S-1318.1 _______________________________________________
SENATE BILL 5643
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State of Washington 52nd Legislature 1991 Regular Session
By Senator McCaslin. Read first time February 12, 1991. Referred to Committee on Governmental Operations.
AN ACT Relating to internal audits by state agencies and institutions; and adding a new chapter to Title 43 RCW.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1. The purpose of this chapter is to strengthen the internal control of state agencies by establishing a program of internal auditing. Such a function will furnish independent analyses, assessment, and recommendations concerning the adequacy and effectiveness of an agency's systems of internal control, and provide for evaluation of the economy and efficiency by which the agencies carry out their assigned responsibilities.
NEW SECTION. Sec. 2. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.
(1) "State agency" means any department, agency, commission, bureau, office, or any other entity or authority of the state government that:
(a) Has an operating budget exceeding fifty million dollars biennially;
(b) Has a staff or more than three hundred employees; or
(c) Receives and processes cash items in excess of thirty million dollars biennially.
(2) "Agency administrator" means the executive head of an agency.
(3) "Internal audit" means an independent appraisal activity within an agency for the review of operations as a service to management.
NEW SECTION. Sec. 3. Each internal audit program shall conform to the standards for the professional practice of internal auditing, the certified internal auditor code of professional ethics, and the statement of responsibilities of internal auditing, as promulgated by the institute of internal auditors. It shall also conform to policies and manuals of the office of financial management and government auditing standards issued by the comptroller general of the United States, as appropriate.
NEW SECTION. Sec. 4. (1) The scope and assignment of internal audits for each agency shall be determined by the internal audit manager and the agency administrator or designee. The internal audit manager and staff shall have access to any and all records, and other information of the state agency they deem necessary to carry out their duties.
(2) Each agency administrator and internal audit manager, for the purpose of making internal audits, may issue subpoenas and compulsory process and direct the service thereof by any constable or sheriff to compel the attendance of witnesses and the production of books and papers at any designated time and place, and may administer oaths.
If any person summoned neglects or refuses to appear, or neglects or refuses to answer any question that may be put to him or her touching any matter under audit, or to produce any books or papers required, the person making such audit shall apply to a superior court judge of the county where the hearing arose to issue a subpoena for the appearance of such person before the judge, and the judge shall order the issuance of a subpoena for the appearance of such person to give testimony; and if any person so summoned fails to appear, or appearing refuses to testify or to produce any books or papers required, the person shall be subject to like proceedings and penalties for contempt as witnesses in the superior court. Willful false swearing in any such examination shall be perjury and punishable as such.
If any audit discloses malfeasance, misfeasance, or nonfeasance in office on the part of any public officer or employee, the agency administrator or internal audit manager shall make a report of such activity to the state auditor for review and possible further action under RCW 43.09.330.
(3) Internal audits shall be performed in compliance with requirements established by the office of financial management.
NEW SECTION. Sec. 5. Each agency administrator shall ensure that the internal audit program includes the following at a minimum:
(1) A biennial plan, identifying the time period in which the audits will be conducted subject to revision as needed.
(2) A review of the agency's internal control structure at least once every three years.
(3) Review of the design of major new electronic data processing systems and major modifications of existing systems before their installation to ensure the systems provide for adequate audit trails and internal control accountability. Such review shall conform to the standards adopted by the department of information systems.
NEW SECTION. Sec. 6. Sections 1 through 5 of this act shall constitute a new chapter in Title 43 RCW.