§ 5-11-1-9 — Financial examinations; unauditable entities; required inquiries; inefficiencies encountered; witnesses; records; process; IEDC waiver; IDDC waiver

Indiana § 5-11-1-9

• Jurisdiction: Indiana
• Title 5: STATE AND LOCAL ADMINISTRATION
• Art. 11: ACCOUNTING FOR PUBLIC FUNDS
• Ch. 1: State Board of Accounts Created

Text

(a) The state examiner, personally or through the
deputy examiners, field examiners, or private examiners, shall examine
all accounts and all financial affairs of every audited entity. However,
an examination of an entity under this subsection shall be limited to
matters relevant to the use of the public money received by the entity.
(b) If an examination of an audited entity is unable to be performed
because the audited entity's accounts, records, files, or reports are not
properly maintained or reconciled, the audited entity may be declared
to be unauditable. An audited entity that is declared unauditable shall
bring its accounts, records, files, or reports into an auditable condition
within ninety (90) days. The state board of accounts shall publish a list
of audited entities declared unauditable on the state board of accounts'
website.
(c) An examination of an entity that is organized as a not-for-profit
corporation deriving:
(1) less than fifty percent (50%); or
(2) subject to subsection (j), at least fifty percent (50%) but less
than seven hundred fifty thousand dollars ($750,000);
of its disbursements during the period subject to an examination from
appropriations, public funds, taxes, and other sources of public expense
shall be limited to matters relevant to the use of the public money
received by the entity.
(d) The examination of an entity may be waived by the state
examiner if the state examiner determines that, based on available
information, there are no compelling reasons to conclude that
disbursements of public money during the period subject to
examination were inconsistent with the purposes for which the money
was received. However, the state examiner may revoke a waiver
granted under this subsection if the state examiner determines that
revocation of the waiver is appropriate in accordance with the risk
based examination criteria set forth in section 25 of this chapter. The
state examiner shall communicate the determination to grant or revoke
a waiver under this subsection to the entity in writing.
(e) Notwithstanding any other law, the:
(1) Indiana economic development corporation created by IC 5-28-3 and the corporation's funds, accounts, and financial affairs
shall be examined by the state board of accounts unless the
examination is waived under subsection (k);
(2) department of financial institutions established by IC 28-11-1-1 and the department's funds, accounts, and financial
affairs shall be examined by the state board of accounts; and
(3) Indiana destination development corporation established by IC 5-33-3-1 and the corporation's funds, accounts, and financial
affairs shall be examined by the state board of accounts unless the
examination is waived under subsection (m).
(f) On every examination under this section, inquiry shall be made
as to the following:
(1) The financial condition and resources of each audited entity.
(2) Whether the laws of the state and the uniform compliance
guidelines of the state board of accounts established under section
24 of this chapter have been complied with.
(3) The methods and accuracy of the accounts and reports of the
person examined.
The examinations may be made without notice.
(g) If during an examination of a state office or a body corporate and
politic under this chapter the examiner encounters an inefficiency in
the operation of the state office or the body corporate and politic, the
examiner may comment on the inefficiency in the examiner's report.
(h) The state examiner, deputy examiners, any field examiner, or
any private examiner, when engaged in making any examination or
when engaged in any official duty devolved upon them by the state
examiner, is entitled to do the following:
(1) Enter into any state, county, city, township, or other public
office in this state, or any entity, agency, or instrumentality, and
examine any books, papers, documents, or electronically stored
information for the purpose of making an examination.
(2) Have access, in the presence of the custodian or the
custodian's deputy, to the cash drawers and cash in the custody of
the officer.
(3) During business hours, examine the public accounts in any
depository that has public funds in its custody pursuant to the
laws of this state.
(i) The state examiner, deputy examiner, or any field examiner,
when engaged in making any examination authorized by law, may issue
subpoenas for witnesses to appear before the examiner in person or to
produce books, papers, or other records (including records stored in
electronic data processing systems) for inspection and examination.
The state examiner, deputy examiner, or any field examiner may issue
a subpoena to enforce the filing of the annual financial report. The state
examiner, deputy examiner, and any field examiner may administer
oaths and examine witnesses under oath orally or by interrogatories
concerning the matters under investigation and examination. Under the
authority of the state examiner, the oral examinations may be
transcribed with the reasonable expense paid by the examined person
in the same manner as the compensation of the field examiner is paid.
The subpoenas shall be served by any person authorized to serve civil
process from any court in this state. If a witness or officer duly
subpoenaed refuses to attend, refuses to produce information required
in the subpoena, or attends and refuses to be sworn or affirmed, or to
testify when called upon to do so, the examiner may apply to the circuit
court having jurisdiction of the witness or officer for the enforcement
of attendance and answers to questions as provided by the law
governing the taking of depositions or to enforce the filing of any report
referred to in this subsection.
(j) The definitions in IC 20-24-1 apply throughout this subsection.
Appropriations, public funds, taxes, and other sources of public money
received by a nonprofit corporation as a charter school or organizer of
a charter school for the purposes of a charter school may not be
counted for the purpose of applying subsection (c)(2). Unless the
nonprofit corporation receives other public money that would qualify
the nonprofit corporation for a full examination of all accounts and
financial affairs of the entity under subsection (c)(2), an examination
of a charter school or organizer of a charter school must be limited to
matters relevant to the use of the public money received for the charter
school. This subsection does not prohibit the state examiner, personally
or through the deputy examiners, field examiners, or private examiners,
from examining the accounts in which appropriations, public funds,
taxes, or other sources of public money are applied that are received by
a nonprofit corporation as a charter school or organizer of a charter
school relating to the operation of the charter school.
(k) The state examiner may waive the examination of the Indiana
economic development corporation and a nonprofit subsidiary
corporation established under IC 5-28-5-13 if:
(1) an independent certified public accounting firm conducts an
examination under IC 5-28-3-2(c) of:
(A) the Indiana economic development corporation and the
Indiana economic development corporation's funds, accounts,
and financial affairs; and
(B) the nonprofit subsidiary corporation;
for the year;
(2) the Indiana economic development corporation submits the
examination report to the state board of accounts; and
(3) the state board of accounts reviews the examination report and
determines that the examination and examination report comply
with the uniform compliance guidelines, directives, and standards
established by the state board of accounts.
(l) Notwithstanding the waiver of an examination of the Indiana
economic development corporation and its nonprofit subsidiary
corporation by the state examiner, the state board of accounts may
examine the Indiana economic development corporation and its
nonprofit subsidiary corporation at any time.
(m) The state examiner may waive the examination of the Indiana
destination development corporation and a nonprofit subsidiary
corporation established under IC 5-33-5-14 if:
(1) an independent certified public accounting firm conducts an
examination under IC 5-33-3-2(c) of:
(A) the Indiana destination development corporation and the
Indiana destination development corporation's funds, accounts,
and financial affairs; and
(B) the nonprofit subsidiary corporation;
for the year;
(2) the Indiana destination development corporation submits the
examination report to the state board of accounts; and
(3) the state board of accounts reviews the examination report and
determines that the examination and examination report comply
with the uniform compliance guidelines, directives, and standards
established by the state board of accounts.
Formerly: Acts 1909, c.55, s.9; Acts 1945, c.176, s.3. As
amended by Acts 1978, P.L.2, SEC.506; Acts 1980, P.L.30, SEC.8;
P.L.3-1986, SEC.11; P.L.63-1989, SEC.1; P.L.70-1995, SEC.1;
P.L.39-1996, SEC.3; P.L.50-1999, SEC.1; P.L.4-2005, SEC.25;
P.L.213-2007, SEC.2; P.L.217-2007, SEC.2; P.L.172-2011, SEC.12;
P.L.280-2013, SEC.3; P.L.181-2015, SEC.12; P.L.237-2017, SEC.12;
P.L.209-2019, SEC.1; P.L.157-2020, SEC.4; P.L.58-2023, SEC.1;
P.L.59-2023, SEC.5; P.L.68-2023, SEC.1; P.L.170-2023,
SEC.6.