As Reported by the Senate State and Local Government 2
and Veterans Affairs Committee 2
123rd General Assembly 5
Regular Session Sub. H. B. No. 769 6
1999-2000 7
REPRESENTATIVES METTLER-NETZLEY-JERSE-GRENDELL-JACOBSON- 9
VAN VYVEN-PETERSON-ROBINSON-CATES-DAMSCHRODER-JOLIVETTE-
CAREY-BUEHRER-CALVERT-MYERS-MOTTLEY-FORD-HUGHES- 10
O'BRIEN-YOUNG-WIDENER-TIBERI-HOOPS-TERWILLEGER- 11
OLMAN-BRITTON-VERICH-SENATORS MUMPER-GARDNER-SPADA 12
_________________________________________________________________ 14
A B I L L
To amend sections 117.01, 117.11, and 117.12 of the 16
Revised Code to make changes in the law governing 17
the Auditor of State's audits of public offices. 18
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 20
Section 1. That sections 117.01, 117.11, and 117.12 of the 22
Revised Code be amended to read as follows: 23
Sec. 117.01. As used in this chapter: 32
(A) "Color of office" means actually, purportedly, or 34
allegedly done under any law, ordinance, resolution, order, or 35
other pretension to official right, power, or authority. 36
(B) "Public accountant" means any person who is authorized 38
by Chapter 4701. of the Revised Code to use the designation of 39
certified public accountant or who was registered prior to 40
January 1, 1971, as a public accountant. 41
(C) "Public money" means any money received, collected by, 43
or due a public official under color of office, as well as any 44
money collected by any individual on behalf of a public office or 45
as a purported representative or agent of the public office. 46
(D) "Public office" means any state agency, public 48
institution, political subdivision, other organized body, office, 49
agency, institution, or entity established by the laws of this 50
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state for the exercise of any function of government. 51
(E) "Public official" means any officer, employee, or duly 53
authorized representative or agent of a public office. 54
(F) "State agency" means every organized body, office, 56
agency, institution, or other entity established by the laws of 57
the state for the exercise of any function of state government. 58
(G) "AUDIT" MEANS ANY OF THE FOLLOWING: 60
(1) ANY EXAMINATION, ANALYSIS, OR INSPECTION OF THE 62
STATE'S OR A PUBLIC OFFICE'S FINANCIAL STATEMENTS OR REPORTS; 64
(2) ANY EXAMINATION, ANALYSIS, OR INSPECTION OF RECORDS, 66
DOCUMENTS, BOOKS, OR ANY OTHER EVIDENCE RELATING TO EITHER OF THE 68
FOLLOWING:
(a) THE COLLECTION, RECEIPT, ACCOUNTING, USE, OR 70
EXPENDITURE OF PUBLIC MONEY BY A PUBLIC OFFICE OR BY A PRIVATE 71
INSTITUTION, ASSOCIATION, BOARD, OR CORPORATION; 72
(b) THE DETERMINATION BY THE AUDITOR OF STATE, AS REQUIRED 74
BY SECTION 117.11 OF THE REVISED CODE, OF WHETHER A PUBLIC OFFICE 75
HAS COMPLIED WITH ALL THE LAWS, RULES, ORDINANCES, OR ORDERS 76
PERTAINING TO THE PUBLIC OFFICE.
(3) ANY OTHER TYPE OF EXAMINATION, ANALYSIS, OR INSPECTION 78
OF A PUBLIC OFFICE OR OF A PRIVATE INSTITUTION, ASSOCIATION, 80
BOARD, OR CORPORATION RECEIVING PUBLIC MONEY THAT IS CONDUCTED 81
ACCORDING TO GENERALLY ACCEPTED OR GOVERNMENTAL AUDITING 82
STANDARDS ESTABLISHED BY RULE PURSUANT TO SECTION 117.19 OF THE 83
REVISED CODE.
Sec. 117.11. (A) Except as OTHERWISE provided in THIS 92
division (D) of this section, the auditor of state shall commence 94
an audit of each public office not more than AT LEAST ONCE EVERY 96
two FISCAL years from the release date of the last audit report 98
of such public office. THE AUDITOR OF STATE SHALL AUDIT A PUBLIC 99
OFFICE EACH FISCAL YEAR IF THAT PUBLIC OFFICE IS REQUIRED TO BE 100
AUDITED ON AN ANNUAL BASIS PURSUANT TO "THE SINGLE AUDIT ACT OF 101
1984," 98 STAT. 2327, 31 U.S.C.A. 7501 ET SEQ., AS AMENDED. In 102
the ANNUAL OR BIENNIAL audit, inquiry shall be made into the 103
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methods, accuracy, and legality of the accounts, financial 104
reports, records, files, and reports of the office, whether the 105
laws, RULES, ordinances, and orders pertaining to the office have 107
been observed, and whether the requirements and rules of the 108
auditor of state have been complied with. Except AS OTHERWISE 109
PROVIDED IN THIS DIVISION OR where auditing standards or 110
procedures dictate otherwise, each audit shall cover at least one 111
fiscal year. IF A PUBLIC OFFICE IS AUDITED ONLY ONCE EVERY TWO 112
FISCAL YEARS, THE AUDIT SHALL COVER BOTH FISCAL YEARS. 113
(B) IN ADDITION TO THE ANNUAL OR BIENNIAL AUDIT PROVIDED 115
FOR IN DIVISION (A) OF THIS SECTION, THE AUDITOR OF STATE MAY 116
CONDUCT AN AUDIT OF A PUBLIC OFFICE AT ANY TIME WHEN SO REQUESTED 119
BY THE PUBLIC OFFICE OR UPON THE AUDITOR OF STATE'S OWN
INITIATIVE IF THE AUDITOR OF STATE HAS REASONABLE CAUSE TO 120
BELIEVE THAT AN ADDITIONAL AUDIT IS IN THE PUBLIC INTEREST. 121
(B)(C)(1) The auditor of state shall identify any public 123
office in which the auditor of state will be unable to conduct an 124
audit AT LEAST once every two FISCAL years as required by 125
division (A) of this section and shall provide immediate written 126
notice to the clerk of the legislative authority or governing 128
board of the public office so identified. Within six months of 129
the receipt of such notice, the legislative authority or 130
governing board may engage an independent certified public 131
accountant to conduct an audit pursuant to section 117.12 of the 132
Revised Code.
(2) When the chief fiscal officer of a public office 134
notifies the auditor of state that an audit is required at a time 135
prior to the next regularly scheduled audit by the auditor of 136
state, the auditor of state shall either cause an earlier audit 137
to be made by the auditor of state or authorize the legislative 138
authority or governing board of the public office to engage an 139
independent certified public accountant to conduct the required 140
audit. The scope of the audit shall be as authorized by the 141
auditor of state. 142
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(3) The auditor of state shall approve the scope of an 144
audit under division (B)(C)(1) or (2) of this section as set 145
forth in the contract for the proposed audit before the contract 146
is executed on behalf of the public office that is to be audited. 147
The independent accountant conducting an audit under division 149
(B)(C)(1) or (2) of this section shall be paid by the public
office. 150
(C)(D) If a uniform accounting network is established 152
under section 117.101 of the Revised Code, the auditor of state 153
or a certified public accountant employed pursuant to this 154
section or section 115.56 of the Revised Code shall, to the 155
extent practicable, utilize services offered by the network in 156
order to conduct efficient and economical audits of public 157
offices.
(D) The auditor of state may, by rule, provide for waiver 159
of the two-year requirement of division (A) of this section with 160
respect to: 161
(1) Public offices participating in a uniform accounting 163
network established under section 117.101 of the Revised Code; 164
(2) Public offices that are not required by federal law to 166
be audited in accordance with federal auditing standards. 167
The rules may provide for the application of specified 169
audit procedures to such public offices in lieu of an audit in 170
accordance with generally accepted government auditing standards. 171
(E) The auditor of state shall, in accordance with 173
division (A)(3) of section 9.65 of the Revised Code and this 174
section, audit an annuity program for volunteer fire fighters 175
established by a political subdivision under section 9.65 of the 176
Revised Code. As used in this section, "volunteer fire fighters" 177
and "political subdivision" have the same meanings as in division 178
(C) of section 9.65 of the Revised Code. 179
Sec. 117.12. Any public accountant engaged to perform an 188
audit pursuant to division (B)(C) of section 117.11 of the 189
Revised Code shall conduct the audit pursuant to the standards, 191
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procedures, and guidelines of the auditor of state for such 192
audits. The auditor of state shall establish these standards, 193
procedures, and guidelines by rule. The audit shall cover the 194
period beginning with the termination date of the most recent 195
audit conducted under this section or section 117.11 of the 196
Revised Code and ending on the date specified by the auditor of 197
state. The accountant shall inquire into the methods, accuracy, 198
and legality of the accounts, records, files, and reports of the 199
public office and shall note whether, in his THE ACCOUNTANT'S 200
opinion, the laws, RULES, ordinances, and orders pertaining to 202
the public office have been complied with. The accountant shall 203
have no authority to make formal findings of illegality, 204
malfeasance, or gross neglect under this division or section 205
117.23 of the Revised Code.
Section 2. That existing sections 117.01, 117.11, and 207
117.12 of the Revised Code are hereby repealed. 208