§ 17:3393 — Operational autonomy contingent on audit findings

§3393. Operational autonomy contingent on audit findings
A.(1)(a) Notwithstanding any provision of law to the contrary, any institution that
meets the requirements of this Paragraph may exercise the autonomies provided by this
Subsection subject to the limitations provided in this Paragraph.
(b) Subsequent to a postsecondary education management board granting approval
to an institution in its system to exercise operational autonomies or a system exercising the
provided authorities, the division of administration shall approve the exercise of such
autonomies to all institutions in the system governed by the management board, provided the
system received for its most recent audit, a financial audit with an unmodified opinion, where
the financial statements were free of material misstatements and material weaknesses, and
the financial position, results of operations, and cash flows were represented fairly in
accordance with Generally Accepted Accounting Principles. If the system did not receive for
the most recent audit, a financial audit with an unmodified opinion, where the financial
statements were free of material misstatements and material weaknesses, and the financial
position, results of operations, and cash flows were represented fairly in accordance with
Generally Accepted Accounting Principles, then the division of administration shall approve
the exercise of such autonomies to all institutions in the system, except for any institution
which was responsible for the finding of noncompliance at the system level.
(c) If an institution granted the right to exercise operational autonomies pursuant to
Subparagraph (b) of this Paragraph subsequently receives an audit with a material weakness
through a financial audit, the institution shall be required to develop and implement a
corrective action plan for approval by the management board. The institution shall be
required to demonstrate to the management board that the necessary corrective actions were
taken within six months from the date the audit finding was reported, or the institution will
lose the authority to exercise the autonomies granted for the remainder of the period that this
authority is in effect. The corrective action plan and post-implementation report shall be
submitted to the division of administration and the Board of Regents.
(2) The operational autonomies that may be granted pursuant to this Subsection are:
(a)(i) Authority to retain any funds which remain unexpended and unobligated at the
end of the fiscal year for use at the institution's discretion.
(ii) No later than October first of each year, each postsecondary education
management board shall report to the Joint Legislative Committee on the Budget the amount
of unexpended and unobligated funds retained by each institution by means of finance from
the prior fiscal year.
(b) Authority to identify and dispose of obsolete equipment, excluding vehicles and
items considered by federal law to be of a dangerous nature. Prior to exercising this
autonomy with respect to electronic devices, the postsecondary education management board
shall provide certification to the division of administration that all such devices are sanitized
of any personally identifiable information.
(c) Authority to be excluded by the division of administration from any table of
organization.
(d)(i) Authority to participate in the higher education procurement code as established
by Louisiana State University and Agricultural and Mechanical College and approved by the
division of administration. Institutions within the same system may cooperatively operate
procurement operations under the higher education procurement code. Each postsecondary
education management board may adopt the higher education procurement code, with
amendments necessary to insert the name of each management board into the procurement
code and to implement the code but excluding any substantive changes, pursuant to rules and
regulations adopted in accordance with the Administrative Procedure Act. Any entity whose
budget is appropriated through Schedule 19-Higher Education or 19E-LSU Health Sciences
Center-health care services division may use the higher education procurement code in lieu
of the Louisiana Procurement Code as provided in R.S. 39:15.3, 196 through 200, and 1551
through 1755, subject to the prior review and approval of the Joint Legislative Committee
on the Budget. Any changes to the higher education procurement code after an initial five-year period shall be submitted to the Joint Legislative Committee on the Budget for approval.
However, there shall be only one higher education procurement code except for
nonsubstantive changes required to implement the code.
(ii) The division of administration shall maintain a list of all institutions participating
in the higher education procurement code, which shall be published on its website.
(e)(i) Exemption from participation in the state's risk management program
established by R.S. 39:1527 et seq. and administered by the office of risk management,
pursuant to a determination by the division of administration that the institution or
management board, as applicable, has the capacity to manage its own risk and a phased-in
plan of implementation as determined by the institution in collaboration with the attorney
general and the division of administration, subject to the prior review and approval of the
Joint Legislative Committee on the Budget. This exemption shall not include the coverage
provided by the state's risk management program pursuant to R.S. 40:1237.1.
(ii) Nothing in this exemption shall abrogate, amend, or alter the authority of the
attorney general or the Department of Justice under Article IV, Sections 1 and 8 of the
Constitution of Louisiana or any other provision of law to represent the state and all
departments and agencies of state government in all litigation arising out of or involving tort
or contract. Any institution that is granted an exemption under this Subparagraph shall enter
into an interagency agreement with the attorney general and pay the attorney general
reasonable attorney fees and expenses incurred in representing the institution.
(iii) Nothing in this Subparagraph shall be construed as creating any independent or
separate cause of action against the state. The state shall continue to be sued only through the
exempt institution's management board and cannot be sued in addition to or separately from
the exempt institution's management board in any cause of action asserted against the exempt
institution. The office of risk management shall not be responsible for payment of any
judgment against the exempt institution's management board rendered subsequent to the
transfer of the applicable line of coverage. The state's obligation to indemnify a covered
individual as provided in R.S. 13:5108.1 shall not be performed by the office of risk
management.
(iv) Any contract between the exempt institution's management board and its insurer
shall name the state as an additional insured. Any provision in any contract between the
exempt institution's management board and its insurer that conflicts with the provisions of
this Subparagraph shall be considered null and void.
(v) Nothing in this Subparagraph shall be construed to adversely affect any of the
substantive and procedural provisions and limitations applicable to actions against the state,
including but not limited to the provisions of R.S. 13:5106, 5107, 5108.1, and 5112, and R.S.
9:2800 which would continue to apply equally to any exempted institution. Those provisions
that will not apply are those that are specifically excluded in this Section. Upon transfer of
each line of coverage to the exempted institution under this Section, the provisions of R.S.
39:1527 et seq., as well as the provisions of R.S. 13:5106(B)(3)(c), shall not apply to the line
of coverage so transferred, nor to any claims asserted against the exempted institution within
the transferred line of coverage.
(f) Notwithstanding the provisions of R.S. 39:113, authority to administer all facilities
projects funded with self-generated revenue, federal funds, donations, grants, or revenue
bonds, including all projects falling under R.S. 39:128; however, excluding those projects
falling under R.S. 39:128, these projects shall not be exempted from the capital outlay budget
or any requirements as pertains thereto.
(g) Authority to invest funds as defined by R.S. 49:327(C) in municipal bonds issued
by any state or political subdivision and those instruments laid out in R.S. 49:327(B)(1), in
tax exempt bonds and other taxable governmental bonds issued by any state or a political
subdivision or public corporation of any state, provided that such bonds are rated by a
nationally recognized rating agency as investment grade. The investment policy governing
such investment as defined by R.S. 49:327(C)(1)(b) shall define the allocation of funds
among instruments and the term of maturity of the instruments, subject to the prior review
and approval of the investment advisory committee. If an institution is determined by the
division of administration to no longer possess the capacity relevant to this autonomy, or
both, authority to invest additional funds shall be limited to those instruments defined by
R.S. 49:327(B)(1) and (C), and shall exclude further investments in tax exempt bonds and
other taxable government bonds issued by any state or a political subdivision or public
corporation of any state.
B. Nothing in this Section abrogates, amends, or alters the authority of the attorney
general or the Department of Justice under Article IV, Sections 1 and 8 of the Constitution
of Louisiana or any other provision of law to represent the state and all departments and
agencies of state government in all litigation arising out of or involving tort or contract. Any
exempt institution under this Section shall enter into an interagency agreement with the
attorney general and pay the attorney general reasonable attorney fees and expenses incurred
in representing the institution.
C. Nothing in this Section shall be construed as creating any independent or separate
cause of action against the state. The state shall continue to be sued only through the exempt
institution's management board and cannot be sued in addition to or separately from the
exempt institution's management board in any cause of action asserted against the exempt
institution.

Legislative History

Acts 2020, 2 nd Ex. Sess., No. 36, §1, eff. Oct. 28, 2020.