EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. Green numbers along left margin indicate location on the printed bill (e.g., 5-15 indicates page 5, line 15).

1-1 Section 1. NRS 354.624 is hereby amended to read as follows:

1-2 354.624 1. Each local government shall provide for an annual audit

1-13 submits an application for an extension to the department. If the local

2-1 government fails to provide for an audit in accordance with the provisions

2-2 of this section, the department of taxation shall cause the audit to be made

2-3 at the expense of the local government. All audits must be conducted by a

2-4 public accountant who is certified or registered or by a partnership or

2-5 professional corporation that is registered pursuant to chapter 628 of NRS.

2-6 2. The annual audit of a school district must [be] :

2-7 (a) Be concluded and the report submitted to the board of trustees as

2-8 provided in subsection 5 not later than 4 months after the close of the fiscal

2-9 year for which the audit is conducted.

2-10 (b) If the school district has more than 150,000 pupils enrolled,

2-11 include an audit of the expenditure by the school district of all public

2-12 money used:

2-13 (1) To design, construct or purchase new buildings for schools or

2-14 related facilities;

2-15 (2) To enlarge, remodel or renovate existing buildings for schools

2-16 or related facilities; and

2-17 (3) To acquire sites for building schools or related facilities, or

2-18 other real property for purposes related to schools.

2-19 3. The governing body may, without requiring competitive bids,

2-20 designate the auditor or firm annually. The auditor or firm must be

2-21 designated not later than 3 months before the close of the fiscal year for

2-22 which the audit is to be made.

2-23 4. Each annual audit must cover the business of the local government

2-24 during the full fiscal year. It must be a financial audit conducted in

2-25 accordance with generally accepted auditing standards, including comment

2-26 on compliance with statutes and regulations, recommendations for

2-27 improvements and any other comments deemed pertinent by the auditor,

2-28 including his expression of opinion on the financial statements. The

2-29 department of taxation shall prescribe the form of the financial statements,

2-30 and the chart of accounts must be as nearly as possible the same as the chart

2-31 that is used in the preparation and publication of the annual budget. The

2-32 report of the audit must include:

2-33 (a) A schedule of all fees imposed by the local government which were

2-34 subject to the provisions of NRS 354.5989;

2-35 (b) A comparison of the operations of the local government with the

2-36 approved budget, including a statement from the auditor that indicates

2-37 whether the governing body has taken action by adoption as recommended,

2-38 by adoption with modifications or by rejection on any deficiencies in

2-39 operations and recommendations for improvements which were noted or

2-40 made in previous reports;

3-1 (c) A statement from the auditor that indicates whether each of the

3-2 following funds established by the local government is being used

3-3 expressly for the purposes for which it was created, in the form required by

3-4 NRS 354.6241:

3-5 (1) An enterprise fund.

3-6 (2) An internal service fund.

3-7 (3) A trust or agency fund.

3-8 (4) A self-insurance fund.

3-9 (5) A fund whose balance is required by law to be:

3-10 (I) Used only for a specific purpose other than the payment of

3-11 compensation to a bargaining unit, as defined in NRS 288.028; or

3-12 (II) Carried forward to the succeeding fiscal year in any designated

3-13 amount; and

3-14 (d) A list and description of any property conveyed to a nonprofit

3-15 organization pursuant to NRS 244.287 or 268.058.

3-16 5. The recommendations and the summary of the narrative comments

3-17 contained in the report of the audit must be read in full at a meeting of the

3-18 governing body held not more than 30 days after the report is submitted to

3-19 it. Immediately thereafter, the entire report, together with any related letter

3-20 to the governing body required by generally accepted auditing standards or

3-21 by regulations adopted pursuant to NRS 354.594, must be filed as a public

3-22 record with:

3-23 (a) The clerk or secretary of the governing body;

3-24 (b) The county clerk;

3-25 (c) The department of taxation; and

3-26 (d) In the case of a school district, the department of education.

3-27 6. The governing body shall act upon the recommendations of the

3-28 report of the audit within 3 months after receipt of the report, unless

3-29 prompter action is required concerning violations of law or regulation, by

3-30 setting forth in its minutes its intention to adopt the recommendations, to

3-31 adopt them with modifications or to reject them for reasons shown in the

3-32 minutes.

3-33 Sec. 2. 1. The legislative auditor shall conduct a performance audit

3-34 of the University and Community College System of Nevada.

3-35 2. The audit must include an examination of the actions taken by the

3-36 University and College System of Nevada to carry out the

3-37 recommendations to control its budgets and expenditures which were made

3-38 by the legislative auditor after the audit that was conducted pursuant to

3-39 chapter 33, Statutes of Nevada 1995, at page 33.

3-40 3. The legislative auditor shall present a final written report of the audit

3-41 to the audit subcommittee of the legislative commission not later than

3-42 February 5, 2001.

4-1 4. The provisions of NRS 218.737 to 218.890, inclusive, apply to the

4-2 audit conducted pursuant to subsection 1.

4-3 5. Upon the request of the legislative auditor, the University and

4-4 Community College System of Nevada shall transfer to the audit division of

4-5 the legislative counsel bureau the sum of $40,000 to carry out the

4-6 provisions of this section. Any remaining balance of the sum transferred

4-7 pursuant to this subsection must not be committed for expenditure after

4-8 February 5, 2001, and must be transferred to the University and

4-9 Community College System of Nevada as soon as all payments of money

4-10 committed have been made.

4-11 Sec. 3. This act becomes effective on July 1, 1999.