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SB1645 - 572R - S Ver
Senate Engrossed
performance audits;
auditor general
State of Arizona
Senate
Fifty-seventh Legislature
Second Regular Session
2026
SENATE BILL 1645
AN
ACT
amending section 41-1279.03,
Arizona Revised Statutes; relating to the auditor general.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it
enacted by the Legislature of the State of Arizona:
Section 1. Section 41-1279.03, Arizona Revised
Statutes, is amended to read:
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41-1279.03.
Powers and duties
A. The auditor general shall:
1. Prepare an audit plan for approval by the
committee and report to the committee the results of each audit and
investigation and other reviews conducted by the auditor general.
2. Conduct or cause to be conducted annual financial
and compliance audits of financial transactions and accounts kept by or for all
state agencies subject to the federal single audit requirements.� The audits
shall be conducted in accordance with generally accepted governmental auditing
standards and accordingly shall include tests of the accounting records and
other auditing procedures as may be considered necessary in the circumstances.�
The audits shall include the issuance of suitable reports as required by the
federal single audit requirements so that the legislature, the federal
government and others will be informed as to the adequacy of financial
statements of this state in compliance with generally accepted accounting
principles and to determine whether this state has complied with laws and
regulations that may have a material effect on the financial statements and on
major federal assistance programs.
3. Perform procedural reviews for all state agencies
at times determined by the auditor general. These reviews may
include evaluation of administrative and accounting internal controls and
reports on these reviews.
4. Perform special research requests, special audits
and related assignments as designated by the committee and conduct performance
audits, special audits, special research requests and investigations of any
state agency, whether created by the constitution or otherwise, as may be
requested by the committee.
5. Annually on or before the fourth Monday of
December, prepare a written report to the governor and to the committee that
contains a summary of activities for the previous fiscal year.
6. In the fifth year and in each fifth year
thereafter in which a transportation excise tax is in effect in a county as
provided in section 42-6106 or 42-6107, conduct a performance audit
that:
(a) Reviews past expenditures and future planned
expenditures of the transportation excise revenues and determines the impact of
the expenditures in solving transportation problems within the county and, for
a transportation excise tax in effect in a county as provided in section 42-6107,
determines whether the expenditures of the transportation excise revenues
comply with section 28-6392, subsection B.
(b) Reviews projects completed to date and projects
to be completed during the remaining years in which a transportation excise tax
is in effect.� Within six months after each review period, the auditor general
shall present a report to the speaker of the house of representatives and the
president of the senate detailing findings and making recommendations.
(c) Reviews, determines, reports and makes
recommendations to the speaker of the house of representatives and the
president of the senate whether the distribution of Arizona highway user
revenues complies with title 28, chapter 18, article 2.
7. If requested by the committee, conduct
performance audits of counties and incorporated cities and towns receiving
Arizona highway user revenue fund monies pursuant to title 28, chapter 18,
article 2 to determine whether the monies are being spent as provided in
section 28-6533, subsection B.
8. Perform special audits designated pursuant to law
if the auditor general determines that there are adequate monies appropriated
for the auditor general to complete the audit. If the auditor
general determines the appropriated monies are inadequate, the auditor general
shall notify the
joint legislative audit
committee.�
Based on information provided by the auditor general, for any legislative
measure that requires the auditor general to perform a special audit, the joint
legislative budget committee staff shall notify all the members of the
legislature as soon as practicable of the cost to conduct the special audit.
9. Establish a schoolwide audit team in the office
of the auditor general to conduct performance audits and monitor school
districts to determine the percentage of every dollar spent in the classroom by
the school district. Each school district shall prominently post on
its website home page a copy of its profile pages that displays the percentage
of every dollar spent in the classroom by that school district from the most
recent status report issued by the auditor general pursuant to this
paragraph. The auditor general shall determine, through random
selection, the school districts to be audited each year, subject to review by
the joint legislative audit committee. A school district that is
subject to an audit pursuant to this paragraph shall notify the auditor general
in writing whether the school district agrees or disagrees with the findings of
the audit and whether the school district will implement the recommendations,
implement modifications to the recommendations or refuse to implement the
recommendations. The school district shall submit to the auditor
general a written status report on the implementation of the audit
recommendations at the request of the auditor general, within the two-year
period following the issuance of an audit conducted pursuant to this
paragraph. The auditor general shall review the school district's
progress toward implementing the recommendations of the audit and provide
status reports of the reviews to the joint legislative audit committee during
this two-year period. The auditor general may review a school
district's progress beyond this two-year period for recommendations that
have not yet been implemented by the school district.� The school district
shall participate in any hearing scheduled during this review period by the
joint legislative audit committee or by any other legislative committee
designated by the joint legislative audit committee.
10. Annually review per diem compensation and
reimbursement of expenses for employees of this state and members of a state
board, commission, council or advisory committee by judgmentally selecting
samples and evaluating the propriety of per diem compensation and expense
reimbursements.
11. If requested by the joint
legislative audit committee, conduct performance audits of an agency or
political subdivision of this state that receives taxpayer monies to determine
whether the terms and conditions that are required to RECEIVe the taxpayer
monies are being met.
B. The auditor general may:
1. Subject to approval by the committee, adopt rules
necessary to administer the duties of the office.
2. Hire consultants to conduct the studies required
by subsection A, paragraphs 6 and 7 of this section.
C. If approved by the committee, the auditor general
may charge a reasonable fee for the cost of performing audits or providing
accounting services for auditing federal funds, special audits or special
services requested by political subdivisions of this state. Monies
collected pursuant to this subsection shall be deposited in the audit services
revolving fund.
D. The department of transportation, the county
treasurer, the county transportation excise tax recipients
,
and
the board of supervisors of a county that has approved
a county transportation excise tax as provided in section 42-6106 or 42-6107
and the governing bodies of counties, cities and towns receiving Arizona
highway user revenue fund monies shall cooperate with and provide necessary
information to the auditor general or the auditor general's consultant.
E. The department of transportation or the county
transportation excise tax recipients shall reimburse the auditor general as
follows, and the auditor general shall deposit the reimbursed monies in the
audit services revolving fund:
1. For the cost of conducting the studies or hiring
a consultant to conduct the studies required by subsection A, paragraph 6,
subdivisions (a) and (b) of this section, from monies collected pursuant to a
county transportation excise tax levied pursuant to section 42-6106 or 42-6107.
2. For the cost of conducting the studies or hiring
a consultant pursuant to subsection A, paragraph 6, subdivision (c) and
paragraph 7 of this section, from the Arizona highway user revenue fund.
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