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An Act Improving the Internal Controls within State Agencies (H.5)

State Auditor Suzanne M. Bump has brought forward legislation to improve the process that government agencies must follow when reporting lost, stolen, or damaged state property or funds.

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House bill 5 will give the State Comptroller, in consultation with the State Auditor, the ability to
establish regulations related to existing reporting requirements for state agencies and departments regarding their processes and plans to mitigate risks to taxpayer assets. This bill also expands the reporting requirements to independent authorities and creates a training program through the Comptroller’s office.

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Strengthens Protection of State Resources

Specifically, House bill 5 promotes greater government efficiency and strengthens protection of state
resources by establishing a minimum threshold at which agencies must report unaccounted for
variances, losses, shortages, or thefts of funds or property to the Office of the State Auditor.

Without a threshold:

  • Agencies must report every instance of variance or loss to the Office of the State Auditor, which is then mandated to review, determine the cause, and make a recommendation on every report received
  • Administrative burdens are placed on both the agencies that must report losses that are insignificant and also to the Office of the State Auditor which must receive and process these reports
  • The Office of the State Auditor often receives reports of a cash drawer being $5 short or an incident of a broken ceiling tile. In following our statutory requirement to process and make recommendations on every report, this is neither a wise use of the office’s time or resources

Increases Government Efficiency

This bill will allow the Office of the State Auditor to increases government efficiency by:

  • Promoting good government by extending the requirements of the state’s internal control law to all state authorities, which are currently exempt from reporting instances of variance or loss.
  • Directing the Comptroller’s Office to establish a comprehensive training program to assist agencies in developing and implementing the required internal control/reporting policies and procedures.