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PA Bulletin, Doc. No. 18-217

STATEMENTS OF POLICY

Title 4—ADMINISTRATION

DEPARTMENT OF THE AUDITOR GENERAL

[ 4 PA. CODE CH. 501 ]

Auditee Reporting Requirements

[48 Pa.B. 879]
[Saturday, February 10, 2018]

 The Department of the Auditor General (Department) adopts Chapter 501 (relating to auditee reporting requirements—statement of policy) for the purpose of interpreting and implementing recent amendments to section 403 of The Fiscal Code (act) (72 P.S. § 403) regarding the auditee reporting requirements under section 1.5 of the act of October 30, 2017 (P.L. 725, No. 44) (Act 44).

 Under section 403 of the act, the Department has the authority to audit every person, association, corporation and public agency receiving State funds payable out of any fund in the State Treasury. Further, the 2004 Commonwealth Court decision in Com., Dept. of the Aud. Gen. v. State Emp. Ret. Sys., 860 A.2d 206, 214 (Pa. Cmwlth. 2004) (citing to the prior case in Com., Dept. of the Aud. Gen. v. State Emp. Ret. Sys., 836 A.2d 1053 (Pa. Cmwlth. 2003)), observed ''[t]he Court's conclusion plainly was that the Auditor General under Article VIII, Section 10 of the Constitution and Sections 402 and 403 of The Fiscal Code has the authority to conduct performance audits.'' (Emphasis added.)

 Therefore, section 402 of the act (72 P.S. § 402) and section 403 of the act provide the basis for the Auditor General to have broad authority to audit every Commonwealth department, board and commission, as well as every person association, corporation and public agency receiving State funds at his discretion.

Purpose of this Statement of Policy

 A ''statement of policy'' is defined in section 102(13) of the act of July 31, 1968 (P.L. 769, No. 240) (45 P.S. § 1102(13)), known as the Commonwealth Documents Law (CDL), as:

any document, except an adjudication or a regulation, promulgated by an agency which sets forth substantive or procedural personal or property rights, privileges, immunities, duties, liabilities or obligations of the public or any part thereof, and includes, without limiting the generality of the foregoing, any document interpreting or implementing any act of Assembly enforced or administered by such agency.

(Emphasis added.)

 Further, the Commonwealth Court recently observed in Borough of Bedford v. Com., Dept. of Environmental Protection, 972 A.2d 53, 61-62 (Pa. Cmwlth. 2009) (citing Com., Dept. of Corrections and Com., Dept. of Public Welfare v. Pennsylvania State Corrections Officers Association, 932 A.2d 359, 365 n. 9 (Pa. Cmwlth. 2007)):

The value of a statement of policy is that it communicates, in advance of a discrete agency action, how the agency interprets a law and intends to give it effect. A statement of policy can be published in the Pennsylvania Code, but publication is not required; by contrast, a regulation must be published in the Pennsylvania Code.

(Emphasis added.)

 Therefore, the Department adopts Chapter 501 to assist the entities impacted by the auditee reporting requirements in section 403 of the act regarding auditee reporting requirements under Act 44.

 As set forth in Annex A, the Department interprets the Act 44 auditee reporting requirements to apply to any entity that receives a direct or indirect appropriation from the Commonwealth including any Commonwealth executive and independent department, board and commission, and a school district.

Contact Person

 The contact person for technical issues is Penelope LaFoe, Administrative Officer III, Department of the Auditor General, Office of Chief Counsel, (717) 787-4546, PLaFoe@PaAuditor.Gov. The contact person for legal questions is Christal Pike-Nase, Deputy Chief Counsel, Department of the Auditor General, Office of Chief Counsel, (717) 787-4546, CPike-Nase@PaAuditor.Gov.

EUGENE A. DePASQUALE, 
Auditor General

 (Editor's Note: Title 4 of the Pennsylvania Code is amended by adding statements of policy in §§ 501.1—501.10 and Appendix A to read as set forth in Annex A. This statements of policy is effective upon publication in the Pennsylvania Bulletin.)

 Fiscal Note: 128-1. No fiscal impact; (8) recommends adoption.

Annex A

TITLE 4. ADMINISTRATION

PART XIV. DEPARTMENT OF THE AUDITOR GENERAL

Chap.

501.AUDITEE REPORTING REQUIREMENTS—STATEMENT OF POLICY

CHAPTER 501. AUDITEE REPORTING REQUIREMENTS—STATEMENT OF POLICY

Sec.

501.1.Statement of policy.
501.2.Performance audits.
501.3.Timely response.
501.4.Department auditee notice.
501.5.Response notification.
501.6.Web site postings.
501.7.Responses considered.
501.8.Failure to report notification.
501.9.Failure to report considered.
501.10.Department coordination.

§ 501.1. Statement of policy.

 The Department of the Auditor General declares that it interprets the entities that are subject to the auditee reporting requirements in section 403 of The Fiscal Code (72 P.S. § 403) as including any Commonwealth executive and independent department, board and commission, and any school district receiving a direct or indirect appropriation from the Commonwealth (auditee).

§ 501.2. Performance audits.

 Under case law, the Auditor General has the authority to conduct ''special'' audits, including special performance audits, under sections 402 and 403 of The Fiscal Code (72 P.S. §§ 402 and 403).

§ 501.3. Timely response.

 Every auditee, including any Commonwealth department, board and commission, and any school district, receiving recommendations in any of its audits shall submit a response to the Department of the Auditor General detailing adoption of the recommendations, or the reason why recommendations have not been adopted (Act 44 Auditee Reporting Form), within 120 business days of the publication of the audit.

§ 501.4. Department auditee notice.

 The Department of the Auditor General will provide notice to every auditee (any department, board and commission, and any school district) 60 business days after the date of the audit's publication that future appropriations could be denied for failure to respond.

§ 501.5. Response notification.

 The Department of the Auditor General (Department) will regularly notify (quarterly) the Governor and the Chairpersons and Minority Chairpersons of the Appropriations Committees of the Senate and the House of Representatives of the auditees' responses received, accompanied by comments the Department may wish to submit.

§ 501.6. Web site postings.

 The Department of the Auditor General (Department) will post all of the auditees' responses on the Department's publicly accessible web site.

§ 501.7. Responses considered.

 The Governor and the Chairpersons and Minority Chairpersons of the Appropriations Committees of the Senate and the House of Representatives may consider the auditees' responses when determining whether future appropriations will be considered.

§ 501.8. Failure to report notification.

 If the auditee does not respond to the Department of the Auditor General (Department) within 120 business days from the date of the publication of the audit, the Department will notify the Governor and the Chairpersons and Minority Chairpersons of the Appropriations Committees of the Senate and the House of Representatives.

§ 501.9. Failure to report considered.

 The Governor and the Chairpersons and Minority Chairpersons of the Appropriations Committees of the Senate and the House of Representatives may consider a failure to respond to the audit when determining future appropriations.

§ 501.10. Department coordination.

 The Department of the Auditor General (Department) will work with the Chairpersons and Minority Chairpersons of the Appropriations Committees of the Senate and the House of Representatives to determine the most effective method to communicate information concerning responses to the Department's audit recommendations based on the type of audit and significance of the recommendations.

 

 


 
[Pa.B. Doc. No. 18-217. Filed for public inspection February 9, 2018, 9:00 a.m.]


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