Department of Budget and Management - Audit and Finance Compliance Unit - Establishment

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*sb0858*

SENATE BILL 858
P1 (6lr3596)
ENROLLED BILL
— Budget and Taxation/Government, Labor, and Elections —
Introduced by Senator Hettleman (By Request – Joint Audit and Evaluation
Committee) and Senators Augustine, Bailey, Beidle, Brooks, Carozza,
Charles, Corderman, Feldman, Ferguson, Gallion, Gile, Guzzone, Harris,
Hayes, Henson, Hershey, Hester, Jackson, James, Jennings, Kagan, King,
Kramer, Lam, Lewis Young, Love, Mautz, McCray, McKay, Muse, Ready,
Rosapepe, Salling, Smith, Sydnor, Waldstreicher, A. Washington,
M. Washington, Watson, West, and Zucker

Read and Examined by Proofreaders:

_______________________________________________
Proofreader.
_______________________________________________
Proofreader.

Sealed with the Great Seal and presented to the Governor, for his approval this

_______ day of _______________ at ________________________ o’clock, ________M.

______________________________________________
President.

CHAPTER ______

AN ACT concerning 1

Department of Budget and Management – Audit and Finance Compliance Unit – 2
Establishment 3

FOR the purpose of establishing the Audit and Finance Compliance Unit in the Department 4
of Budget and Management; requiring the Governor to implement systems and 5
processes to monitor certain efforts; requiring the Unit to carry out certain 6
responsibilities and perform certain duties, including monitoring efforts of Executive 7
Branch agencies Departmental Units to correct certain audit findings and 8
implement certain corrective actions provide certain guidance, coordination, and 9
2 SENATE BILL 858

technical assistance; requiring the Unit to establish a certain specialized team to 1
provide certain direct assistance to certain agencies Executive Departmental Units 2
under certain circumstances; requiring the Unit to establish and maintain a 3
dashboard with certain information on its website submit a certain annual report by 4
a certain date each year; authorizing certain unredacted cybersecurity findings to be 5
viewed by certain individuals ; and generally relating to the establishment of the 6
Audit and Finance Compliance Unit in the Department of Budget and Management. 7

BY repealing and reenacting, without amendments, 8
Article – State Finance and Procurement 9
Section 3–101 10
Annotated Code of Maryland 11
(2021 Replacement Volume and 2025 Supplement) 12

BY adding to 13
Article – State Finance and Procurement 14
Section 3–401 through 3 –407 to be under the new subtitle “Subtitle 4. Audit and 15
Finance Compliance Unit” 16
Annotated Code of Maryland 17
(2021 Replacement Volume and 2025 Supplement) 18

BY repealing and reenacting, without amendments, 19
Article – State Government 20
Section 2–1224(h)(1) 21
Annotated Code of Maryland 22
(2021 Replacement Volume and 2025 Supplement) 23

BY repealing and reenacting, with amendments, 24
Article – State Government 25
Section 2–1224(i) 26
Annotated Code of Maryland 27
(2021 Replacement Volume and 2025 Supplement) 28

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 29
That the Laws of Maryland read as follows: 30

Article – State Finance and Procurement 31

3–101. 32

(a) In this title the following words have the meanings indicated. 33

(b) “Department” means the Department of Budget and Management. 34

(c) “Secretary” means the Secretary of Budget and Management. 35

SENATE BILL 858 3

SUBTITLE 4. AUDIT AND FINANCE COMPLIANCE UNIT. 1

3–401. 2

(A) IN THIS SUBTITLE , THE FOLLOWING WORDS HAVE THE MEANINGS 3
INDICATED. 4

(B) “AGENCY” MEANS AN ENTITY OF T HE EXECUTIVE BRANCH OF STATE 5
GOVERNMENT. 6

(C) “UNIT” MEANS THE AUDIT AND FINANCE COMPLIANCE UNIT. 7

3–402. 8

THERE IS AN AUDIT AND FINANCE COMPLIANCE UNIT IN THE DEPARTMENT. 9

3–403. 10

(A) IN ACCORDANCE WITH § 2–1224(H)(1) OF THE STATE GOVERNMENT 11
ARTICLE, THE GOVERNOR SHALL IMPLEM ENT SYSTEMS AND PROC ESSES TO 12
MONITOR THE EFFORTS OF THE EXECUTIVE DEPARTMENTAL UNITS TO CORRECT 13
AUDIT FINDINGS REPORTED BY THE OFFICE OF LEGISLATIVE AUDITS. 14

(B) THE UNIT IS RE SPONSIBLE FOR MONITO RING THE EFFORTS OF 15
AGENCIES EXECUTIVE DEPARTMENTAL UNITS IN CORRECTING AUDIT FINDINGS 16
REPORTED BY THE OFFICE OF LEGISLATIVE AUDITS IN ACCORDANCE WITH TITLE 17
2, SUBTITLE 12, PART IV OF THE STATE GOVERNMENT ARTICLE. 18

3–404. 19

(A) IN CARR YING OUT ITS RESPONS IBILITIES, THE UNIT SHALL ASSIST 20
AGENCIES EXECUTIVE DEPARTMENTAL UNITS WITH THE RESOLUTION OF AUDIT 21
FINDINGS BY: 22

(1) PROVIDING OBJECTIVE ASSESSMENT OF CORREC TIVE ACTIONS ; 23
AND 24

(2) MONITORING PROGRESS IN THE IMPLEMENTATIO N OF 25
CORRECTIVE ACTIONS. 26

(B) THE UNIT MAY IMPLEMENT PROACTIVE STEPS TO ADDRESS AND 27
PREVENT AUDIT FINDIN GS THROUGH ADVICE AN D SUPPORT PROVIDED T O 28
AGENCIES PROVIDE GUIDANCE, COORDINATION, AND TECHNICAL ASSIST ANCE TO 29
4 SENATE BILL 858

EXECUTIVE DEPARTMENTAL UNITS TO STRENGTHEN E FFORTS TO ADDRESS AND 1
PREVENT AUDIT FINDIN GS AND TO STRENGTHEN INTERNAL CONTROLS AN D 2
COMPLIANCE PRACTICES. 3

3–405. 4

(A) THE UNIT SHALL PROVIDE DI RECT ASSISTANCE TO AGENCIES 5
EXECUTIVE DEPARTMENTAL UNITS WITH: 6

(1) FOUR OR MORE REPEAT AUDIT FINDINGS; OR 7

(2) AS REQUESTED BY THE JOINT AUDIT AND EVALUATION 8
COMMITTEE UNSATISFACTORY AUDITS. 9

(B) THE DIRECT ASSISTANCE PROVIDED UNDER SUBSE CTION (A) OF THIS 10
SECTION SHALL INCLUDE: 11

(1) ADVICE AND SUPPORT T O DEVELOP CORRECTIVE ACTIONS AS 12
SOON AS PRACTICABLE , A REVIEW OF THE TIME LINE DEVELOPED BY TH E 13
EXECUTIVE DEPARTMENTAL UNIT FOR THE IMPLEMEN TATION OF CORRECTIVE 14
ACTIONS FOR EACH REC OMMENDATION TO ENSUR E THAT THE TIMELINE HAS 15
ACHIEVABLE COMPLETION DATES; 16

(2) A REVIEW OF RESOLUTI ON ACTIONS ON EACH F INDING WI TH A 17
FOCUS ON REPEAT AND SIGNIFICANT FINDINGS TO PROVIDE ADVICE AND SUPPORT 18
IN ASSISTING WITH THE DEVELOPMENT OF CORRECTIVE ACTIONS; 19

(3) PERFORMING SAMPLE TE STS OF IMPLEMENTED C ORRECTIVE 20
ACTIONS, AS NEEDED; AND 21

(4) MONITORING PROGRESS IN OF THE IMPLEMENTATION O F 22
CORRECTION CORRECTIVE ACTIONS UNTIL THE LEGISLATIVE AUDITORS RETURN TO 23
BEGIN THE NEXT RELATED FISCAL COMPLIANCE AUDIT. 24

(C) (1) THE UNIT SHALL ESTABLISH A SPECIALIZED TEAM T O PROVIDE 25
THE DIRECT ASSISTANCE REQUIRED UNDER THIS SECTION. 26

(2) THE SPECIALIZED TEAM ESTABLISHED IN PARAG RAPH (1) OF 27
THIS SUBSECTION MAY INCLUDE CURRENT STATE EMPLOYEES , CURRENT 28
CONTRACTUAL EMPLOYEES, AND EXTERNAL CONTRACTORS. 29

3–406. 30

SENATE BILL 858 5

(A) THE UNIT SHALL MAINTAIN A DASHBOARD ON CURRENT AND REPEAT 1
AUDIT FINDINGS ON ITS WEBSITE. 2

(B) (1) THE DASHBOARD REQUIRE D UNDER SUBSECTION (A) OF THIS 3
SECTION SHALL INCLUD E ALL AUDIT FINDINGS FOR AGENCIES UNDER 4
EXAMINATION EACH YEAR, ORGANIZED BY UNITS OF THE AGENCY. 5

(2) FOR EACH FINDING, THE DASHBOARD SHALL INCLUDE: 6

(A) ON OR BEFORE OCTOBER 1 EACH YEAR, THE UNIT SHALL SUBMIT AN 7
ANNUAL REPORT TO THE JOINT AUDIT AND EVALUATION COMMITTEE, IN 8
ACCORDANCE WITH § 2–1257 OF THE STATE GOVERNMENT ARTICLE, ON ALL AUDIT 9
FINDINGS FOR EXECUTIVE DEPARTMENTAL UNITS UNDER EXAMINATION. 10

(B) THE REPORT SHALL INCL UDE THE FOLLOWING IN FORMATION FOR 11
EACH FINDING: 12

(I) (1) THE RECOMMENDATIONS OF THE OFFICE OF 13
LEGISLATIVE AUDITS; 14

(II) (2) THE NUMBER OF YEARS THAT A REPEAT FINDIN G 15
REMAINS UNRESOLVED; 16

(III) (3) THE PROJE CTED COMPLETION DATE OF THE FOR 17
RESOLUTION OF A FINDING; 18

(IV) (4) INFORMATION ON UNRES OLVED FINDINGS , 19
INCLUDING THE REASON A FINDING IS UNRESOLVED; AND 20

(V) (5) A GRAPHIC REPRESENTA TION OF THE PROGRESS OF 21
CORRECTIVE ACTIONS THAT INCLUDES WHETHER THE FINDING IS UNRESOLVED, IN 22
PROGRESS, OR RESOLVED THE PROGRESS OF CORRECTIVE ACTIONS THAT INCLUDES 23
WHETHER THE FINDING IS UNRESOLVED, IN PROGRESS, OR RESOLVED. 24

(C) THE DASHBOARD SHALL B E FULLY OPERATIONAL ON OR BEFORE 25
OCTOBER 1, 2027. 26

3–407. 27

THE SECRETARY MAY ADOPT REGULATIONS TO CARRY OUT THIS SUBTITLE. 28

Article – State Government 29

6 SENATE BILL 858

2–1224. 1

(h) (1) The Governor and the Chief Justice of the Supreme Court of Maryland 2
shall implement systems and processes to monitor the efforts of the Executive 3
Departmental Units and the Judiciary, respectively, to correct audit findings reported by 4
the Office of Legislative Audits. 5

(i) (1) A report auditing a unit of State or local government shall have any 6
cybersecurity findings redacted in a manner consistent with auditing best practices before 7
the report is made available to the public. 8

(2) AN UNREDACTED CYBERSE CURITY FINDING IN A REPORT 9
AUDITING A UNIT OF STATE OR LOCAL GOVERNMENT MAY BE VIEWED BY: 10

(I) MEMBERS OF THE JOINT AUDIT AND EVALUATION 11
COMMITTEE; 12

(II) MEMBERS OF THE JOINT COMMITTEE ON CYBERSECURITY, 13
INFORMATION TECHNOLOGY, AND BIOTECHNOLOGY; 14

(III) THE CHAIR AND THE SU BCOMMITTEE CHAIRS OF THE 15
SENATE BUDGET AND TAXATION COMMITTEE; 16

(IV) THE CHAIR AND THE SU BCOMMITTEE CHAIRS OF THE 17
HOUSE APPROPRIATIONS COMMITTEE; 18

(V) THE GOVERNOR, THE GOVERNOR’S CHIEF OF STAFF, AND 19
THE GOVERNOR’S DEPUTY CHIEFS OF STAFF; AND 20

(VI) THE AUDIT AND FINANCE COMPLIANCE UNIT IN THE 21
DEPARTMENT OF BUDGET AND MANAGEMENT. 22

SECTION 2. AND BE IT FURTHER ENACTED, That, on or before October 1, 2026, 23
and October 1, 2027, the Audit and Finance Compliance Unit shall report to the Joint Audit 24
and Evaluation Committee, in accordance with § 2 –1257 of the State Government Article, 25
on the status of the dashboard re quired under § 3 –406 of the State Finance and 26
Procurement Article, as enacted by Section 1 of this Act. 27

SECTION 3. 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 28
July 1, 2026. 29