Senate Bill No. 173–Committee on
Government Affairs

 

(On Behalf of the Department of Administration,
Budget Division)

 

February 20, 2003

____________

 

Referred to Committee on Commerce and Labor

 

SUMMARY—Exempts certain licensing boards from State Budget Act and certain provisions governing financial administration. (BDR 31‑506)

 

FISCAL NOTE:  Effect on Local Government: No.

                           Effect on the State: No.

 

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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

AN ACT relating to state financial administration; exempting certain licensing boards from the State Budget Act and certain provisions governing financial administration; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

1-1  Section 1. NRS 353.005 is hereby amended to read as follows:

1-2  353.005  The provisions of this chapter do not apply to boards

1-3  created [pursuant to] by the provisions of chapters 623 to 625A,

1-4  inclusive, 628, 630 to 640A, inclusive, 641 to 644, inclusive, 648,

1-5  654 and 656 of NRS and NRS 590.485 and the officers and

1-6  employees [thereof.] of those boards.

1-7  Sec. 2.  NRS 353A.020 is hereby amended to read as follows:

1-8  353A.020  1.  The Director, in consultation with the

1-9  Committee and Legislative Auditor, shall adopt a uniform system of

1-10  internal accounting and administrative control for agencies. The

1-11  elements of the system must include, without limitation:

1-12      (a) A plan of organization which provides for a segregation of

1-13  duties appropriate to safeguard the assets of the agency;

2-1  (b) A plan which limits access to assets of the agency to persons

2-2  who need the assets to perform their assigned duties;

2-3  (c) Procedures for authorizations and recordkeeping which

2-4  effectively control accounting of assets, liabilities, revenues and

2-5  expenses;

2-6  (d) A system of practices to be followed in the performance of

2-7  the duties and functions of each agency; and

2-8  (e) An effective system of internal review.

2-9  2.  The Director, in consultation with the Committee and

2-10  Legislative Auditor, may modify the system whenever he considers

2-11  it necessary.

2-12      3.  Each agency shall develop written procedures to carry out

2-13  the system of internal accounting and administrative control adopted

2-14  pursuant to this section.

2-15      4.  For the purposes of this section, “agency” does not include:

2-16      (a) A board created by the provisions of chapters 623 to 625A,

2-17  inclusive, 628, 630 to 640A, inclusive, 641 to 644, inclusive, 648,

2-18  654 and 656 of NRS[.] and NRS 590.485.

2-19      (b) The University and Community College System of Nevada.

2-20      (c) The Public Employees’ Retirement System.

2-21      (d) The Housing Division of the Department of Business and

2-22  Industry.

2-23      (e) The Colorado River Commission of Nevada.

2-24      Sec. 3.  NRS 353A.025 is hereby amended to read as follows:

2-25      353A.025  1.  The head of each agency shall periodically

2-26  review the agency’s system of internal accounting and

2-27  administrative control to determine whether it is in compliance with

2-28  the uniform system of internal accounting and administrative control

2-29  for agencies adopted pursuant to subsection 1 of NRS 353A.020.

2-30      2.  On or before July 1 of each even-numbered year, the head of

2-31  each agency shall report to the Director whether the agency’s

2-32  system of internal accounting and administrative control is in

2-33  compliance with the uniform system adopted pursuant to subsection

2-34  1 of NRS 353A.020. The reports must be made available for

2-35  inspection by the members of the Legislature.

2-36      3.  For the purposes of this section, “agency” does not include:

2-37      (a) A board created by the provisions of chapters 623 to 625A,

2-38  inclusive, 628, 630 to 640A, inclusive, 641 to 644, inclusive, 648,

2-39  654 and 656 of NRS[.] and NRS 590.485.

2-40      (b) The University and Community College System of Nevada.

2-41      (c) The Public Employees’ Retirement System.

2-42      (d) The Housing Division of the Department of Business and

2-43  Industry.

2-44      (e) The Colorado River Commission of Nevada.

3-1  4.  The Director shall, on or before the first Monday in

3-2  February of each odd-numbered year, submit a report on the status

3-3  of internal accounting and administrative controls in agencies to the:

3-4  (a) Director of the Legislative Counsel Bureau for transmittal to

3-5  the:

3-6       (1) Senate Standing Committee on Finance; and

3-7       (2) Assembly Standing Committee on Ways and Means;

3-8  (b) Governor; and

3-9  (c) Legislative Auditor.

3-10      5.  The report submitted by the Director pursuant to subsection

3-11  4 must include, without limitation:

3-12      (a) The identification of each agency that has not complied with

3-13  the requirements of subsections 1 and 2;

3-14      (b) The identification of each agency that does not have an

3-15  effective method for reviewing its system of internal accounting and

3-16  administrative control; and

3-17      (c) The identification of each agency that has weaknesses in its

3-18  system of internal accounting and administrative control, and the

3-19  extent and types of such weaknesses.

3-20      Sec. 4.  NRS 353A.045 is hereby amended to read as follows:

3-21      353A.045  The Chief shall:

3-22      1.  Report to the Director.

3-23      2.  Develop long-term and annual work plans to be based on the

3-24  results of periodic documented risk assessments. The annual work

3-25  plan must list the agencies to which the Division will provide

3-26  training and assistance and be submitted to the Director for

3-27  approval. Such agencies must not include:

3-28      (a) A board created by the provisions of chapters 623 to 625A,

3-29  inclusive, 628, 630 to 640A, inclusive, 641 to 644, inclusive, 648,

3-30  654 and 656 of NRS[.] and NRS 590.485.

3-31      (b) The University and Community College System of Nevada.

3-32      (c) The Public Employees’ Retirement System.

3-33      (d) The Housing Division of the Department of Business and

3-34  Industry.

3-35      (e) The Colorado River Commission of Nevada.

3-36      3.  Provide a copy of the approved annual work plan to the

3-37  Legislative Auditor.

3-38      4.  In consultation with the Director, prepare a plan for auditing

3-39  executive branch agencies for each fiscal year and present the plan

3-40  to the Committee for its review and approval. Each plan for auditing

3-41  must:

3-42      (a) State the agencies which will be audited, the proposed scope

3-43  and assignment of those audits and the related resources which will

3-44  be used for those audits; and

4-1  (b) Ensure that the internal accounting, administrative controls

4-2  and financial management of each agency are reviewed periodically.

4-3  5.  Perform the audits of the programs and activities of the

4-4  agencies in accordance with the plan approved pursuant to

4-5  subsection 5 of NRS 353A.038 and prepare audit reports of his

4-6  findings.

4-7  6.  Review each agency that is audited pursuant to subsection 5

4-8  and advise those agencies concerning internal accounting,

4-9  administrative controls and financial management.

4-10      7.  Submit to each agency that is audited pursuant to subsection

4-11  5 analyses, appraisals and recommendations concerning:

4-12      (a) The adequacy of the internal accounting and administrative

4-13  controls of the agency; and

4-14      (b) The efficiency and effectiveness of the management of the

4-15  agency.

4-16      8.  Report any possible abuses, illegal actions, errors, omissions

4-17  and conflicts of interest of which the Division becomes aware

4-18  during the performance of an audit.

4-19      9.  Adopt the standards of the Institute of Internal Auditors for

4-20  conducting and reporting on audits.

4-21      10.  Consult with the Legislative Auditor concerning the plan

4-22  for auditing and the scope of audits to avoid duplication of effort

4-23  and undue disruption of the functions of agencies that are audited

4-24  pursuant to subsection 5.

4-25      11.  Appoint a Manager of Internal Controls.

4-26      Sec. 5.  NRS 218.825 is hereby amended to read as follows:

4-27      218.825  1.  Each of the boards [and commissions] created by

4-28  the provisions of chapters 623 to 625A, inclusive, 628 , 630 to

4-29  640A, inclusive, 641 to 644, inclusive, [and 641C,] 648, 654 and

4-30  656 of NRS and NRS 590.485 shall engage the services of a

4-31  certified public accountant or public accountant, or firm of either of

4-32  such accountants, to audit all its fiscal records once each year for the

4-33  preceding fiscal year or once every other year for the 2 preceding

4-34  fiscal years. The cost of the audit must be paid by the board [or

4-35  commission] audited.

4-36      2.  A report of each such audit must be filed by the board [or

4-37  commission] with the Legislative Auditor and the [director of the

4-38  budget] Chief of the Budget Division of the Department of

4-39  Administration on or before December 1 of each year in which an

4-40  audit is conducted. All audits must be conducted in accordance with

4-41  generally accepted auditing standards , and all financial statements

4-42  must be prepared in accordance with generally accepted principles

4-43  of accounting for special revenue funds.

4-44      3.  The Legislative Auditor shall audit the fiscal records of any

4-45  such board [or commission] whenever directed to do so by the

5-1  Legislative Commission. When the Legislative Commission directs

5-2  such an audit, [it] the Legislative Commission shall also determine

5-3  who is to pay the cost of the audit.

5-4  Sec. 6.  This act becomes effective on July 1, 2003.

 

5-5  H