Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 142 (2016GS)

Sponsor

Rep. Cutler, B. R.

Final action

Governor Signed 3/23/2016

Outcome

Became law — signed by Gov. Gary R. Herbert

Summary

What it does

• This bill:
• requires the State Board of Education to establish an internal audit program for programs administered by the State Board of Education;
• requires an audit committee to approve internal auditing policies proposed by an agency internal audit director; and
• makes technical changes.

Every vote on this bill

Bill text

AGENCY AUDITING PROCEDURES FOR EDUCATION
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Bruce R. Cutler
Senate Sponsor: 
J. Stuart Adams
LONG TITLE
General Description:
This bill modifies provisions relating to the state agency internal audit program for the
education state agency.
Highlighted Provisions:
This bill:
▸ requires the State Board of Education to establish an internal audit program for
programs administered by the State Board of Education;
▸ requires an audit committee to approve internal auditing policies proposed by an
agency internal audit director; and
▸ makes technical changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
63I-5-102
, as last amended by Laws of Utah 2014, Chapter 433
63I-5-201
, as repealed and reenacted by Laws of Utah 2014, Chapter 433
63I-5-301
, as last amended by Laws of Utah 2014, Chapter 433
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
63I-5-102
 is amended to read:
63I-5-102.
Definitions.
As used in this chapter:
(1) "Agency governing board" is any board or commission that has policy making and
oversight responsibility over the agency, including the authority to appoint and remove the
agency director.
(2) "Agency head" means a cabinet officer, an elected official, an executive director, or
a board or commission vested with responsibility to administer or make policy for a state
agency.
(3) "Agency internal audit director" or "audit director" means the person who:
(a) directs the internal audit program for the state agency; and
(b) is appointed by the audit committee or, if no audit committee has been established,
by the agency head.
(4) "Appointing authority" means:
(a) the governor, for state agencies other than the State Tax Commission;
(b) the Judicial Council, for judicial branch agencies;
(c) the Board of Regents, for higher education entities;
(d) the State Board of Education, for [
the
] 
entities administered by the
 State [
Office
]
Board
 of Education; [
and
] 
or
(e) the four tax commissioners, for the State Tax Commission.
(5) "Audit committee" means a standing committee composed of members who:
(a) are appointed by an appointing authority;
(b) (i) do not have administrative responsibilities within the agency; and
(ii) are not an agency contractor or other service provider; and
(c) have the expertise to provide effective oversight of and advice about internal audit
activities and services.
(6) "Audit plan" means a prioritized list of audits to be performed by an internal audit
program within a specified period of time.
(7) "Higher education entity" means the Board of Regents, the institutional councils of
each higher education institution, [
and
] 
or
 each higher education institution.
(8) "Internal audit" means an independent appraisal activity established within a state
agency as a control system to examine and evaluate the adequacy and effectiveness of other
internal control systems within the agency.
(9) "Internal audit program" means an audit function that:
(a) is conducted by an agency, division, bureau, or office, independent of the agency,
division, bureau, or office operations;
(b) objectively evaluates the effectiveness of agency, division, bureau, or office
governance, risk management, internal controls, and the efficiency of operations; and
(c) is conducted in accordance with the current:
(i) International Standards for the Professional Practice of Internal Auditing; or
(ii) The Government Auditing Standards, issued by the Comptroller General of the
United States.
(10) "Judicial branch agency" means each administrative entity of the judicial branch.
(11) (a) "State agency" means:
(i) each department, commission, board, council, agency, institution, officer,
corporation, fund, division, office, committee, authority, laboratory, library, unit, bureau, panel,
or other administrative unit of the state; [
and
] 
or
(ii) each state public education entity.
(b) "State agency" does not mean:
(i) a legislative branch agency;
(ii) an independent state agency as defined in Section 
63E-1-102
;
(iii) a county, municipality, school district, local district, or special service district; or
(iv) any administrative subdivision of a county, municipality, school district, local
district, or special service district.
Section 2. Section 
63I-5-201
 is amended to read:
63I-5-201.
Internal auditing programs -- State agencies.
(1) (a) The departments of Administrative Services, Agriculture, Commerce, Heritage
and Arts, Corrections, Workforce Services, Environmental Quality, Health, Human Services,
Natural Resources, Public Safety, and Transportation, and the State Tax Commission shall
conduct various types of auditing procedures as determined by the agency head or governor.
(b) The governor may, by executive order, require a state agency not described in
Subsection (1)(a) to establish an internal audit program.
(c) The governor shall ensure that each state agency that reports to the governor has
adequate internal audit coverage.
(2) (a) The Office of the Court Administrator shall establish an internal audit program
under the direction of the Judicial Council, including auditing procedures for courts not of
record.
(b) The Judicial Council may, by rule, require other judicial agencies to establish an
internal audit program.
(3) (a) Dixie State University, the University of Utah, Utah State University, Salt Lake
Community College, Southern Utah University, Utah Valley University, Weber State
University, and Snow College shall establish an internal audit program under the direction of
the Board of Regents.
(b) The State Board of Regents may issue policies requiring other higher education
entities or programs to establish an internal audit program.
(4) The [
State Office of Education shall establish under the direction of the
] State
Board of Education 
shall establish
 an internal audit program that provides internal audit
services for each program administered by the State [
Office
] 
Board
 of Education.
(5) Subject to Section 
32B-2-302.5
, the internal audit division of the Department of
Alcoholic Beverage Control shall establish an internal audit program under the direction of the
Alcoholic Beverage Control Commission.
Section 3. Section 
63I-5-301
 is amended to read:
63I-5-301.
Audit committee -- Powers and duties.
(1) (a) Each appointing authority may establish an audit committee to monitor the
activities of the agency internal audit program.
(b) An audit committee may serve more than one state agency internal audit program.
(2) The appointing authority shall ensure that audit committee members have the
expertise to provide effective oversight of and advice about internal audit activities and
services.
(3) If an audit committee has been established, the audit committee shall:
(a) appoint, evaluate, and, if necessary, remove the agency internal audit director;
(b) prepare and adopt formal policies that define:
(i) the purpose of the agency's internal audit program; and
(ii) the authority and responsibility of the agency's internal auditors;
(c) ensure that policies adopted under Subsection (3)(b):
(i) do not place limitations on the scope of the internal audit program's work; and
(ii) clarify that an auditor does not have authority or responsibility for an activity that
the auditor audits;
(d) ensure that:
(i) the audit director employs a sufficient number of professional and support staff to
implement an effective internal audit program;
(ii) compensation, training, job tenure, and advancement of internal auditing staff is
based upon job performance;
(iii) the audit director and staff collectively possess the knowledge, skills, and
experience essential to the practices of the profession and are proficient in applying internal
auditing standards, procedures, and techniques;
(iv) the internal audit program has [
employees
] 
staff
 who are qualified in disciplines
necessary to meet the audit responsibilities, including accounting, business management, public
administration, human resource management, economics, finance, statistics, electronic data
processing, or engineering;
(v) internal audit staff are free of operational and management responsibilities that
would impair their ability to make independent audits of any aspects of the agency's operations;
(vi) the audit director and the internal audit staff have access to all personnel and
records, data, and other agency information that the audit director or staff consider necessary to
carry out their assigned duties; and
(vii) [
that
] the audit director and [
the director's employees
] 
internal audit staff
 have the
necessary access to the agency head, agency management, and agency staff;
(e) [
consent to the
] 
approve
 internal auditing policies proposed by the agency head 
or
audit director
;
(f) review and approve the annual internal audit plan, modifications to the internal
audit plan, risk assessment, and budget;
(g) review internal and external audit reports, follow-up reports, and quality assurance
reviews of the internal audit office; and
(h) periodically meet with the agency internal audit director to discuss pertinent
matters, including whether there are any restrictions on the scope of audits.