Senate Bill No. 561–Committee on Government Affairs
CHAPTER..........
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
Section 1. Chapter 353A of NRS is hereby amended by adding
thereto a new section to read as follows:
1. The manager of internal controls appointed pursuant to NRS
353A.045 must:
(a) Be a certified public accountant licensed by this state or a public
accountant qualified pursuant to chapter 628 of NRS to practice public
accounting in this state; and
(b) Have at least 4 years of progressively responsible experience in
professional auditing and performing internal audits or postaudits. The
experience must include, without limitation, the performance of audits
of governmental entities or of private business organizations, whether or
not organized for profit.
2. The manager of internal controls is in the unclassified service of
this state and serves at the pleasure of the chief.
3. The chief shall establish the powers and duties of the manager of
internal controls.
Sec. 2. NRS 353A.020 is hereby amended to read as follows:
353A.020 1. The director, in consultation with the committee and
legislative auditor, shall adopt a uniform system of internal accounting and
administrative control for agencies. The elements of the system must
include, without limitation:
(a) A plan of organization which provides for a segregation of duties
appropriate to safeguard the assets of the agency;
(b) A plan which limits access to assets of the agency to persons who
need the assets to perform their assigned duties;
(c) Procedures for authorizations and recordkeeping which effectively
control accounting of assets, liabilities, revenues and expenses;
(d) A system of practices to be followed in the performance of the
duties and functions of each agency; and
(e) An effective system of internal review.
2. The director, in consultation with the committee and legislative
auditor, may modify the system whenever he considers it necessary.
3. Each agency shall develop written procedures to carry out the
system of internal accounting and administrative control adopted pursuant
to this section.
4. For the purposes of this section, “agency” does not include:
(a) A board [or commission] created by the provisions of chapters 623
to [625,] 625A, inclusive, 628 , 630 to 640A, inclusive, 641 to 644,
inclusive, 654 and 656 of NRS.
(b) The University and Community College System of Nevada.
(c) The public employees’ retirement system.
(d) The housing division of the department of business and industry.
(e) The Colorado River Commission.
Sec. 3. NRS 353A.025 is hereby amended to read as follows:
353A.025 1. The head of each agency shall periodically review the
agency’s system of internal accounting and administrative control to
determine whether it is in compliance with the uniform system of internal
accounting and administrative control for agencies adopted pursuant to
subsection 1 of NRS 353A.020.
2. On or before July 1 of each even-numbered year, the head of each
agency shall report to the director whether the agency’s system of internal
accounting and administrative control is in compliance with the uniform
system adopted pursuant to subsection 1 of NRS 353A.020. The reports
must be made available for inspection by the members of the legislature.
3. For the purposes of this section, “agency” does not include:
(a) A board [or commission] created by the provisions of chapters 623
to [625,] 625A, inclusive, 628 , 630 to 640A, inclusive, 641 to 644,
inclusive, 654 and 656 of NRS.
(b) The University and Community College System of Nevada.
(c) The public employees’ retirement system.
(d) The housing division of the department of business and industry.
(e) The Colorado River Commission.
4. The director shall, on or before the first Monday in February of each
odd-numbered year, submit a report on the status of internal accounting
and administrative controls in agencies to the:
(a) Director of the legislative counsel bureau for transmittal to the:
(1) Senate standing committee on finance; and
(2) Assembly standing committee on ways and means;
(b) Governor; and
(c) Legislative auditor.
5. The report submitted by the director pursuant to subsection 4 must
include, without limitation:
(a) The identification of each agency that has not complied with the
requirements of subsections 1 and 2;
(b) The identification of each agency that does not have an effective
method for reviewing its system of internal accounting and administrative
control; and
(c) The identification of each agency that has weaknesses in its system
of internal accounting and administrative control, and the extent and types
of such weaknesses.
Sec. 4. NRS 353A.031 is hereby amended to read as follows:
353A.031 As used in NRS 353A.031 to 353A.100, inclusive, and
section 1 of this act, unless the context otherwise requires, the words and
terms defined in NRS 353A.034 and 353A.036 have the meanings
ascribed to them in those sections.
Sec. 5. NRS 353A.045 is hereby amended to read as follows:
353A.045 The chief [of the division] shall:
1. Report to the director.
2. Develop long-term and annual work plans to be based on the results
of periodic documented risk assessments. The annual work plan must[:
(a) List] list the agencies to which the division will provide training and
assistance[; and
(b) Be] and be submitted to the director for approval. Such agencies
must not include:
(a) A board created by the provisions of chapters 623 to 625A,
inclusive, 628, 630 to 640A, inclusive, 641 to 644, inclusive, 654 and 656
of NRS.
(b) The University and Community College System of Nevada.
(c) The public employees’ retirement system.
(d) The housing division of the department of business and industry.
(e) The Colorado River Commission.
3. Provide a copy of the approved annual work plan to the legislative
auditor.
4. In consultation with the director, prepare a plan for auditing
executive branch agencies for each fiscal year and present the plan to the
committee for its review and approval. Each plan for auditing must:
(a) State the agencies which will be audited, the proposed scope and
assignment of those audits and the related resources which will be used for
those audits; and
(b) Ensure that the internal accounting, administrative controls and
financial management of each agency are reviewed periodically.
5. Perform the audits of the programs and activities of the agencies in
accordance with the plan approved pursuant to subsection 5 of NRS
353A.038 and prepare audit reports of his findings.
6. Review each agency that is audited pursuant to subsection 5 and
advise those agencies concerning internal accounting, administrative
controls and financial management.
7. Submit to each agency that is audited pursuant to subsection 5
analyses, appraisals and recommendations concerning:
(a) The adequacy of the internal accounting and administrative controls
of the agency; and
(b) The efficiency and effectiveness of the management of the agency.
8. Report any possible abuses, illegal actions, errors, omissions and
conflicts of interest of which the division becomes aware during the
performance of an audit.
9. Adopt the standards of the Institute of Internal Auditors for
conducting and reporting on audits.
10. Consult with the legislative auditor concerning the plan for
auditing and the scope of audits to avoid duplication of effort and undue
disruption of the functions of agencies that are audited pursuant to
subsection 5.
11. Appoint a manager of internal controls.
Sec. 6. This act becomes effective on July 1, 2001.
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