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STATE OF OKLAHOMA
2nd Session of the 60th Legislature (2026)
SENATE BILL 1786 By: Jett
AS INTRODUCED
An Act relating to state government; granting State
Auditor and Inspector certain authority; prohibiting
certain noncompliance; stating penalty for violation;
requiring submission of certain report to the
Attorney General and district attorney; requiring
Attorney General to take certain actions; requiring
Attorney General to submit certain annual report;
requiring State Auditor and Inspector to submit
certain audit to certain officers; providing for
certain conditional public release of certain audit;
requiring certain entities to create certain plan;
providing for State Auditor and Inspector to monitor
implementation of certain plan; creating the
Investigative Division of the Office of the State
Auditor and Inspector; allowing for certain recovery
of costs by State Auditor and Inspector; making
certain appropriation; providing for codification;
providing for noncodification; providing an effective
date; and declaring an emergency.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 212.5 of Title 74, unless there
is created a duplication in numbering, reads as follows:
A. The State Auditor and Inspector shall have discretionary
authority to initiate performance audits, operational audits,
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forensic audits, or special investigative audits of any state
agency, board, commission, or local government entity. Such audits
may be initiated based on:
1. Risk assessments;
2. Credible allegations of waste, fraud, abuse, or
inefficiency; or
3. The State Auditor and Inspector’s independent determination.
B. The audits provided for in subsection A of this section may
be initiated by the State Auditor and Inspector without requiring
the prior request of the Governor, the Attorney General, an agency
director, a district attorney, or a legislative resolution.
C. The State Auditor and Inspector shall have the authority to
issue administrative subpoenas to any public entity, officer,
employee, contractor, or third party receiving or managing public
funds for:
1. Documents;
2. Records;
3. Testimony under oath;
4. Electronic data; and
5. Physical evidence.
D. Any person who does not comply with an administrative
subpoena issued by the State Auditor and Inspector under the
provisions of subsection A of this section shall, upon conviction,
be guilty of a misdemeanor punishable by a fine not more than One
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Thousand Dollars ($1,000.00), or by imprisonment in the custody of
the Department of Corrections for not more than thirty (30) days, or
by both such fine and imprisonment.
E. The State Auditor and Inspector is authorized to conduct
audits or inspections without prior announcement.
F. The State Auditor and Inspector is authorized to secure
premises or records on a temporary basis when deemed necessary by
the State Auditor and Inspector to preserve evidence of potential
wrongdoing.
SECTION 2. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 212.6 of Title 74, unless there
is created a duplication in numbering, reads as follows:
A. The State Auditor and Inspector shall, within thirty (30)
days of the finalization of an audit, refer all audit findings that
indicate potential criminal violations, fraud, embezzlement, or
misappropriation of public funds to the Attorney General and the
district attorney for the county where such violations occurred.
B. The Attorney General shall review such referral from the
State Auditor and Inspector and shall:
1. Initiate investigation or prosecution where probable cause
exists; or
2. Electronically submit a written explanation to the State
Auditor and Inspector and the Legislature for any decision to not
proceed with such investigation or prosecution.
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C. The Attorney General shall annually submit a report to the
Legislature and the State Auditor and Inspector by electronic
submission on the status and outcomes of all referrals received from
the State Auditor and Inspector, including:
1. Actions taken;
2. Cases prosecuted;
3. Recoveries achieved; and
4. The written explanations provided for in paragraph 2 of
subsection B of this section.
D. Any audit that provides serious findings of waste, fraud, or
abuse shall be automatically transmitted by the State Auditor and
Inspector to the President Pro Tempore of the Senate, the Speaker of
the House of Representatives, and the chairs of the legislative
committee relating to the audited entity. Additionally, unless
confidentiality is required for an ongoing criminal investigation,
the contents of such audit shall be released for public viewing.
SECTION 3. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 212.7 of Title 74, unless there
is created a duplication in numbering, reads as follows:
A. Any entity audited by the State Auditor and Inspector shall
submit a corrective action plan to the State Auditor and Inspector
within sixty (60) days after receiving an audit report with adverse
findings.
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B. The State Auditor and Inspector shall monitor the
implementation of the corrective action plan and report
noncompliance with such plan to the Attorney General and the
Legislature. An entity reported to be in noncompliance by the State
Auditor and Inspector may be subject to sanctions, including but not
limited to the withholding of state funds.
SECTION 4. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 212.8 of Title 74, unless there
is created a duplication in numbering, reads as follows:
A. There is hereby established within the Office of the State
Auditor and Inspector the Investigative Division.
B. The Division shall:
1. Be staffed with certified fraud examiners and investigators;
and
2. Support expanded forensic and special audits.
C. The State Auditor and Inspector shall promulgate rules to
effectuate the provisions of this section.
SECTION 5. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 212.9 of Title 74, unless there
is created a duplication in numbering, reads as follows:
The Office of the State Auditor and Inspector is authorized to
recover costs from audited entities for expenses related to special
or investigate audits.
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SECTION 6. NEW LAW A new section of law not to be
codified in the Oklahoma Statutes reads as follows:
There is hereby appropriated to the State Auditor and Inspector
from any monies not otherwise appropriated from the General Revenue
Fund of the State Treasury for the fiscal year ending June 30, 2027,
One Million Five Hundred Thousand Dollars ($1,500,000.00) for the
purposes of supporting enhanced staffing and operations as provided
for in this act.
SECTION 7. This act shall become effective July 1, 2026.
SECTION 8. It being immediately necessary for the preservation
of the public peace, health or safety, an emergency is hereby
declared to exist, by reason whereof this act shall take effect and
be in full force from and after its passage and approval.
60-2-3110 MSBB 1/14/2026 5:55:43 PM