Chapter 165
2015 -- H 5883
Enacted 07/09/2015

A N   A C T
RELATING TO PUBLIC FINANCE

Introduced By: Representatives Shekarchi, Casey, Kennedy, Canario, and Williams
Date Introduced: March 13, 2015

It is enacted by the General Assembly as follows:
     SECTION 1. Section 35-14-2 of the General Laws in Chapter 35-14 entitled "Financial
Integrity and Accountability" is hereby amended to read as follows:
     35-14-2. Policy. -- (a) The legislature hereby finds that:
      (1) Fraud and errors in state programs are more likely to occur from a lack of effective
systems of internal accounting and administrative control in the sufficient internal control
structures at state agencies;
      (2) Effective systems of internal accounting and administrative control structures provide
the basic foundation upon which a structure of public accountability must be built;
      (3) Effective systems of internal accounting and administrative control are necessary to
assure that state assets and funds are adequately safeguarded, as well as to produce reliable
financial information for the state; An entity's system of internal control structures consists of
policies and procedures designed to provide management with reasonable assurance that the
agency achieves its objectives and goals including:
     (i) Reliability of financial reporting;
     (ii) Compliance with applicable laws and regulations; and
     (iii) Effectiveness and efficiency of operations.
      (4) Systems of internal accounting and administrative Internal control structures are
necessarily dynamic and must be continuously evaluated and, where necessary, improved; and
      (5) Reports regarding addressing the adequacy of the system of internal accounting and
administrative control structure of each state agency are necessary to enable the executive branch,
the legislature, and the public to evaluate the agency's performance of its public responsibilities
and accountability.
      (b) The legislature declares that:
      (1) Each The management of each state agency must maintain effective systems of
internal accounting and administrative control as an integral part of its management practices; is
responsible for establishing and maintaining an adequate internal control structure and policies
and procedures for financial reporting;
      (2) The systems of internal accounting and administrative control of each Each state
agency shall perform an assessment and produce a report on the effectiveness of the internal
control structure and procedures for financial reporting be evaluated on an ongoing basis and,
when detected, weaknesses must be promptly corrected; and
      (3) All levels of management of the state agencies must be involved in assessing and
strengthening the systems of internal accounting and administrative control structures to
minimize fraud, errors, abuse, and waste of government funds.
     SECTION 2. Section 35-20-2 of the General Laws in Chapter 35-20 entitled "Public
Corporation Financial Integrity and Accountability" is hereby amended to read as follows:
     35-20-2. Policy. -- (a) The legislature hereby finds that:
      (1) Fraud and errors in public and quasi-public programs are more likely to occur from a
lack of effective systems of internal accounting and administrative control sufficient internal
control structures in the state authorized state-authorized public corporations.
      (2) Effective systems of internal accounting and administrative control structures provide
the basic foundation upon which a structure of public accountability must be built.
      (3) Effective systems of internal accounting and administrative control are necessary to
assure that public and quasi-public state assets and funds are adequately safeguarded, as well as to
produce reliable financial information for the state. An entity's system of internal control
structures consists of policies and procedures designed to provide management with reasonable
assurance that the agency achieves its objectives and goals including:
     (i) Reliability of financial reporting;
     (ii) Compliance with applicable laws and regulations; and
     (iii) Effectiveness and efficiency of operations.
     (4) Systems of internal accounting and administrative Internal control structures are
necessarily dynamic and must be continuously evaluated and, where necessary, improved.
      (5) Reports regarding addressing the adequacy of the system of internal accounting and
administrative internal control structure of each public corporation are necessary to enable the
executive branch, the legislature, and the public to evaluate the corporation's performance of its
public and quasi-public responsibilities and accountability.
      (b) The legislature declares that:
      (1) Each The management of each public corporation must maintain effective systems of
internal accounting and administrative control as an integral part of its management practices. is
responsible for establishing and maintaining an adequate internal control structure and policies
and procedures for financial reporting.
      (2) The systems of internal accounting and administrative control of each state agency
shall be evaluated on an ongoing basis Each public corporation shall perform an assessment and
produce a report on the effectiveness of the internal control structure and procedures for financial
reporting and, when detected, control weaknesses must be promptly corrected.
      (3) All levels of management of the public corporation must be involved in assessing and
strengthening the systems of internal accounting and administrative control structures to
minimize fraud, errors, abuse, and waste of public and quasi-public funds.
     SECTION 3. This act shall take effect upon passage.
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LC001735
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