ENROLLED
Senate Bill No. 4006
(By Senators Tomblin, Mr. President, and Sprouse,
By Request of the Executive)
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[Passed September 13, 2005; in effect from passage.]
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AN ACT to amend and reenact §12-4-14 of the Code of West Virginia, 1931, as amended,
relating to accountability of persons receiving state funds or grants; requiring
reports or sworn statements for certain state funds or grants; giving Secretary
of the Department of Administration rule-making authority; providing for the barring
of persons from receiving state grants or funds; providing for the submission of
information on sworn statements or reports to the Legislative Auditor; authorizing
the Legislative Auditor to perform audits in certain circumstances; requiring the
Legislative Auditor to inform the State Treasurer if certain reports or sworn statements
are not submitted within a certain period; and providing criminal penalties for
filing a fraudulent sworn statement of expenditures, a fraudulent sworn statement
or a fraudulent report.
Be it enacted by the Legislature of West Virginia:
That §12-4-14 of the Code of West Virginia, 1931, as amended, be amended and reenacted
to read as follows:
ARTICLE 4. ACCOUNTS, REPORTS AND GENERAL PROVISIONS.
§12-4-14. Accountability of persons receiving state funds or grants; sworn statements
by volunteer fire departments; criminal penalties.
(a) For the purposes of this section:
(1) "Grantor" means a state spending unit awarding a state grant.
(2) "Person" includes any corporation, partnership, association, individual or other
legal entity. The term "person" does not include a state spending unit or a local
government as defined in section one-a, article nine, chapter six of this code.
(3) "Report" means an engagement, such as an agreed-upon procedures engagement or
other attestation engagement, performed and prepared by a certified public accountant
to test whether state grants were spent as intended. The term "report" does not
mean a full-scope audit or review of the person receiving state funds.
(4)"State grant" means funding provided by a state spending unit, regardless of
the original source of the funds, to a person upon application for a specific purpose.
The term "state grant" does not include: (A) Payments for goods and services purchased
by a state spending unit; (B) compensation to state employees and public officials;
(C) reimbursements to state employees and public officials for travel or incidental
expenses; (D) grants of student aid; (E) government transfer payments; (F) direct
benefits provided under state insurance and welfare programs; (G) funds reimbursed
to a person for expenditures made for qualified purposes when receipts for the expenditures
are required prior to receiving the funds:
Provided, That notwithstanding
the provisions of this subdivision, funding provided pursuant to section twelve,
article two, chapter five-b is included within the term "state grant"; (H) retirement
benefits; and (I) federal pass-through funds that are subject to the federal Single
Audit Act Amendments of 1996, 31 U. S. C. 7501,
et seq. The term "state grant"
does not include formula distributions to volunteer and part-volunteer fire departments
made pursuant to sections fourteen-d and thirty-three, article three, chapter thirty-three
of this code and section seven, article twelve-c of said chapter.
(b) (1) Any person who receives one or more state grants in the amount of fifty
thousand dollars or more in the aggregate in a state's fiscal year shall file with
the grantor a report of the disbursement of the state grant funds. When the grantor
causes an audit, by an independent certified public accountant, to be conducted
of the grant funds, the audit is performed using generally accepted government auditing
standards and a copy of the audit is available for public inspection, no report
is required to be filed under this section. An audit performed that complies with
Office of Management and Budget circular A-133, as published on the twenty-seventh
day of June, two thousand three, and submitted within the period provided in this
section may be substituted for the report.
(2) Any person who receives a state grant in an amount less than fifty thousand
dollars or who is not required to file a report because an audit has been conducted
or substituted as provided by subdivision (1) of this subsection shall file with
the grantor a sworn statement of expenditures made under the grant.
(3) Reports and sworn statements of expenditures required by subdivisions (1) and
(2) of this subsection shall be filed within two years of the end of the person's
fiscal year in which the disbursement of state grant funds by the grantor was made.
The report shall be made by an independent certified public accountant at the cost
of the person receiving the state grant. State grant funds may be used to pay for
the report if the applicable grant provisions allow . The scope of the report is
limited to showing that the state grant funds were spent for the purposes intended
when the grant was made.
(c) (1) Any person failing to file a required report or sworn statement of expenditures
within the two-year period provided in subdivision (3), subsection (b) of this section
for state grant funds disbursed after the first day of July, two thousand three,
is barred from subsequently receiving state grants until the person has filed the
report or sworn statement of expenditures and is otherwise in compliance with the
provisions of this section.
(2) Any grantor of a state grant shall report any persons failing to file a required
report or sworn statement of expenditures within the required period provided in
subdivision (3), subsection (b) of this section for a state grant disbursed after
the first day of July, two thousand three, to the Legislative Auditor for purposes
of debarment from receiving state grants.
(d) (1) The state agency administering the state grant shall notify the grantee
of the reporting requirements set forth in this section.
(2) All grantors awarding state grants shall, prior to awarding a state grant, take
reasonable actions to verify that the person is not barred from receiving state
grants pursuant to this section. The verification process shall, at a minimum, include:
(A) A requirement that the person seeking the state grant provide a sworn statement
from an authorized representative that the person has filed all reports and sworn
statements of expenditures for state grants received as required under this section;
and
(B) Confirmation from the Legislative Auditor by the grantor that the person has
not been identified as one who has failed to file a report or sworn statement of
expenditures under this section. Confirmation may be accomplished by accessing the
computerized database provided in subsection (e) of this section.
(3) If any report or sworn statement of expenditures submitted pursuant to the requirements
of this section provides evidence of a reportable condition or violation, the grantor
shall provide a copy of the report or sworn statement of expenditures to the Legislative
Auditor within thirty days of receipt by the grantor.
(4) The grantor shall maintain copies of reports and sworn statements of expenditures
required by this section and make the reports or sworn statements of expenditures
available for public inspection, as well as for use in audits and performance reviews
of the grantor.
(5) The Secretary of the Department of Administration has authority to promulgate
procedural and interpretive rules and propose legislative rules for promulgation
in accordance with the provisions of article three, chapter twenty-nine-a of this
code to assist in implementing the provisions of subsections (a), (b), (c) and (d)
of this section.
(e) (1) Any state agency administering a state grant shall, in the manner designated
by the Legislative Auditor, notify the Legislative Auditor of the maximum amount
of funds to be disbursed, the identity of the person authorized to receive the funds,
the person's fiscal year and federal employer identification number and the purpose
and nature of the state grant within thirty days of making the state grant or authorizing
the disbursement of the funds, whichever is later. If the state grant was awarded
prior to the first day of October, two thousand five, the grantor shall provide
the information required by this section by the first day of December, two thousand
five.
(2) The State Treasurer shall provide the Legislative Auditor the information concerning
formula distributions to volunteer and part-volunteer fire departments, made pursuant
to sections fourteen-d and thirty-three, article three, chapter thirty-three of
this code and section seven, article twelve-c of said chapter, the Legislative Auditor
requests and in the manner designated by the Legislative Auditor.
(3) The Legislative Auditor shall maintain a list identifying persons who have failed
to file reports and sworn statements required by this section. The list may be in
the form of a computerized database that may be accessed by state agencies over
the Internet.
(f) An audit of state grant funds may be authorized at any time by the Joint Committee
on Government and Finance to be conducted by the Legislative Auditor at no cost
to the grantee.
(g) (1) Volunteer and part-volunteer fire departments receiving formula distributions
pursuant to sections fourteen-d and thirty-three, article three, chapter thirty-three
of this code and section seven, article twelve-c of said chapter shall either:
(A) File a report, as defined in subdivision (3), subsection (a) of this section
with the Legislative Auditor within the same time frames as are required for sworn
statements of annual expenditures to be filed under this section. The report shall
be made by an independent certified public accountant at the cost of the volunteer
or part-volunteer fire department. The scope of the report is limited to showing
that the funds distributed were spent for authorized purposes; or
(B) File a sworn statement of annual expenditures with the Legislative Auditor on
or before the fourteenth day of February of each year. The sworn statement of expenditures
shall be signed by the chief or director of the volunteer fire department and shall
be made under oath and acknowledged before a notary public.
(2) If the sworn statement or report required by this subsection is not filed on
or before the fifteenth day of May, unless the time period is extended by the Legislative
Auditor, the Legislative Auditor may conduct an audit of the volunteer or part-
volunteer fire department.
(3) If the sworn statement of annual expenditures or report required by this subsection
is not filed with the Legislative Auditor by the first day of July, unless the time
period is extended by the Legislative Auditor, the Legislative Auditor shall notify
the State Treasurer who shall withhold payment of any amount that would otherwise
be distributed to the fire department under the provisions of sections fourteen-d
and thirty-three, article three, chapter thirty-three of this code and section seven,
article twelve-c of said chapter until the report is complete. Moneys withheld pursuant
to this subdivision are to be deposited in the special revenue account created in
the State Treasury in subdivision (4) of this subsection.
(4) The Legislative Auditor may assign an employee or employees to perform audits
or reviews at the direction of the Legislative Auditor of the disbursement of state
grant funds to volunteer fire departments. The volunteer fire department shall cooperate
with the Legislative Auditor, the Legislative Auditor's employees and the State
Auditor in performing their duties under this section. If the Legislative Auditor
determines a volunteer fire department is not cooperating, the Legislative Auditor
shall notify the State Treasurer who shall withhold payment of any amount that would
otherwise be distributed to the fire department under the provisions of sections
fourteen-d and thirty-three, article three, chapter thirty-three of this code and
section seven, article twelve-c of said chapter until the Legislative Auditor informs
the Treasurer that the fire department has cooperated as required by this section.
The State Treasurer shall pay the amount withheld into a special revenue account
hereby created in the State Treasury and designated the "Volunteer Fire Department
Audit Account". If, after one year from payment of the amount withheld into the
special revenue account, the Legislative Auditor informs the State Treasurer of
continued noncooperation by the fire department, the State Treasurer shall pay the
amount withheld to the fund from which it was distributed to be redistributed the
following year pursuant to the applicable provisions of those sections.
(5) Whenever the State Auditor performs an audit of a volunteer fire department
for any purpose the Auditor shall also conduct an audit of other state funds received
by the fire department pursuant to sections fourteen-d and thirty-three, article
three, chapter thirty-three of this code and section seven, article twelve-c of
said chapter. The Auditor shall send a copy of the audit to the Legislative Auditor.
The Legislative Auditor may accept an audit performed by the Auditor in lieu of
performing an audit under this section.
(6) If the Legislative Auditor is notified by a grantor that a fire department has
failed to file a report or a sworn statement of expenditures for a state grant it
received, the Legislative Auditor shall notify the Treasurer who shall withhold
further distributions to the fire department in the same manner provided in subdivision
(3) of this subsection.
(h) Any report submitted pursuant to the provisions of this section may be filed
electronically in accordance with the provisions of article one, chapter thirty-nine-a
of this code.
(i) Any person who files a fraudulent sworn statement of expenditures under subsection
(b) or (g) of this section, a fraudulent sworn statement under subsection (d) of
this section or a fraudulent report under this section is guilty of a felony and,
upon conviction thereof, shall be fined not less than one thousand dollars nor more
than five thousand dollars or imprisoned in a state correctional facility for not
less than one year nor more than five years, or both fined and imprisoned.