures and
deadlines prepared by the Oregon Department of Administrative
Services for establishing a database for the financial management
system.
  (b) Comply fully with policies and procedures prepared by the
Oregon Department of Administrative Services for operation of the
financial management system.
  (3) The Oregon Department of Administrative Services shall
report to the Legislative Assembly no later than December 1 of
even-numbered years:
  (a) Progress in implementing the financial management system as
to preparation of financial statements, nonfinancial management
information and the ability of the system to support legislative
program evaluation and performance auditing.
  (b) Compliance by each agency and unit of state government with
policies and procedures of the Oregon Department of
Administrative Services for implementation of the financial
management system.

  (4) After a review of the Oregon Department of Administrative
Services report by the   { - Legislative Fiscal Officer - }
 { + Legislative Auditor + }, the Joint Legislative Audit
Committee may schedule a hearing for any agency or unit of state
government to review compliance with this section and policies
and procedures of the Oregon Department of Administrative
Services, prior to any appropriation approval by the Legislative
Assembly, as provided in ORS 171.585 (1).
  SECTION 14. ORS 297.050 is amended to read:
  297.050. The Division of Audits of the office of the Secretary
of State shall supply the Joint Legislative Audit Committee
 { - , - }  { +  and + } the Committee on Performance Excellence
established in ORS 182.562   { - and the Legislative Fiscal
Officer - } with a copy of each audit report made by or for the
Division of Audits.
  SECTION 15.  { + The unit captions used in this 2011 Act are
provided only for the convenience of the reader and do not become
part of the statutory law of this state or express any
legislative intent in the enactment of this 2011 Act. + }
  SECTION 16.  { + This 2011 Act being necessary for the
immediate preservation of the public peace, health and safety, an
emergency is declared to exist, and this 2011 Act takes effect on
its passage. + }
                         ----------