As Introduced

129th General Assembly
Regular Session
2011-2012
S. B. No. 4


Senator Schaffer 


A BILL
To amend section 117.13 and to enact sections 117.46, 1
117.461, 117.47, 117.471, and 117.472 of the 2
Revised Code to require performance auditing by 3
the Auditor of State of a minimum of four state 4
agencies each biennium, to establish the Leverage 5
for Efficiency, Accountability, and Performance 6
Fund, and to make an appropriation.7


BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

       Section 1. That section 117.13 be amended and sections 8
117.46, 117.461, 117.47, 117.471, and 117.472 of the Revised Code 9
be enacted to read as follows:10

       Sec. 117.13.  (A) TheExcept as otherwise provided in section 11
117.472 of the Revised Code, the costs of audits of state agencies 12
shall be recovered by the auditor of state in the following 13
manner:14

       (1) The costs of all audits of state agencies shall be paid 15
to the auditor of state on statements rendered by the auditor of 16
state. Money so received by the auditor of state shall be paid 17
into the state treasury to the credit of the public audit expense 18
fund--intrastate, which is hereby created, and shall be used to 19
pay costs related to such audits. The costs of audits of a state 20
agency shall be charged to the state agency being audited. The 21
costs of any assistant auditor, employee, or expert employed 22
pursuant to section 117.09 of the Revised Code called upon to 23
testify in any legal proceedings in regard to any audit, or called 24
upon to review or discuss any matter related to any audit, may be 25
charged to the state agency to which the audit relates.26

       (2) The auditor of state shall establish by rule rates to be 27
charged to state agencies for recovering the costs of audits of 28
state agencies.29

       (B) As used in this division, "government auditing standards" 30
means the government auditing standards published by the 31
comptroller general of the United States general accounting 32
office.33

       (1) Except as provided in divisions (B)(2) and (3) of this 34
section, any costs of an audit of a private institution, 35
association, board, or corporation receiving public money for its 36
use shall be charged to the public office providing the public 37
money in the same manner as costs of an audit of the public 38
office.39

       (2) If an audit of a private child placing agency or private 40
noncustodial agency receiving public money from a public children 41
services agency for providing child welfare or child protection 42
services sets forth that money has been illegally expended, 43
converted, misappropriated, or is unaccounted for, the costs of 44
the audit shall be charged to the agency being audited in the same 45
manner as costs of an audit of a public office, unless the 46
findings are inconsequential, as defined by government auditing 47
standards.48

       (3) If such an audit does not set forth that money has been 49
illegally expended, converted, misappropriated, or is unaccounted 50
for or sets forth findings that are inconsequential, as defined by 51
government auditing standards, the costs of the audit shall be 52
charged as follows:53

       (a) One-third of the costs to the agency being audited;54

       (b) One-third of the costs to the public children services 55
agency that provided the public money to the agency being audited;56

       (c) One-third of the costs to the department of job and 57
family services.58

       (C) TheExcept as otherwise provided in section 117.472 of 59
the Revised Code, the costs of audits of local public offices 60
shall be recovered by the auditor of state in the following 61
manner:62

       (1) The total amount of compensation paid assistant auditors 63
of state, their expenses, the cost of employees assigned to assist 64
the assistant auditors of state, the cost of experts employed 65
pursuant to section 117.09 of the Revised Code, and the cost of 66
typing, reviewing, and copying reports shall be borne by the 67
public office to which such assistant auditors of state are so 68
assigned, except that annual vacation and sick leave of assistant 69
auditors of state, employees, and typists shall be financed from 70
the general revenue fund. The necessary traveling and hotel 71
expenses of the deputy inspectors and supervisors of public 72
offices shall be paid from the state treasury. Assistant auditors 73
of state shall be compensated by the taxing district or other 74
public office audited for activities undertaken pursuant to 75
division (B) of section 117.18 and section 117.24 of the Revised 76
Code. The costs of any assistant auditor, employee, or expert 77
employed pursuant to section 117.09 of the Revised Code called 78
upon to testify in any legal proceedings in regard to any audit, 79
or called upon to review or discuss any matter related to any 80
audit, may be charged to the public office to which the audit 81
relates.82

       (2) The auditor of state shall certify the amount of such 83
compensation, expenses, cost of experts, reviewing, copying, and 84
typing to the fiscal officer of the local public office audited. 85
The fiscal officer of the local public office shall forthwith draw 86
a warrant upon the general fund or other appropriate funds of the 87
local public office to the order of the auditor of state; 88
provided, that the auditor of state is authorized to negotiate 89
with any local public office and, upon agreement between the 90
auditor of state and the local public office, may adopt a schedule 91
for payment of the amount due under this section. Money so 92
received by the auditor of state shall be paid into the state 93
treasury to the credit of the public audit expense fund--local 94
government, which is hereby created, and shall be used to pay the 95
compensation, expense, cost of experts and employees, reviewing, 96
copying, and typing of reports.97

       (3) At the conclusion of each audit, or analysis and report 98
made pursuant to section 117.24 of the Revised Code, the auditor 99
of state shall furnish the fiscal officer of the local public 100
office audited a statement showing the total cost of the audit, or 101
of the audit and the analysis and report, and the percentage of 102
the total cost chargeable to each fund audited. The fiscal officer 103
may distribute such total cost to each fund audited in accordance 104
with its percentage of the total cost.105

       (4) The auditor of state shall provide each local public 106
office a statement or certification of the amount due from the 107
public office for services performed by the auditor of state under 108
this or any other section of the Revised Code, as well as the date 109
upon which payment is due to the auditor of state. Any local 110
public office that does not pay the amount due to the auditor of 111
state by that date may be assessed by the auditor of state for 112
interest from the date upon which the payment is due at the rate 113
per annum prescribed by section 5703.47 of the Revised Code. All 114
interest charges assessed by the auditor of state may be collected 115
in the same manner as audit costs pursuant to division (D) of this 116
section.117

       (D) If the auditor of state fails to receive payment for any 118
amount due, including, but not limited to, fines, fees, and costs, 119
from a public office for services performed under this or any 120
other section of the Revised Code, the auditor of state may seek 121
payment through the office of budget and management. (Amounts due 122
include any amount due to an independent public accountant with 123
whom the auditor has contracted to perform services, all costs and 124
fees associated with participation in the uniform accounting 125
network, and all costs associated with the auditor's provision of 126
local government services.) Upon certification by the auditor of 127
state to the director of budget and management of any such amount 128
due, the director shall withhold from the public office any amount 129
available, up to and including the amount certified as due, from 130
any funds under the director's control that belong to or are 131
lawfully payable or due to the public office. The director shall 132
promptly pay the amount withheld to the auditor of state. If the 133
director determines that no funds due and payable to the public 134
office are available or that insufficient amounts of such funds 135
are available to cover the amount due, the director shall withhold 136
and pay to the auditor of state the amounts available and, in the 137
case of a local public office, certify the remaining amount to the 138
county auditor of the county in which the local public office is 139
located. The county auditor shall withhold from the local public 140
office any amount available, up to and including the amount 141
certified as due, from any funds under the county auditor's 142
control and belonging to or lawfully payable or due to the local 143
public office. The county auditor shall promptly pay any such 144
amount withheld to the auditor of state.145

       Sec. 117.46.  Each biennium the auditor of state shall 146
conduct a performance audit of a minimum of four state agencies. 147
At least two of the audits shall be of agencies selected from a 148
list comprised of the administrative departments listed in section 149
121.02 of the Revised Code and the department of education and at 150
least two of the audits shall be of other state agencies. 151

       The auditor of state shall submit a report of each completed 152
audit to the governor, speaker and minority leader of the house of 153
representatives, president and minority leader of the senate, and 154
inspector general. The report shall be submitted within thirty 155
days of the completion of the audit.156

       Sec. 117.461.  A state agency audited under section 117.46 of 157
the Revised Code shall annually submit a report describing the 158
agency's compliance with the audit recommendations to the auditor 159
of state, governor, speaker and minority leader of the house of 160
representatives, president and minority leader of the senate, and 161
inspector general. Reports shall continue to be submitted annually 162
until all recommendations are implemented or until the agency 163
submits a report explaining why the agency refuses to implement a 164
recommendation.165

       Sec. 117.47. There is hereby created in the state treasury 166
the leverage for efficiency, accountability, and performance fund. 167
The auditor of state shall use the fund to make loans to state 168
agencies and local public offices requesting loans under section 169
117.471 of the Revised Code and to pay for costs incurred by the 170
auditor of state for conducting performance audits. The fund shall 171
consist of money appropriated to it plus the repayments of 172
principal and interest on loans made from the fund. Interest 173
earned on money in the fund shall be credited to the fund. 174

       Sec. 117.471.  A state agency or local public office may 175
apply for a loan from the fund created in section 117.47 of the 176
Revised Code to pay the auditor of state for a performance audit. 177
The auditor of state shall oversee the application and approval 178
process for a loan. Prior to applying for a loan from the fund, 179
approval shall be obtained from the county elected official whose 180
office will be audited and from the county commission of the 181
county in which the county office is located.182

       The interest rate on a loan from the fund shall be calculated 183
at the same rate as the average of the average monthly yields for 184
the state treasury asset reserve fund for the duration of the 185
loan. Interest shall accrue on a loan from the date the audit is 186
completed until the date the loan is repaid.187

       Rates charged for performance audits of state agencies shall 188
be determined in accordance with division (A)(2) of section 117.13 189
of the Revised Code. Rates charged for performance audits of local 190
public offices shall be determined in accordance with division 191
(C)(1) of section 117.13 of the Revised Code. 192

       Sec. 117.472.  The auditor of state shall provide each state 193
agency receiving a loan from the fund created in section 117.47 of 194
the Revised Code with a statement of the amount of the loan plus 195
interest due. The statement shall include the date upon which 196
payment is due to the auditor of state, which shall be one year 197
following the date the performance audit is completed. When 198
payment is due, the auditor of state shall certify to the director 199
of budget and management the amount of the loan plus interest due. 200
The director shall withhold from the agency the amount certified 201
from funds under the director's control that belong to or are 202
lawfully payable or due to the agency and that may be used to 203
repay the loan. The director shall promptly pay the amount 204
withheld to the auditor of state for deposit into the fund. If the 205
director determines that no funds due and payable to the agency 206
are available or that insufficient amounts of such funds are 207
available to cover the amount due, the director shall withhold and 208
pay to the auditor of state the amounts available and shall 209
continue to do so until full payment is made. Funds so received by 210
the auditor of state shall be paid into the state treasury to the 211
credit of the fund.212

       The auditor of state shall provide each local public office 213
receiving a loan from the fund created in section 117.47 of the 214
Revised Code with a statement of the amount of the loan plus 215
interest due from the office. The statement shall include the date 216
upon which payment is due to the auditor of state, which shall be 217
one year following the date the performance audit is completed. 218
When payment is due, the auditor of state shall certify to the 219
county auditor the amount of the loan plus interest due. The 220
county auditor shall withhold from the local public office the 221
amount certified from funds under the county auditor's control 222
that belong to or are lawfully payable or due to the local public 223
office and that may be used to repay the loan. The county auditor 224
shall promptly pay the amount withheld to the auditor of state for 225
deposit into the fund. If the county auditor determines that no 226
funds due and payable to the local public office are available or 227
that insufficient amounts of such funds are available to cover the 228
amount due, the county auditor shall withhold and pay to the 229
auditor of state the amounts available and shall continue to do so 230
until full payment is made. Funds so received by the auditor of 231
state shall be paid into the state treasury to the credit of the 232
fund.233

       Section 2. That existing section 117.13 of the Revised Code 234
is hereby repealed.235

       Section 3.  Section 117.46 of the Revised Code as enacted by 236
this act does not imply that the Auditor of State currently has no 237
performance audit authority under Chapter 117. of the Revised 238
Code.239

       Section 4.  Notwithstanding section 117.101 of the Revised 240
Code, on the effective date of this act or as soon as possible 241
thereafter, the Director of Budget and Management shall transfer 242
$1,500,000 cash from the Uniform Accounting Network Fund (Fund 243
6750) to the Leverage for Efficiency, Accountability, and 244
Performance Fund (Fund 5JZ0) established under section 117.47 of 245
the Revised Code. Moneys within Fund 5JZ0 shall be used in 246
accordance with sections 117.47 and 117.471 of the Revised Code. 247
When cash balances in Fund 5JZ0 exceed the amount originally 248
transferred pursuant to this section, the Director of Budget and 249
Management shall transfer the excess amounts to Fund 6750 until 250
the $1,500,000 originally transferred has been repaid.251

       Section 5.  All items in this section are hereby appropriated 252
as designated out of any moneys in the state treasury to the 253
credit of the Leverage for Efficiency, Accountability, and 254
Performance Fund (Fund 5JZ0). For all appropriations made in this 255
act, those in the first column are for fiscal year 2010 and those 256
in the second column are for fiscal year 2011. The appropriations 257
made in this act are in addition to any other appropriations made 258
for the FY 2010-2011 biennium.259

Appropriations

AUD Auditor of State
260

Auditor of State Fund Group261

5JZ0 070606 LEAP Revolving Loans $ 0 $ 1,500,000 262
TOTAL AUD Auditor of State Fund Group $ 0 $ 1,500,000 263
TOTAL ALL BUDGET FUND GROUPS $ 0 $ 1,500,000 264

       LEAP REVOLVING LOANS265

       The foregoing appropriation item 070606, LEAP Revolving 266
Loans, shall be used to advance the costs of performance audits to 267
state agencies and local public offices who have applied to and 268
been approved by the Auditor of State for receipt of these funds 269
pursuant to section 117.471 of the Revised Code.270

       Within the limits set forth in this act, the Director of 271
Budget and Management shall establish accounts indicating the 272
source and amount of funds for each appropriation made in this 273
act, and shall determine the form and manner in which 274
appropriation accounts shall be maintained. Expenditures from 275
appropriations contained in this act shall be accounted for as 276
though made in Am. Sub. H.B. 1 of the 128th General Assembly.277

       The appropriations made in this act are subject to all 278
provisions of Am. Sub. H.B. 1 of the 128th General Assembly that 279
are generally applicable to such appropriations.280

       Section 6. Sections 1, 2, 3, 4, 5, and 6 of this act are not 281
subject to the referendum because they are or they relate to an 282
appropriation for current expenses within the meaning of Ohio 283
Constitution, Article II, Section 1d, and section 1.471 of the 284
Revised Code, and therefore those sections take effect immediately 285
when this act becomes law.286