2013 -- S 0612

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LC01978

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- ESTABLISHING AN OFFICE OF

INSPECTOR GENERAL

     Introduced By: Senators Sheehan, Raptakis, Cote, Cool Rumsey, and Kettle

     Date Introduced: March 06, 2013

     Referred To: Senate Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. Title 42 of the General Laws entitled "STATE AFFAIRS AND

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GOVERNMENT" is hereby amended by adding thereto the following chapter:

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     CHAPTER 9.4

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INSPECTOR GENERAL

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     42-9.4-1. Purpose. -- The office of inspector general shall be an independent

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administrative agency charged with the purpose of preventing and detecting fraud, waste, abuse

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and mismanagement in the expenditure of public funds, whether federal, state, or local, and

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relating to any and all state programs and operations as well as the procurement of any supplies,

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services, or construction, by agencies, bureaus, divisions, sections, departments, offices,

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commissions, institutions and activities of the state of Rhode Island, including those districts,

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authorities, or political subdivisions created by the general assembly, the governor, and any court,

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including any city and town within the state of Rhode Island. Investigations may include the

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expenditures by nongovernmental agencies of federal, state and local public funds.

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     42-9.4-2. Definitions. -- As used in this chapter, unless the context requires otherwise,

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the following words shall have the following meanings:

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     (1) "Construction" means the process of building, altering, repairing, improving, or

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demolishing any public structure or building, or other improvements of any kind to any public

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property.

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     (2) "Contract" means all types of agreements, including grants and orders, for the

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purchase or disposal of supplies, services, construction, or any other item. It includes: awards;

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contracts of a fixed-price, cost, cost-plus-a-fixed-fee, or incentive type; contracts providing for

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the issuance of job or task orders; leases; letter contracts; purchase orders; and construction

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management contracts. It also includes supplemental agreements with respect to any of the

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foregoing.

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     (3) "Contractor" means any person, corporation, partnership, business, union, committee,

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or other organization entity or group of individuals performing any tasks, or duties defined under

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a written or oral contract with and for the state of Rhode Island or the joint committee on

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legislative services.

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     (4) "Procurement" means the purchasing, buying, renting, leasing, or otherwise obtaining

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of any supplies, services, or construction. It also includes all functions that pertain to the

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obtaining of any supply, service, or construction item, including a description of requirements,

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selection and solicitation of sources, preparation, and award of contract, and all phases of contract

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administration.

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     (5) "Public funds" means state, federal and local funds, either appropriated, non-

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appropriated or given under right of grant.

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     (6) "Services" means the rendering, by a contractor, of its time and effort rather than the

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furnishing of a specific end product, other than reports which are merely incidental to the required

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performance of services.

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     (7) "Supplies" means all property, including, but not limited to, leases of real property,

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printing, and insurance, except land or permanent interest in land.

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     42-9.4-3. Establishment of office -- Appointment and removal of inspector general. --

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There is hereby established an office of inspector general, hereinafter called the office. There

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shall be in the office an inspector general, who shall be the administrative head of the office and

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who shall be appointed by a majority vote of the governor, the attorney general and the general

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treasurer for a five (5) year term to begin July 1 and end June 30, five (5) years later. The

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appointee shall serve one term only. The person so appointed shall be selected without regard to

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political affiliation and with a demonstrated ability in more than one of the following areas:

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accounting, auditing, financial analysis, law, management analysis, public administration,

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investigation and criminal justice administration.

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     The selection process of a qualified inspector general shall include at least one public

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forum. If an inspector general is not selected within one month of a new inspector general term,

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the governor shall appoint an inspector general. The inspector general shall have at least five (5)

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years experience in accounting, criminal justice, or a closely related profession and a bachelor's

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degree from an accredited college or university with a major in accounting, criminal justice, or a

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closely related field of study.

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     No inspector general shall hold, or be a candidate for, any other elective or appointed

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public office while an inspector general and for one year thereafter. No inspector general shall

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hold a position in any political party or political committee, or participate in any political

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campaign of any candidate for public office while an inspector general.

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     In case of a vacancy in the position of inspector general, his/her successor shall be

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appointed in the manner described above, and shall serve from his/her date of appointment until

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the fifth (5th) June 30th following his/her appointment. If this vacancy is not filled within one

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month, then the governor shall appoint an inspector general.

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     The person so appointed may be removed from office for cause by a unanimous vote of

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the governor, the lieutenant governor and the secretary of state. Such cause may include

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substantial neglect of duty, gross misconduct or conviction of a crime whether or not it is work

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related. The reasons for removal of the inspector general shall be stated in writing and shall

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include the basis for such removal. Such writing shall be a public document. The inspector

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general shall have ten (10) days to submit a written appeal, which shall be a public document. If

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no appeal is made, the inspector general shall be dismissed from office. If an appeal is made, a

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vote shall be taken in the senate. A two-thirds (2/3) vote of the senate shall be required to dismiss

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the inspector general.

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     42-9.4-4. Employees -- Appointment and removal, salaries, qualifications. -- The

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inspector general may appoint and remove such employees as he/she deems necessary to perform

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the duties of the office, including, but not limited to, assistant inspectors general, chief and deputy

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counsels, clerks, paralegals, accountants, auditors, financial management analysts and

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investigators. The inspector general may determine their salaries and duties; provided, however,

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that the total amount of all such salaries shall not exceed the sum appropriated therefor by the

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general assembly.

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     The inspector general shall file an annual personnel report not later than the first

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Wednesday in February with the senate and house finance committees containing the job

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classifications, duties and salary of each officer and employee within the department together

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with personnel regulations applicable to said officers and employees. The inspector general shall

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file amendments to such report with the senate and house finance committees whenever any

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change becomes effective.

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     No officer or employee of the office of inspector general shall hold, or be a candidate for,

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any elective public office while an officer or employee, or for one year thereafter, nor shall he/she

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hold a position in any political party or political committee, or participate in any political

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campaign of any candidate for public office while an officer or employee.

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     42-9.4-5. Inspector general -- Salary and budget. -- The general assembly shall

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annually set the salary of the inspector general and shall appropriate sufficient funds for the total

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budget for the office of the inspector general.

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     42-9.4-6. Rules and regulations. -- The office shall, pursuant to the provisions of

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chapter 42-35, Administrative Procedures, promulgate rules and regulations which shall govern

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its proceedings.

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     42-9.4-7. Duties. -- The inspector general shall supervise, coordinate and/or conduct

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audits, criminal, civil and administrative investigations and inspections or oversight reviews,

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when necessary, relating to programs and operations listed in section 42-9.4-1. The inspector

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general shall review statutes and regulations relating to programs and operations listed in section

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42-9.4-1 and shall determine if public bodies listed in section 42-9.4-1 are in compliance and

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shall make recommendations concerning the effect of such statutes or regulations on the

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prevention and detection of fraud, waste and abuse. The inspector general may recommend

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policies that will assist in the prevention or detection of fraud, waste and abuse and

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mismanagement. The person in charge of, or the governing body of any public body listed in

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section 42-9.4-1, may request the assistance of the office of inspector general with respect to

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implementation of any reviews, audits, and/or investigations as deemed appropriate and

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implement suggested policy or procedure changes. In such events the inspector general may

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assign personnel to conduct, supervise, or coordinate such activity as deemed necessary and

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appropriate to perform his/her duties in a diligent and prudent manner. The inspector general may

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recommend policies for the conduct, supervision or coordination of relationship, between state

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and county agencies and other state and local governmental agencies as well as federal

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governmental agencies and nongovernmental entities with respect to all matters relating to the

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prevention and detection of fraud, waste, abuse and mismanagement in or relating to any and all

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programs and activities of the state of Rhode Island as listed in section 42-9.4-1.

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     42-9.4-8. Inspection of records and papers –Investigations – Subpoenas. -- (a) The

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inspector general, in carrying out the duties outlined in this chapter, shall have access to all

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records, reports, audits, reviews, papers, books, documents, recommendations, correspondence,

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including information relative to the purchase of services or anticipated purchase of services from

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any contractor by any public body listed in section 42-9.4-1, and any other data and material that

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is maintained by or available to any public body regardless of the media in which it is maintained

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which is in any way related to the programs and operations with respect to the state of Rhode

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Island, including any local town, municipality or city.

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     (b) The inspector general may request information, cooperation and assistance from any

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state, county or local governmental agency as may be necessary for carrying out his/her duties

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and responsibilities. Upon receipt of such request, each person in charge of, or the governing

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body of any public body listed in section 42-9.4-1, shall furnish to the inspector general or his/her

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authorized agent or representative such information, cooperation and assistance, including

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information relative to the purchase of services or anticipated purchase of services from any

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contractor by any public body within ten (10) business days of receipt of the inspector general's

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request. If the request for the information requested cannot be complied with, within the ten (10)

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business days, the senior official of the governmental agency must notify the inspector general

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before the expiration of the ten (10) business days as to the reason that the request cannot be

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complied with in the time frame of this section and shall provide a specific date for expected

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compliance.

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     (c) The inspector general may initiate and conduct investigations, audits and compliance

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reviews and shall prepare detailed reports relating to findings and conclusions concerning the

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administration of the programs and operations of the applicable public bodies listed in section 42-

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9.4-1, as are in the judgment of the inspector general necessary and may conduct an examination

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of any public documents and any information with respect to whether internal quality controls are

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in place and operating.

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     (d) The inspector general shall have direct and prompt access to the head of any public

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body listed in section 42-9.4-1 when necessary for any purpose pertaining to the performance of

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his/her duties and responsibilities under this chapter.

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     (e) The inspector general may request the production, on a voluntary basis, of testimony

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or documents from any individual, firm or nongovernmental entity which relate to actions or

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matters that pertain to state, municipal or local governmental agencies as dictated by his/her

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duties and responsibilities.

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     (f)(1) The inspector general may issue a subpoena for the production of all records,

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reports, audits, reviews, papers, books, documents, recommendations, correspondence and any

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other data and material relevant to any matter under audit or investigation pursuant to the

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provisions of this chapter, no matter in which media the information is maintained.

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     (2) A subpoena may be issued only when a person, corporation or other entity under

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investigation or being audited refuses to voluntarily comply with a request from the inspector

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general.

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     (3) Such subpoena shall be served in the same manner as a subpoena for the production

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of documents in civil cases issued on behalf of the state of Rhode Island, and all provisions of law

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relative to said subpoena shall apply to a subpoena issued pursuant to this chapter. Any justice of

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the superior court may, upon application by the inspector general, issue an order to compel the

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production of records, reports, audits, reviews, papers, books, documents, recommendations,

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correspondence and any other data and material as aforesaid in the same manner and to the same

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extent as before said superior court. Any failure to obey such order may be punished by the

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superior court as a contempt of court.

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     (4) Any subpoena issued pursuant to this section, shall not be made public by the

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inspector general or any officer or employee of that department, nor shall any documents or

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records provided pursuant to this section be made public until such time as it is necessary for the

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inspector general to do so in the performance of his/her official duties. The production of such

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documents or records pursuant to subpoena shall be governed by the same provisions with

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reference to secrecy, which govern the proceedings of a grand jury. Disclosure of such

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production, attendance, and testimony may be made to such members of the staff of the office of

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the inspector general as is deemed necessary in the performance of the inspector general's duties

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and responsibilities under this chapter and such members of the staff may be present at the

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production of records.

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     42-9.4-9. Subpoena for witness testimony and for release of material evidence. -- (a)

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Whenever the inspector general has reason to believe that a person has information or evidence in

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his/her possession with respect to any matter which is within the inspector general's jurisdiction

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to investigate, he/she may issue a subpoena for the attendance and testimony under oath of any

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person as designated, or the surrender of identified item(s) of evidence; provided, however, that

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such subpoena may be issued by the inspector general only in the performance of official duties

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relating to the detection of fraud, waste, abuse and mismanagement. The subpoena for testimony

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or specific items identified as needed in support of an investigation shall include: The name and

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address of the prospective witness or specific items identified as needed for the investigation; and

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The reasons for requesting a subpoena for testimony or production of items deemed necessary to

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support the investigation.

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     (b) The inspector general or anyone duly authorized by law shall serve such subpoena.

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Once the subpoena is served, the serving officer shall annotate the time and date served, the

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person served and the location of service.

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     (c) A witness required by subpoena to attend and testify under oath and/or produce books

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and records or other items as demanded, shall be given not less than forty-eight (48) hours notice

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of the time and place for the taking of testimony or delivery of subpoenaed items, unless such

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notice shall unduly interfere with the conduct of the investigation.

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     Such witness, at the time of service of a subpoena, shall be notified of the matter under

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investigation concerning which such witness will be required to testify. A subject of an

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investigation is a person whose conduct is within the scope of the investigation and is suspected

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of committing or being party to an offense under investigation. The failure to furnish such witness

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with any notice or information required to be given by this section shall cause the issued

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subpoena to be invalid.

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     (d) A person subpoenaed to testify under oath shall appear and testify under oath at the

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time and place designated on the subpoena. In addition, the witness shall be notified that he/she

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has a right to consult with and to have an attorney present at the time the testimony is taken and

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that he/she has a constitutional right not to furnish or produce evidence that may tend to

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incriminate him or her.

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     (e) The terms of any such subpoena must be reasonable and focused on specific

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testimony or evidence sought and must directly relate to the matters under investigation. A

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subpoena issued that is broad in nature is not considered valid. No subpoena may be issued for

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purposes of harassment or for any illegitimate or improper purpose. All constitutional and

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statutory rights and privileges which exist with respect to any subpoena issued by the inspector

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general, including the privilege against self-incrimination, shall have the same force and effect

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with any and all existing laws and constitutional rights.

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     (f) A subpoenaed person may object to the subpoena served upon him/her in advance of

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the return date of the subpoena by a motion to quash filed in the superior court of the state of

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Rhode Island. The filing of a motion to quash shall stay all pending subpoenas until further order

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of the superior court. Any justice of the superior court may, upon application by the inspector

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general, issue an order to compel the attendance of witnesses subpoenaed as aforesaid and the

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giving of testimony under oath in furtherance of any audit or investigation under this chapter in

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the same manner and to the same extent as before the superior court. Failure to obey any order of

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the court with respect to a subpoena may be punished by said court as contempt.

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     (g) Any subpoena issued pursuant to this section shall not be made public by the

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inspector general or any persons subject to his/her direction or by any member of the inspector

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general's office designated to hear testimony under this section, and the same provisions with

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reference to secrecy, which govern grand jury proceedings, shall govern testimony given.

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Whoever violates the provisions of this paragraph shall be punished by imprisonment for not

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more than six (6) months in a jail or house of correction or by a fine of not more than one

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thousand dollars ($1,000). Disclosure of such testimony may be made to such members of the

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staff of the office of inspector general as is deemed necessary by the inspector general to assist in

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the performance of the office's duties and responsibilities and such members of the staff may be

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present at the taking of such testimony.

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     42-9.4-10. Compact – Investigation. -- (a) The inspector general must accept and may

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investigate or audit complaints or information from any individual concerning the possible

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existence of any activity constituting fraud, waste, abuse and mismanagement relating to

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programs and operations as listed in section 42-9.4-1.

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     (b) The inspector general shall not, after receipt of a complaint or information from an

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employee, contractor or private citizen who requests confidentiality, disclose the identity of that

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individual without the written consent of said individual, unless the inspector general determines

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such disclosure is necessary and unavoidable during the course of an investigation. In such event,

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the individual shall be notified immediately of such disclosure. The inspector general shall set up

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an anonymous hotline for reporting possible wrongdoings.

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     (c) Employees are protected under the "Rhode Island Whistleblowers' Protection Act,"

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chapter 28-50 of the general laws.

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     42-9.4-11. Reports to the attorney general or United States attorney. -- In carrying

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out his/her duties and responsibilities, the inspector general shall report to the attorney general,

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the United States attorney or both whenever the inspector general has reasonable grounds to

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believe there has been a violation of federal or state criminal law. The attorney general shall

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institute appropriate proceedings in the furtherance of completing an investigation and, if

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warranted, to refer a matter for prosecution.

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     The inspector general shall refer audit or investigative findings to the state ethics

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commission, or to any other federal, state or local agency, which has an interest in said findings.

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     Any referrals made under this section shall not be made public.

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     42-9.4-12. Coordination with other state agencies. -- The inspector general may

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coordinate with other state agencies that are responsible for investigating, auditing, reviewing or

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evaluating the management of state agencies for the purpose of sharing information and avoiding

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duplication of effort.

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     42-9.4-13. Civil actions. -- The inspector general shall have the authority to institute a

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civil recovery action if authorized by the attorney general. In any case where the inspector general

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has discovered fraudulent acts and believes that civil recovery proceedings may be appropriate,

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he/she shall refer the matter to the attorney general. The attorney general may institute whatever

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proceedings he/she deems appropriate, may refer the matter to another state or local agency, may

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authorize the initiation of appropriate civil proceedings by the inspector general, may retain the

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matter for further investigation, or may remand the matter to the inspector general for further

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investigation.

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     42-9.4-14. Annual and interim reports. -- (a) The office of inspector general shall, no

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later than April 1st of each year, prepare a report summarizing the activities of the office of

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inspector general for the prior calendar year. The office of inspector general may also prepare

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interim reports. These reports shall be forwarded to the governor, lieutenant governor, attorney

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general, secretary of state, general treasurer and the general assembly and shall be made available

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to the public.

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     (b) The report shall include, but not be limited to: a description of significant problems in

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the areas of fraud, waste and abuse within programs and operations within the jurisdiction of the

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office; a description of the recommendations for corrective action made by the office during the

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reporting period with respect to significant deficiencies in the areas of fraud, waste and abuse; the

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identification of each significant recommendation described in previous annual reports on which

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corrective action has not been completed; a summary of matters referred to prosecuting

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authorities and the prosecutions and convictions which have resulted; a summary of any matters

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concerning the recovery of monies as a result of a civil suit by the office of inspector general or a

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referral to another agency for the purposes of such suit; a list of all audit reports completed by the

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office during the reporting period and a statement of recommendations of amendments to this

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chapter or the rules, regulations or procedures governing the office of inspector general which

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would improve the effectiveness or the operation of the office.

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     (c) The head or governing body of each public body may, within sixty (60) days of

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receipt, comment upon any references to such public body contained within the report. Such

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comment, if any, shall be forwarded to the governor, the attorney general, the general assembly

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and the office of inspector general.

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     (d) The report of the inspector general shall be made public on the day of filing;

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provided, that the report shall not list the names of individuals or corporations, nor describe them

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with sufficient particularity as to readily identify them to the general public in those cases in

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which no official disposition has been made by the office of inspector general, the office of

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attorney general or the local office of the U.S. attorney.

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     SECTION 2. This act shall take effect upon passage.

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LC01978

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- ESTABLISHING AN OFFICE OF

INSPECTOR GENERAL

***

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     This act would establish the office of inspector general as an independent administrative

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agency charged with the purpose of preventing and detecting fraud, waste and abuse, and

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mismanagement in the expenditure of public funds.

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     This act would take effect upon passage.

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LC01978

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