Florida Senate - 2019                             CS for SB 7014
       
       
        
       By the Committees on Community Affairs; and Governmental
       Oversight and Accountability
       
       
       
       
       578-02725-19                                          20197014c1
    1                        A bill to be entitled                      
    2         An act relating to government accountability; amending
    3         s. 11.40, F.S.; specifying that the Governor, the
    4         Commissioner of Education, or the designee of the
    5         Governor or of the commissioner, may notify the
    6         Legislative Auditing Committee of an entity’s failure
    7         to comply with certain auditing and financial
    8         reporting requirements; amending s. 11.45, F.S.;
    9         revising definitions and defining the terms “abuse,”
   10         “fraud,” and “waste”; excluding water management
   11         districts from certain audit requirements; removing a
   12         cross-reference; authorizing the Auditor General to
   13         conduct audits of tourist development councils and
   14         county tourism promotion agencies; revising reporting
   15         requirements applicable to the Auditor General;
   16         amending s. 11.47, F.S.; specifying that any person
   17         who willfully fails or refuses to provide access to an
   18         employee, officer, or agent of an entity under audit
   19         is subject to a penalty; amending s. 28.35, F.S.;
   20         revising reporting requirements applicable to the
   21         Florida Clerks of Court Operations Corporation;
   22         amending s. 43.16, F.S.; revising the responsibilities
   23         of the Justice Administrative Commission, each state
   24         attorney, each public defender, the criminal conflict
   25         and civil regional counsel, the capital collateral
   26         regional counsel, and the Guardian Ad Litem Program,
   27         to include the establishment and maintenance of
   28         certain internal controls; amending ss. 129.03,
   29         129.06, and 166.241, F.S.; requiring counties and
   30         municipalities to maintain certain budget documents on
   31         the entities’ websites for a specified period;
   32         amending s. 215.86, F.S.; revising the purposes for
   33         which management systems and internal controls must be
   34         established and maintained by each state agency and
   35         the judicial branch; amending s. 215.97, F.S.;
   36         revising certain audit threshold requirements;
   37         amending s. 215.985, F.S.; revising the requirements
   38         for a monthly financial statement provided by a water
   39         management district; amending s. 218.31, F.S.:
   40         revising the definition of the term “financial audit”;
   41         amending s. 218.32, F.S.; authorizing the Department
   42         of Financial Services to request additional
   43         information from a local governmental entity in
   44         preparation of an annual report; requiring a local
   45         governmental entity to respond to such requests within
   46         a specified timeframe; requiring the department to
   47         notify the Legislative Auditing Committee of
   48         noncompliance; amending s. 218.33, F.S.; requiring
   49         local governmental entities to establish and maintain
   50         internal controls to achieve specified purposes;
   51         amending s. 218.391, F.S.; revising membership, and
   52         restrictions thereof, for an auditor selection
   53         committee; prescribing requirements and procedures for
   54         selecting an auditor if certain conditions exist;
   55         amending s. 373.536, F.S.; deleting obsolete language;
   56         requiring water management districts to maintain
   57         certain budget documents on the districts’ websites
   58         for specified periods; amending s. 1001.42, F.S.;
   59         authorizing additional internal audits as directed by
   60         the district school board; amending s. 1002.33, F.S.;
   61         revising the responsibilities of the governing board
   62         of a charter school to include the establishment and
   63         maintenance of internal controls; amending s. 1002.37,
   64         F.S.; requiring completion of an annual financial
   65         audit of the Florida Virtual School; specifying audit
   66         requirements; requiring an audit report to be
   67         submitted to the board of trustees of the Florida
   68         Virtual School and the Auditor General; deleting
   69         obsolete provisions; amending s. 1010.01, F.S.;
   70         requiring each school district, Florida College System
   71         institution, and state university to establish and
   72         maintain certain internal controls; creating ss.
   73         1012.8551 and 1012.915, F.S.; specifying applicable
   74         standards as to employee background screening and
   75         investigations of Florida College System and State
   76         University System personnel, respectively; amending s.
   77         218.503, F.S.; conforming provisions and cross
   78         references to changes made by the act; providing a
   79         declaration of important state interest; providing an
   80         effective date.
   81          
   82  Be It Enacted by the Legislature of the State of Florida:
   83  
   84         Section 1. Subsection (2) of section 11.40, Florida
   85  Statutes, is amended to read:
   86         11.40 Legislative Auditing Committee.—
   87         (2) Following notification by the Auditor General, the
   88  Department of Financial Services, or the Division of Bond
   89  Finance of the State Board of Administration, the Governor or
   90  his or her designee, or the Commissioner of Education or his or
   91  her designee of the failure of a local governmental entity,
   92  district school board, charter school, or charter technical
   93  career center to comply with the applicable provisions within s.
   94  11.45(5)-(7), s. 218.32(1), s. 218.38, or s. 218.503(3), the
   95  Legislative Auditing Committee may schedule a hearing to
   96  determine if the entity should be subject to further state
   97  action. If the committee determines that the entity should be
   98  subject to further state action, the committee shall:
   99         (a) In the case of a local governmental entity or district
  100  school board, direct the Department of Revenue and the
  101  Department of Financial Services to withhold any funds not
  102  pledged for bond debt service satisfaction which are payable to
  103  such entity until the entity complies with the law. The
  104  committee shall specify the date that such action must shall
  105  begin, and the directive must be received by the Department of
  106  Revenue and the Department of Financial Services 30 days before
  107  the date of the distribution mandated by law. The Department of
  108  Revenue and the Department of Financial Services may implement
  109  the provisions of this paragraph.
  110         (b) In the case of a special district created by:
  111         1. A special act, notify the President of the Senate, the
  112  Speaker of the House of Representatives, the standing committees
  113  of the Senate and the House of Representatives charged with
  114  special district oversight as determined by the presiding
  115  officers of each respective chamber, the legislators who
  116  represent a portion of the geographical jurisdiction of the
  117  special district, and the Department of Economic Opportunity
  118  that the special district has failed to comply with the law.
  119  Upon receipt of notification, the Department of Economic
  120  Opportunity shall proceed pursuant to s. 189.062 or s. 189.067.
  121  If the special district remains in noncompliance after the
  122  process set forth in s. 189.0651, or if a public hearing is not
  123  held, the Legislative Auditing Committee may request the
  124  department to proceed pursuant to s. 189.067(3).
  125         2. A local ordinance, notify the chair or equivalent of the
  126  local general-purpose government pursuant to s. 189.0652 and the
  127  Department of Economic Opportunity that the special district has
  128  failed to comply with the law. Upon receipt of notification, the
  129  department shall proceed pursuant to s. 189.062 or s. 189.067.
  130  If the special district remains in noncompliance after the
  131  process set forth in s. 189.0652, or if a public hearing is not
  132  held, the Legislative Auditing Committee may request the
  133  department to proceed pursuant to s. 189.067(3).
  134         3. Any manner other than a special act or local ordinance,
  135  notify the Department of Economic Opportunity that the special
  136  district has failed to comply with the law. Upon receipt of
  137  notification, the department shall proceed pursuant to s.
  138  189.062 or s. 189.067(3).
  139         (c) In the case of a charter school or charter technical
  140  career center, notify the appropriate sponsoring entity, which
  141  may terminate the charter pursuant to ss. 1002.33 and 1002.34.
  142         Section 2. Subsection (1), paragraph (j) of subsection (2),
  143  paragraph (u) of subsection (3), and paragraph (i) of subsection
  144  (7) of section 11.45, Florida Statutes, are amended, and
  145  paragraph (x) is added to subsection (3) of that section, to
  146  read:
  147         11.45 Definitions; duties; authorities; reports; rules.—
  148         (1) DEFINITIONS.—As used in ss. 11.40-11.51, the term:
  149         (a)“Abuse” means behavior that is deficient or improper
  150  when compared with behavior that a prudent person would consider
  151  a reasonable and necessary operational practice given the facts
  152  and circumstances. The term includes the misuse of authority or
  153  position for personal gain.
  154         (b)(a) “Audit” means a financial audit, operational audit,
  155  or performance audit.
  156         (c)(b) “County agency” means a board of county
  157  commissioners or other legislative and governing body of a
  158  county, however styled, including that of a consolidated or
  159  metropolitan government, a clerk of the circuit court, a
  160  separate or ex officio clerk of the county court, a sheriff, a
  161  property appraiser, a tax collector, a supervisor of elections,
  162  or any other officer in whom any portion of the fiscal duties of
  163  a body or officer expressly stated in this paragraph are the
  164  above are under law separately placed by law.
  165         (d)(c) “Financial audit” means an examination of financial
  166  statements in order to express an opinion on the fairness with
  167  which they are presented in conformity with generally accepted
  168  accounting principles and an examination to determine whether
  169  operations are properly conducted in accordance with legal and
  170  regulatory requirements. Financial audits must be conducted in
  171  accordance with auditing standards generally accepted in the
  172  United States and government auditing standards as adopted by
  173  the Board of Accountancy. When applicable, the scope of
  174  financial audits must shall encompass the additional activities
  175  necessary to establish compliance with the Single Audit Act
  176  Amendments of 1996, 31 U.S.C. ss. 7501-7507, and other
  177  applicable federal law.
  178         (e)“Fraud” means obtaining something of value through
  179  willful misrepresentation, including, but not limited to,
  180  intentional misstatements or intentional omissions of amounts or
  181  disclosures in financial statements to deceive users of
  182  financial statements, theft of an entity’s assets, bribery, or
  183  the use of one’s position for personal enrichment through the
  184  deliberate misuse or misapplication of an organization’s
  185  resources.
  186         (f)(d) “Governmental entity” means a state agency, a county
  187  agency, or any other entity, however styled, that independently
  188  exercises any type of state or local governmental function.
  189         (g)(e) “Local governmental entity” means a county agency,
  190  municipality, tourist development council, county tourism
  191  promotion agency, or special district as defined in s. 189.012.
  192  The term, but does not include any housing authority established
  193  under chapter 421.
  194         (h)(f) “Management letter” means a statement of the
  195  auditor’s comments and recommendations.
  196         (i)(g) “Operational audit” means an audit whose purpose is
  197  to evaluate management’s performance in establishing and
  198  maintaining internal controls, including controls designed to
  199  prevent and detect fraud, waste, and abuse, and in administering
  200  assigned responsibilities in accordance with applicable laws,
  201  administrative rules, contracts, grant agreements, and other
  202  guidelines. Operational audits must be conducted in accordance
  203  with government auditing standards. Such audits examine internal
  204  controls that are designed and placed in operation to promote
  205  and encourage the achievement of management’s control objectives
  206  in the categories of compliance, economic and efficient
  207  operations, reliability of financial records and reports, and
  208  safeguarding of assets, and identify weaknesses in those
  209  internal controls.
  210         (j)(h) “Performance audit” means an examination of a
  211  program, activity, or function of a governmental entity,
  212  conducted in accordance with applicable government auditing
  213  standards or auditing and evaluation standards of other
  214  appropriate authoritative bodies. The term includes an
  215  examination of issues related to:
  216         1. Economy, efficiency, or effectiveness of the program.
  217         2. Structure or design of the program to accomplish its
  218  goals and objectives.
  219         3. Adequacy of the program to meet the needs identified by
  220  the Legislature or governing body.
  221         4. Alternative methods of providing program services or
  222  products.
  223         5. Goals, objectives, and performance measures used by the
  224  agency to monitor and report program accomplishments.
  225         6. The accuracy or adequacy of public documents, reports,
  226  or requests prepared under the program by state agencies.
  227         7. Compliance of the program with appropriate policies,
  228  rules, or laws.
  229         8. Any other issues related to governmental entities as
  230  directed by the Legislative Auditing Committee.
  231         (k)(i) “Political subdivision” means a separate agency or
  232  unit of local government created or established by law and
  233  includes, but is not limited to, the following and the officers
  234  thereof: authority, board, branch, bureau, city, commission,
  235  consolidated government, county, department, district,
  236  institution, metropolitan government, municipality, office,
  237  officer, public corporation, town, or village.
  238         (l)(j) “State agency” means a separate agency or unit of
  239  state government created or established by law and includes, but
  240  is not limited to, the following and the officers thereof:
  241  authority, board, branch, bureau, commission, department,
  242  division, institution, office, officer, or public corporation,
  243  as the case may be, except any such agency or unit within the
  244  legislative branch of state government other than the Florida
  245  Public Service Commission.
  246         (m)“Waste” means the act of using or expending resources
  247  unreasonably, carelessly, extravagantly, or for no useful
  248  purpose.
  249         (2) DUTIES.—The Auditor General shall:
  250         (j) Conduct audits of local governmental entities when
  251  determined to be necessary by the Auditor General, when directed
  252  by the Legislative Auditing Committee, or when otherwise
  253  required by law. No later than 18 months after the release of
  254  the audit report, the Auditor General shall perform such
  255  appropriate followup procedures as he or she deems necessary to
  256  determine the audited entity’s progress in addressing the
  257  findings and recommendations contained within the Auditor
  258  General’s previous report. The Auditor General shall notify each
  259  member of the audited entity’s governing body and the
  260  Legislative Auditing Committee of the results of his or her
  261  determination. For purposes of this paragraph, local
  262  governmental entities do not include water management districts.
  263  
  264  The Auditor General shall perform his or her duties
  265  independently but under the general policies established by the
  266  Legislative Auditing Committee. This subsection does not limit
  267  the Auditor General’s discretionary authority to conduct other
  268  audits or engagements of governmental entities as authorized in
  269  subsection (3).
  270         (3) AUTHORITY FOR AUDITS AND OTHER ENGAGEMENTS.—The Auditor
  271  General may, pursuant to his or her own authority, or at the
  272  direction of the Legislative Auditing Committee, conduct audits
  273  or other engagements as determined appropriate by the Auditor
  274  General of:
  275         (u) The Florida Virtual School pursuant to s. 1002.37.
  276         (x)Tourist development councils and county tourism
  277  promotion agencies.
  278         (7) AUDITOR GENERAL REPORTING REQUIREMENTS.—
  279         (i) The Auditor General shall annually transmit by July 15,
  280  to the President of the Senate, the Speaker of the House of
  281  Representatives, and the Department of Financial Services, a
  282  list of all school districts, charter schools, charter technical
  283  career centers, Florida College System institutions, state
  284  universities, and local governmental entities water management
  285  districts that have failed to comply with the transparency
  286  requirements as identified in the audit reports reviewed
  287  pursuant to paragraph (b) and those conducted pursuant to
  288  subsection (2).
  289         Section 3. Subsection (3) of section 11.47, Florida
  290  Statutes, is amended to read:
  291         11.47 Penalties; failure to make a proper audit or
  292  examination; making a false report; failure to produce documents
  293  or information.—
  294         (3) Any person who willfully fails or refuses to provide
  295  access to an employee, officer, or agent of an entity subject to
  296  an audit or to furnish or produce any book, record, paper,
  297  document, data, or sufficient information necessary to a proper
  298  audit or examination which the Auditor General or the Office of
  299  Program Policy Analysis and Government Accountability is by law
  300  authorized to perform commits shall be guilty of a misdemeanor
  301  of the first degree, punishable as provided in s. 775.082 or s.
  302  775.083.
  303         Section 4. Paragraph (d) of subsection (2) of section
  304  28.35, Florida Statutes, is amended to read:
  305         28.35 Florida Clerks of Court Operations Corporation.—
  306         (2) The duties of the corporation shall include the
  307  following:
  308         (d) Developing and certifying a uniform system of workload
  309  measures and applicable workload standards for court-related
  310  functions as developed by the corporation and clerk workload
  311  performance in meeting the workload performance standards. These
  312  workload measures and workload performance standards shall be
  313  designed to facilitate an objective determination of the
  314  performance of each clerk in accordance with minimum standards
  315  for fiscal management, operational efficiency, and effective
  316  collection of fines, fees, service charges, and court costs. The
  317  corporation shall develop the workload measures and workload
  318  performance standards in consultation with the Legislature. When
  319  the corporation finds a clerk has not met the workload
  320  performance standards, the corporation shall identify the nature
  321  of each deficiency and any corrective action recommended and
  322  taken by the affected clerk of the court. For quarterly periods
  323  ending on the last day of March, June, September, and December
  324  of each year, the corporation shall notify the Legislature of
  325  any clerk not meeting workload performance standards and provide
  326  a copy of any corrective action plans. Such notifications must
  327  be submitted no later than 45 days after the end of the
  328  preceding quarterly period. As used in this subsection, the
  329  term:
  330         1. “Workload measures” means the measurement of the
  331  activities and frequency of the work required for the clerk to
  332  adequately perform the court-related duties of the office as
  333  defined by the membership of the Florida Clerks of Court
  334  Operations Corporation.
  335         2. “Workload performance standards” means the standards
  336  developed to measure the timeliness and effectiveness of the
  337  activities that are accomplished by the clerk in the performance
  338  of the court-related duties of the office as defined by the
  339  membership of the Florida Clerks of Court Operations
  340  Corporation.
  341         Section 5. Present subsections (6) and (7) of section
  342  43.16, Florida Statutes, are renumbered as subsections (7) and
  343  (8), respectively, and a new subsection (6) is added to that
  344  section, to read:
  345         43.16 Justice Administrative Commission; membership, powers
  346  and duties.—
  347         (6)The commission, each state attorney, each public
  348  defender, the criminal conflict and civil regional counsel, the
  349  capital collateral regional counsel, and the Guardian Ad Litem
  350  Program shall establish and maintain internal controls designed
  351  to:
  352         (a)Prevent and detect fraud, waste, and abuse as defined
  353  in s. 11.45(1).
  354         (b)Promote and encourage compliance with applicable laws,
  355  rules, contracts, grant agreements, and best practices.
  356         (c)Support economical and efficient operations.
  357         (d)Ensure reliability of financial records and reports.
  358         (e)Safeguard assets.
  359         Section 6. Paragraph (c) of subsection (3) of section
  360  129.03, Florida Statutes, is amended to read:
  361         129.03 Preparation and adoption of budget.—
  362         (3) The county budget officer, after tentatively
  363  ascertaining the proposed fiscal policies of the board for the
  364  next fiscal year, shall prepare and present to the board a
  365  tentative budget for the next fiscal year for each of the funds
  366  provided in this chapter, including all estimated receipts,
  367  taxes to be levied, and balances expected to be brought forward
  368  and all estimated expenditures, reserves, and balances to be
  369  carried over at the end of the year.
  370         (c) The board shall hold public hearings to adopt tentative
  371  and final budgets pursuant to s. 200.065. The hearings shall be
  372  primarily for the purpose of hearing requests and complaints
  373  from the public regarding the budgets and the proposed tax
  374  levies and for explaining the budget and any proposed or adopted
  375  amendments. The tentative budget must be posted on the county’s
  376  official website at least 2 days before the public hearing to
  377  consider such budget and must remain on the website for at least
  378  45 days. The final budget must be posted on the website within
  379  30 days after adoption and must remain on the website for at
  380  least 2 years. The tentative budgets, adopted tentative budgets,
  381  and final budgets shall be filed in the office of the county
  382  auditor as a public record. Sufficient reference in words and
  383  figures to identify the particular transactions must shall be
  384  made in the minutes of the board to record its actions with
  385  reference to the budgets.
  386         Section 7. Paragraph (f) of subsection (2) of section
  387  129.06, Florida Statutes, is amended to read:
  388         129.06 Execution and amendment of budget.—
  389         (2) The board at any time within a fiscal year may amend a
  390  budget for that year, and may within the first 60 days of a
  391  fiscal year amend the budget for the prior fiscal year, as
  392  follows:
  393         (f) Unless otherwise prohibited by law, if an amendment to
  394  a budget is required for a purpose not specifically authorized
  395  in paragraphs (a)-(e), the amendment may be authorized by
  396  resolution or ordinance of the board of county commissioners
  397  adopted following a public hearing.
  398         1. The public hearing must be advertised at least 2 days,
  399  but not more than 5 days, before the date of the hearing. The
  400  advertisement must appear in a newspaper of paid general
  401  circulation and must identify the name of the taxing authority,
  402  the date, place, and time of the hearing, and the purpose of the
  403  hearing. The advertisement must also identify each budgetary
  404  fund to be amended, the source of the funds, the use of the
  405  funds, and the total amount of each fund’s appropriations.
  406         2. If the board amends the budget pursuant to this
  407  paragraph, the adopted amendment must be posted on the county’s
  408  official website within 5 days after adoption and must remain on
  409  the website for at least 2 years.
  410         Section 8. Subsections (3) and (5) of section 166.241,
  411  Florida Statutes, are amended to read:
  412         166.241 Fiscal years, budgets, and budget amendments.—
  413         (3) The tentative budget must be posted on the
  414  municipality’s official website at least 2 days before the
  415  budget hearing, held pursuant to s. 200.065 or other law, to
  416  consider such budget and must remain on the website for at least
  417  45 days. The final adopted budget must be posted on the
  418  municipality’s official website within 30 days after adoption
  419  and must remain on the website for at least 2 years. If the
  420  municipality does not operate an official website, the
  421  municipality must, within a reasonable period of time as
  422  established by the county or counties in which the municipality
  423  is located, transmit the tentative budget and final budget to
  424  the manager or administrator of such county or counties who
  425  shall post the budgets on the county’s website.
  426         (5) If the governing body of a municipality amends the
  427  budget pursuant to paragraph (4)(c), the adopted amendment must
  428  be posted on the official website of the municipality within 5
  429  days after adoption and must remain on the website for at least
  430  2 years. If the municipality does not operate an official
  431  website, the municipality must, within a reasonable period of
  432  time as established by the county or counties in which the
  433  municipality is located, transmit the adopted amendment to the
  434  manager or administrator of such county or counties who shall
  435  post the adopted amendment on the county’s website.
  436         Section 9. Section 215.86, Florida Statutes, is amended to
  437  read:
  438         215.86 Management systems and controls.—Each state agency
  439  and the judicial branch as defined in s. 216.011 shall establish
  440  and maintain management systems and internal controls designed
  441  to:
  442         (1)Prevent and detect fraud, waste, and abuse as defined
  443  in s. 11.45(1). that
  444         (2) Promote and encourage compliance with applicable laws,
  445  rules, contracts, and grant agreements.;
  446         (3)Support economical and economic, efficient, and
  447  effective operations.;
  448         (4)Ensure reliability of financial records and reports.;
  449         (5)Safeguard and safeguarding of assets. Accounting
  450  systems and procedures shall be designed to fulfill the
  451  requirements of generally accepted accounting principles.
  452         Section 10. Paragraph (a) of subsection (2) of section
  453  215.97, Florida Statutes, is amended to read:
  454         215.97 Florida Single Audit Act.—
  455         (2) As used in this section, the term:
  456         (a) “Audit threshold” means the threshold amount used to
  457  determine when a state single audit or project-specific audit of
  458  a nonstate entity shall be conducted in accordance with this
  459  section. Each nonstate entity that expends a total amount of
  460  state financial assistance equal to or in excess of $750,000 in
  461  any fiscal year of such nonstate entity shall be required to
  462  have a state single audit, or a project-specific audit, for such
  463  fiscal year in accordance with the requirements of this section.
  464  Every 2 years the Auditor General, After consulting with the
  465  Executive Office of the Governor, the Department of Financial
  466  Services, and all state awarding agencies, the Auditor General
  467  shall periodically review the threshold amount for requiring
  468  audits under this section and may recommend any appropriate
  469  statutory change to revise the threshold amount in the annual
  470  report submitted to the Legislature pursuant to s. 11.45(7)(h)
  471  adjust such threshold amount consistent with the purposes of
  472  this section.
  473         Section 11. Subsection (11) of section 215.985, Florida
  474  Statutes, is amended to read:
  475         215.985 Transparency in government spending.—
  476         (11) Each water management district shall provide a monthly
  477  financial statement in the form and manner prescribed by the
  478  Department of Financial Services to the district’s its governing
  479  board and make such monthly financial statement available for
  480  public access on its website.
  481         Section 12. Subsection (17) of section 218.31, Florida
  482  Statutes, is amended to read:
  483         218.31 Definitions.—As used in this part, except where the
  484  context clearly indicates a different meaning:
  485         (17) “Financial audit” means an examination of financial
  486  statements in order to express an opinion on the fairness with
  487  which they are presented in conformity with generally accepted
  488  accounting principles and an examination to determine whether
  489  operations are properly conducted in accordance with legal and
  490  regulatory requirements. Financial audits must be conducted in
  491  accordance with auditing standards generally accepted in the
  492  United States and government auditing standards as adopted by
  493  the Board of Accountancy and as prescribed by rules promulgated
  494  by the Auditor General. When applicable, the scope of financial
  495  audits must shall encompass the additional activities necessary
  496  to establish compliance with the Single Audit Act Amendments of
  497  1996, 31 U.S.C. ss. 7501-7507, and other applicable federal law.
  498         Section 13. Subsection (2) of section 218.32, Florida
  499  Statutes, is amended to read:
  500         218.32 Annual financial reports; local governmental
  501  entities.—
  502         (2) The department shall annually by December 1 file a
  503  verified report with the Governor, the Legislature, the Auditor
  504  General, and the Special District Accountability Program of the
  505  Department of Economic Opportunity showing the revenues, both
  506  locally derived and derived from intergovernmental transfers,
  507  and the expenditures of each local governmental entity, regional
  508  planning council, local government finance commission, and
  509  municipal power corporation that is required to submit an annual
  510  financial report. In preparing the verified report, the
  511  department may request additional information from the local
  512  governmental entity. The information requested must be provided
  513  to the department within 45 days after the request. If the local
  514  governmental entity does not comply with the request, the
  515  department shall notify the Legislative Auditing Committee,
  516  which may take action pursuant to s. 11.40(2). The report must
  517  include, but is not limited to:
  518         (a) The total revenues and expenditures of each local
  519  governmental entity that is a component unit included in the
  520  annual financial report of the reporting entity.
  521         (b) The amount of outstanding long-term debt by each local
  522  governmental entity. For purposes of this paragraph, the term
  523  “long-term debt” means any agreement or series of agreements to
  524  pay money, which, at inception, contemplate terms of payment
  525  exceeding 1 year in duration.
  526         Section 14. Present subsection (3) of section 218.33,
  527  Florida Statutes, is renumbered as subsection (4), and a new
  528  subsection (3) is added to that section, to read:
  529         218.33 Local governmental entities; establishment of
  530  uniform fiscal years and accounting practices and procedures.—
  531         (3)Each local governmental entity shall establish and
  532  maintain internal controls designed to:
  533         (a)Prevent and detect fraud, waste, and abuse as defined
  534  in s. 11.45(1).
  535         (b)Promote and encourage compliance with applicable laws,
  536  rules, contracts, grant agreements, and best practices.
  537         (c)Support economical and efficient operations.
  538         (d)Ensure reliability of financial records and reports.
  539         (e)Safeguard assets.
  540         Section 15. Subsections (2), (3), and (4) of section
  541  218.391, Florida Statutes, are amended, and subsection (9) is
  542  added to that section, to read:
  543         218.391 Auditor selection procedures.—
  544         (2) The governing body of a charter county, municipality,
  545  special district, district school board, charter school, or
  546  charter technical career center shall establish an auditor
  547  selection audit committee.
  548         (a) The auditor selection committee for a Each noncharter
  549  county must shall establish an audit committee that, at a
  550  minimum, shall consist of each of the county officers elected
  551  pursuant to the county charter or s. 1(d), Art. VIII of the
  552  State Constitution, or their respective designees a designee,
  553  and one member of the board of county commissioners or its
  554  designee.
  555         (b) The auditor selection committee for a municipality,
  556  special district, district school board, charter school, or
  557  charter technical career center must consist of at least three
  558  members. One member of the auditor selection committee must be a
  559  member of the governing body of an entity specified in this
  560  paragraph, who shall serve as the chair of the committee.
  561         (c) An employee, a chief executive officer, or a chief
  562  financial officer of the county, municipality, special district,
  563  district school board, charter school, or charter technical
  564  career center may not serve as a member of an auditor selection
  565  committee established under this subsection; however, an
  566  employee, a chief executive officer, or a chief financial
  567  officer of the county, municipality, special district, district
  568  school board, charter school, or charter technical career center
  569  may serve in an advisory capacity.
  570         (d) The primary purpose of the auditor selection audit
  571  committee is to assist the governing body in selecting an
  572  auditor to conduct the annual financial audit required in s.
  573  218.39; however, the audit committee may serve other audit
  574  oversight purposes as determined by the entity’s governing body.
  575  The public may shall not be excluded from the proceedings under
  576  this section.
  577         (3) The auditor selection audit committee shall:
  578         (a) Establish factors to use for the evaluation of audit
  579  services to be provided by a certified public accounting firm
  580  duly licensed under chapter 473 and qualified to conduct audits
  581  in accordance with government auditing standards as adopted by
  582  the Florida Board of Accountancy. Such factors shall include,
  583  but are not limited to, ability of personnel, experience,
  584  ability to furnish the required services, and such other factors
  585  as may be determined by the committee to be applicable to its
  586  particular requirements.
  587         (b) Publicly announce requests for proposals. Public
  588  announcements must include, at a minimum, a brief description of
  589  the audit and indicate how interested firms can apply for
  590  consideration.
  591         (c) Provide interested firms with a request for proposal.
  592  The request for proposal shall include information on how
  593  proposals are to be evaluated and such other information the
  594  committee determines is necessary for the firm to prepare a
  595  proposal.
  596         (d) Evaluate proposals provided by qualified firms. If
  597  compensation is one of the factors established pursuant to
  598  paragraph (a), it shall not be the sole or predominant factor
  599  used to evaluate proposals.
  600         (e) Rank and recommend in order of preference no fewer than
  601  three firms deemed to be the most highly qualified to perform
  602  the required services after considering the factors established
  603  pursuant to paragraph (a). If fewer than three firms respond to
  604  the request for proposal, the committee shall recommend such
  605  firms as it deems to be the most highly qualified.
  606         (4) The governing body shall inquire of qualified firms as
  607  to the basis of compensation, select one of the firms
  608  recommended by the auditor selection audit committee, and
  609  negotiate a contract, using one of the following methods:
  610         (a) If compensation is not one of the factors established
  611  pursuant to paragraph (3)(a) and not used to evaluate firms
  612  pursuant to paragraph (3)(e), the governing body shall negotiate
  613  a contract with the firm ranked first. If the governing body is
  614  unable to negotiate a satisfactory contract with that firm,
  615  negotiations with that firm shall be formally terminated, and
  616  the governing body shall then undertake negotiations with the
  617  second-ranked firm. Failing accord with the second-ranked firm,
  618  negotiations shall then be terminated with that firm and
  619  undertaken with the third-ranked firm. Negotiations with the
  620  other ranked firms shall be undertaken in the same manner. The
  621  governing body, in negotiating with firms, may reopen formal
  622  negotiations with any one of the three top-ranked firms, but it
  623  may not negotiate with more than one firm at a time.
  624         (b) If compensation is one of the factors established
  625  pursuant to paragraph (3)(a) and used in the evaluation of
  626  proposals pursuant to paragraph (3)(d), the governing body shall
  627  select the highest-ranked qualified firm or must document in its
  628  public records the reason for not selecting the highest-ranked
  629  qualified firm.
  630         (c) The governing body may select a firm recommended by the
  631  audit committee and negotiate a contract with one of the
  632  recommended firms using an appropriate alternative negotiation
  633  method for which compensation is not the sole or predominant
  634  factor used to select the firm.
  635         (d) In negotiations with firms under this section, the
  636  governing body may allow a designee to conduct negotiations on
  637  its behalf.
  638         (9) If the entity fails to select the auditor in accordance
  639  with the requirements of subsections (3)-(6), the entity must
  640  again perform the auditor selection process in accordance with
  641  this section to select an auditor to conduct audits for
  642  subsequent fiscal years.
  643         Section 16. Paragraph (e) of subsection (4), paragraph (d)
  644  of subsection (5), and paragraph (d) of subsection (6) of
  645  section 373.536, Florida Statutes, are amended to read:
  646         373.536 District budget and hearing thereon.—
  647         (4) BUDGET CONTROLS; FINANCIAL INFORMATION.—
  648         (e) By September 1, 2012, Each district shall provide a
  649  monthly financial statement in the form and manner prescribed by
  650  the Department of Financial Services to the district’s governing
  651  board and make such monthly financial statement available for
  652  public access on its website.
  653         (5) TENTATIVE BUDGET CONTENTS AND SUBMISSION; REVIEW AND
  654  APPROVAL.—
  655         (d) Each district shall, by August 1 of each year, submit
  656  for review a tentative budget and a description of any
  657  significant changes from the preliminary budget submitted to the
  658  Legislature pursuant to s. 373.535 to the Governor, the
  659  President of the Senate, the Speaker of the House of
  660  Representatives, the chairs of all legislative committees and
  661  subcommittees having substantive or fiscal jurisdiction over
  662  water management districts, as determined by the President of
  663  the Senate or the Speaker of the House of Representatives, as
  664  applicable, the secretary of the department, and the governing
  665  body of each county in which the district has jurisdiction or
  666  derives any funds for the operations of the district. The
  667  tentative budget must be posted on the district’s official
  668  website at least 2 days before budget hearings held pursuant to
  669  s. 200.065 or other law and must remain on the website for at
  670  least 45 days.
  671         (6) FINAL BUDGET; ANNUAL AUDIT; CAPITAL IMPROVEMENTS PLAN;
  672  WATER RESOURCE DEVELOPMENT WORK PROGRAM.—
  673         (d) The final adopted budget must be posted on the water
  674  management district’s official website within 30 days after
  675  adoption and must remain on the website for at least 2 years.
  676         Section 17. Paragraph (l) of subsection (12) of section
  677  1001.42, Florida Statutes, as amended by chapter 2018-5, Laws of
  678  Florida, is amended to read:
  679         1001.42 Powers and duties of district school board.—The
  680  district school board, acting as a board, shall exercise all
  681  powers and perform all duties listed below:
  682         (12) FINANCE.—Take steps to assure students adequate
  683  educational facilities through the financial procedure
  684  authorized in chapters 1010 and 1011 and as prescribed below:
  685         (l) Internal auditor.—May or, in the case of a school
  686  district receiving annual federal, state, and local funds in
  687  excess of $500 million, shall employ an internal auditor. The
  688  scope of the internal auditor shall not be restricted and shall
  689  include every functional and program area of the school system.
  690         1. The internal auditor shall perform ongoing financial
  691  verification of the financial records of the school district, a
  692  comprehensive risk assessment of all areas of the school system
  693  every 5 years, and other audits and reviews as the district
  694  school board directs for determining:
  695         a. The adequacy of internal controls designed to prevent
  696  and detect fraud, waste, and abuse as defined in s. 11.45(1).
  697         b. Compliance with applicable laws, rules, contracts, grant
  698  agreements, district school board-approved policies, and best
  699  practices.
  700         c. The efficiency of operations.
  701         d. The reliability of financial records and reports.
  702         e. The safeguarding of assets.
  703         f. Financial solvency.
  704         g. Projected revenues and expenditures.
  705         h. The rate of change in the general fund balance.
  706         2. The internal auditor shall prepare audit reports of his
  707  or her findings and report directly to the district school board
  708  or its designee.
  709         3. Any person responsible for furnishing or producing any
  710  book, record, paper, document, data, or sufficient information
  711  necessary to conduct a proper audit or examination which the
  712  internal auditor is by law authorized to perform is subject to
  713  the provisions of s. 11.47(3) and (4).
  714         Section 18. Paragraph (j) of subsection (9) of section
  715  1002.33, Florida Statutes, is amended to read:
  716         1002.33 Charter schools.—
  717         (9) CHARTER SCHOOL REQUIREMENTS.—
  718         (j) The governing body of the charter school shall be
  719  responsible for:
  720         1.Establishing and maintaining internal controls designed
  721  to:
  722         a.Prevent and detect fraud, waste, and abuse as defined in
  723  s. 11.45(1).
  724         b.Promote and encourage compliance with applicable laws,
  725  rules, contracts, grant agreements, and best practices.
  726         c.Support economical and efficient operations.
  727         d.Ensure reliability of financial records and reports.
  728         e.Safeguard assets.
  729         2.1. Ensuring that the charter school has retained the
  730  services of a certified public accountant or auditor for the
  731  annual financial audit, pursuant to s. 1002.345(2), who shall
  732  submit the report to the governing body.
  733         3.2. Reviewing and approving the audit report, including
  734  audit findings and recommendations for the financial recovery
  735  plan.
  736         4.a.3.a. Performing the duties in s. 1002.345, including
  737  monitoring a corrective action plan.
  738         b. Monitoring a financial recovery plan in order to ensure
  739  compliance.
  740         5.4. Participating in governance training approved by the
  741  department which must include government in the sunshine,
  742  conflicts of interest, ethics, and financial responsibility.
  743         Section 19. Present subsections (6) through (10) of section
  744  1002.37, Florida Statutes, are renumbered as subsections (7)
  745  through (11), respectively, present subsection (6) is amended,
  746  and a new subsection (6) is added to that section, to read:
  747         1002.37 The Florida Virtual School.—
  748         (6)The Florida Virtual School shall have an annual
  749  financial audit of its accounts and records conducted by an
  750  independent auditor who is a certified public accountant
  751  licensed under chapter 473. The independent auditor shall
  752  conduct the audit in accordance with rules adopted by the
  753  Auditor General pursuant to s. 11.45 and, upon completion of the
  754  audit, shall prepare an audit report in accordance with such
  755  rules. The audit report must include a written statement by the
  756  board of trustees describing corrective action to be taken in
  757  response to each of the independent auditor’s recommendations
  758  included in the audit report. The independent auditor shall
  759  submit the audit report to the board of trustees and the Auditor
  760  General no later than 9 months after the end of the preceding
  761  fiscal year.
  762         (7)(6) The board of trustees shall annually submit to the
  763  Governor, the Legislature, the Commissioner of Education, and
  764  the State Board of Education the audit report prepared pursuant
  765  to subsection (6) and a complete and detailed report setting
  766  forth:
  767         (a) The operations and accomplishments of the Florida
  768  Virtual School within the state and those occurring outside the
  769  state as Florida Virtual School Global.
  770         (b) The marketing and operational plan for the Florida
  771  Virtual School and Florida Virtual School Global, including
  772  recommendations regarding methods for improving the delivery of
  773  education through the Internet and other distance learning
  774  technology.
  775         (c) The assets and liabilities of the Florida Virtual
  776  School and Florida Virtual School Global at the end of the
  777  fiscal year.
  778         (d)A copy of an annual financial audit of the accounts and
  779  records of the Florida Virtual School and Florida Virtual School
  780  Global, conducted by an independent certified public accountant
  781  and performed in accordance with rules adopted by the Auditor
  782  General.
  783         (d)(e) Recommendations regarding the unit cost of providing
  784  services to students through the Florida Virtual School and
  785  Florida Virtual School Global. In order to most effectively
  786  develop public policy regarding any future funding of the
  787  Florida Virtual School, it is imperative that the cost of the
  788  program is accurately identified. The identified cost of the
  789  program must be based on reliable data.
  790         (e)(f) Recommendations regarding an accountability
  791  mechanism to assess the effectiveness of the services provided
  792  by the Florida Virtual School and Florida Virtual School Global.
  793         Section 20. Subsection (5) is added to section 1010.01,
  794  Florida Statutes, to read:
  795         1010.01 Uniform records and accounts.—
  796         (5)Each school district, Florida College System
  797  institution, and state university shall establish and maintain
  798  internal controls designed to:
  799         (a)Prevent and detect fraud, waste, and abuse as defined
  800  in s. 11.45(1).
  801         (b)Promote and encourage compliance with applicable laws,
  802  rules, contracts, grant agreements, and best practices.
  803         (c)Support economical and efficient operations.
  804         (d)Ensure reliability of financial records and reports.
  805         (e)Safeguard assets.
  806         Section 21. Section 1012.8551, Florida Statutes, is created
  807  to read:
  808         1012.8551 Employee background screening and investigations
  809  for Florida College System personnel.—Section 110.1127 applies
  810  to each institution in the Florida College System. Each
  811  institution must designate the positions subject to background
  812  screening and investigation pursuant to that section.
  813         Section 22. Section 1012.915, Florida Statutes, is created
  814  to read:
  815         1012.915 Employee background screening and investigations
  816  for State University System personnel.—Section 110.1127 applies
  817  to each institution in the State University System. Each
  818  institution must designate the positions subject to background
  819  screening and investigation pursuant to that section.
  820         Section 23. Subsection (3) of section 218.503, Florida
  821  Statutes, is amended to read:
  822         218.503 Determination of financial emergency.—
  823         (3) Upon notification that one or more of the conditions in
  824  subsection (1) have occurred or will occur if action is not
  825  taken to assist the local governmental entity or district school
  826  board, the Governor or his or her designee shall contact the
  827  local governmental entity or the Commissioner of Education or
  828  his or her designee shall contact the district school board, as
  829  appropriate, to determine what actions have been taken by the
  830  local governmental entity or the district school board to
  831  resolve or prevent the condition. The information requested must
  832  be provided within 45 days after the date of the request. If the
  833  local governmental entity or the district school board does not
  834  comply with the request, the Governor or his or her designee or
  835  the Commissioner of Education or his or her designee shall
  836  notify the members of the Legislative Auditing Committee, which
  837  who may take action pursuant to s. 11.40(2) 11.40. The Governor
  838  or the Commissioner of Education, as appropriate, shall
  839  determine whether the local governmental entity or the district
  840  school board needs state assistance to resolve or prevent the
  841  condition. If state assistance is needed, the local governmental
  842  entity or district school board is considered to be in a state
  843  of financial emergency. The Governor or the Commissioner of
  844  Education, as appropriate, has the authority to implement
  845  measures as set forth in ss. 218.50-218.504 to assist the local
  846  governmental entity or district school board in resolving the
  847  financial emergency. Such measures may include, but are not
  848  limited to:
  849         (a) Requiring approval of the local governmental entity’s
  850  budget by the Governor or approval of the district school
  851  board’s budget by the Commissioner of Education.
  852         (b) Authorizing a state loan to a local governmental entity
  853  and providing for repayment of same.
  854         (c) Prohibiting a local governmental entity or district
  855  school board from issuing bonds, notes, certificates of
  856  indebtedness, or any other form of debt until such time as it is
  857  no longer subject to this section.
  858         (d) Making such inspections and reviews of records,
  859  information, reports, and assets of the local governmental
  860  entity or district school board as are needed. The appropriate
  861  local officials shall cooperate in such inspections and reviews.
  862         (e) Consulting with officials and auditors of the local
  863  governmental entity or the district school board and the
  864  appropriate state officials regarding any steps necessary to
  865  bring the books of account, accounting systems, financial
  866  procedures, and reports into compliance with state requirements.
  867         (f) Providing technical assistance to the local
  868  governmental entity or the district school board.
  869         (g)1. Establishing a financial emergency board to oversee
  870  the activities of the local governmental entity or the district
  871  school board. If a financial emergency board is established for
  872  a local governmental entity, the Governor shall appoint board
  873  members and select a chair. If a financial emergency board is
  874  established for a district school board, the State Board of
  875  Education shall appoint board members and select a chair. The
  876  financial emergency board shall adopt such rules as are
  877  necessary for conducting board business. The board may:
  878         a. Make such reviews of records, reports, and assets of the
  879  local governmental entity or the district school board as are
  880  needed.
  881         b. Consult with officials and auditors of the local
  882  governmental entity or the district school board and the
  883  appropriate state officials regarding any steps necessary to
  884  bring the books of account, accounting systems, financial
  885  procedures, and reports of the local governmental entity or the
  886  district school board into compliance with state requirements.
  887         c. Review the operations, management, efficiency,
  888  productivity, and financing of functions and operations of the
  889  local governmental entity or the district school board.
  890         d. Consult with other governmental entities for the
  891  consolidation of all administrative direction and support
  892  services, including, but not limited to, services for asset
  893  sales, economic and community development, building inspections,
  894  parks and recreation, facilities management, engineering and
  895  construction, insurance coverage, risk management, planning and
  896  zoning, information systems, fleet management, and purchasing.
  897         2. The recommendations and reports made by the financial
  898  emergency board must be submitted to the Governor for local
  899  governmental entities or to the Commissioner of Education and
  900  the State Board of Education for district school boards for
  901  appropriate action.
  902         (h) Requiring and approving a plan, to be prepared by
  903  officials of the local governmental entity or the district
  904  school board in consultation with the appropriate state
  905  officials, prescribing actions that will cause the local
  906  governmental entity or district school board to no longer be
  907  subject to this section. The plan must include, but need not be
  908  limited to:
  909         1. Provision for payment in full of obligations outlined in
  910  subsection (1), designated as priority items, which are
  911  currently due or will come due.
  912         2. Establishment of priority budgeting or zero-based
  913  budgeting in order to eliminate items that are not affordable.
  914         3. The prohibition of a level of operations which can be
  915  sustained only with nonrecurring revenues.
  916         4. Provisions implementing the consolidation, sourcing, or
  917  discontinuance of all administrative direction and support
  918  services, including, but not limited to, services for asset
  919  sales, economic and community development, building inspections,
  920  parks and recreation, facilities management, engineering and
  921  construction, insurance coverage, risk management, planning and
  922  zoning, information systems, fleet management, and purchasing.
  923         Section 24. The Legislature finds that a proper and
  924  legitimate state purpose is served when internal controls are
  925  established to prevent and detect fraud, waste, and abuse and to
  926  safeguard and account for government funds and property.
  927  Therefore, the Legislature determines and declares that this act
  928  fulfills an important state interest.
  929         Section 25. This act shall take effect July 1, 2019.