Chapter 165

2015 -- H 5883 Enacted 07/09/2015

A N   A C T

RELATING TO PUBLIC FINANCE

Introduced By: Representatives Shekarchi, Casey, Kennedy, Canario, and Williams

Date Introduced: March 13, 2015

It is enacted by the General Assembly as follows:

SECTION 1. Section 35-14-2 of the General Laws in Chapter 35-14 entitled "Financial

Integrity and Accountability" is hereby amended to read as follows:

35-14-2. Policy. -- (a) The legislature hereby finds that:

(1) Fraud and errors in state programs are more likely to occur from a lack of effective

systems of internal accounting and administrative control in the sufficient internal control

structures at state agencies;

(2) Effective systems of internal accounting and administrative control structures provide

the basic foundation upon which a structure of public accountability must be built;

(3) Effective systems of internal accounting and administrative control are necessary to

assure that state assets and funds are adequately safeguarded, as well as to produce reliable

financial information for the state; An entity's system of internal control structures consists of

policies and procedures designed to provide management with reasonable assurance that the

agency achieves its objectives and goals including:

(i) Reliability of financial reporting;

(ii) Compliance with applicable laws and regulations; and

(iii) Effectiveness and efficiency of operations.

(4) Systems of internal accounting and administrative Internal control structures are

necessarily dynamic and must be continuously evaluated and, where necessary, improved; and

(5) Reports regarding addressing the adequacy of the system of internal accounting and

administrative control structure of each state agency are necessary to enable the executive branch,

the legislature, and the public to evaluate the agency's performance of its public responsibilities

and accountability.

(b) The legislature declares that:

(1) Each The management of each state agency must maintain effective systems of

internal accounting and administrative control as an integral part of its management practices; is

responsible for establishing and maintaining an adequate internal control structure and policies

and procedures for financial reporting;

(2) The systems of internal accounting and administrative control of each Each state

agency shall perform an assessment and produce a report on the effectiveness of the internal

control structure and procedures for financial reporting be evaluated on an ongoing basis and,

when detected, weaknesses must be promptly corrected; and

(3) All levels of management of the state agencies must be involved in assessing and

strengthening the systems of internal accounting and administrative control structures to

minimize fraud, errors, abuse, and waste of government funds.

SECTION 2. Section 35-20-2 of the General Laws in Chapter 35-20 entitled "Public

Corporation Financial Integrity and Accountability" is hereby amended to read as follows:

35-20-2. Policy. -- (a) The legislature hereby finds that:

(1) Fraud and errors in public and quasi-public programs are more likely to occur from a

lack of effective systems of internal accounting and administrative control sufficient internal

control structures in the state authorized state-authorized public corporations.

(2) Effective systems of internal accounting and administrative control structures provide

the basic foundation upon which a structure of public accountability must be built.

(3) Effective systems of internal accounting and administrative control are necessary to

assure that public and quasi-public state assets and funds are adequately safeguarded, as well as to

produce reliable financial information for the state. An entity's system of internal control

structures consists of policies and procedures designed to provide management with reasonable

assurance that the agency achieves its objectives and goals including:

(i) Reliability of financial reporting;

(ii) Compliance with applicable laws and regulations; and

(iii) Effectiveness and efficiency of operations.

(4) Systems of internal accounting and administrative Internal control structures are

necessarily dynamic and must be continuously evaluated and, where necessary, improved.

(5) Reports regarding addressing the adequacy of the system of internal accounting and

administrative internal control structure of each public corporation are necessary to enable the

executive branch, the legislature, and the public to evaluate the corporation's performance of its

public and quasi-public responsibilities and accountability.

(b) The legislature declares that:

(1) Each The management of each public corporation must maintain effective systems of

internal accounting and administrative control as an integral part of its management practices. is

responsible for establishing and maintaining an adequate internal control structure and policies

and procedures for financial reporting.

(2) The systems of internal accounting and administrative control of each state agency

shall be evaluated on an ongoing basis Each public corporation shall perform an assessment and

produce a report on the effectiveness of the internal control structure and procedures for financial

reporting and, when detected, control weaknesses must be promptly corrected.

(3) All levels of management of the public corporation must be involved in assessing and

strengthening the systems of internal accounting and administrative control structures to

minimize fraud, errors, abuse, and waste of public and quasi-public funds.

SECTION 3. This act shall take effect upon passage.

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LC001735

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