2023 -- H 5444

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2023

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A N   A C T

RELATING TO PUBLIC FINANCE -- THE OFFICE OF INTERNAL AUDIT

     Introduced By: Representatives Noret, Casimiro, Hull, Casey, Baginski, Corvese,
O'Brien, Phillips, Dawson, and Finkelman

     Date Introduced: February 08, 2023

     Referred To: House Judiciary

     (Dept. of Administration)

It is enacted by the General Assembly as follows:

     SECTION 1. Chapter 35-7.1 of the General Laws entitled "The Office of Internal Audit"

is hereby amended by adding thereto the following sections:

     35-7.1-6.1. Inspection of records and papers -- Investigations -- Subpoenas.

     (a) The chief of the office of internal audit, in carrying out the duties outlined in this

chapter, shall have access to all records, reports, audits, reviews, papers, books, documents,

recommendations, correspondence, including information related to the purchase of service or

anticipated purchase of services from any agent, contractor or vendor by any public body as defined

in § 35-7.1-1(e), and any other data and material that is maintained by or available to any public

body, regardless of the media in which it is maintained, that is in any way related to the programs

and operations with respect to the State of Rhode Island, including any local town, municipality or

city.

     (b) The chief may request information and records, cooperation and assistance from any

state, or local governmental agency as may be necessary for carrying out the chief's duties and

responsibilities. Upon receipt of such request, each person in charge of the public body shall furnish

to the chief, or agent or representative authorized by the chief, within ten (10) business days of

receipt of the chief’s request, such information and records, cooperation and assistance, including

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

contractor or vendor by any public body. If the public body is unable to comply with the request

for records and/or information within ten (10) business days, the person in charge of the public

body must notify the chief in writing, prior to the expiration of the ten (10) business days, the reason

or reasons why the request cannot be fulfilled within this time and whether additional time is

necessary.

     (c) The chief may initiate and conduct audits, investigations, and compliance reviews and

shall prepare detailed reports relating to findings, conclusions, and recommendations concerning

the administration of programs or operations, and internal controls over processes of public bodies.

Audits will be determined in accordance with a risk-based evaluation; other activities are in the

judgment of the chief, with guidance from the statewide audit advisory committee and the approval

of the director of management and budget.

     (d) The chief shall have direct and prompt access to the head of any public body when

necessary for any purpose pertaining to the performance of the chief's duties and responsibilities

under this chapter.

     (e) The chief may request the production, on a voluntary basis, of testimony or documents

from any firm or nongovernmental entity which relate to actions or matter that pertain to state,

municipal or local governmental agencies as dictated by his/her duties and responsibilities.

     (f)(1) The director of administration, at the written request of the chief, may compel the

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

correspondence and any other data or material, regardless of its form, relevant to any matter under

audit or investigation, pursuant to the provisions of this chapter, by issuing a subpoena duces tecum

signed by the director. Any entity or its agents acting in their official capacity who disobey any

such subpoena shall be considered in contempt of the department, and the department may proceed

in superior court to enforce compliance.

     (2) A subpoena may be issued only when a corporation, other entity, or its agents acting

on their behalf, under investigation or being audited refuses to comply voluntarily with a request

from the chief.

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

documents in a civil case issued on behalf of the State of Rhode Island, and all provisions of law

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

the superior court may, upon application by the office of internal audit, issue an order to compel

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

correspondence and any other data and material previously requested by the director of

administration. Any failure to obey such order may be punished by the superior court as a contempt

of court.

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

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sought and must directly relate to the matters under investigation. A subpoena issued that is broad

in nature is not considered valid. No subpoena may be issued for purposes of harassment or for any

illegitimate or improper purpose. All constitutional and statutory rights and privileges that exist

with respect to any subpoena issued by the director of administration, including the privilege

against self-incrimination, shall continue to have the same force and effect.

     (5) An entity, or agents acting on its behalf, may object to a subpoena served upon the

entity, or agents in advance of the return date of the subpoena by a motion to quash filed in the

superior court of the State of Rhode Island. The filing of a motion to quash shall stay the pending

subpoena until further order of the superior court.

     (6) Any subpoena issued pursuant to this section, shall not be made public, nor shall any

documents or records provided pursuant to this section to the office be made public until such time

as it is necessary for the chief to do so in the performance of the chief's official duties and in

consideration of the exemptions provided by the Rhode Island access to public records act, chapter

2 of title 38 ("access to public records"). The production of such documents or records pursuant to

subpoena shall be governed by the same provisions with reference to secrecy that govern the

proceedings of a grand jury. Disclosure of such production, attendance, and testimony may be made

to such members of the staff of the office of internal audit as deemed necessary in the performance

of the chief’s duties and responsibilities under this chapter, and such members of the staff may be

present at the production of records.

     35-7.1-6.2. Subpoena for witness testimony and for release of material evidence.

     (a) Whenever the chief has reason to believe that an entity, or its agents acting on the

entity’s behalf, have information or evidence with respect to any matter that is within the chief’s

jurisdiction to investigate, the chief may request a subpoena for the attendance and testimony under

oath of any authorized agent of the entity as designated; provided, however, that such subpoena

may be issued only in the performance of official duties relating to the detection of fraud, waste,

abuse or mismanagement. The director of administration, upon written request by the chief, is

hereby authorized and empowered to summon witnesses to attend and testify on matters. A

subpoena for testimony or specific items needed in support of an investigation shall include the

name and address of the prospective witness(es) and/or a list of the specific items needed for the

investigation, and the reasons for requesting such subpoena.

     (b) The subpoena shall be served in a similar manner to a subpoena served in a civil case

in the superior court of Rhode Island. Once the subpoena is served, the serving officer shall annotate

the time and date served, the person served and the location of service.

     (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 advance

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

such notice shall unduly interfere with the conduct of the investigation. Such witness, at the time

of service of a subpoena, shall be notified of the matter under investigation and whether the person

is a subject of the investigation. A “subject of an investigation” is a person who is reasonably

suspected of committing or being party to an offense in their capacity as an agent for an entity

under investigation. The failure to furnish such witness with any notice or information required to

be given by this section shall cause the issued subpoena to be invalid.

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

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

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

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

statutory rights and privileges that exist with respect to any subpoena issued by the director of

administration, including the privilege against self-incrimination, shall continue to have the same

force and effect.

     (e) A witness representing an entity in their official capacity who is subpoenaed to testify

shall appear and testify under oath at the time and place designated on the subpoena. In addition,

the witness shall be notified that as a witness a right to consult with and to have an attorney present

exists at the time the testimony is taken, and that the witness has a constitutional right not to furnish

or produce evidence that may tend to be incriminating.

     (f) A witness representing an entity may object to the subpoena served upon them in

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

State of Rhode Island. The filing of a motion to quash shall stay the pending subpoena until further

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

issue an order to compel the attendance of witnesses subpoenaed as foresaid and the giving of

testimony under oath in furtherance of any audit or investigation under this chapter. Failure to obey

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

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

provisions with reference to secrecy, which govern grand jury proceedings, shall govern testimony

given. Whoever violates the provisions of this subsection shall be punished by imprisonment for

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

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

of the office of internal audit as deemed necessary by the chief to assist in the performance of the

office’s duties and responsibilities, and such members of the staff may be present at the taking of

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such testimony.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PUBLIC FINANCE -- THE OFFICE OF INTERNAL AUDIT

***

     This act would provide that the chief of the office of internal audit, when carrying out

official duties, shall have access to certain records relating to the purchase of services from vendors

or contractors by public bodies and would further provide the chief with the authority to initiate

audits, investigations and compliance reviews and would provide for a subpoena process for

witness testimony and material evidence upon the chief's request.

     This act would take effect upon passage.

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