SF 2518

as introduced - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to governmental audits; establishing a 
  1.3             procedure for the investigation and referral by the 
  1.4             legislative auditor and the state auditor of 
  1.5             indications of illegal or improper activities; 
  1.6             amending Minnesota Statutes 1994, sections 3.971, by 
  1.7             adding a subdivision; 8.31, by adding a subdivision; 
  1.8             and 388.051, by adding a subdivision; proposing coding 
  1.9             for new law in Minnesota Statutes, chapter 6. 
  1.10  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.11     Section 1.  Minnesota Statutes 1994, section 3.971, is 
  1.12  amended by adding a subdivision to read: 
  1.13     Subd. 5.  [INVESTIGATIONS.] (a) For purposes of this 
  1.14  subdivision, "wrongdoing" means a violation of criminal or civil 
  1.15  law or an action or omission that, while not a violation of law, 
  1.16  is contrary to public policy. 
  1.17     (b) If the legislative auditor, by any means, becomes aware 
  1.18  of possible wrongdoing by an agency under the auditor's 
  1.19  jurisdiction, or by an officer or employee of such an agency, 
  1.20  the auditor shall follow the procedure prescribed by this 
  1.21  subdivision.  The auditor shall first conduct an informal 
  1.22  preliminary investigation to determine whether there is any 
  1.23  substance to the allegation, report, or appearance of 
  1.24  wrongdoing.  If the preliminary investigation determines that 
  1.25  there is no substantial indication of wrongdoing, the auditor's 
  1.26  inquiry must end.  If the auditor's awareness of the possible 
  1.27  wrongdoing came from a report or complaint from a person or 
  2.1   agency, the auditor shall notify the person or agency that the 
  2.2   preliminary investigation has not substantiated the report or 
  2.3   complaint. 
  2.4      (c) If the auditor's preliminary investigation determines 
  2.5   that there is a substantial indication of wrongdoing, the 
  2.6   auditor shall further investigate the matter to the best of the 
  2.7   auditor's resources.  The further investigation must be an 
  2.8   attempt to determine probable cause that a violation of criminal 
  2.9   law has occurred, to establish evidence that a violation of 
  2.10  civil law has occurred, or to verify that an action or omission 
  2.11  not illegal, but contrary to public policy, has occurred.  The 
  2.12  auditor shall conduct the investigation required by this 
  2.13  paragraph whether or not the agency involved in the possible 
  2.14  wrongdoing is investigating the matter on its own.  The subject 
  2.15  of an investigation under this paragraph, and the agency 
  2.16  involved if the agency itself is not the subject, shall 
  2.17  cooperate with the auditor and shall furnish to the auditor any 
  2.18  records or other documents requested by the auditor, including 
  2.19  any documents uncovered or prepared as a result of the agency's 
  2.20  own investigation.  An investigator retained by an agency to 
  2.21  conduct an investigation of the matter for the agency shall also 
  2.22  cooperate with the auditor.  If the investigator is an attorney, 
  2.23  but is retained by the agency as an investigator, the 
  2.24  investigator may not also provide legal counsel or 
  2.25  representation to the agency, and the investigator's 
  2.26  work-product during the course of the investigation is not 
  2.27  protected by attorney-client privilege. 
  2.28     (d) If the investigation conducted under paragraph (c) 
  2.29  results in a finding of probable cause that a violation of 
  2.30  criminal law has occurred, the auditor shall report the matter 
  2.31  to the attorney general or appropriate county attorney for 
  2.32  prosecution.  If the investigation does not result in a finding 
  2.33  of probable cause, but does determine that there is a 
  2.34  substantial indication of criminal acts, warranting further 
  2.35  investigation beyond the resources of the auditor, the auditor 
  2.36  shall report that determination and all supporting evidence to 
  3.1   the appropriate prosecutor for further investigation by the 
  3.2   prosecutor. 
  3.3      (e) If the investigation required by paragraph (c) 
  3.4   establishes evidence that a violation of civil law has occurred, 
  3.5   the auditor shall submit a public report to the legislative 
  3.6   audit commission, appropriate committees of the legislature, and 
  3.7   any state agency that might have jurisdiction over the agency 
  3.8   that is the subject of, or is involved in, the investigation.  
  3.9   If the civil violation has resulted in the loss of any public 
  3.10  money, the auditor shall initiate or recommend action to recover 
  3.11  the money. 
  3.12     (f) If the investigation required by paragraph (c) verifies 
  3.13  that an action or omission that is not illegal, but contrary to 
  3.14  public policy, has occurred, the auditor shall recommend 
  3.15  corrective action to the agency that is the subject of, or is 
  3.16  involved in, the investigation.  The auditor shall also report 
  3.17  the finding and the recommendation to the legislative audit 
  3.18  commission and the public.  The agency shall respond in writing 
  3.19  to the legislative auditor, the commission, and the public. 
  3.20     Sec. 2.  [6.77] [INVESTIGATIONS.] 
  3.21     (a) For purposes of this section, "wrongdoing" means a 
  3.22  violation of criminal or civil law or an action or omission 
  3.23  that, while not a violation of law, is contrary to public policy.
  3.24     (b) If the state auditor, by any means, becomes aware of 
  3.25  possible wrongdoing by a governmental unit under the auditor's 
  3.26  jurisdiction, or by an officer or employee of such a unit, the 
  3.27  auditor shall follow the procedure prescribed by this section.  
  3.28  The auditor shall first conduct an informal preliminary 
  3.29  investigation to determine whether there is any substance to the 
  3.30  allegation, report, or appearance of wrongdoing.  If the 
  3.31  preliminary investigation determines that there is no 
  3.32  substantial indication of wrongdoing, the auditor's inquiry must 
  3.33  end.  If the auditor's awareness of the possible wrongdoing came 
  3.34  from a report or complaint from a person or agency, the auditor 
  3.35  shall notify the person or agency that the preliminary 
  3.36  investigation has not substantiated the report or complaint. 
  4.1      (c) If the auditor's preliminary investigation determines 
  4.2   that there is a substantial indication of wrongdoing, the 
  4.3   auditor shall further investigate the matter to the best of the 
  4.4   auditor's resources.  The further investigation must be an 
  4.5   attempt to determine probable cause that a violation of criminal 
  4.6   law has occurred, to establish evidence that a violation of 
  4.7   civil law has occurred, or to verify that an action or omission 
  4.8   not illegal, but contrary to public policy, has occurred.  The 
  4.9   auditor shall conduct the investigation required by this 
  4.10  paragraph whether or not the unit involved in the possible 
  4.11  wrongdoing is investigating the matter on its own.  The subject 
  4.12  of an investigation under this paragraph, and the unit involved 
  4.13  if the unit itself is not the subject, shall cooperate with the 
  4.14  auditor and shall furnish to the auditor any records or other 
  4.15  documents requested by the auditor, including any documents 
  4.16  uncovered or prepared as a result of the unit's own 
  4.17  investigation.  An investigator retained by a unit to conduct an 
  4.18  investigation of the matter for the unit shall also cooperate 
  4.19  with the auditor.  If the investigator is an attorney, but is 
  4.20  retained by the unit as an investigator, the investigator may 
  4.21  not also provide legal counsel or representation to the unit, 
  4.22  and the investigator's work-product during the course of the 
  4.23  investigation is not protected by attorney-client privilege. 
  4.24     (d) If the investigation conducted under paragraph (c) 
  4.25  results in a finding of probable cause that a violation of 
  4.26  criminal law has occurred, the auditor shall report the matter 
  4.27  to the attorney general or appropriate county attorney for 
  4.28  prosecution.  If the investigation does not result in a finding 
  4.29  of probable cause, but does determine that there is a 
  4.30  substantial indication of criminal acts, warranting further 
  4.31  investigation beyond the resources of the auditor, the auditor 
  4.32  shall report that determination and all supporting evidence to 
  4.33  the appropriate prosecutor for further investigation by the 
  4.34  prosecutor. 
  4.35     (e) If the investigation required by paragraph (c) 
  4.36  establishes evidence that a violation of civil law has occurred, 
  5.1   the auditor shall submit a public report to the legislative 
  5.2   audit commission, appropriate committees of the legislature, and 
  5.3   any state agency that might have jurisdiction over the matter 
  5.4   that is the subject of, or is involved in, the investigation.  
  5.5   If the civil violation has resulted in the loss of any public 
  5.6   money, the auditor shall initiate or recommend action to recover 
  5.7   the money. 
  5.8      (f) If the investigation required by paragraph (c) verifies 
  5.9   that an action or omission that is not illegal, but contrary to 
  5.10  public policy, has occurred, the auditor shall recommend 
  5.11  corrective action to the unit that is the subject of, or is 
  5.12  involved in, the investigation.  The auditor shall also report 
  5.13  the finding and the recommendation to the public.  The unit 
  5.14  shall respond in writing to the auditor and the public. 
  5.15     Sec. 3.  Minnesota Statutes 1994, section 8.31, is amended 
  5.16  by adding a subdivision to read: 
  5.17     Subd. 1a.  [RESPONSE TO LEGISLATIVE AUDITOR OR STATE 
  5.18  AUDITOR.] Upon receipt of a report of probable cause or 
  5.19  substantial evidence of a violation of criminal law from the 
  5.20  legislative auditor or state auditor under section 3.971, 
  5.21  subdivision 5, or 6.77, the attorney general shall prosecute the 
  5.22  matter or shall investigate further.  If the attorney general 
  5.23  determines prosecution or further investigation is not 
  5.24  warranted, the attorney general shall report that determination, 
  5.25  and reasons for it, in writing to the legislative auditor or 
  5.26  state auditor and the public. 
  5.27     Sec. 4.  Minnesota Statutes 1994, section 388.051, is 
  5.28  amended by adding a subdivision to read: 
  5.29     Subd. 1a.  [RESPONSE TO LEGISLATIVE AUDITOR OR STATE 
  5.30  AUDITOR.] Upon receipt of a report of probable cause or 
  5.31  substantial evidence of a violation of criminal law from the 
  5.32  legislative auditor or state auditor under section 3.971, 
  5.33  subdivision 5, or 6.77, the county attorney shall prosecute the 
  5.34  matter or shall investigate further.  If the county attorney 
  5.35  determines prosecution or further investigation is not 
  5.36  warranted, the county attorney shall report that determination, 
  6.1   and reasons for it, in writing to the legislative auditor or 
  6.2   state auditor and the public.