I.         AUTHORITY AND INDEPENDENCE

KSC 10.405: State Public Auditor

1.      The Office of State Public Auditor is to be headed by a State Public Auditor, who may be a certified public accountant. If the State Public Auditor is not a certified public accountant, then at least one certified public accountant, who had been certified in the United States, must be employed by the State Public Auditor. The office of State Public Auditor shall otherwise be staffed within the discretion of the State Public Auditor subject to an approved budgetary appropriation.

2.      The State Public Auditor shall be appointed by the Governor, with the advice and consent of the Legislature. The Public Auditor shall serve for a term of four years and until a successor is confirmed. An individual may be reappointed for an additional term or terms with the advice and consent of the Legislature. The Legislature may remove the State Public Auditor from office for a cause by a two-third vote. In the event of such removal, the Governor shall appoint an Acting Public Auditor until a successor is appointed and confirmed.

3.      The State Public Auditor shall be responsible to conduct audit on all books, records, files, papers and documents, and all financial affairs of every department, office, agency, political subdivision, and non-profit organization receiving public funds from the State.

     II.            KSC 10.406 Powers and Duties

The State Public Auditor shall:

·      Inspect and audit personally, or by his duly authorized assistants, all accounts, books, and other financial records of the State Government, to include but not be limited to, every branch, department, office, political subdivision, board, commission, agency, other public legal entity (owned, or partially owned by the State), whether they receive public funds or not, and nonprofit organizations that receive public funds from the State Government (KSC 10.406 (a);

·      Inspect and audit personally, or by his duly authorized assistants, the fiscal books, records, and accounts of all allottees  and other custodians of public funds, making independent verifications of all assets, liabilities, revenues, expenditures, and obligations of the State Government, entities owned in whole or part by the State Government, and agencies of the State Government (KSC 10.406(b);

·      Inspect and audit personally, or by his duly authorized assistants, the fiscal books, records, accounts, and other financial records associated with any project, program, and activity receiving funding in whole or in part from funds of the State Government, including the records of any contractor performing public work on a cost –reimbursement-type contract in order to verify the cost charged to the public contractor (KSC 10.406(c );

·      Inspect and audit personally or by his duly authorized assistants, the books, records, accounts, and other financial records associated with business sales that may be used for sales assessment for tax collection purposes (KSC 10.406 (d));

·      Prepare and file written audit reports of all inspections and audits completed (KSC 10.406 (e));

·      Have the exclusive audit jurisdiction over public funds of the State Government, except as set forth in section 10.403, and except as he shall contract for independent auditing services to be perform beyond the capacity of the State Public Auditor’s staff and where funding is available (KSC 10.406(f));

·      Keep a complete and accurate record or file of all audit reports, investigations, releases, audit work papers, and other materials pertaining to the work of the Office of the State Public Auditor (KSC10.406 (g));

·      Cooperate with State agencies by offering such advice and assistance as may be requested of the State Public Auditor for the establishment or improvement of the accounting system(s) used by the various State agencies and departments (KSC 10.406 (h));

·      Require the aid and assistance of all State officials and employees and any custodian of public funds at all times in inspection, examination, and audit of any and all books, accounts, and records of the State Government (KSC 10.406 (i));

·      Have access during regular business hours to all of the books and accounts, reports, vouchers, or other records of information in any branch, department, office, political subdivision, board, commission, agency and other public legal entity (owned, or partially owned by the State).  Nothing in this section shall be construed as authorizing or permitting the publication of information prohibited by law (KSC 10.406 (j))

III.        KSC 10.413 Types of Audits and Audit Standards

The types of audits and applicable audit standards shall be as follows:

1.      Three types of audits may be performed:

a)      Financial and compliance.  This type of audit determines whether the financial statements of an audited entity present fairly the financial position and results of financial operations in accordance with generally accepted accounting principles and whether the entity has complied with laws and regulations that may have a material effect upon the financial statements.

b)      Economy and efficiency.  This type of audit determines whether an entity is managing and utilizing its resources economically and efficiently, the causes of inefficiencies or uneconomical practices, and whether the entity has complied with law and regulations concerning economy and efficiency.

c)      Program results.  This type of audit determines whether the desired results or benefits established by the Legislature or other authorizing body are being achieved and whether the program administrators have considered alternatives that might yield desired results at a lower cost.

2.      Any given audit or review may include one or more of the objectives in Subsection (1) of this section in the reasonable exercise of the State Public Auditor’s discretion.

3.      The State Public Auditor shall perform audits in conformity with generally accepted audit standards as established by the American Institute of Certified Public Accountants.