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BILL # HB 2677 |
TITLE: JLAC; auditor general |
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SPONSOR: Kern |
STATUS: House Engrossed |
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PREPARED BY: Rebecca Perrera |
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The bill makes several changes to the Office of the Auditor General's (OAG) audits, investigations, powers and duties. In addition, the bill requires the OAG to conduct a performance audit of a county transportation excise tax every 5 years after its adoption rather than every 5 years after the first 10 years.
Estimated Impact
Based on input from the Auditor General, the JLBC Staff anticipates that the bill would have no net cost to the General Fund.
The bill makes several changes to the OAG's audit reporting requirements for sunset audits. The effect of these changes appears to have no net change to the overall workload of the OAG. For example, while the bill modifies the specific sunset factors the OAG and agencies report to the COR, the overall total number of factors does not change. The bill also requires that the OAG conduct annual, rather than biennial, audits for agencies subject to federal single audit requirements. Pursuant to federal requirements, the OAG currently conducts these audits annually.
In addition, the bill requires the JLBC Staff to complete a fiscal note on the cost of conducting a special audit required by legislation prior to the consideration of the legislation. The OAG would provide information to the JLBC Staff on the cost of the audit. Both the JLBC Staff and OAG expect no additional cost to complete the required fiscal analysis.
The Auditor General reports that the changes streamline work for the OAG, state agencies and school districts but the relative cost impact cannot be estimated.
Local Government Impact
Statute requires the OAG to conduct a performance audit of a county excise tax after 10 years of implementation, and then, every 5 years. The bill would require the OAG to conduct a performance audit starting at 5 years. Pursuant to statute, counties must reimburse the OAG for the cost of a performance audit with excise tax revenue which would otherwise fund road maintenance projects. Currently, 2 counties, Pinal County and Gila County have transportation excise taxes in effect for more than 10 years. The OAG reports that 6 prior audits over the past 15 years individually cost between $39,500 and $108,000 or an average of $83,200. The per audit cost depends on the complexity and number of issues found during the audit.
The bill would apply to Coconino County which established its transportation excise tax in FY 2015. Under the proposal, Coconino County would be first audited in FY 2020 rather than FY 2025.
4/25/19