HOUSE BILL 424

50th legislature - STATE OF NEW MEXICO - first session, 2011

INTRODUCED BY

Mimi Stewart

AN ACT

RELATING TO PUBLIC MONEY; REQUIRING THE STATE AUDITOR TO DESIGNATE AN AGENCY AT RISK FOR FRAUD, WASTE OR ABUSE IF IT FAILS TO SUBMIT A TIMELY AUDIT; REQUIRING THE STATE AUDITOR TO DESIGNATE AN AGENCY AT RISK FOR FRAUD, WASTE OR ABUSE IF IT RECEIVES A DISCLAIMER OF OPINION OR AN ADVERSE OPINION ON ITS ANNUAL FINANCIAL AUDIT; PROVIDING FOR REPORTING REQUIREMENTS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. A new section of the Audit Act is enacted to read:

     "[NEW MATERIAL] AT-RISK DESIGNATION OF AN AGENCY BY THE STATE AUDITOR.--

          A. The state auditor shall designate an agency at risk for fraud, waste or abuse if the agency:

                (1) fails to submit a required audit report or agreed-upon procedures report within ninety days of the due date specified by the state auditor; or

                (2)  receives a disclaimer of opinion or an adverse opinion on its annual financial audit.

          B. An agency designated at risk for fraud, waste or abuse shall be required, within thirty days from the state auditor's designation, to submit monthly progress reports to the state auditor. The progress report shall be signed by a member of the agency's governing authority, a designee of the governing authority or a member of the agency's top management. At a minimum, the progress report shall include:

                (1)  a detailed explanation of the agency's efforts to complete and submit its audit or agreed-upon procedures;

                (2)  an explanation of the current status of any ongoing audit or agreed-upon procedures work;

                (3)  a description of any obstacles encountered by the agency in completing its audit or agreed-upon procedures;

                (4)  a projected completion date for the audit or agreed-upon procedures; and

                (5)  if the agency received a disclaimer of opinion or an adverse opinion on its annual financial audit, the progress report shall include the agency's planned corrective actions to address the audit's findings and recommendations.

          C. The state auditor shall publish on the state auditor's web site a list of agencies designated at risk for fraud, waste or abuse. The state auditor shall also submit a list of agencies designated at risk for fraud, waste or abuse on a monthly basis to the:

                (1) governor;

                (2) legislative finance committee;

                (3) department of finance and administration;

                (4) public education department, if any school district or charter school is designated at risk for fraud, waste or abuse; and

                (5) higher education department, if any institution of higher education is designated at risk for fraud, waste or abuse.

          D. The state auditor shall withdraw an agency's designation if:

                (1) an agency that failed to submit a required audit report or agreed-upon procedures report submits the required report; or

                (2) an agency that received a disclaimer of opinion or an adverse opinion on its annual financial audit receives an unqualified opinion or qualified opinion on its subsequent annual financial audit."

     SECTION 2. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2011.

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