§ 12 — Audits; access to accounts; production of records; response to findings; exceptions

Massachusetts § 12

• Jurisdiction: Massachusetts
• Part I: ADMINISTRATION OF THE GOVERNMENT
• Title II: EXECUTIVE AND ADMINISTRATIVE OFFICERS OF THE COMMONWEALTH
• Ch. 11: DEPARTMENT OF THE STATE AUDITOR

Text

[ First paragraph effective until December 5, 2024. For text effective December 5, 2024, see below.]Section 12. The department of the state auditor shall audit the accounts, programs, activities and functions directly related to the aforementioned accounts of all departments, offices, commissions, institutions and activities of the commonwealth, including those of districts and authorities created by the general court and including those of the income tax division of the department of revenue and, for such purposes, the authorized officers and employees of the department of the state auditor shall have access to such accounts at reasonable times and the department may require the production of books, documents, vouchers and other records relating to any matter within the scope of an audit conducted under this section or section 13, except tax returns. In determining the audit frequency of a covered entity, the department shall consider the materiality, risk and complexity of the entity's activities as well as the nature and extent of prior audit findings. Each entity may be audited separately as a part of a larger organizational entity or as a part of an audit covering multiple entities; provided, however, that each entity shall be audited at least once every 3 years and an entity shall be subject to audit as often as the state auditor determines it necessary. The superior court shall have jurisdiction to enforce the production of records that the department requires to be produced pursuant to this section, and the court shall order the production of all such records within the scope of any such audit. All such audits shall be conducted in accordance with the standards for audits of governmental organizations, programs, activities, and functions published by the Comptroller General of the United States. In any audit report of the accounts, funds, programs, activities, and functions of any agency, department, office, commission, or institution of the commonwealth, including those of districts and authorities created by the general court, issued by the department of the state auditor, wherein there appears adverse or critical audit results, the state auditor may require a response, in writing, to such audit results. Such response shall be forwarded to the department of the state auditor within fifteen days of notification by the state auditor. A copy of the response shall be filed with the appropriate secretariat, the secretary of administration and finance, the cognizant executive board in the case of an authority, and the house and senate committees on ways and means. The state auditor shall notify the appropriate secretariat, the secretary of administration and finance, the cognizant executive board in the case of an authority, and the house and senate committees on ways and means in the event of an agency's failure to respond or of the filing of unresponsive answers. This section shall not apply to those accounts which the director of accounts of the department of revenue is required by law to examine; provided, however, that in a town following a majority vote by the board of selectmen or school committee that is ratified by a special or annual town meeting, or in a regional school district following a two-thirds vote of the regional school district committee members, or in a city following a majority vote of the city council and approval by the mayor, or in a county following a majority vote of the county commissioners, the department of the state auditor may make an audit of the accounts, programs, activities and other public functions of said town, district, regional school district, city or county to the extent determined necessary by the state auditor; provided, further, that the expenses incurred for any such audit shall be borne by the city, town or regional school district and the state auditor may charge for the cost of said audit; provided, further, that all funds received for any such audits of said city, town, district, regional school district or county shall be deposited with the state treasurer in a separate account and expended solely for audits of any city, town, district, regional school district or county. On or before April 1 of each year, the state auditor shall submit a report to the house and senate committees on ways and means which shall include, but not be limited to, (i) the number of audits performed under this section; (ii) a summary of findings under said audits; and (iii) the cost of each audit. The department of the state auditor shall, in any audit of the executive office of health and human services or any agency thereof, refer to the fraudulent claims commission any case coming to its attention in the course of such audit which appears to involve fraud. The department of the state auditor is hereby authorized to inspect, review or audit, in conformity with generally accepted government auditing standards, the accounts, books, records and activities of vendors contracting, having contracted, or agreeing to provide services or materials of any description, or any other thing of value pursuant to any and all contracts or agreements between the commonwealth, its departments, agencies, bureaus, boards, commissions, institutions, or authorities and said vendors to the extent necessary to determine compliance with the provisions and requirements of such contracts or agreements and the laws of the commonwealth. Said access shall include access as defined above, to any grant, contract or agreement between said vendors and any other entity, provided the grant or contract to provide goods or services is specifically related to and funded by the vendor's contract with the commonwealth. Any grant or contract entered into between an entity, including vendors, and a state agency shall include a clause providing the state auditor with access as intended by this section. In addition, any grant, contract or agreement between said vendors and any other entity providing goods or services to said vendors, that is specifically related to and funded by, the vendor's direct contract with the commonwealth, shall include a clause providing the state auditor with access to said other entity's accounts, books, records and activities, except tax returns, as related to the provision of such goods or services to the vendor. The department of the state auditor is hereby authorized to conduct audits, in accordance with generally accepted governmental auditing standards, of the accounts, funds, programs, activities, and functions, of any program or activity funded in whole or in part by state grants, loans or reimbursements and carried out by cities, towns, counties, districts, or regional school districts, and for said purpose the authorized officers and employees of said department of the state auditor shall have access to such records at reasonable times and said department may require the production of books, documents, vouchers, reports and other records relating to any matter within the scope of such audit.[ First paragraph as amended by 2024, 250, Sec. 1 effective December 5, 2024. For text effective until December 5, 2024, see above.]The department of the state auditor shall audit the accounts, programs, activities and functions directly related to the aforementioned accounts of all departments, offices, commissions, institutions and activities of the commonwealth, including those of districts and authorities created by the general court and the general court itself, and including those of the income tax division of the department of revenue, and for such purposes, the authorized officers and employees of the department of the state auditor shall have access to such accounts at reasonable times and the department may require the production of books, documents, vouchers and other records relating to any matter within the scope of an audit conducted under this section or section 13, except tax returns. In determining the audit frequency of a covered entity, the department shall consider the materiality, risk and complexity of the entity's activities as well as the nature and extent of prior audit findings. Each entity may be audited separately as a part of a larger organizational entity or as a part of an audit covering multiple entities; provided, however, that each entity shall be audited at least once every 3 years and an entity shall be subject to audit as often as the state auditor determines it necessary. The superior court shall have jurisdiction to enforce the production of records that the department requires to be produced pursuant to this section, and the court shall order the production of all such records within the scope of any such audit. All such audits shall be conducted in accordance with the standards for audits of governmental organizations, programs, activities, and functions published by the Comptroller General of the United States. In any audit report of the accounts, funds, programs, activities, and functions of any agency, department, office, commission, or institution of the commonwealth, including those of districts and authorities created by the general court, issued by the department of the state auditor, wherein there appears adverse or critical audit results, the state auditor may require a response, in writing, to such audit results. Such response shall be forwarded to the department of the state auditor within fifteen days of notification by the state auditor. A copy of the response shall be filed with the appropriate secretariat, the secretary of administration and finance, the cognizant executive board in the case of an authority, and the house and senate committees on ways and means. The state auditor shall notify the appropriate secretariat, the secretary of administration and finance, the cognizant executive board in the case of an authority, and the house and senate committees on ways and means in the event of an agency's failure to respond or of the filing of unresponsive answers. This section shall not apply to those accounts which the director of accounts of the department of revenue is required by law to examine; provided, however, that in a town following a majority vote by the board of selectmen or school committee that is ratified by a special or annual town meeting, or in a regional school district following a two-thirds vote of the regional school district committee members, or in a city following a majority vote of the city council and approval by the mayor, or in a county following a majority vote of the county commissioners, the department of the state auditor may make an audit of the accounts, programs, activities and other public functions of said town, district, regional school district, city or county to the extent determined necessary by the state auditor; provided, further, that the expenses incurred for any such audit shall be borne by the city, town or regional school district and the state auditor may charge for the cost of said audit; provided, further, that all funds received for any such audits of said city, town, district, regional school district or county shall be deposited with the state treasurer in a separate account and expended solely for audits of any city, town, district, regional school district or county. On or before April 1 of each year, the state auditor shall submit a report to the house and senate committees on ways and means which shall include, but not be limited to, (i) the number of audits performed under this section; (ii) a summary of findings under said audits; and (iii) the cost of each audit. The department of the state auditor shall, in any audit of the executive office of health and human services or any agency thereof, refer to the fraudulent claims commission any case coming to its attention in the course of such audit which appears to involve fraud. The department of the state auditor is hereby authorized to inspect, review or audit, in conformity with generally accepted government auditing standards, the accounts, books, records and activities of vendors contracting, having contracted, or agreeing to provide services or materials of any description, or any other thing of value pursuant to any and all contracts or agreements between the commonwealth, its departments, agencies, bureaus, boards, commissions, institutions, or authorities and said vendors to the extent necessary to determine compliance with the provisions and requirements of such contracts or agreements and the laws of the commonwealth. Said access shall include access as defined above, to any grant, contract or agreement between said vendors and any other entity, provided the grant or contract to provide goods or services is specifically related to and funded by the vendor's contract with the commonwealth. Any grant or contract entered into between an entity, including vendors, and a state agency shall include a clause providing the state auditor with access as intended by this section. In addition, any grant, contract or agreement between said vendors and any other entity providing goods or services to said vendors, that is specifically related to and funded by, the vendor's direct contract with the commonwealth, shall include a clause providing the state auditor with access to said other entity's accounts, books, records and activities, except tax returns, as related to the provision of such goods or services to the vendor. The department of the state auditor is hereby authorized to conduct audits, in accordance with generally accepted governmental auditing standards, of the accounts, funds, programs, activities, and functions, of any program or activity funded in whole or in part by state grants, loans or reimbursements and carried out by cities, towns, counties, districts, or regional school districts, and for said purpose the authorized officers and employees of said department of the state auditor shall have access to such records at reasonable times and said department may require the production of books, documents, vouchers, reports and other records relating to any matter within the scope of such audit.The department of the state auditor is hereby further authorized to inspect, review, or audit the accounts, funds, books, records, and activities, including audit reports relating to any matter within the scope of the audit, of any vendor contracting, having contracted, or agreeing to provide services or materials of any description, or any other thing of value, with a city, town, county, district, or regional school district pursuant to a contract or agreement funded in whole or in part directly or indirectly with state financial assistance. Said inspection, review, or audit shall be conducted to the extent necessary to determine compliance with the provisions and requirements of the contract or agreement, the grant, and the laws of the commonwealth.The examination of the accounts of districts and authorities required by this section shall be made in addition to any audit required by the law creating such district or authority.