HF 873

2nd Engrossment - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to counties; changing certain auditing 
  1.3             requirements; amending Minnesota Statutes 2002, 
  1.4             sections 6.48; 6.49; 6.54; 6.55; 6.64; 6.65; 6.66; 
  1.5             6.67; 6.68, subdivision 1; 6.70; 6.71. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 2002, section 6.48, is 
  1.8   amended to read: 
  1.9      6.48 [EXAMINATION OF COUNTIES; COST, FEES.] 
  1.10     All the powers and duties conferred and imposed upon the 
  1.11  state auditor shall be exercised and performed by the state 
  1.12  auditor in respect to the offices, institutions, public 
  1.13  property, and improvements of several counties of the state.  At 
  1.14  least once in each year, if funds and personnel permit, the 
  1.15  state auditor shall may visit, without previous notice, each 
  1.16  county and make a thorough examination of all accounts and 
  1.17  records relating to the receipt and disbursement of the public 
  1.18  funds and the custody of the public funds and other 
  1.19  property.  If the audit is performed by a private certified 
  1.20  public accountant, the state auditor may require specific 
  1.21  additional information from the private certified public 
  1.22  accountant to resolve the specified issues or questions.  The 
  1.23  state auditor may accept the audit or make additional 
  1.24  examinations as the state auditor deems to be in the public 
  1.25  interest.  The state auditor shall prescribe and install systems 
  2.1   of accounts and financial reports that shall be uniform, so far 
  2.2   as practicable, for the same class of offices.  A copy of the 
  2.3   report of such examination shall be filed and be subject to 
  2.4   public inspection in the office of the state auditor and another 
  2.5   copy in the office of the auditor of the county thus examined.  
  2.6   The state auditor may accept the records and audit, or any part 
  2.7   thereof, of the department of human services in lieu of 
  2.8   examination of the county social welfare funds, if such audit 
  2.9   has been made within any period covered by the state auditor's 
  2.10  audit of the other records of the county.  If any such 
  2.11  examination shall disclose malfeasance, misfeasance, or 
  2.12  nonfeasance in any office of such county, such report shall be 
  2.13  filed with the county attorney of the county, and the county 
  2.14  attorney shall institute such civil and criminal proceedings as 
  2.15  the law and the protection of the public interests shall require.
  2.16     The county receiving such any examination shall pay to the 
  2.17  state general fund, notwithstanding the provisions of section 
  2.18  16A.125, the total cost and expenses of such examinations, 
  2.19  including the salaries paid to the examiners while actually 
  2.20  engaged in making such examination.  The state auditor on 
  2.21  deeming it advisable may bill counties, having a population of 
  2.22  200,000 or over, monthly for services rendered and the officials 
  2.23  responsible for approving and paying claims shall cause said 
  2.24  bill to be promptly paid.  The general fund shall be credited 
  2.25  with all collections made for any such examinations.  
  2.26     Sec. 2.  Minnesota Statutes 2002, section 6.49, is amended 
  2.27  to read: 
  2.28     6.49 [CITIES OF FIRST CLASS.] 
  2.29     All powers and duties conferred and imposed upon the state 
  2.30  auditor with respect to state and county officers, institutions, 
  2.31  property, and improvements are hereby extended to cities of the 
  2.32  first class.  Copies of the written report of the state auditor 
  2.33  on the financial condition and accounts of such city shall be 
  2.34  filed in the state auditor's office, with the mayor, city 
  2.35  council, and city comptroller thereof, and with the city 
  2.36  commissioners, if such city have such officers.  If such report 
  3.1   disclose malfeasance, misfeasance, or nonfeasance in office, 
  3.2   copies thereof shall be filed with the city attorney thereof and 
  3.3   with the county attorney of the county in which such city is 
  3.4   located, and these officials of the law shall institute such 
  3.5   proceedings, civil or criminal, as the law and the public 
  3.6   interest require.  
  3.7      The state auditor may shall bill said cities monthly for 
  3.8   services rendered, including any examination, and the officials 
  3.9   responsible for approving and paying claims shall cause said 
  3.10  bill to be promptly paid.  
  3.11     Sec. 3.  Minnesota Statutes 2002, section 6.54, is amended 
  3.12  to read: 
  3.13     6.54 [EXAMINATION OF COUNTY AND MUNICIPAL RECORDS PURSUANT 
  3.14  TO PETITION.] 
  3.15     The registered voters in a county, home rule charter, or 
  3.16  statutory city or the electors at an annual or special town 
  3.17  meeting of a town may petition the state auditor to examine the 
  3.18  books, records, accounts, and affairs of the county, home rule 
  3.19  charter, or statutory city, town, or of any organizational unit, 
  3.20  activity, project, enterprise, or fund thereof; and the scope of 
  3.21  the examination may be limited by the petition, but the 
  3.22  examination shall cover, at least, all cash received and 
  3.23  disbursed and the transactions relating thereto, provided that 
  3.24  the state auditor shall not examine more than the six latest 
  3.25  years preceding the circulation of the petition, unless it 
  3.26  appears to the state auditor during the examination that the 
  3.27  audit period should be extended to permit a full recovery under 
  3.28  bonds furnished by public officers or employees, and may if it 
  3.29  appears to the auditor in the public interest confine the period 
  3.30  or the scope of audit or both period and scope of audit, to less 
  3.31  than that requested by the petition.  In the case of a county, 
  3.32  home rule charter, or statutory city, the petition shall be 
  3.33  signed by a number of registered voters at least equal to 20 
  3.34  percent of those voting in the last presidential election.  The 
  3.35  eligible voters of any school district may petition the state 
  3.36  auditor, who shall be subject to the same restrictions regarding 
  4.1   the scope and period of audit, provided that the petition shall 
  4.2   be signed by at least ten eligible voters for each 50 resident 
  4.3   pupils in average daily membership during the preceding school 
  4.4   year as shown on the records in the office of the commissioner 
  4.5   of children, families, and learning.  In the case of school 
  4.6   districts, the petition shall be signed by at least ten eligible 
  4.7   voters.  At the time it is circulated, every petition shall 
  4.8   contain a statement that the cost of the audit will be borne by 
  4.9   the county, city, or school district as provided by law.  Thirty 
  4.10  days before the petition is delivered to the state auditor it 
  4.11  shall be presented to the appropriate city or school district 
  4.12  clerk and the county auditor.  The county auditor shall 
  4.13  determine and certify whether the petition is signed by the 
  4.14  required number of registered voters or eligible voters as the 
  4.15  case may be.  The certificate shall be conclusive evidence 
  4.16  thereof in any action or proceeding for the recovery of the 
  4.17  costs, charges, and expenses of any examination made pursuant to 
  4.18  the petition. 
  4.19     Sec. 4.  Minnesota Statutes 2002, section 6.55, is amended 
  4.20  to read: 
  4.21     6.55 [EXAMINATION OF RECORDS PURSUANT TO RESOLUTION OF 
  4.22  GOVERNING BODY.] 
  4.23     The governing body of any city, town, county or school 
  4.24  district, by appropriate resolution may ask the state auditor to 
  4.25  examine the books, records, accounts and affairs of their 
  4.26  government, or of any organizational unit, activity, project, 
  4.27  enterprise, or fund thereof; and the state auditor shall examine 
  4.28  the same upon receiving, pursuant to said resolution, a written 
  4.29  request signed by a majority of the members of the governing 
  4.30  body; and the governing body of any public utility commission, 
  4.31  or of any public corporation having a body politic and 
  4.32  corporate, or of any instrumentality joint or several of any 
  4.33  city, town, county, or school district, may request an audit of 
  4.34  its books, records, accounts and affairs in the same manner; 
  4.35  provided that the scope of the examination may be limited by the 
  4.36  request, but such examination shall cover, at least, all cash 
  5.1   received and disbursed and the transactions relating thereto.  
  5.2   Such written request shall be presented to the clerk, or 
  5.3   recording officer of such city, town, county, school district, 
  5.4   public utility commission, public corporation, or 
  5.5   instrumentality, before being presented to the state auditor, 
  5.6   who shall determine whether the same is signed by a majority of 
  5.7   the members of such governing body and, if found to be so 
  5.8   signed, shall certify such fact, and the fact that such 
  5.9   resolution was passed, which certificate shall be conclusive 
  5.10  evidence thereof in any action or proceedings for the recovery 
  5.11  of the costs, charges and expenses of any examination made 
  5.12  pursuant to such request.  Nothing contained in any of the laws 
  5.13  of the state relating to the state auditor, shall be so 
  5.14  construed as to prevent any county, city, town, or school 
  5.15  district from employing a certified public accountant to examine 
  5.16  its books, records, accounts, and affairs.  For the purposes of 
  5.17  this section, the governing body of a town is the town board.  
  5.18     Sec. 5.  Minnesota Statutes 2002, section 6.64, is amended 
  5.19  to read: 
  5.20     6.64 [COOPERATION WITH PUBLIC ACCOUNTANTS; PUBLIC 
  5.21  ACCOUNTANT DEFINED.] 
  5.22     There shall be mutual cooperation between the state auditor 
  5.23  and public accountants in the performance of auditing, 
  5.24  accounting, and other related services for counties, cities, 
  5.25  towns, school districts, and other public corporations.  For the 
  5.26  purposes of sections 6.64 to 6.71 the term public accountant 
  5.27  shall have the meaning ascribed to it in section 412.222.  
  5.28     Sec. 6.  Minnesota Statutes 2002, section 6.65, is amended 
  5.29  to read: 
  5.30     6.65 [MINIMUM PROCEDURES FOR AUDITORS, PRESCRIBED.] 
  5.31     The state auditor shall prescribe minimum procedures and 
  5.32  the audit scope for auditing the books, records, accounts, and 
  5.33  affairs of counties and local governments in Minnesota.  The 
  5.34  minimum scope for audits of all local governments must include 
  5.35  financial and legal compliance audits.  Audits of all school 
  5.36  districts must include a determination of compliance with 
  6.1   uniform financial accounting and reporting standards.  The state 
  6.2   auditor shall promulgate an audit guide for legal compliance 
  6.3   audits, in consultation with representatives of the state 
  6.4   auditor, the attorney general, towns, cities, counties, school 
  6.5   districts, and private sector public accountants. 
  6.6      Sec. 7.  Minnesota Statutes 2002, section 6.66, is amended 
  6.7   to read: 
  6.8      6.66 [CERTAIN PRACTICES OF PUBLIC ACCOUNTANTS AUTHORIZED.] 
  6.9      Any public accountant may engage in the practice of 
  6.10  auditing the books, records, accounts, and affairs of counties, 
  6.11  cities, towns, school districts, and other public corporations 
  6.12  which are not otherwise required by law to be audited 
  6.13  exclusively by the state auditor.  
  6.14     Sec. 8.  Minnesota Statutes 2002, section 6.67, is amended 
  6.15  to read: 
  6.16     6.67 [PUBLIC ACCOUNTANTS; REPORT OF EVIDENCE POINTING TO 
  6.17  MISCONDUCT.] 
  6.18     Whenever a public accountant in the course of auditing the 
  6.19  books and affairs of a county, city, town, school district, or 
  6.20  other public corporations, shall discover evidence pointing to 
  6.21  nonfeasance, misfeasance, or malfeasance, on the part of an 
  6.22  officer or employee in the conduct of duties and affairs, the 
  6.23  public accountant shall promptly make a report of such discovery 
  6.24  to the state auditor and the county attorney of the county in 
  6.25  which the governmental unit is situated and the public 
  6.26  accountant shall also furnish a copy of the report of audit upon 
  6.27  completion to said officers.  The county attorney shall act on 
  6.28  such report in the same manner as required by law for reports 
  6.29  made to the county attorney by the state auditor.  
  6.30     Sec. 9.  Minnesota Statutes 2002, section 6.68, subdivision 
  6.31  1, is amended to read: 
  6.32     Subdivision 1.  [REQUEST TO GOVERNING BODY.] If in an audit 
  6.33  of a county, city, town, school district, or other public 
  6.34  corporation, a public accountant has need of the assistance of 
  6.35  the state auditor, the accountant may obtain such assistance by 
  6.36  requesting the governing body of the governmental unit being 
  7.1   examined to request the state auditor to perform such auditing 
  7.2   or investigative services, or both, as the matter and the public 
  7.3   interest require.  
  7.4      Sec. 10.  Minnesota Statutes 2002, section 6.70, is amended 
  7.5   to read: 
  7.6      6.70 [ACCESS TO REPORTS.] 
  7.7      The state auditor and the public accountants shall have 
  7.8   reasonable access to each other's audit reports, working papers, 
  7.9   and audit programs concerning audits made by each of counties, 
  7.10  cities, towns, school districts, and other public corporations.  
  7.11     Sec. 11.  Minnesota Statutes 2002, section 6.71, is amended 
  7.12  to read: 
  7.13     6.71 [SCOPE OF AUDITOR'S INVESTIGATION.] 
  7.14     Whenever the governing body of a county, city, town, or 
  7.15  school district shall have requested a public accountant to make 
  7.16  an audit of its books and affairs, and such audit is in progress 
  7.17  or has been completed, and freeholders petition or the governing 
  7.18  body requests or both the state auditor to make an examination 
  7.19  covering the same, or part of the same, period, the state 
  7.20  auditor may, in the public interest, limit the scope of the 
  7.21  examination to less than that specified in section 6.54, but the 
  7.22  scope shall cover, at least, an investigation of those 
  7.23  complaints which are within the state auditor's powers and 
  7.24  duties to investigate.