SECTION 1. Title 42 of the General Laws entitled "STATE AFFAIRS AND GOVERNMENT" is hereby amended by adding thereto the following chapter: 42-9.4-1. Purpose. The office of inspector general shall be an independent administrative agency charged with the purpose of preventing and detecting fraud, waste, abuse and mismanagement in the expenditure of public funds, whether federal, state, or local, and relating to any and all state programs and operations, as well as the procurement of any supplies, services, or construction, by agencies, bureaus, divisions, sections, departments, offices, commissions, institutions and activities of the State of Rhode Island, including those districts, authorities, or political subdivisions created by the general assembly, the governor, and any court, including any city or town within the State of Rhode Island. Investigations may include the expenditures by nongovernmental agencies of federal, state, and local public funds. 42-9.4-2. Definitions. As used in this chapter, unless the context requires otherwise, the following terms shall have the following meanings:
(1) "Construction" means the process of building, altering, repairing, improving, or demolishing any public structure or building, or other improvements of any kind to any public property.
(2) "Contract" means all types of agreements, including grants and orders, for the purchase or disposal of supplies, services, construction, or any other item. It includes:
(i) Awards;
(ii) Contracts of a fixed-price, cost, cost-plus-a-fixed-fee, or incentive type;
(iii) Contracts providing for the issuance of job or task orders;
(iv) Leases;
(v) Letter contracts;
(vi) Purchase orders; and
(vii) Construction management contracts. It also includes supplemental agreements to any of the foregoing agreements.
(3) "Contractor" means any person, corporation, partnership, business, union, committee, or other organization entity or group of individuals, performing any tasks, or duties as defined under a written or oral contract with and for the State of Rhode Island or the joint committee on legislative services.
(4) "Procurement" means the purchasing, buying, renting, leasing, or otherwise obtaining any supplies, services, or construction. It also includes all functions that pertain to the obtaining of any supply, service, or construction item, including a description of requirements, selection and solicitation of sources, preparation, and award of contract, and all phases of contract administration.
(5) "Public funds" means state, federal or local funds, either appropriated, non-appropriated or given under right of grant.
(6) "Services" means the rendering by a contractor of its time and effort, rather than the furnishing of a specific end product, other than reports which are merely incidental to the required performance of services.
(7) "Supplies" means all property including, but not limited to, leases of real property, printing, and insurance, except land or permanent interest in land. 42-9.4-3. Establishment of office -- Appointment and removal of inspector general.
(a) There is hereby established an office of inspector general, (hereinafter referred to as the "office"). There shall be in the office an inspector general, who shall be the administrative head of the office and who shall be appointed by a majority vote of the governor, the attorney general, and the general treasurer for a five (5) year term to begin July 1 and end June 30, five (5) years later. The appointee shall serve no longer than two (2) terms. The person so appointed shall be selected without regard to political affiliation and with a demonstrated ability in more than one of the following areas: accounting, auditing, financial analysis, law, management analysis, public administration, investigation and criminal justice administration.
(b) The selection process of a qualified inspector general shall include at least one public forum. If an inspector general is not selected within one month of a new inspector general's term, the governor shall appoint an inspector general. The inspector general shall have at least five (5) years' experience in accounting, criminal justice, or a closely related profession and a bachelor’s degree from an accredited college or university with a major in accounting, criminal justice, or a closely related field of study.
(c) No inspector general shall hold, or be a candidate for, any other elective or appointed public office, while an inspector general and for one year prior. No inspector general shall hold a position in any political party or political committee, or participate in any political campaign of any candidate for public office, while an inspector general.
(d) In case of a vacancy in the position of inspector general, their successor shall be appointed in the manner described in subsections (a) and (b) of this section, and shall serve from their date of appointment until the fifth June 30 following their appointment. If this vacancy is not filled within one month, then the governor shall appoint an inspector general.
(e) The person so appointed may be removed from office for cause by a two-thirds (2/3) vote of the governor, the attorney general, the general treasurer, the lieutenant governor, secretary of state, the speaker and the minority leader of the house of representatives and the president and minority leader of the senate. Cause may include substantial neglect of duty, gross misconduct or conviction of a crime, whether or not it is work related. The reasons for removal of the inspector general shall be stated in writing and shall include the basis for such removal. The writing shall be a public document. The inspector general shall have ten (10) days to submit a written appeal, which shall be a public document. If no appeal is made, the inspector general shall be dismissed from office. If an appeal is made, a vote shall be taken in the senate and two-thirds (2/3) vote of the senate shall be required to dismiss the inspector general. 42-9.4-4. Employees -- Appointment and removal, salaries, qualifications.
(a) The inspector general may appoint and remove such employees as deemed necessary to perform the duties of the office including, but not limited to, assistant inspectors general, chief and deputy counsels, clerks, paralegals, accountants, auditors, financial management analysts and investigators. The inspector general may determine their salaries and duties; provided, however, that the total amount of all such salaries shall not exceed the sum appropriated therefore by the general assembly.
(b) The inspector general shall file an annual personnel report not later than the first Wednesday in February with the senate and house finance committees containing the job classifications, duties and salary of each officer and employee within the office together with personnel regulations applicable to said officers and employees. The inspector general shall file amendments to such report with the senate and house finance committees whenever any change becomes effective.
(c) No officer or employee of the office of inspector general shall hold, or be a candidate for, any elective public office, while an officer or employee, or for one year thereafter, nor shall they hold a position in any political party or political committee, or participate in any political campaign of any candidate for public office, while an officer or employee. 42-9.4-5. Inspector general -- Salary and budget. The general assembly shall annually set the salary of the inspector general and shall appropriate sufficient funds for the total budget for the office. 42-9.4-6. Rules and regulations. The office shall, pursuant to the provisions of chapter 35 of title 42, ("administrative procedures act"), promulgate rules and regulations which shall govern its proceedings. 42-9.4-7. Duties.
(a) The inspector general shall supervise, coordinate and/or conduct audits, criminal, civil and administrative investigations and inspections or oversight reviews, when necessary, relating to programs and operations listed in § 42-9.4-1. The inspector general shall review laws and regulations relating to programs and operations listed in § 42-9.4-1 and shall determine if public bodies listed in § 42-9.4-1 are in compliance, and shall make recommendations concerning the effect of such laws or regulations on the prevention and detection of fraud, waste and abuse. The inspector general may recommend policies that will assist in the prevention or detection of fraud, waste and abuse and mismanagement. The person in charge of, or the governing body of any public body listed in § 42-9.4-1, may request the assistance of the inspector general with respect to implementation of any reviews, audits, and/or investigations, as deemed appropriate, and implement suggested policy or procedure changes. In such events the inspector general may assign personnel to conduct, supervise, or coordinate such activity as deemed necessary and appropriate to perform their duties in a diligent and prudent manner. The inspector general may recommend policies for the conduct, supervision or coordination of relationships, between state and municipal agencies and other state and local governmental agencies, as well as federal governmental agencies and nongovernmental entities, with respect to all matters relating to the prevention and detection of fraud, waste, abuse and mismanagement in or relating to any and all programs and activities of the State of Rhode Island, as set forth in § 42-9.4-1.
(b) The inspector general shall establish and maintain an information system to receive communications from the general public, relating to the duties of the office to guarantee the anonymity of the individual supplying the information, consisting of the transmission by email, regular mail or other electronic system that does not involve the use of a telephone line. 42-9.4-8. Persons authorized to conduct audits – Reports of irregularities. Any qualified person duly authorized by the inspector to act as auditor may examine the books, papers, and documents of any public body having control of state or federal funds, and if the audit discloses any irregularities or improper handling of records or funds, the auditor shall report the same to the inspector general who shall, in turn, report such findings and recommendations to the director of administration. 42-9.4-9. Inspection of records and papers –Investigations – Subpoenas.
(a) The inspector general, in carrying out the duties outlined in this chapter, shall have access to all records, reports, audits, reviews, papers, books, documents, recommendations, correspondence, including information relative to the purchase of services or anticipated purchase of services from any contractor by any public body set forth in § 42-9.4-1, and any other data and material that is maintained by or available to any public body, regardless of the medium in which it is maintained which is, in any way, related to the programs and operations, with respect to the State of Rhode Island, including any local town, municipality or city.
(b) The inspector general may request information, cooperation and assistance from any state or local governmental agency as may be necessary for carrying out their duties and responsibilities. Upon receipt of such request, each person in charge of, or the governing body of any public body set forth in § 42-9.4-1, shall furnish to the inspector general or their authorized agent or representative such information, cooperation, and assistance, including information relative to the purchase of services or anticipated purchase of services from any contractor by any public body within ten (10) business days of receipt of the inspector general’s request. If the request for the information requested cannot be complied with, within ten (10) business days, the senior official of the governmental agency shall notify the inspector general before the expiration of the ten (10) business days with the reason why the request cannot be complied within the time frame of this section, and shall provide a specific date for expected compliance.
(c) The inspector general may initiate and conduct investigations, audits, and compliance reviews, and shall prepare detailed reports relating to findings and conclusions concerning the administration of the programs and operations of the applicable public bodies listed in § 42-9.4-1, as are in the judgment of the inspector general necessary and may conduct an examination of any public documents, and any information with respect to whether internal quality controls are in place and operating.
(d) The inspector general shall have direct and prompt access to the head of any public body, set forth in § 42-9.4-1 when necessary, for any purpose pertaining to the performance of their duties and responsibilities under this chapter.
(e) The inspector general may request the production, on a voluntary basis, of testimony or documents from any individual, firm or nongovernmental entity which relate to actions or matters that pertain to state or municipal governmental agencies as dictated by their duties and responsibilities.
(f) (1) The inspector general may issue a subpoena for the production of all records, reports, audits, reviews, papers, books, documents, recommendations, correspondence and any other data and material relevant to any matter under audit or investigation, pursuant to the provisions of this chapter, no matter in which medium the information is maintained.
(2) A subpoena may be issued only when a person, corporation or other entity under investigation or being audited, refuses to voluntarily comply with a request from the inspector general.
(3) The subpoena shall be served in the same manner as a subpoena for the production of documents in civil cases issued on behalf of the State of Rhode Island, and all provisions of law relative to the subpoena, shall apply to a subpoena issued pursuant to this chapter. Any justice of the superior court may, upon application by the inspector general, issue an order to compel the production of records, reports, audits, reviews, papers, books, documents, recommendations, correspondence, and any other data and material, as aforesaid in the same manner and to the same extent as before said superior court. Any failure to obey the order may be punished by the superior court through contempt of court.
(4) Any subpoena issued pursuant to this section shall not be made public by the inspector general or any officer or employee of that office, nor shall any documents or records provided pursuant to this section, be made public until such time as it is necessary for the inspector general to do so in the performance of their official duties. The production of documents or records pursuant to subpoena shall be governed by the same provisions with reference to secrecy, which govern the proceedings of a grand jury. Disclosure of such production, attendance, and testimony may be made to such members of the staff of the office of the inspector general as is deemed necessary in the performance of the inspector general's duties and responsibilities under this chapter, and such members of the staff may be present at the production of records. 42-9.4-10. Subpoena for witness testimony and for release of material evidence.
(a) Whenever the inspector general has reason to believe that a person has information or evidence in their possession, with respect to any matter which is within the inspector general’s jurisdiction to investigate, a subpoena must issue for the attendance and testimony under oath of any person as designated, or the surrender of identified items of evidence; provided, however, that the subpoena may be issued by the inspector general, only in the performance of official duties relating to the detection of fraud, waste, abuse and mismanagement. The subpoena for testimony or specific items identified as needed in support of an investigation shall include: the name and address of the prospective witness or specific items identified as needed for the investigation and the reasons for requesting a subpoena for testimony or production of items deemed necessary to support the investigation.
(b) The inspector general, or any other person duly authorized by law, shall serve a subpoena. Once the subpoena is served, the serving officer shall annotate the time and date served, the person served and the location of service.
(c) A witness required by subpoena to attend and testify under oath and/or produce books and records or other items as demanded, shall be given not less than forty-eight (48) hours' notice of the time and place for the taking of testimony or delivery of subpoenaed items, unless such notice shall unduly interfere with the conduct of the investigation.
(d) The witness, at the time of service of a subpoena, shall be notified of the matter under investigation concerning which the witness will be required to testify. A subject of an investigation is a person whose conduct is within the scope of the investigation and is suspected of committing or being party to an offense under investigation. The failure to furnish the witness with any notice or information required to be given by this section shall cause the issued subpoena to be invalid.
(e) A person subpoenaed to testify under oath shall appear and testify under oath at the time and place designated on the subpoena. In addition, the witness shall be notified that they have a right to consult with and to have an attorney present at the time their testimony is taken, and that they have a constitutional right not to furnish or produce evidence that may tend to incriminate them.
(f) The terms of any such subpoena shall be reasonable and focused on specific testimony or evidence sought and shall directly relate to the matters under investigation. A subpoena issued that is broad in nature is not considered valid. No subpoena shall be issued for purposes of harassment or for any illegitimate or improper purpose. All constitutional and statutory rights and privileges which exist with respect to any subpoena issued by the inspector general, including the privilege against self-incrimination, shall have the same force and effect with any and all existing laws and constitutional rights.
(g) A subpoenaed person may object to the subpoena served upon them, in advance of the return date of the subpoena, by a motion to quash filed in the superior court of the State of Rhode Island. The filing of a motion to quash shall stay all pending subpoenas, until further order of the superior court. Any justice of the superior court may, upon application by the inspector general, issue an order to compel the attendance of witnesses subpoenaed, and the giving of testimony under oath, in furtherance of any audit or investigation under this chapter in the same manner and to the same extent as before the superior court. Failure to obey any order of the court with respect to a subpoena may be punished by the court as contempt.
(h) Any subpoena issued pursuant to this section shall not be made public by the inspector general or any persons subject to their direction or by any member of the inspector general's office designated to hear testimony under this section, and the same provisions with reference to secrecy, which govern grand jury proceedings, shall govern testimony given. Whoever violates the provisions of this subsection shall be punished by imprisonment for not more than six (6) months or by a fine of not more than one thousand dollars ($1,000), or both. Disclosure of such testimony may be made to such members of the staff of the office of inspector general, as is deemed necessary by the inspector general to assist in the performance of the office's duties and responsibilities and such members of the staff may be present at the taking of such testimony. 42-9.4-11. Compact – Investigation.
(a) The inspector general shall accept and may investigate or audit complaints or information from any individual, concerning the possible existence of any activity constituting fraud, waste, abuse and mismanagement, relating to programs and operations as set forth in § 42- 9.4-1.
(b) The inspector general shall not, after receipt of a complaint or information from an employee, contractor or private citizen who requests confidentiality, disclose the identity of that individual without their written consent, unless the inspector general determines such disclosure is necessary and unavoidable during the course of the investigation. In such event, the individual shall be notified immediately of the disclosure. The inspector general shall set up an anonymous hotline for reporting possible wrongdoings.
(c) Employees are protected under chapter 50 of title 28, the ("Rhode Island whistleblower's protection act"). 42-9.4-12. Investigations or management advisory and consulting services upon request of governor or general assembly. The office of inspector general may, upon the written request of the governor or of the general assembly, conduct audits, provide management advisory and consulting services, or conduct investigations relative to the financial affairs or the economy and efficiency of management, or both, of any public bodies. “Public body” or “public bodies” under this chapter shall mean state agencies, bureaus, divisions, departments, offices, commissions, boards, institutions, including the public institutions of higher education, districts, authorities, quasi- agencies, or political subdivisions created by the general assembly, or the governor. “Public body” shall also include any city and town within the State of Rhode Island but municipal audits under this chapter shall only cover the expenditure of state or federal funds distributed by the state. Audits and investigations of public bodies may include the expenditures by nongovernmental agencies of federal, state, and local public funds. The office of inspector general may, from time to time, make such investigations and additional reports to the governor, the director of the department of administration, and the general assembly as deemed necessary or advisable. 42-9.4-13. Inspection of records, papers, and witness testimony -- Investigations and subpoenas.
(a) The inspector general, in carrying out the duties outlined in this chapter, shall have access to all records, reports, audits, reviews, papers, books, documents, recommendations, correspondence, including information relative to the purchase of goods or services or anticipated purchase of goods or services, from any agent, contractor, or vendor by any public body, as defined in § 35-7.1-1(f), and any other data and material that is maintained by or available to any public body regardless of the media in which it is maintained which is in any way related to the programs and operations with respect to public bodies.
(b) The inspector general may request information and records, cooperation, and assistance from any state or local governmental agency as may be necessary for carrying out the inspector general’s duties and responsibilities. Upon receipt of such request, each person in charge of the public body shall furnish to the inspector general, or the inspector general’s authorized agent or representative, such information and records, cooperation and assistance, including information relative to the purchase of goods or services or anticipated purchase of goods or services from any contractor or vendor by any public body, within ten (10) business days of receipt of the inspector general’s request. If the public body is unable to comply with the request for records and/or information within (10) business days, the public body must notify the inspector general, prior to the expiration of the ten (10) business days, in writing as to the reason, or reasons, why the request cannot be fulfilled within this time and whether additional time is necessary.
(c) The inspector general may initiate and conduct audits, investigations, and compliance reviews and shall prepare detailed findings, conclusions, and recommendations concerning the administration of programs or operations, and internal controls over processes of public bodies.
(d) The inspector general shall have direct and prompt access to any public body, its agents, officers, and employees when necessary for any purpose pertaining to the performance of the inspector general’s duties and responsibilities under this chapter.
(e) In furtherance of carrying out any of the duties of this chapter, the inspector general may request, with the written approval of the director of the department of administration and through an administrative subpoena, the attendance and testimony of witnesses and the production of books, records, and other evidence relevant to an active fraud investigation as described in this chapter. The subpoena shall specify the time, date, and place where the witness is to respond. Within twenty (20) days after the service of the subpoena or at any time before the return date specified in the subpoena, whichever period is shorter, the person served may file in a state superior court and serve upon the unit and the attorney general a civil petition for an order of the court modifying or setting aside the subpoena. The petition shall specify each ground upon which the petitioner is seeking relief. If a person neglects or refuses to comply with any request to provide testimony or produce books, records, and other evidence relevant to an investigation, the office of inspector general or the attorney general may petition the superior court for an order compelling the person to answer the request. Books, records, and other evidence obtained through an administrative subpoena that are not used in a court proceeding shall be destroyed as soon as practicable. 42-9.4-14. Complaint -- Investigation.
(a) The inspector general shall accept and may investigate or audit complaints or information from any identified individual concerning the possible existence of any activity constituting fraud, waste, abuse, or mismanagement relating to programs and operations of public bodies.
(b) The inspector general shall not, after receipt of a complaint or information from an employee, contractor, or private citizen who requests confidentiality, disclose the identity of that individual, without the written consent of said individual, unless the inspector general determines such disclosure is necessary and unavoidable during the course of an investigation. In such event, the individual filing the complaint shall be notified, if possible, immediately of such disclosure.
(c) Employees are protected under the chapter 50 of title 28 “Rhode Island Whistleblowers’ Protection Act.” 42-9.4-15. Coordination with other state agencies. The inspector general may coordinate with other state agencies that are responsible for investigating, auditing, reviewing, or evaluating the management of public bodies for the purpose of sharing information and avoiding duplication of effort. 42-9.4-16. Reports to the attorney general or United States Attorney.
(a) In carrying out their duties and responsibilities, the inspector general shall report to the attorney general, the United States Attorney or both whenever the inspector general has reasonable grounds to believe there has been a violation of federal or state criminal law. The attorney general shall institute appropriate proceedings in the furtherance of completing an investigation and, if warranted, refer the matter for prosecution.
(b) The inspector general shall refer audit or investigative findings to the state ethics commission, or to any other federal, state or local agency, which has an interest in said findings.
(c) Any referrals made under this section shall not be made public. 42-9.4-17. Coordination with other state agencies. The inspector general may coordinate with other state agencies that are responsible for investigating, auditing, reviewing or evaluating the management of state agencies for the purpose of sharing information and avoiding duplication of effort. 42-9.4-18. Management advisory and consulting services provided to public bodies. When requested in writing by a public body to the inspector general, the office of inspector general may provide management advisory or consulting services to the public body. Any such request must include the scope of services requested and a schedule for the work to be performed. 42-9.4-19. Civil actions.
(a) The inspector general shall have the authority to institute a civil recovery action, if authorized by the attorney general. In any case, where the inspector general has discovered fraudulent acts and believes that civil recovery proceedings may be appropriate, the matter shall be referred to the attorney general. The attorney general may institute whatever proceedings deemed appropriate, may refer the matter to another state or local agency, may authorize the initiation of appropriate civil proceedings by the inspector general, may retain the matter for further investigation, or may remand the matter back to the inspector general for further investigation. 42-9.4-20. Annual and interim reports.
(a) The office of inspector general shall, no later than April 1 of each year, prepare a written report summarizing the activities of the office for the prior calendar year. The office may also prepare interim reports. These reports shall be forwarded to the governor, lieutenant governor, attorney general, secretary of state, general treasurer and the general assembly, and shall be made available to the public.
(b) The report shall include, but not be limited to:
(1) A description of significant problems in the areas of fraud, waste and abuse within programs and operations within the jurisdiction of the office;
(2) A description of the recommendations for corrective action made by the office during the reporting period with respect to significant deficiencies in the areas of fraud, waste and abuse;
(3) The identification of each significant recommendation described in previous annual reports on which corrective action has not been completed;
(4) A summary of matters referred to prosecuting authorities and the prosecutions and convictions which have resulted;
(5) A summary of any matters concerning the recovery of monies as a result of a civil suit by the office or a referral to another agency for the purposes of such suit; and
(6) A list of all audit reports completed by the office during the reporting period and a statement of recommendations of amendments to this chapter or the rules, regulations or procedures governing the office of inspector general which would improve the effectiveness or the operation of the office.
(c) The head or governing body of each public body may, within sixty (60) days of receipt, comment upon any references to the public body contained within the report. The comment, if any, shall be forwarded to the governor, the attorney general, the general assembly and the office of inspector general.
(d) The report of the inspector general shall be made public on the day of filing; provided, that the report shall not list the names of individuals or corporations, nor describe them with sufficient particularity as to readily identify them to the general public in those cases in which no official disposition has been made by the office of inspector general, the department of the attorney general or the local office of the United States Attorney.
SECTION 2. Sections 22-13-1, 22-13-2, 22-13-3, 22-13-4, 22-13-9 and 22-13-10 of the General Laws in Chapter 22-13 entitled "Auditor General" are hereby amended to read as follows: 22-13-1. Appointment — Qualifications — Oath — Bond — Office space — Rules and regulations.
(a) The auditor general shall be appointed by the joint committee on legislative services, referred to in this chapter as “the committee.” inspector general and head a division within the office of the inspector general. At the time of appointment, the auditor general shall have had active experience in general accounting principles and practices in this state for a total period of at least five (5) years. Vacancies in the office shall be filled in the same manner as the original appointment. (b)(1) The committee inspector general shall employ qualified persons necessary for the efficient operation of the office and shall fix their duties and compensation and those persons shall be in the unclassified service.
(2) No person shall be employed as an auditor who does not have adequate technical training and proficiency, and a baccalaureate degree from a college or university, and no person shall be employed or retained as legal advisor on either a full-time or a part-time basis who is not a member of the Rhode Island bar.
(c) The auditor general, before entering upon the duties of his or her office, shall take and subscribe to the oath of office required of state officers by the state constitution.
(d) The auditor general shall be covered by the state’s blanket position bond and conditioned that he or she will well and faithfully discharge the duties of his or her office; promptly report any delinquency or shortage discovered in any accounts and records audited by him or her; and promptly pay over and account for any and all funds that shall come into his or her hands as auditor. (e)(1) All auditors employed by the auditor general shall be covered by a blanket position bond. The bonds or bond shall meet and contain the same conditions as are required in the bond of the auditor general.
(2) All bonds shall be filed with the committee inspector general. If an auditor is not covered in the blanket position bond, an individual bond shall be filed within thirty (30) days after the employee received notice of his or her employment. The amount of the bond shall be determined by the auditor general. Failure to file an individual bond or to be covered in the blanket position bond shall terminate his or her employment.
(f) The annual premium of all bonds shall be paid out of any funds provided for the operation of the office of the inspector general.
(g) The auditor general shall be provided with suitable quarters, but to facilitate auditing and to eliminate unnecessary traveling, the joint committee on legislative services inspector general may establish divisions, including a performance investigation division, and assign auditors to each division and determine their duties and the areas of the state to be served by the respective divisions. The auditor general shall be provided and furnished with any space that may be necessary to carry out his or her functions in other areas of the state.
(h) The auditor general may make and enforce reasonable rules and regulations necessary to facilitate audits and investigations that the joint committee on legislative services inspector general authorizes the auditor general to perform. This includes the post-audit of the financial transactions and accounts of the state that is provided for by the finance committee of the house of representatives.
(i) No full-time employee of the office of auditor general shall serve as an executive, officer, or employee of any political party committee, organization, or association. Neither the auditor general nor any employee of the auditor general shall become a candidate for election to public office unless he or she shall first resign from his or her office or employment. 22-13-2. Termination of appointment. Failure on the part of the auditor general to perform the mandatory duties under the direction of the committee inspector general shall constitute cause for termination of appointment. The appointment of the auditor general may be terminated at any time by a majority vote of the joint committee on legislative services the inspector general. 22-13-3. Salaries and expenses.
(a) The expenses of the members of the committee shall be approved by the chairperson of the committee inspector general and paid from the appropriation for legislative expense the office of the inspector general.
(b) The auditor general shall prepare and annually submit to the committee inspector general a proposed budget for the ensuing fiscal year. The committee inspector general shall review the budget request and may amend or change the budget request as it deems necessary. The budget request, as amended or changed by the committee inspector general, shall become the operating budget of the auditor general for the ensuing fiscal year; provided, that the budget so adopted may subsequently be amended under the same procedure.
(c) Within the limitations of the approved operating budget, the salaries and expenses of the auditor general and his or her staff shall be paid from the appropriation for legislative expense or any other moneys appropriated by the legislature for that purpose the office of the inspector general. The joint committee on legislative services inspector general shall approve all bills for salaries and expenses. 22-13-4. Definitions — Duties of auditor general — Investigations by committee.
(a) The following words and phrases have the following meanings unless a different meaning is required by the context:
(1) “Performance audit” means an examination of the effectiveness of administration and its efficiency and adequacy in terms of the program of the state agency authorized by law to be performed. The “performance audit” may also include a review of the agency in terms of compliance with federal and state laws and executive orders relating to equal employment opportunities and the set aside for minority businesses.
(2) “Political subdivision” means a separate agency or unit of local government created or established by law and includes, but is not limited to, the following and the officers of the following: authority, board, branch, bureau, city, commission, council, consolidated government, county, department, district, institution, metropolitan government, municipality, office, officer, public corporation, town, or village.
(3) “Post-audit” means an audit made at some point after the completion of a transaction or a group of transactions.
(4) “State agency” means a separate agency or unit of state government created or established by law and includes, but is not limited to, the following and the officers of the following: authority, board, branch, bureau, commission, council, department, division, institution, office, officer, or public corporation, as the case may be, except any agency or unit within the legislative branch of state government.
(b) The auditor general shall make post-audits and performance audits of public records and perform related duties as prescribed by the committee inspector general. He or she shall perform his or her duties independently but under the general policies established by the committee inspector general. (c)(1) The auditor general shall have the power and duty to make post-audits and performance audits of the accounts and records of all state agencies, including the board of governors for higher education and the board of regents for elementary and secondary education, as defined in this section.
(2) The auditor general shall have the power, when requested by a majority of the committee the inspector general, to make post-audits and performance audits of accounts and records of any other public body or political subdivision, or any association or corporation created or established by any general or special law of the general assembly, or any person, association, or corporation to which monies of the state have been appropriated by the general assembly. Nothing in the subdivision shall be construed to apply to public utilities.
(3) The auditor general shall perform or have performed annually a complete post-audit of the financial transactions and accounts of the state when approved by the chairperson of the joint committee on legislative services inspector general.
(d) The committee inspector general may at any time, without regard to whether the legislature is then in session or out of session, take under investigation any matter within the scope of an audit either completed or then being conducted by the auditor general, and in connection with that investigation may exercise the powers of subpoena vested by law in a standing committee of the legislature the office of the inspector general. (e)(1) The auditor general may, when directed by the committee inspector general, designate and direct any auditor employed by him or her to audit any accounts or records within the power of the auditor general to audit. The auditor shall report his or her findings for review by the auditor general, who shall prepare the audit report.
(2) The audit report shall make special mention of:
(i) Any violation of the laws within the scope of the audit; and
(ii) Any illegal or improper expenditure, any improper accounting procedures, all failures to properly record financial transactions, and all other inaccuracies, irregularities, shortages, and defalcations.
(3) At the conclusion of the audit, the auditor general or his or her designated representative will conduct an exit conference with the official whose office or department is subject to audit and submit to him or her a draft report which includes a list of findings and recommendations. If an official is not available for the exit conference, delivery of the draft report is presumed to be sufficient notice. The official must submit to the auditor general within sixty (60) days after the receipt of the draft report his or her written reply as to:
(i) Acceptance and plan of implementation of each recommendation;
(ii) Reason(s) for non-acceptance of a recommendation.
(4) Should the auditor general determine that the written explanation or rebuttal of the official whose office is subject to audit is unsatisfactory, he or she shall, as soon as practicable, report his or her findings to the joint committee on legislative services inspector general.
(f) A copy of the audit report shall be submitted to each member of the committee.
(g) If the auditor general discovers any errors, unusual practices, or any other discrepancies in connection with his or her audit or post-audit of a state agency or state officers, the auditor general shall, as soon as practicable, notify in writing the president of the senate and the speaker of the house of representatives, respectively.
(h) The auditor general shall annually review the capital development program to determine: (1) the status of all projects included in the program; (2) whether the funds are being properly expended for their intended purposes; (3) the completion date or projected completion date of the projects; (4) which projects require professional services and to determine the identity of individuals or firms appointed; and (5) the expended and unexpended funds. This report shall be annually submitted to the general assembly on the first Wednesday in February.
(i) The auditor general shall supervise, coordinate, and/or conduct investigations and inspections or oversight reviews with the purpose of preventing and detecting fraud, waste, abuse and mismanagement in the expenditure of public funds. 22-13-9. Access to executive sessions of a public agency — Access to records — Disclosure by the auditor general.
(a) Whenever a public agency goes into executive session, the auditor general or his or her designated representative shall be permitted to attend the executive session or if the auditor general or his or her designee is not in attendance at the executive session, the auditor general or his or her designee, upon written request, shall be furnished with copies of all data or materials furnished to the members of the public agency at the executive session. If the auditor general or his or her designee attends the executive session, the auditor general shall be furnished the same data in the same form and at the same time as members of the public agency.
(b) Within three (3) working days of a written request by the auditor general, the public agency shall furnish a copy, whether approved by the agency or not, of the minutes of any meeting, including any executive session of the public agency.
(c) The auditor general shall have full and unlimited access to any and all records of any public agency, in whatever form or mode the records may be, unless the auditor general’s access to the records is specifically prohibited or limited by federal or state law. In no case shall any confidentiality provisions of state law be construed to restrict the auditor general’s access to the records; provided, the auditor general’s access to any confidential data shall not in any way change the confidential nature of the data obtained. Where an audit or investigative finding emanates from confidential data, specific confidential information will not be made public. The records shall include those in the immediate possession of a public agency as well as records which the agency itself has a right to. In the event of a dispute between the agency involved and the auditor general as to whether or not the data involved are confidential by law, the matter will be referred to the attorney general for resolution. (d)(1) If in the course of an executive session any fact comes to the attention of the auditor general or his or her designated representative, which in his or her judgment constitutes an impropriety, irregularity, or illegal transaction, or points to the onset of an impropriety or illegal transaction, then the auditor general shall disclose that information to the joint committee on legislative services inspector general, the director of administration, and the chairperson of the public agency involved. Where the facts or the data upon which the facts are based are deemed confidential pursuant to the provisions of federal or state law, the auditor general’s access to the information shall not in any way change the confidential nature of the data obtained.
(2) In the event of a dispute between the agency involved and the auditor general as to whether or not the data involved are confidential by law, the matter will be referred to the attorney general for resolution.
(e) The auditor general or his or her designated representative shall be immune from any liability to any party for claims arising out of disclosure authorized by this section.
(f) For the purposes of this section, the phrase “public agency” shall include the following: the Rhode Island industrial building authority, the Rhode Island recreational building authority, the Rhode Island commerce corporation, the Rhode Island industrial facilities corporation, the Rhode Island refunding bond authority, the Rhode Island housing and mortgage finance corporation, the Rhode Island resource recovery corporation, the Rhode Island public transit authority, the Rhode Island student loan authority, the water resources board, the Rhode Island health and educational building corporation, the Rhode Island turnpike and bridge authority, the Narragansett Bay commission, the convention center authority, their successors and assigns, and any other body corporate and politic which has been or which is subsequently created or established within this state. 22-13-10. Audit of information security systems.
(a) The general assembly recognizes that the security of government computer systems is essential to ensuring the stability and integrity of vital information gathered and stored by government for the benefit of the citizenry and the breach of security over computer systems presents a risk to the health, safety, and welfare of the public. It is the intent of the legislature to insure that government computer systems and information residing on these systems are protected from unauthorized access, compromise, sabotage, hacking, viruses, destruction, illegal use, cyber attack or any other act which might jeopardize or harm the computer systems and the information stored on them.
(b) In conjunction with the powers and duties outlined in this chapter, the auditor general may conduct reviews and assessments of the various government computer systems and the security systems established to safeguard these computer systems. Computer systems subject to this section shall include systems which pertain to federal, state, or local programs, and quasi-governmental bodies, and the computer systems of any entity or program which is subject to audit by the office of the auditor general. The auditor general’s review may include an assessment of system vulnerability, network penetration, potential security breaches, and susceptibility to cyber attack and cyber fraud.
(c) In the event the review by the auditor general indicates a computer system is vulnerable, or security over the system is lacking, those findings shall not be disclosed publicly and shall not be considered public records. Notwithstanding any other provision of law to the contrary, the workpapers developed in connection with the review of the computer system and the security over the system shall not be deemed public records and are not subject to disclosure. The auditor general’s findings may be disclosed at the discretion of the auditor general to the chief information officer of the state as well as the joint committee on legislative services inspector general. Unless the auditor general authorizes the release of information or findings gathered in the conduct of a review of computer system security, all such information shall be deemed classified, confidential, secret, and non-public.
(d) In order to maintain the integrity of the computer system, the auditor general may procure the services of specialists in information security systems or other contractors deemed necessary in conducting reviews under this section, and in procuring those services shall be exempt from the requirements of the state purchasing law or regulation.
(e) Any outside contractor or vendor hired to provide services in the review of the security of a computer system shall be bound by the confidentiality provisions of this section.
SECTION 3. Chapter 35-7.1 of the General Laws entitled "The Office of Internal Audit and Program Integrity" is hereby repealed in its entirety. 35-7.1-1. Establishment of office of internal audit and program integrity.
(a) There is hereby established within the office of management and budget an office of internal audit and program integrity. Within the office of internal audit and program integrity, there shall be a chief, appointed by the director of administration, who shall be the administrative head of the office. The person so selected to be the chief shall be selected without regard to political affiliation and with a demonstrated ability in the following areas: accounting, auditing, financial analysis, investigation, management analysis, and public administration. The office of internal audit and program integrity will report to the office of management and budget director. Any reference in general law to the “bureau of audits” or “office of internal audit” shall mean the office of internal audit and program integrity.
(b) The purpose of the office is to prevent and detect fraud, waste, abuse, and mismanagement in the expenditure of public funds including:
(1) All state programs and operations;
(2) The procurement of any supplies, services, or construction by state agencies, bureaus, divisions, sections, departments, offices, commissions, institutions, and activities of the state; and
(3) The procurement or expenditure of public funds by organizations or individuals.
(c) The chief of the office of internal audit and program integrity shall not hold, or be a candidate for, any elective or any other appointed public office while a chief. No current chief shall hold a position in any political party or political committee, or, aside from voting, actively engage in the political campaign of any candidate for public office that may cause a real or perceived conflict of interest, or participate as a board member of any entity that receives state or federal funding.
(d) No employee of the office of internal audit and program integrity shall hold, or be a candidate for, any elective public office while an employee, nor shall they hold a position in any political party or political committee or, aside from voting, actively engage in a political campaign of any candidate for public office that may cause a real or perceived conflict of interest, or participate as a board member of any not for profit entity that receives state or federal funding.
(e) The office of internal audit and program integrity is authorized to conduct audits of any state department, state agency, or private entity that is a recipient of state funding or state grants. In addition, the office of internal audit and program integrity is authorized, but not limited to, evaluating the efficiency of operations and internal controls, preventing and detecting fraud, waste, abuse, or mismanagement in the expenditure of public funds, whether federal, state, or local, that are related to any and all state programs and operations as well as the procurement of any goods, services, or construction, by public bodies. As deemed necessary or expedient by the office of internal audit and program integrity, audits may be made relative to the financial affairs or the economy and efficiency of management of each department, agency, or public body. The office of internal audit and program integrity shall determine which such audits shall be performed in accordance with a risk-based evaluation.
(f) “Public body” or “public bodies” under this chapter shall mean state agencies, bureaus, divisions, departments, offices, commissions, boards, institutions, including the public institutions of higher education, districts, authorities, quasi-agencies, or political subdivisions created by the general assembly, or the governor. “Public body” shall also include any city and town within the state of Rhode Island but municipal audits under this chapter shall only cover the expenditure of state or federal funds distributed by the state. Audits and investigations of public bodies may include the expenditures by nongovernmental agencies of federal, state, and local public funds. 35-7.1-2. Duties.
(a) The chief of internal audit and program integrity shall supervise, coordinate, and/or conduct audits, civil and administrative investigations, and inspections or oversight reviews, when necessary, relating to expenditure of state or federal funds, or to any and all state programs and operations, as well as the procurement of any supplies, services, or construction, by public bodies. In the course of an audit or investigation, the office of internal audit and program integrity shall review statutes and regulations of the public body and shall determine if such a public body is in compliance and shall make recommendations concerning the efficiency of operations, and the effect of such statutes or regulations on internal controls and the prevention and detection of fraud, waste, and abuse. The chief of internal audit and program integrity may recommend policies or procedures that may strengthen internal controls, or assist in the prevention or detection of fraud, waste, and abuse or mismanagement.
(b) The person, or persons, with legal authority for any public body may request the assistance of the office of internal audit and program integrity. Any such request must include the scope of services requested and the work to be performed. In such events, the chief, with the approval of the director of management and budget, may assign personnel to conduct, supervise, or coordinate such activity as deemed necessary and appropriate to perform their duties in a diligent and prudent manner. The expenses for any such assistance requested by the public body shall be reimbursed by the public body to the office of internal audit and program integrity. The chief may recommend policies for the conduct, supervision, or coordination of the relationship, between state and other state, local governmental agencies as well as federal governmental agencies and nongovernmental entities with respect to all matters relating to the prevention and detection of fraud, waste, abuse, or mismanagement in or relating to any and all programs and activities of the state of Rhode Island.
(c) When it is determined by the office of internal audit and program integrity that an audit is necessary because there is sufficient evidence to believe that there may have been fiscal impropriety, wrongdoing, or fiscal mismanagement by any agent, employee, board member, or commissioner of any public body, the office of internal audit and program integrity may conduct a forensic examination of such entity. All costs associated with the forensic examination shall be paid, as deemed appropriate, either by the examined entity or by an appropriation by the general assembly. Such costs shall include, but not be limited to, the following expenses:
(1) One hundred percent (100%) of the total salaries and benefits paid to the examining personnel of the office of internal audit and program integrity engaged in those examinations;
(2) All costs associated with the procurement of a forensic consultant;
(3) All costs associated with a consultant that provides expertise pertinent to the examinee’s operations;
(4) All reasonable administrative and technology costs related to the forensic examination process. Technology costs shall include the actual cost of software and hardware utilized in the examination process and the cost of training examination personnel in the proper use of the software and hardware.
(d) The chief of internal audit and program integrity, or their designee, may investigate reports of any person who, either prior to, or at the time of, or subsequent to the application for public assistance:
(1) Willfully makes a false statement or misrepresentation;
(2) Impersonates someone else;
(3) Willfully fails to disclose a material fact regarding eligibility or other fraudulent means; or
(4) Secures, aids, or abets, or attempts to secure, aid, or abet, others in securing public assistance (including Supplemental Nutrition Assistance Program (SNAP) or Medicaid) through fraudulent actions.
(e) The chief of internal audit and program integrity, or their designee, is authorized to:
(1) Coordinate, conduct, and/or support investigations aimed at preventing and detecting, fraud, waste, abuse, and mismanagement in public assistance programs;
(2) Coordinate and support state and local efforts to investigate and eliminate fraud in public assistance programs;
(3) Work to recover both state and federal funds related to fraudulent activities.
(f) In the course of these investigations, the office of internal audit and program integrity shall collaborate with local law enforcement agencies, the Rhode Island department of human services, the Rhode Island state police, the Rhode Island attorney general, or other local, state, and federal entities as needed to complete the investigations.
(g) The office shall identify methods to implement innovative technology and data sharing in order to detect, analyze, and prevent fraud, waste, and abuse. 35-7.1-3. Investigations or management advisory and consulting services upon request of governor or general assembly. The office of internal audit and program integrity may, upon the written request of the governor or of the general assembly, conduct audits, provide management advisory and consulting services, or conduct investigations relative to the financial affairs or the economy and efficiency of management, or both, of any public bodies as defined in § 35-7.1-1(f). The office of internal audit and program integrity may, from time to time, make such investigations and additional reports to the governor, the director of the department of administration, the director of the office of management and budget, and the general assembly as deemed necessary or advisable. 35-7.1-4. Management advisory and consulting services provided to public bodies. When requested in writing by a public body to the chief, the office of internal audit and program integrity may provide management advisory or consulting services to the public body. Any such request must include the scope of services requested and a schedule for the work to be performed. 35-7.1-5. Persons authorized to conduct audits — Reports of irregularities. Any qualified person duly authorized by the director of management and budget to act as auditor may examine the books, papers, and documents of any public body having control of state or federal funds, and if the audit discloses any irregularities or improper handling of records or funds, the auditor shall report the same to the chief who shall, in turn, report such findings and recommendations to the director of management and budget, who shall further report to the director of administration. 35-7.1-6. Inspection of records, papers, and witness testimony — Investigations and subpoenas.
(a) The chief, in carrying out the duties outlined in this chapter, shall have access to all records, reports, audits, reviews, papers, books, documents, recommendations, correspondence, including information relative to the purchase of goods or services or anticipated purchase of goods or services, from any agent, contractor, or vendor by any public body, as defined in § 35-7.1-1(f), and any other data and material that is maintained by or available to any public body regardless of the media in which it is maintained which is in any way related to the programs and operations with respect to public bodies.
(b) The chief may request information and records, cooperation, and assistance from any state or local governmental agency as may be necessary for carrying out the chief’s duties and responsibilities. Upon receipt of such request, each person in charge of the public body shall furnish to the chief, or the chief’s authorized agent or representative, such information and records, cooperation and assistance, including information relative to the purchase of goods or services or anticipated purchase of goods or services from any contractor or vendor by any public body, within ten (10) business days of receipt of the chief’s request. If the public body is unable to comply with the request for records and/or information within (10) business days, the public body must notify the chief, prior to the expiration of the ten (10) business days, in writing as to the reason, or reasons, why the request cannot be fulfilled within this time and whether additional time is necessary.
(c) The chief may initiate and conduct audits, investigations, and compliance reviews and shall prepare detailed findings, conclusions, and recommendations concerning the administration of programs or operations, and internal controls over processes of public bodies.
(d) The chief shall have direct and prompt access to any public body, its agents, officers, and employees when necessary for any purpose pertaining to the performance of the chief’s duties and responsibilities under this chapter.
(e) In furtherance of carrying out any of the duties of this chapter, the chief may request, with the written approval of the director of the department of administration and through an administrative subpoena, the attendance and testimony of witnesses and the production of books, records, and other evidence relevant to an active fraud investigation as described in this chapter. The subpoena shall specify the time, date, and place where the witness is to respond. Within twenty
(20) days after the service of the subpoena or at any time before the return date specified in the subpoena, whichever period is shorter, the person served may file in a state superior court and serve upon the unit and the attorney general a civil petition for an order of the court modifying or setting aside the subpoena. The petition shall specify each ground upon which the petitioner is seeking relief. If a person neglects or refuses to comply with any request to provide testimony or produce books, records, and other evidence relevant to an investigation, the office of internal audit and program integrity or the attorney general may petition the superior court for an order compelling the person to answer the request. Books, records, and other evidence obtained through an administrative subpoena that are not used in a court proceeding shall be destroyed as soon as practicable. 35-7.1-7. Complaint — Investigation.
(a) The chief shall accept and may investigate or audit complaints or information from any identified individual concerning the possible existence of any activity constituting fraud, waste, abuse, or mismanagement relating to programs and operations of public bodies.
(b) The chief shall not, after receipt of a complaint or information from an employee, contractor, or private citizen who requests confidentiality, disclose the identity of that individual, without the written consent of said individual, unless the chief determines such disclosure is necessary and unavoidable during the course of an investigation. In such event, the individual filing the complaint shall be notified, if possible, immediately of such disclosure.
(c) Employees are protected under the chapter 50 of title 28 “Rhode Island Whistleblowers’ Protection Act.” 35-7.1-8. Reports to the state police. In carrying out the chief’s duties and responsibilities, the chief shall report to the Rhode Island state police whenever the chief has reasonable grounds to believe there has been a violation of federal or state criminal law. The chief shall also refer findings to the state ethics commission, or to any other federal, state, or local agency with an interest in said findings, in the discretion of the chief. Any referrals made under this section shall not be made public by the office of internal audit and program integrity. 35-7.1-9. Coordination with other state agencies. The chief may coordinate with other state agencies that are responsible for investigating, auditing, reviewing, or evaluating the management of public bodies for the purpose of sharing information and avoiding duplication of effort. 35-7.1-10. Audit and annual reports.
(a) The office of internal audit and program integrity shall prepare an annual report summarizing the activities of the office of internal audit and program integrity for the prior fiscal year. The office of internal audit and program integrity may also prepare interim performance reports. These reports shall be presented to the director of management and budget. The annual reports shall be posted on the office’s website.
(b) The annual report shall include, but not be limited to: a general description of significant problems in the areas of efficiencies, internal controls, fraud, waste, and abuse within programs and operations within the jurisdiction of the office; a general description of the recommendations for corrective actions made by the office during the reporting period with respect to significant deficiencies in the areas of efficiencies, internal controls, fraud, waste, and abuse; the identification of each significant recommendation described in previous annual reports on which corrective action has not been completed; a summary of matters referred to prosecuting authorities; a summary of any matters concerning the recovery of monies as a result of an audit finding or civil suit or a referral to another agency for the purposes of such suit; a list of all audit reports completed by the office during the reporting period; and a statement of recommendations of amendment to this chapter or the rules, regulations, or procedures governing the office of internal audit and program integrity that would improve the effectiveness or the operations of the office.
(c) The annual report of the office of internal audit and program integrity shall be made public on the day of filing.
(d) At the conclusion of each formal audit, the office of internal audit and program integrity shall produce an audit report which contains, but is not limited to, the scope of the audit, findings, and recommendations. Within twenty (20) calendar days following the date of the issuance of the management-response copy of the draft audit report, the head of the department, agency, public body, or private entity audited shall respond, in writing, to each recommendation made in the audit report. This response shall address the department’s, agency’s, or public body’s or private entity’s plan of corrective action, the party responsible to implement the corrective action plan, and the anticipated date to complete the implementation of the corrective action; and, if applicable, the reasons for disagreement with any recommendation proposed in the audit report and justification of management’s acceptance of risk. The office of internal audit and program integrity may perform follow-up procedures for the purpose of determining whether the department, agency, public body, or private entity has implemented, in an efficient and effective manner, its plan of correction action for the recommendations proposed in the audit report or addressed the risk discussed in the audit report.
(e) Copies of each audit report, inclusive of management’s responses noted in subsection
(d) shall be submitted to the chairpersons of the house finance committee, and the senate finance committee and posted on the office’s website. 35-7.1-11. Civil actions. The chief of the office of internal audit and program integrity shall have the authority to initiate civil recovery actions. In any case where the office of internal audit and program integrity has discovered fraudulent acts and believes that civil recovery proceedings may be appropriate, the chief may authorize the initiation of appropriate civil proceedings or refer the case to the appropriate state agency for civil recovery.
SECTION 4. This act shall take effect upon passage.
