HB 165

1
A bill to be entitled
2An act relating to agency inspectors general; amending s.
320.055, F.S.; providing definitions; requiring agency
4inspectors general to comply with certain principles and
5standards; requiring an inspector general to submit
6findings of an audit to specified persons or entities;
7requiring agencies under the Governor to notify the Chief
8Inspector General of inspector general appointments and
9terminations; prohibiting agency staff from preventing or
10prohibiting the inspector general or director of auditing
11from initiating, carrying out, or completing any audit or
12investigation; requiring audits to be conducted in
13accordance with the current International Standards for
14the Professional Practice of Internal Auditing; requiring
15the inspector general of each state agency to report
16certain written complaints to the Chief Inspector General;
17requiring the Chief Inspector General to fulfill certain
18duties and responsibilities; requiring a state agency to
19reimburse legal fees and costs that are incurred by
20certain individuals and entities under certain conditions;
21providing an effective date.
22
23Be It Enacted by the Legislature of the State of Florida:
24
25     Section 1.  Section 20.055, Florida Statutes, is amended to
26read:
27     20.055  Agency inspectors general.--
28     (1)  For the purposes of this section:
29     (a)  "State agency" means each department created pursuant
30to this chapter, and also includes the Executive Office of the
31Governor, the Department of Military Affairs, the Fish and
32Wildlife Conservation Commission, the Office of Insurance
33Regulation of the Financial Services Commission, the Office of
34Financial Regulation of the Financial Services Commission, the
35Public Service Commission, the Board of Governors of the State
36University System, and the state courts system.
37     (b)  "Agency head" means a public official such as the
38Governor, a Cabinet officer, a secretary as defined in s.
3920.03(5), or an executive director as defined in s. 20.03(6). It
40also includes the chair of the Public Service Commission, the
41Director of the Office of Insurance Regulation of the Financial
42Services Commission, the Director of the Office of Financial
43Regulation of the Financial Services Commission, and the Chief
44Justice of the State Supreme Court. The term does not include
45the head of, or an officer of, a private entity operating as a
46for-profit or not-for-profit entity.
47     (c)  "Individuals substantially affected" means natural
48persons who have established a real and sufficiently immediate
49injury in fact due to the findings, conclusions, or
50recommendations of a final report of a state agency inspector
51general, who are the subject of the audit or investigation, and
52who do not have or are not currently afforded an existing right
53to an independent review process. Employees of the state,
54including career service, probationary, other personal service,
55Selected Exempt Service, and Senior Management Service
56employees, are not covered by this definition. This definition
57also does not cover former employees of the state if the final
58report of the state agency inspector general relates to matters
59arising during a former employee's term of state employment.
60     (d)  "Entities contracting with the state" means for-profit
61and not-for-profit organizations or businesses having a legal
62existence, such as corporations or partnerships, as opposed to
63natural persons, that have entered into a relationship with a
64state agency as defined in paragraph (a) to provide for
65consideration certain goods or services to the state agency or
66on behalf of the state agency. The relationship may be evidenced
67by payment by warrant or purchasing card, contract, purchase
68order, provider agreement, or other such mutually agreed upon
69relationship.
70     (e)  "Additional material relevant" means evidence
71submitted to the state agency inspector general prior to release
72of the final report that likely would have affected the
73investigative findings. Such evidence is not merely cumulative
74of evidence considered by the state agency inspector general
75and, to be relevant, must tend to prove or disprove the matters
76at issue in the investigation. Newly discovered evidence may be
77considered if it was discovered subsequent to the agency
78inspector general's final report and the agency inspector
79general has affirmatively refused to reopen the investigation
80despite such evidence. Such evidence shall not have been
81withheld from the state agency inspector general during the
82original investigation.
83     (f)  "Original investigation" means an official
84investigative review by a state agency inspector general of
85information relative to suspected violations of any law, rule,
86or agency policy resulting in written findings.
87     (2)  The Office of Inspector General is hereby established
88in each state agency to provide a central point for coordination
89of and responsibility for activities that promote
90accountability, integrity, and efficiency in government. It
91shall be the duty and responsibility of each inspector general,
92with respect to the state agency in which the office is
93established, to:
94     (a)  Advise in the development of performance measures,
95standards, and procedures for the evaluation of state agency
96programs.
97     (b)  Assess the reliability and validity of the information
98provided by the state agency on performance measures and
99standards, and make recommendations for improvement, if
100necessary, prior to submission of those measures and standards
101to the Executive Office of the Governor pursuant to s.
102216.0166(1).
103     (c)  Review the actions taken by the state agency to
104improve program performance and meet program standards and make
105recommendations for improvement, if necessary.
106     (d)  Provide direction for, supervise, and coordinate
107audits, investigations, and management reviews relating to the
108programs and operations of the state agency, except that when
109the inspector general does not possess the qualifications
110specified in subsection (4), the director of auditing shall
111conduct such audits.
112     (e)  Conduct, supervise, or coordinate other activities
113carried out or financed by that state agency for the purpose of
114promoting economy and efficiency in the administration of, or
115preventing and detecting fraud and abuse in, its programs and
116operations.
117     (f)  Keep such agency head informed concerning fraud,
118abuses, and deficiencies relating to programs and operations
119administered or financed by the state agency, recommend
120corrective action concerning fraud, abuses, and deficiencies,
121and report on the progress made in implementing corrective
122action.
123     (g)  Ensure effective coordination and cooperation between
124the Auditor General, federal auditors, and other governmental
125bodies with a view toward avoiding duplication.
126     (h)  Review, as appropriate, rules relating to the programs
127and operations of such state agency and make recommendations
128concerning their impact.
129     (i)  Ensure that an appropriate balance is maintained
130between audit, investigative, and other accountability
131activities.
132     (j)  Comply with the General Principles and Standards for
133Offices of Inspector General as published and revised by the
134Association of Inspectors General.
135     (3)(a)  The inspector general shall be appointed by the
136agency head. For agencies under the direction of the Governor,
137the appointment shall be made after notifying the Governor and
138the Chief Inspector General in writing, at least 7 days prior to
139an offer of employment, of the agency head's intention to hire
140the inspector general.
141     (b)  Each inspector general shall report to and be under
142the general supervision of the agency head and shall not be
143subject to supervision by any other employee of the state
144agency. The inspector general shall be appointed without regard
145to political affiliation.
146     (c)  An inspector general may be removed from office by the
147agency head. For agencies under the direction of the Governor,
148the agency head shall notify the Governor and the Chief
149Inspector General, in writing, of the intention to terminate the
150inspector general at least 7 days prior to the removal. For
151state agencies under the direction of the Governor and Cabinet,
152the agency head shall notify the Governor and Cabinet in writing
153of the intention to terminate the inspector general at least 7
154days prior to the removal.
155     (d)  The agency head or agency staff shall not prevent or
156prohibit the inspector general or director of auditing from
157initiating, carrying out, or completing any audit or
158investigation.
159     (4)  To ensure that state agency audits are performed in
160accordance with applicable auditing standards, the inspector
161general or the director of auditing within the inspector
162general's office shall possess the following qualifications:
163     (a)  A bachelor's degree from an accredited college or
164university with a major in accounting, or with a major in
165business which includes five courses in accounting, and 5 years
166of experience as an internal auditor or independent postauditor,
167electronic data processing auditor, accountant, or any
168combination thereof. The experience shall at a minimum consist
169of audits of units of government or private business
170enterprises, operating for profit or not for profit; or
171     (b)  A master's degree in accounting, business
172administration, or public administration from an accredited
173college or university and 4 years of experience as required in
174paragraph (a); or
175     (c)  A certified public accountant license issued pursuant
176to chapter 473 or a certified internal audit certificate issued
177by the Institute of Internal Auditors or earned by examination,
178and 4 years of experience as required in paragraph (a).
179     (5)  In carrying out the auditing duties and
180responsibilities of this act, each inspector general shall
181review and evaluate internal controls necessary to ensure the
182fiscal accountability of the state agency. The inspector general
183shall conduct financial, compliance, electronic data processing,
184and performance audits of the agency and prepare audit reports
185of his or her findings. The scope and assignment of the audits
186shall be determined by the inspector general; however, the
187agency head may at any time direct the inspector general to
188perform an audit of a special program, function, or
189organizational unit. The performance of the audit shall be under
190the direction of the inspector general, except that if the
191inspector general does not possess the qualifications specified
192in subsection (4), the director of auditing shall perform the
193functions listed in this subsection.
194     (a)  Such audits shall be conducted in accordance with the
195current International Standards for the Professional Practice of
196Internal Auditing as and subsequent Internal Auditing Standards
197or Statements on Internal Auditing Standards published by the
198Institute of Internal Auditors, Inc., or, where appropriate, in
199accordance with generally accepted governmental auditing
200standards. All audit reports issued by internal audit staff
201shall include a statement that the audit was conducted pursuant
202to the appropriate standards.
203     (b)  Audit workpapers and reports shall be public records
204to the extent that they do not include information which has
205been made confidential and exempt from the provisions of s.
206119.07(1) pursuant to law. However, when the inspector general
207or a member of the staff receives from an individual a complaint
208or information that falls within the definition provided in s.
209112.3187(5), the name or identity of the individual shall not be
210disclosed to anyone else without the written consent of the
211individual, unless the inspector general determines that such
212disclosure is unavoidable during the course of the audit or
213investigation.
214     (c)  The inspector general and the staff shall have access
215to any records, data, and other information of the state agency
216he or she deems necessary to carry out his or her duties. The
217inspector general is also authorized to request such information
218or assistance as may be necessary from the state agency or from
219any federal, state, or local government entity.
220     (d)  At the conclusion of each audit, the inspector general
221shall submit preliminary findings and recommendations to the
222person responsible for supervision of the program function or
223operational unit who shall respond to any adverse findings
224within 20 working days after receipt of the tentative findings.
225Such response and the inspector general's rebuttal to the
226response shall be included in the final audit report.
227     (e)  At the conclusion of an audit in which the results of
228the audit are published and disbursed and the subject of the
229audit is a specific, singular entity contracting with the state,
230the inspector general shall submit findings to the subject who
231shall respond to any adverse findings within 20 working days.
232Such response and the inspector general's rebuttal to the
233response, if any, shall be included in the final audit report.
234     (f)(e)  The inspector general shall submit the final report
235to the agency head and to the Auditor General.
236     (g)(f)  The Auditor General, in connection with the
237independent postaudit of the same agency pursuant to s. 11.45,
238shall give appropriate consideration to internal audit reports
239and the resolution of findings therein. The Legislative Auditing
240Committee may inquire into the reasons or justifications for
241failure of the agency head to correct the deficiencies reported
242in internal audits that are also reported by the Auditor General
243and shall take appropriate action.
244     (h)(g)  The inspector general shall monitor the
245implementation of the state agency's response to any report on
246the state agency issued by the Auditor General or by the Office
247of Program Policy Analysis and Government Accountability. No
248later than 6 months after the Auditor General or the Office of
249Program Policy Analysis and Government Accountability publishes
250a report on the state agency, the inspector general shall
251provide a written response to the agency head on the status of
252corrective actions taken. The Inspector General shall file a
253copy of such response with the Legislative Auditing Committee.
254     (i)(h)  The inspector general shall develop long-term and
255annual audit plans based on the findings of periodic risk
256assessments. The plan, where appropriate, should include
257postaudit samplings of payments and accounts. The plan shall
258show the individual audits to be conducted during each year and
259related resources to be devoted to the respective audits. The
260Chief Financial Officer, to assist in fulfilling the
261responsibilities for examining, auditing, and settling accounts,
262claims, and demands pursuant to s. 17.03(1), and examining,
263auditing, adjusting, and settling accounts pursuant to s. 17.04,
264may utilize audits performed by the inspectors general and
265internal auditors. For state agencies under the Governor, the
266audit plans shall be submitted to the Governor's Chief Inspector
267General. The plan shall be submitted to the agency head for
268approval. A copy of the approved plan shall be submitted to the
269Auditor General.
270     (6)  In carrying out the investigative duties and
271responsibilities specified in this section, each inspector
272general shall initiate, conduct, supervise, and coordinate
273investigations designed to detect, deter, prevent, and eradicate
274fraud, waste, mismanagement, misconduct, and other abuses in
275state government. For these purposes, each inspector general
276state agency shall:
277     (a)  Receive complaints and coordinate all activities of
278the agency as required by the Whistle-blower's Act pursuant to
279ss. 112.3187-112.31895.
280     (b)  Receive and consider the complaints which do not meet
281the criteria for an investigation under the Whistle-blower's Act
282and conduct, supervise, or coordinate such inquiries,
283investigations, or reviews as the inspector general deems
284appropriate.
285     (c)  Report expeditiously to the Department of Law
286Enforcement or other law enforcement agencies, as appropriate,
287whenever the inspector general has reasonable grounds to believe
288there has been a violation of criminal law.
289     (d)  Conduct investigations and other inquiries free of
290actual or perceived impairment to the independence of the
291inspector general or the inspector general's office. This shall
292include freedom from any interference with investigations and
293timely access to records and other sources of information.
294     (e)  At the conclusion of each investigation in which the
295subject of the investigation is a specific entity contracting
296with the state or an individual substantially affected by the
297findings, conclusions, and recommendations, the inspector
298general shall, consistent with chapter 119, submit findings to
299the subject who shall respond to any adverse findings within 10
300days. Such response and the inspector general's rebuttal to the
301response, if any, shall be included in the final investigative
302report.
303     (f)(e)  Submit in a timely fashion final reports on
304investigations conducted by the inspector general to the agency
305head, except for whistle-blower's investigations, which shall be
306conducted and reported pursuant to s. 112.3189.
307     (7)  Each inspector general shall, not later than September
30830 of each year, prepare an annual report summarizing the
309activities of the office during the immediately preceding state
310fiscal year. The final report shall be furnished to the agency
311head. Such report shall include, but need not be limited to:
312     (a)  A description of activities relating to the
313development, assessment, and validation of performance measures.
314     (b)  A description of significant abuses and deficiencies
315relating to the administration of programs and operations of the
316agency disclosed by investigations, audits, reviews, or other
317activities during the reporting period.
318     (c)  A description of the recommendations for corrective
319action made by the inspector general during the reporting period
320with respect to significant problems, abuses, or deficiencies
321identified.
322     (d)  The identification of each significant recommendation
323described in previous annual reports on which corrective action
324has not been completed.
325     (e)  A summary of each audit and investigation completed
326during the reporting period.
327     (8)  The inspector general in each agency under the
328Governor's jurisdiction shall timely report to the Chief
329Inspector General all written complaints received concerning the
330duties and responsibilities outlined in this section or any
331misconduct alleged related to the office of the inspector
332general or its employees.
333     (9)  For agencies under the Governor's jurisdiction, the
334Chief Inspector General in the Executive Office of the Governor,
335as defined in s. 14.32, shall:
336     (a)  Receive and consider all complaints against offices of
337inspectors general or their employees and conduct, supervise, or
338coordinate such inquiries, investigations, or reviews as the
339Chief Inspector General considers appropriate.
340     (b)  Develop policies and procedures for reviewing
341complaints against a state agency office of inspector general or
342its employees, including, but not limited to, complaints
343regarding misconduct, failure to properly follow professional
344standards, or any other violation of agency policy, rule, or law
345which is consistent with the definitions in this section and s.
34614.32. The policies and procedures must identify exemptions from
347this process, including, but not limited to, whistle-blower
348investigations conducted in accordance with ss. 112.3187-
349112.31895. These policies and procedures must afford entities
350contracting with state agencies, and individuals substantially
351affected by the findings, conclusions, and recommendations, a
352meaningful opportunity to express their complaint and present
353additional material relevant to the original investigation.
354Policies and procedures specified herein are not subject to
355rulemaking under chapter 120.
356     (c)  Distribute the report of any investigation conducted
357or supervised by the Chief Inspector General to the office of
358the inspector general of the state agency, the agency head of
359the subject's employing agency, and the person that filed the
360complaint against the office of inspector general of the state
361agency or its employees.
362     (10)  If a state agency inspector general's reported
363adverse findings regarding entities contracting with state
364agencies and individuals substantially affected by the findings,
365conclusions, and recommendations are determined to be not
366substantially justified after an informal evidentiary hearing by
367a hearing master selected by agreement of the state agency and
368the Chief Inspector General, the agency shall reimburse
369reasonable legal fees and costs not to exceed $50,000
370specifically associated with filing and pursuing the complaints,
371which are incurred by the entities contracting with state
372agencies and individuals substantially affected by the findings,
373conclusions, and recommendations.
374     (11)(8)  Each agency inspector general shall, to the extent
375both necessary and practicable, include on his or her staff
376individuals with electronic data processing auditing experience.
377     Section 2.  This act shall take effect July 1, 2008.


CODING: Words stricken are deletions; words underlined are additions.