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H. B. No. 201 As IntroducedAs Introduced
129th General Assembly | Regular Session | 2011-2012 |
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Representatives Rosenberger, Beck
Cosponsors:
Representatives Adams, J., Boose, Maag, Martin, Thompson
A BILL
To amend sections 117.13 and 131.02 and to enact
sections 117.60 to 117.70 of the Revised Code to
require the Auditor of State to perform recovery
audits for overpayments made to vendors by certain
state agencies and to permit the Auditor to
contract with independent audit consultants to
conduct those audits.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 117.13 and 131.02 be amended and
sections 117.60, 117.61, 117.62, 117.63, 117.64, 117.65, 117.66,
117.67, 117.68, 117.69, and 117.70 of the Revised Code be enacted
to read as follows:
Sec. 117.13. (A) The Except as otherwise provided for
recovery audits under sections 117.63 to 117.69 of the Revised
Code, the costs of audits of state agencies shall be recovered by
the auditor of state in the following manner:
(1) The costs of all audits of state agencies shall be paid
to the auditor of state on statements rendered by the auditor of
state. Money so received by the auditor of state shall be paid
into the state treasury to the credit of the public audit expense
fund--intrastate, which is hereby created, and shall be used to
pay costs related to such audits. The costs of audits of a state
agency shall be charged to the state agency being audited. The
costs of any assistant auditor, employee, or expert employed
pursuant to section 117.09 of the Revised Code called upon to
testify in any legal proceedings in regard to any audit, or called
upon to review or discuss any matter related to any audit, may be
charged to the state agency to which the audit relates.
(2) The auditor of state shall establish by rule rates to be
charged to state agencies for recovering the costs of audits of
state agencies.
(B) As used in this division, "government auditing standards"
means the government auditing standards published by the
comptroller general of the United States general accounting
office.
(1) Except as provided in divisions (B)(2) and (3) of this
section, any costs of an audit of a private institution,
association, board, or corporation receiving public money for its
use shall be charged to the public office providing the public
money in the same manner as costs of an audit of the public
office.
(2) If an audit of a private child placing agency or private
noncustodial agency receiving public money from a public children
services agency for providing child welfare or child protection
services sets forth that money has been illegally expended,
converted, misappropriated, or is unaccounted for, the costs of
the audit shall be charged to the agency being audited in the same
manner as costs of an audit of a public office, unless the
findings are inconsequential, as defined by government auditing
standards.
(3) If such an audit does not set forth that money has been
illegally expended, converted, misappropriated, or is unaccounted
for or sets forth findings that are inconsequential, as defined by
government auditing standards, the costs of the audit shall be
charged as follows:
(a) One-third of the costs to the agency being audited;
(b) One-third of the costs to the public children services
agency that provided the public money to the agency being audited;
(c) One-third of the costs to the department of job and
family services.
(C) The costs of audits of local public offices shall be
recovered by the auditor of state in the following manner:
(1) The total amount of compensation paid assistant auditors
of state, their expenses, the cost of employees assigned to assist
the assistant auditors of state, the cost of experts employed
pursuant to section 117.09 of the Revised Code, and the cost of
typing, reviewing, and copying reports shall be borne by the
public office to which such assistant auditors of state are so
assigned, except that annual vacation and sick leave of assistant
auditors of state, employees, and typists shall be financed from
the general revenue fund. The necessary traveling and hotel
expenses of the deputy inspectors and supervisors of public
offices shall be paid from the state treasury. Assistant auditors
of state shall be compensated by the taxing district or other
public office audited for activities undertaken pursuant to
division (B) of section 117.18 and section 117.24 of the Revised
Code. The costs of any assistant auditor, employee, or expert
employed pursuant to section 117.09 of the Revised Code called
upon to testify in any legal proceedings in regard to any audit,
or called upon to review or discuss any matter related to any
audit, may be charged to the public office to which the audit
relates.
(2) The auditor of state shall certify the amount of such
compensation, expenses, cost of experts, reviewing, copying, and
typing to the fiscal officer of the local public office audited.
The fiscal officer of the local public office shall forthwith draw
a warrant upon the general fund or other appropriate funds of the
local public office to the order of the auditor of state;
provided, that the auditor of state is authorized to negotiate
with any local public office and, upon agreement between the
auditor of state and the local public office, may adopt a schedule
for payment of the amount due under this section. Money so
received by the auditor of state shall be paid into the state
treasury to the credit of the public audit expense fund--local
government, which is hereby created, and shall be used to pay the
compensation, expense, cost of experts and employees, reviewing,
copying, and typing of reports.
(3) At the conclusion of each audit, or analysis and report
made pursuant to section 117.24 of the Revised Code, the auditor
of state shall furnish the fiscal officer of the local public
office audited a statement showing the total cost of the audit, or
of the audit and the analysis and report, and the percentage of
the total cost chargeable to each fund audited. The fiscal officer
may distribute such total cost to each fund audited in accordance
with its percentage of the total cost.
(4) The auditor of state shall provide each local public
office a statement or certification of the amount due from the
public office for services performed by the auditor of state under
this or any other section of the Revised Code, as well as the date
upon which payment is due to the auditor of state. Any local
public office that does not pay the amount due to the auditor of
state by that date may be assessed by the auditor of state for
interest from the date upon which the payment is due at the rate
per annum prescribed by section 5703.47 of the Revised Code. All
interest charges assessed by the auditor of state may be collected
in the same manner as audit costs pursuant to division (D) of this
section.
(D) If the auditor of state fails to receive payment for any
amount due, including, but not limited to, fines, fees, and costs,
from a public office for services performed under this or any
other section of the Revised Code, the auditor of state may seek
payment through the office of budget and management. (Amounts due
include any amount due to an independent public accountant with
whom the auditor has contracted to perform services, all costs and
fees associated with participation in the uniform accounting
network, and all costs associated with the auditor's provision of
local government services.) Upon certification by the auditor of
state to the director of budget and management of any such amount
due, the director shall withhold from the public office any amount
available, up to and including the amount certified as due, from
any funds under the director's control that belong to or are
lawfully payable or due to the public office. The director shall
promptly pay the amount withheld to the auditor of state. If the
director determines that no funds due and payable to the public
office are available or that insufficient amounts of such funds
are available to cover the amount due, the director shall withhold
and pay to the auditor of state the amounts available and, in the
case of a local public office, certify the remaining amount to the
county auditor of the county in which the local public office is
located. The county auditor shall withhold from the local public
office any amount available, up to and including the amount
certified as due, from any funds under the county auditor's
control and belonging to or lawfully payable or due to the local
public office. The county auditor shall promptly pay any such
amount withheld to the auditor of state.
Sec. 117.60. As used in sections 117.60 to 117.70 of the
Revised Code, "overpayment" means a duplicate payment made by a
state agency to a vendor for a single invoice or any payment made
to a vendor that meets any of the following:
(A) It represents an amount above the required payment minus
any available discounts applied to result in a deduction in the
required payment.
(B) It includes a late payment penalty that was improperly
applied.
(C) It was collected to cover shipping costs that were
incorrectly computed or incorrectly included in an invoice.
(D) It was paid for state sales tax.
(E) It was paid for a good or service that the vendor did not
provide.
(F) It was paid as a result of an invoice error.
(G) It was paid as a result of a pricing error.
(H) Its amount fails to reflect the appropriate discounts,
rebates, or other allowances.
(I) It fails to comply with the purchasing agreement.
Sec. 117.61. (A) Subject to division (B) of this section, the
auditor of state shall, once a biennium, perform a recovery audit
for overpayments made to vendors by each state agency that, during
the most recently concluded biennium, had total expenditures that
exceeded twenty-five million dollars or that, during the current
biennium, has appropriations in excess of twenty-five million
dollars.
(B) The auditor of state may exempt from a recovery audit any
state agency that meets the criteria established under division
(B) of section 117.70 of the Revised Code.
(C) The recovery audits required by this section are
supplemental to public office audits required under section 117.11
of the Revised Code.
Sec. 117.62. The auditor of state may contract with one or
more overpayment-recovery-audit consultants on behalf of a state
agency to conduct the recovery audits required under section
117.61 of the Revised Code. The consultants shall have
recovery-audit expertise. Recovery audits conducted by such
consultants are subject to sections 117.63 to 117.69 of the
Revised Code.
Sec. 117.63. A contract with an overpayment-recovery-audit
consultant executed under section 117.62 of the Revised Code shall
specify the scope of the recovery audit. To allow for the
completion of any existing internal auditing procedures of the
state agency, the contract shall not permit an audit to be
performed on payments during the one-hundred-eighty-day period
after the date on which the payments were made.
Sec. 117.64. An overpayment-recovery-audit consultant shall
conduct a recovery audit required under section 117.61 of the
Revised Code pursuant to the standards, procedures, and guidelines
established by the auditor of state under section 117.70 of the
Revised Code. Each state agency subject to a recovery audit shall
provide the consultant with all information necessary for the
audit.
Sec. 117.65. The auditor of state or a state agency subject
to a recovery audit required under section 117.61 of the Revised
Code may provide the overpayment-recovery-audit consultant and the
consultant's employees with any confidential information in the
auditor's or agency's custody that is necessary for the audit's
performance or the recovery of an overpayment, to the extent that
the auditor or agency is not prohibited from sharing the
information under an agreement with another state or the federal
government. The consultant, and each employee or agent of the
consultant, is subject to all prohibitions against the disclosure
of confidential information obtained from the state in connection
with the contract that applies to the auditor, the agency, or an
employee of the auditor or the agency. A consultant, or an
employee or agent of the consultant, who discloses any such
confidential information is subject to the same sanctions and
penalties that would apply to the auditor, the agency, or an
employee of the auditor or the agency.
Sec. 117.66. A contract for a recovery audit executed under
section 117.62 of the Revised Code may provide for reasonable
compensation for services provided under the contract, including
compensation determined by the application of a percentage,
specified in the contract, of the total amount recovered because
of the overpayment-recovery-audit consultant's audit activities or
recommendations, as a fee for services. The state agency subject
to a recovery audit shall pay, from recovered money, the
consultant conducting the audit and responsible for identifying
the overpayment.
Sec. 117.67. Any portion of an overpayment recovered that is
not paid to the overpayment-recovery-audit consultant under
section 117.66 of the Revised Code shall be credited to the fund
or account from which the payment originated. A state agency shall
expend or return to the federal government any federal money
recovered through a recovery audit. The state agency shall expend
or return the federal money in accordance with the rules of the
federal program through which the agency received the federal
money.
Sec. 117.68. An overpayment-recovery-audit consultant shall
submit a written audit report for each recovery audit the
consultant conducts to the state agency subject to the audit and
the auditor of state. The auditor, within seven days after receipt
of these reports, shall provide copies of them to the governor,
the speaker of the house of representatives, and the president of
the senate.
The auditor shall notify the attorney general in writing of
every recovery-audit report received that sets forth that an
overpayment of public money exists and has not been collected, and
of the date that the auditor received the report.
Not later than the first day of January of each even-numbered
year, the auditor shall issue a report to the general assembly
summarizing the contents of all written recovery-audit reports
received under this section during the state biennium ending the
thirtieth day of June of the previous year.
Sec. 117.69. When a recovery-audit report sets forth that an
overpayment of public money exists and has not been collected, the
overpayment-recovery-audit consultant may, during the
forty-five-day period following the issuance of the report,
continue attempting to recover the overpayment. The head officer
of the state agency receiving the report shall proceed to collect
the amount in accordance with section 131.02 of the Revised Code.
For purposes of division (A) of section 131.02 of the Revised
Code, the amount is to be considered due when the report is
received by the officer.
Sec. 117.70. The auditor of state shall adopt rules that do
both of the following:
(A) Establish, for the conduct of recovery audits, standards,
procedures, and guidelines that are designed to detect and recover
overpayments made by a state agency to a vendor and to recommend
improved state-agency-accounting operations;
(B) Establish criteria for determining whether a state agency
may be exempted from a recovery audit. The criteria shall include
consideration of the likely costs and benefits of performing the
audit.
Sec. 131.02. (A) Except as otherwise provided in section
4123.37 and division (K) of section 4123.511 of the Revised Code,
whenever any amount is payable to the state, the officer,
employee, or agent responsible for administering the law under
which the amount is payable shall immediately proceed to collect
the amount or cause the amount to be collected and shall pay the
amount into the state treasury or into the appropriate custodial
fund in the manner set forth pursuant to section 113.08 of the
Revised Code. Except as otherwise provided in this division, if
the amount is not paid within forty-five days after payment is
due, the officer, employee, or agent shall certify the amount due
to the attorney general, in the form and manner prescribed by the
attorney general, and notify the director of budget and management
thereof. In the case of an amount payable by a student enrolled in
a state institution of higher education, the amount shall be
certified within the later of forty-five days after the amount is
due or the tenth day after the beginning of the next academic
semester, quarter, or other session following the session for
which the payment is payable. The attorney general may assess the
collection cost to the amount certified in such manner and amount
as prescribed by the attorney general.
For the purposes of this section, the attorney general and
the officer, employee, or agent responsible for administering the
law under which the amount is payable shall agree on the time a
payment is due, and that agreed upon time shall be one of the
following times:
(1) If a law, including an administrative rule, of this state
prescribes the time a payment is required to be made or reported,
when the payment is required by that law to be paid or reported.
(2) If the payment is for services rendered, when the
rendering of the services is completed.
(3) If the payment is reimbursement for a loss, when the loss
is incurred.
(4) In the case of a fine or penalty for which a law or
administrative rule does not prescribe a time for payment, when
the fine or penalty is first assessed.
(5) If the payment arises from a legal finding, judgment, or
adjudication order, when the finding, judgment, or order is
rendered or issued.
(6) If the payment arises from an overpayment of money by the
state to another person, when the overpayment is discovered.
(7) The date on which the amount for which an individual is
personally liable under section 5735.35, section 5739.33, or
division (G) of section 5747.07 of the Revised Code is determined.
(8) Upon proof of claim being filed in a bankruptcy case.
(9) Any other appropriate time determined by the attorney
general and the officer, employee, or agent responsible for
administering the law under which the amount is payable on the
basis of statutory requirements or ordinary business processes of
the state agency to which the payment is owed.
(B)(1) The attorney general shall give immediate notice by
mail or otherwise to the party indebted of the nature and amount
of the indebtedness.
(2) If the amount payable to this state arises from a tax
levied under Chapter 5733., 5739., 5741., 5747., or 5751. of the
Revised Code, the notice also shall specify all of the following:
(a) The assessment or case number;
(b) The tax pursuant to which the assessment is made;
(c) The reason for the liability, including, if applicable,
that a penalty or interest is due;
(d) An explanation of how and when interest will be added to
the amount assessed;
(e) That the attorney general and tax commissioner, acting
together, have the authority, but are not required, to compromise
the claim and accept payment over a reasonable time, if such
actions are in the best interest of the state.
(C) The attorney general shall collect the claim or secure a
judgment and issue an execution for its collection.
(D) Each claim shall bear interest, from the day on which the
claim became due, at the rate per annum required by section
5703.47 of the Revised Code.
(E) The attorney general and the chief officer of the agency
reporting a claim, acting together, may do any of the following if
such action is in the best interests of the state:
(1) Compromise the claim;
(2) Extend for a reasonable period the time for payment of
the claim by agreeing to accept monthly or other periodic
payments. The agreement may require security for payment of the
claim.
(3) Add fees to recover the cost of processing checks or
other draft instruments returned for insufficient funds and the
cost of providing electronic payment options.
(F)(1) Except as provided in division (F)(2) of this section,
if the attorney general finds, after investigation, that any claim
due and owing to the state is uncollectible, the attorney general,
with the consent of the chief officer of the agency reporting the
claim, may do the following:
(a) Sell, convey, or otherwise transfer the claim to one or
more private entities for collection;
(b) Cancel the claim or cause it to be canceled.
(2) The attorney general shall cancel or cause to be canceled
an unsatisfied claim on the date that is forty years after the
date the claim is certified.
(3) No initial action shall be commenced to collect any tax
payable to the state that is administered by the tax commissioner,
whether or not such tax is subject to division (B) of this
section, or any penalty, interest, or additional charge on such
tax, after the expiration of the period ending on the later of the
dates specified in divisions (F)(3)(a) and (b) of this section,
provided that such period shall be extended by the period of any
stay to such collection or by any other period to which the
parties mutually agree. If the initial action in aid of execution
is commenced before the later of the dates specified in divisions
(F)(3)(a) and (b) of this section, any and all subsequent actions
may be pursued in aid of execution of judgment for as long as the
debt exists.
(a) Seven years after the assessment of the tax, penalty,
interest, or additional charge is issued.
(b) Four years after the assessment of the tax, penalty,
interest, or additional charge becomes final. For the purposes of
division (F)(3)(b) of this section, the assessment becomes final
at the latest of the following: upon expiration of the period to
petition for reassessment, or if applicable, to appeal a final
determination of the commissioner or decision of the board of tax
appeals or a court, or, if applicable, upon decision of the United
States supreme court.
For the purposes of division (F)(3) of this section, an
initial action to collect a tax debt is commenced at the time when
any action, including any action in aid of execution on a
judgment, commences after a certified copy of the tax
commissioner's entry making an assessment final has been filed in
the office of the clerk of court of common pleas in the county in
which the taxpayer resides or has its principal place of business
in this state, or in the office of the clerk of court of common
pleas of Franklin county, as provided in section 5739.13, 5741.14,
5747.13, or 5751.09 of the Revised Code or in any other applicable
law requiring such a filing. If an assessment has not been issued
and there is no time limitation on the issuance of an assessment
under applicable law, an action to collect a tax debt commences
when the action is filed in the courts of this state to collect
the liability.
(4) If information contained in a claim that is sold,
conveyed, or transferred to a private entity pursuant to this
section is confidential pursuant to federal law or a section of
the Revised Code that implements a federal law governing
confidentiality, such information remains subject to that law
during and following the sale, conveyance, or transfer.
(G) Except as provided in section 117.69 of the Revised Code,
this section does not apply to overpayments discovered and
collected by an overpayment-recovery-audit consultant under
contract with the auditor of state pursuant to section 117.62 of
the Revised Code.
Section 2. That existing sections 117.13 and 131.02 of the
Revised Code are hereby repealed.
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