House Study Bill 197
SENATE/HOUSE FILE
BY (PROPOSED AUDITOR OF
STATE BILL)
Passed Senate, Date Passed House, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act concerning audit and review functions of the auditor of
2 state relative to governmental subdivisions.
3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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PAG LIN
1 1 Section 1. Section 11.1, Code 2009, is amended to read as
1 2 follows:
1 3 11.1 DEFINITIONS.
1 4 1. For purposes of this chapter, unless the context
1 5 otherwise requires:
1 6 a. The term "department" shall be construed to mean
1 7 "Department" means any authority charged by law with official
1 8 responsibility for the expenditure of public money of the
1 9 state and any agency receiving money from the general revenues
1 10 of the state.
1 11 b. "Examination" means procedures that are less in scope
1 12 than an audit but which are directed toward reviewing
1 13 financial activities and compliance with legal requirements.
1 14 c. "Governmental subdivision" means cities and
1 15 administrative agencies established by cities, hospitals or
1 16 health care facilities established by a city, counties, county
1 17 hospitals organized under chapters 347 and 347A, memorial
1 18 hospitals organized under chapter 37, entities organized under
1 19 chapter 28E, community colleges, area education agencies, and
1 20 school districts.
1 21 d. "Regents institutions" means the institutions governed
1 22 by the board of regents under section 262.7.
1 23 2. As used in this chapter, unless the context otherwise
1 24 requires, "book", "list", "record", or "schedule" kept by a
1 25 county auditor, assessor, treasurer, recorder, sheriff, or
1 26 other county officer means the county system as defined in
1 27 section 445.1.
1 28 Sec. 2. Section 11.6, subsection 1, paragraph a,
1 29 subparagraph (1), Code 2009, is amended to read as follows:
1 30 (1) The Except for entities organized under chapter 28E
1 31 having budgeted gross receipts of one hundred thousand dollars
1 32 or less in a fiscal year, the financial condition and
1 33 transactions of all cities and city offices, counties, county
1 34 hospitals organized under chapters 347 and 347A, memorial
1 35 hospitals organized under chapter 37, entities organized under
2 1 chapter 28E having gross receipts in excess of one hundred
2 2 thousand dollars in a fiscal year, merged areas, area
2 3 education agencies, and all school offices in school
2 4 districts, governmental subdivisions shall be examined audited
2 5 at least once each year, except that cities. Cities having a
2 6 population of seven hundred or more but less than two thousand
2 7 shall be examined at least once every four years, and cities
2 8 budgeted gross receipts of one hundred thousand dollars but
2 9 less than two million dollars in a fiscal year shall be
2 10 examined at least once each year pursuant to procedures
2 11 established by the office of auditor of state and the report
2 12 of the examination shall be filed with the office of the
2 13 auditor of state and the examined city. However, cities
2 14 having a population of less than seven hundred budgeted gross
2 15 receipts of less than one hundred thousand dollars in a fiscal
2 16 year may be examined as otherwise provided in this section.
2 17 The examination shall cover the fiscal year next preceding the
2 18 year in which the audit is conducted. The examination audit
2 19 of school offices districts shall include an audit of all
2 20 school funds including categorical funding provided by the
2 21 state, the certified annual financial report, the certified
2 22 enrollment as provided in section 257.6, supplementary
2 23 weighting as provided in section 257.11, and the revenues and
2 24 expenditures of any nonprofit school organization established
2 25 pursuant to section 279.62. Differences in certified
2 26 enrollment shall be reported to the department of management.
2 27 The examination audit of school offices districts shall
2 28 include at a minimum a determination that the laws of the
2 29 state are being followed, that categorical funding is not used
2 30 to supplant other funding except as otherwise provided, that
2 31 supplementary weighting is pursuant to an eligible sharing
2 32 condition, and that postsecondary courses provided in
2 33 accordance with section 257.11 and chapter 261E supplement,
2 34 rather than supplant, school district courses. The
2 35 examination audit of a city that owns or operates a municipal
3 1 utility providing local exchange services pursuant to chapter
3 2 476 shall include an audit performing tests of the city's
3 3 compliance with section 388.10. The examination audit of a
3 4 city that owns or operates a municipal utility providing
3 5 telecommunications services pursuant to section 388.10 shall
3 6 include an audit performing tests of the city's compliance
3 7 with section 388.10.
3 8 Sec. 3. Section 11.36, Code 2009, is amended by adding the
3 9 following new subsection:
3 10 NEW SUBSECTION. 4. When, in the auditor of state's
3 11 judgment, the auditor of state finds sufficient information is
3 12 available to demonstrate a governmental subdivision may not
3 13 have substantially complied with the laws, rules, regulations,
3 14 and contractual agreements governing public funds, the auditor
3 15 of state shall establish actions to be taken to determine
3 16 whether substantial compliance with those laws, rules,
3 17 regulations, and contractual agreements has been achieved by
3 18 the governmental subdivision receiving public funds. Payment
3 19 for the examination shall be made from the proper public funds
3 20 of the governmental subdivision.
3 21 EXPLANATION
3 22 This bill makes changes relating to the duties and
3 23 responsibilities of the auditor of state relative to
3 24 governmental subdivisions.
3 25 Code section 11.1 is amended to define examination as a
3 26 procedure less in scope than an audit but which is directed at
3 27 reviewing financial activities and compliance with legal
3 28 requirements. Governmental subdivision is also defined to
3 29 mean cities, administrative agencies of cities, city
3 30 hospitals, counties, county hospitals, memorial hospitals,
3 31 chapter 28E entities, community colleges, area education
3 32 agencies, and school districts.
3 33 Code section 11.6(1), concerning what governmental
3 34 subdivisions are subject to audit or examination is amended.
3 35 The bill amends language concerning the auditing of cities by
4 1 eliminating the requirement that cities with a population
4 2 between 700 and 2,000 shall have an audit at least once in
4 3 four years. The bill provides that cities with budgeted gross
4 4 receipts of at least $100,000, but less than $2 million, shall
4 5 be examined at least once each year pursuant to procedures
4 6 established by the auditor and a report of the examination
4 7 shall be filed with the auditor and the examined city. The
4 8 bill provides that cities with budgeted gross receipts of less
4 9 than $100,000 may be examined.
4 10 Code section 11.36, concerning the review by the auditor of
4 11 entities receiving public moneys, is amended. The Code
4 12 section is amended to provide that the auditor has the
4 13 authority to investigate a governmental subdivision if the
4 14 auditor of state gains information of noncompliance that is
4 15 sufficient to warrant an investigation. If an examination is
4 16 warranted, the governmental subdivision is required to pay for
4 17 the examination.
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