2013 Kentucky Revised Statutes CHAPTER 45 - BUDGET AND FINANCIAL ADMINISTRATION 45.237 Definitions for KRS 45.237 to 45.239 -- Establishment of internal controls and preaudit procedures for state agencies -- Collection of improper payments -- Referral of certified debts by agency or local government to Department of Revenue -- Information to be provided to State Treasurer.
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45.237 Definitions for KRS 45.237 to 45.239 -- Establishment of internal
controls and preaudit procedures for state agencies -- Collection of
improper payments -- Referral of certified debts by agency or local
government to Department of Revenue -- Information to be provided to
State Treasurer.
(1)
(2)
(3)
As used in KRS 45.237 to 45.239:
(a) "Agency" means an organizational unit or administrative body in the
executive branch of state government as defined in KRS 12.010;
(b) "Cabinet" means the Finance and Administration Cabinet;
(c) "Court of Justice" means the Administrative Office of the Courts, all
courts, and all clerks of the courts;
(d) "Debt" means:
1.
For agencies, a sum certain which has been certified as due and
owing;
2.
For local governments, a sum certain which has been certified as
due and owing, including but not limited to any delinquent taxes or
fees other than delinquent real and personal property taxes; and
3.
For the Court of Justice, a legal debt, including any fine, fee, court
costs, or restitution due the Commonwealth, which have been
imposed by a final sentence of a trial court of the Commonwealth
and for which the time permitted for payment pursuant to KRS
23A.205(3) or 24A.175(4) has expired;
(e) "Department" means the Department of Revenue;
(f) "Improper payment" means a payment made to a vendor, provider, or
recipient due to error, fraud, or abuse; and
(g) "Local government" means any city, county, urban-county government,
consolidated local government, charter county government, or unified
local government of the Commonwealth.
The cabinet shall develop for the executive branch of state government a
system of internal controls and preaudit policies and procedures applicable to
disbursement transactions for the purpose of prevention and detection of errors
or fraud and abuse prior to the issuance of a check or warrant. The initial
policies and procedures shall focus first on programs or activities that expend
the most federal and general fund dollars. The cabinet shall develop preaudit
procedures that meet the unique needs of each agency.
In establishing these systems of internal control and preaudit policies and
procedures, the cabinet shall:
(a) Consult with each agency within the executive branch to ascertain its
unique fraud risks;
(b) Establish policies and procedures for agency-level oversight of fraud
risks, including risk assessment, risk tolerance, and management policies,
and fraud-prevention processing controls;
(c) Establish systems and procedures for detecting both unintentional errors
and fraudulent misrepresentations that may have occurred in vendor
invoices submitted for payment, applications submitted for benefits,
(4)
(5)
(6)
(7)
(8)
(9)
claims for refunds of amounts previously paid or withheld, and other
disbursements;
(d) Establish systems and procedures for preventing and detecting
unintentional errors and the fraudulent disbursement of funds by state
government employees in the processing, approving, and paying of
invoices, refunds, vouchers, benefit payments, and other disbursements;
and
(e) Consult with the state Auditor of Public Accounts, the Commonwealth
Office of Technology, the American Institute of Certified Public
Accountants, the Association of Certified Fraud Examiners, law
enforcement agencies, or any other entity with knowledge and expertise
in the detection and prevention of fraud.
Each agency shall diligently attempt to collect amounts paid to a vendor,
provider, or recipient due to error, fraud, or abuse for sixty (60) days after the
improper payment is discovered. If the improper payment has not been
recovered after sixty (60) days, the agency shall certify the improper payment
as a debt of the agency and shall refer all certified debts to the department.
A local government may, after making reasonable efforts to collect its debts, by
ordinance, resolution, or otherwise pursuant to law, certify its debts that have
been due and owing for more than ninety (90) days to the department for
collection. The department may, by administrative regulation promulgated in
accordance with KRS Chapter 13A, prescribe the form and format of, and the
information required in, referrals by a local government, which may be required
to be made electronically.
Any funds recovered by an agency within the sixty (60) day collection period
allowed under subsection (4) of this section and prior to referral to the
department shall be allocated to the fund from which the improper payment
was expended.
Each agency shall submit annual summaries of debts due to error, fraud, or
abuse, improper payments discovered, and certified debts referred to the
department to the Legislative Research Commission. These summaries shall
include but not be limited to:
(a) Debts owed the Commonwealth that have been identified by the agency,
in accordance with the preaudit procedures established under this
section, as those resulting from error, fraud, or abuse, of either the payee
or the state agency;
(b) The aggregate amount of money collected by the agency on those debts
during the sixty (60) day period allowed under subsection (4) of this
section; and
(c) The aggregate amount of certified debts that the agency referred to the
department.
Each agency shall provide information about each debt due to error, fraud, or
abuse that is certified under this section to the State Treasurer for the
Treasurer's action under KRS 44.030(1).
Each local government shall, where feasible, provide information about each
debt that is certified pursuant to this section to the State Treasurer for the
Treasurer's action under KRS 44.030(1).
Effective:June 25, 2013
History: Amended 2013 Ky. Acts ch. 88, sec. 3, effective June 25, 2013. -Amended 2005 Ky. Acts ch. 85, sec. 61, effective June 20, 2005. -- Created
2004 Ky. Acts ch. 192, sec. 1, effective April 21, 2004.
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