North Carolina § 143-746 - Internal auditing required.

§ 143-746. Internal auditing required.

Requirements. - A State agency shall establish a program of internal auditing that: Promotes an effective system of internal controls that safeguards public funds and assets and minimizes incidences of fraud, waste, and abuse. Determines if programs and business operations are administered in compliance with federal and state laws, regulations, and other requirements. Reviews the effectiveness and efficiency of agency and program operations and service delivery. Periodically audits the agency's major systems and controls, including: Accounting systems and controls. Administrative systems and controls. Information technology systems and controls. Internal Audit Standards. - Internal audits shall comply with current Standards for the Professional Practice of Internal Auditing issued by the Institute for Internal Auditors or, if appropriate, Government Auditing Standards issued by the Comptroller General of the United States. Appointment and Qualifications of Internal Auditors. - Any State employee who performs the internal audit function shall meet the minimum qualifications for internal auditors established by the Office of State Human Resources, in consultation with the Council of Internal Auditing. Director of Internal Auditing. - The agency head shall appoint a Director of Internal Auditing who shall report to, as designated by the agency head, (i) the agency head, (ii) the chief deputy or chief administrative assistant, or (iii) the agency governing board, or subcommittee thereof, if such a governing board exists. The Director of Internal Auditing shall be organizationally situated to avoid impairments to independence as defined in the auditing standards referenced in subsection (b) of this section. Insufficient Personnel. - If a State agency has insufficient personnel to comply with this section, the Office of State Budget and Management shall provide technical assistance. Reporting Fraudulent Activity. - If an internal audit conducted pursuant to this section results in a finding that a private person or entity has received public funds as a result of fraud, misrepresentation, or other deceptive acts or practices while doing business with the State agency, the internal auditor shall submit a detailed written report of the finding, and any additional necessary supporting documentation, to the State Purchasing Officer. A report submitted under this subsection may include a recommendation that the private person or entity be debarred from doing business with the State or a political subdivision thereof. History (2007-424, s. 1; 2013-382, s. 9.1(c); 2013-406, s. 1; 2015-241, s. 25.1(a); 2015-268, s. 7.4.) Editor's Note. - This section was originally enacted as G.S. 143-739. It has been renumbered as this section at the direction of the Revisor of Statutes. Session Laws 2013-382, s. 9.1(b), provides: "The following entities and positions created by Chapter 126 of the General Statutes are hereby renamed by this act: "(1) The State Personnel Commission is renamed the 'North Carolina Human Resources Commission.' "(2) The Office of State Personnel is renamed the 'North Carolina Office of State Human Resources.' "(3) The State Personnel Director is renamed the 'Director of the North Carolina Office of State Human Resources.'" Session Laws 2013-382 was effective August 21, 2013. Session Laws 2013-382, s. 9.1(c), provides in part: "Modification of References. - The Revisor of Statutes shall delete any references in the General Statutes to the State Personnel Act, State Personnel Commission, the State Personnel Director, and the Office of State Personnel (or any derivatives thereof) and substitute references to the North Carolina Human Resources Act, the State Human Resources Commission, the Director of the Office of State Human Resources, and the Office of Human Resources (or the appropriate derivative thereof) to effectuate the renaming set forth in this section wherever conforming changes are necessary." Session Laws 2013-382, s. 9.2, provides: "No action or proceeding pending on the effective date of this section, brought by or against the State Personnel Commission, the Director of the Office of State Personnel, or the Office of State Personnel, shall be affected by any provision of this section, but the same may be prosecuted or defended in the new name of the Commission, Director, and Office. In these actions and proceedings, the renamed Commission, Director, or Office shall be substituted as a party upon proper application to the courts or other public bodies." Session Laws 2013-382, s. 9.3, provides: "Any business or other matter undertaken or commanded by the former State Personnel Commission, State Personnel Director, or Office of State Personnel regarding any State program, office, or contract or pertaining to or connected with their respective functions, powers, obligations, and duties that are pending on the date this act becomes effective may be conducted and completed by the Commission, Director, or Office in the same manner and under the same terms and conditions and with the same effect as if conducted and completed by the formerly named commission, director, or office." Session Laws 2015-241, s. 25.1(c), as amended by Session Laws 2015-268, s. 7.4, provides: "This section becomes effective October 1, 2015, and the requirement to submit a report applies to audits conducted or undertaken on or after that date. Nothing in this subsection shall be construed as prohibiting the State Auditor or an internal auditor from submitting a report detailing fraud, misrepresentation, or other deceptive acts or practices found during an audit conducted prior to the effective date of this section." Session Laws 2015-241, s. 1.1, provides: "This act shall be known as 'The Current Operations and Capital Improvements Appropriations Act of 2015.'" Session Laws 2015-241, s. 33.6, is a severability clause. Effect of Amendments. - Session Laws 2013-382, s. 9.1(c), effective August 21, 2013, substituted "Office of State Human Resources" for "Office of State Personnel" in subsection (c). Session Laws 2013-406, s. 1, effective August 23, 2013, substituted "Promotes" for "Implements" in subdivision (a1)(1); substituted "Determines if" for "Ensures" in subdivision (a)(2); substituted "Information technology" for "Electronic data processing" in sub-subdivision (a)(4)c.; rewrote subsections (c) and (d); and added subsection (e). Session Laws 2015-241, s. 25.1(a), effective October 1, 2015, inserted the heading in subsection (e); and added subsection (f). For applicability, see Editor's note.