2005 Nevada Revised Statutes - Chapter 353A — Internal Accounting and Administrative Control

CHAPTER 353A - INTERNAL ACCOUNTING ANDADMINISTRATIVE CONTROL

GENERAL PROVISIONS

NRS 353A.010 Definitions.

SYSTEM OF ACCOUNTING AND CONTROL

NRS 353A.020 Adoption;elements; modification; development of procedures.

NRS 353A.025 Periodicreview; biennial report of compliance by agency; biennial report of status ofaccounting and controls in agencies by Director.

DIVISION OF INTERNAL AUDITS

NRS 353A.031 Definitions.

NRS 353A.034 Chiefdefined.

NRS 353A.036 Divisiondefined.

NRS 353A.038 Creationof Executive Branch Audit Committee; members; duties.

NRS 353A.041 Qualificationsof Chief; staff.

NRS 353A.045 Dutiesof Chief.

NRS 353A.047 Managerof Internal Controls: Qualifications; unclassified service; powers and duties.

NRS 353A.055 Dutiesof Division; prohibited acts.

NRS 353A.065 Annualreport.

NRS 353A.075 Agencyto make records available to Division; limitation.

NRS 353A.085 Preliminaryfindings and recommendations of audit; written statement of acceptance,explanation or rebuttal from agency; final report; confidentiality.

NRS 353A.090 Correctiveactions.

NRS 353A.100 Chiefto maintain file of copies of reports; confidentiality.

_________

GENERAL PROVISIONS

NRS 353A.010 Definitions. As used in this chapter, unless the context otherwiserequires:

1. Agency means every agency, department, division,board, commission or similar body, or elected officer, of the Executive Branchof the State.

2. Committee means the Executive Branch AuditCommittee created pursuant to NRS 353A.038.

3. Director means the Director of the Department ofAdministration.

4. Internal accounting and administrative controlmeans a method through which agencies can safeguard assets, check the accuracyand reliability of their accounting information, promote efficient operationsand encourage adherence to prescribed managerial policies.

(Added to NRS by 1987, 2054; A 1991, 993; 1993, 396;1995, 645; 1999, 1821,2889, 3065)

SYSTEM OF ACCOUNTING AND CONTROL

NRS 353A.020 Adoption;elements; modification; development of procedures.

1. The Director, in consultation with the Committeeand Legislative Auditor, shall adopt a uniform system of internal accountingand administrative control for agencies. The elements of the system mustinclude, without limitation:

(a) A plan of organization which provides for asegregation of duties appropriate to safeguard the assets of the agency;

(b) A plan which limits access to assets of the agencyto persons who need the assets to perform their assigned duties;

(c) Procedures for authorizations and recordkeepingwhich effectively control accounting of assets, liabilities, revenues andexpenses;

(d) A system of practices to be followed in theperformance of the duties and functions of each agency; and

(e) An effective system of internal review.

2. The Director, in consultation with the Committeeand Legislative Auditor, may modify the system whenever he considers itnecessary.

3. Each agency shall develop written procedures tocarry out the system of internal accounting and administrative control adoptedpursuant to this section.

4. For thepurposes of this section, agency does not include:

(a) A boardcreated by the provisions of NRS 590.485and chapters 623 to 625A, inclusive, 628,630 to 644,inclusive, 648, 654and 656 of NRS.

(b) The NevadaSystem of Higher Education.

(c) The PublicEmployees Retirement System.

(d) The HousingDivision of the Department of Business and Industry.

(e) The Colorado River Commission of Nevada.

(Added to NRS by 1987, 2055; A 1999, 2889; 2001, 207, 208, 943, 2444, 2445; 2003, 908, 2076; 2005, 1138)

NRS 353A.025 Periodicreview; biennial report of compliance by agency; biennial report of status ofaccounting and controls in agencies by Director.

1. The head ofeach agency shall periodically review the agencys system of internalaccounting and administrative control to determine whether it is in compliancewith the uniform system of internal accounting and administrative control foragencies adopted pursuant to subsection 1 of NRS 353A.020.

2. On orbefore July 1 of each even-numbered year, the head of each agency shall reportto the Director whether the agencys system of internal accounting andadministrative control is in compliance with the uniform system adoptedpursuant to subsection 1 of NRS 353A.020.The reports must be made available for inspection by the members of theLegislature.

3. For thepurposes of this section, agency does not include:

(a) A boardcreated by the provisions of NRS 590.485and chapters 623 to 625A, inclusive, 628,630 to 644,inclusive, 648, 654and 656 of NRS.

(b) The NevadaSystem of Higher Education.

(c) The PublicEmployees Retirement System.

(d) The HousingDivision of the Department of Business and Industry.

(e) TheColorado River Commission of Nevada.

4. TheDirector shall, on or before the first Monday in February of each odd-numberedyear, submit a report on the status of internal accounting and administrativecontrols in agencies to the:

(a) Director ofthe Legislative Counsel Bureau for transmittal to the:

(1) SenateStanding Committee on Finance; and

(2) AssemblyStanding Committee on Ways and Means;

(b) Governor;and

(c) LegislativeAuditor.

5. The reportsubmitted by the Director pursuant to subsection 4 must include, withoutlimitation:

(a) Theidentification of each agency that has not complied with the requirements ofsubsections 1 and 2;

(b) Theidentification of each agency that does not have an effective method forreviewing its system of internal accounting and administrative control; and

(c) The identification of each agency that hasweaknesses in its system of internal accounting and administrative control, andthe extent and types of such weaknesses.

(Added to NRS by 1995, 388; A 1999, 882, 2890, 2892; 2001, 207, 209, 943, 2444, 2445; 2003, 909, 2077; 2005, 1138)

DIVISION OF INTERNAL AUDITS

NRS 353A.031 Definitions. As used in NRS 353A.031to 353A.100, inclusive, unless thecontext otherwise requires, the words and terms defined in NRS 353A.034 and 353A.036 have the meanings ascribed tothem in those sections.

(Added to NRS by 1999, 2887; A 2001, 944)

NRS 353A.034 Chiefdefined. Chief means the Chief of theDivision.

(Added to NRS by 1999, 2887)

NRS 353A.036 Divisiondefined. Division means the Division of InternalAudits of the Department of Administration.

(Added to NRS by 1999, 2887)

NRS 353A.038 Creationof Executive Branch Audit Committee; members; duties.

1. The Executive Branch Audit Committee is herebycreated.

2. The Committee must consist of one member who is arepresentative of the general public appointed by the Governor, who has atleast 5 years of progressively responsible experience in the field of auditingand who does not engage in business with any agency, and the following exofficio members:

(a) The Governor, who shall serve as Chairman of theCommittee;

(b) The Lieutenant Governor;

(c) The Secretary of State;

(d) The State Treasurer;

(e) The State Controller; and

(f) The Attorney General.

3. The member of the Committee who is a representativeof the general public is entitled to receive a salary of $80 per day while engagedin the business of the Committee.

4. While engaged in the business of the Committee,each member of the Committee is entitled to receive the per diem allowance andtravel expenses provided for state officers and employees generally.

5. The Committee shall:

(a) Adopt policies and procedures for the operation ofthe Division;

(b) Approve, with or without revision, each annual planfor auditing agencies presented by the Chief pursuant to NRS 353A.045, and any revisions to such aplan, before the plan is implemented; and

(c) Approve, with or without revision, each annualreport submitted by the Chief pursuant to NRS353A.065.

(Added to NRS by 1999, 2887)

NRS 353A.041 Qualificationsof Chief; staff.

1. The Chiefmust:

(a) Be acertified public accountant licensed by this state or a public accountantqualified pursuant to chapter 628 of NRS topractice public accounting in this state; and

(b) Have atleast 5 years of progressively responsible experience in professional auditingand performing internal audits or postaudits. The experience must include,without limitation, the performance of audits of governmental entities or ofprivate business organizations, whether or not organized for profit.

2. The Chief may employ, within the limits oflegislative appropriations, such staff as is necessary to the performance ofhis duties.

(Added to NRS by 1999, 2887)

NRS 353A.045 Dutiesof Chief. The Chief shall:

1. Report to the Director.

2. Develop long-term and annual work plans to be basedon the results of periodic documented risk assessments. The annual work planmust list the agencies to which the Division will provide training and assistanceand be submitted to the Director for approval. Such agencies must not include:

(a) A board created by the provisions of NRS 590.485 and chapters623 to 625A, inclusive, 628, 630 to 644, inclusive, 648,654 and 656of NRS.

(b) The Nevada System of Higher Education.

(c) The Public Employees Retirement System.

(d) The Housing Division of the Department of Businessand Industry.

(e) The Colorado River Commission of Nevada.

3. Provide a copy of the approved annual work plan tothe Legislative Auditor.

4. Inconsultation with the Director, prepare a plan for auditing executive branchagencies for each fiscal year and present the plan to the Committee for itsreview and approval. Each plan for auditing must:

(a) State theagencies which will be audited, the proposed scope and assignment of thoseaudits and the related resources which will be used for those audits; and

(b) Ensure thatthe internal accounting, administrative controls and financial management ofeach agency are reviewed periodically.

5. Perform theaudits of the programs and activities of the agencies in accordance with theplan approved pursuant to subsection 5 of NRS353A.038 and prepare audit reports of his findings.

6. Review eachagency that is audited pursuant to subsection 5 and advise those agenciesconcerning internal accounting, administrative controls and financial management.

7. Submit toeach agency that is audited pursuant to subsection 5 analyses, appraisals andrecommendations concerning:

(a) Theadequacy of the internal accounting and administrative controls of the agency;and

(b) Theefficiency and effectiveness of the management of the agency.

8. Report anypossible abuses, illegal actions, errors, omissions and conflicts of interestof which the Division becomes aware during the performance of an audit.

9. Adopt thestandards of the Institute of Internal Auditors for conducting and reporting oninternal audits.

10. Consult with the Legislative Auditor concerningthe plan for auditing and the scope of audits to avoid duplication of effortand undue disruption of the functions of agencies that are audited pursuant tosubsection 5.

11. Appoint a Manager of Internal Controls.

(Added to NRS by 1995, 397; A 1997, 505; 1999, 2890; 2001, 944; 2003, 626, 909, 2077; 2005, 1139)

NRS 353A.047 Managerof Internal Controls: Qualifications; unclassified service; powers and duties.

1. The Manager of Internal Controls appointed pursuantto NRS 353A.045 must:

(a) Be a certified public accountant licensed by thisstate or a public accountant qualified pursuant to chapter628 of NRS to practice public accounting in this state; and

(b) Have at least 4 years of progressively responsibleexperience in professional auditing and performing internal audits orpostaudits. The experience must include, without limitation, the performance ofaudits of governmental entities or of private business organizations, whetheror not organized for profit.

2. The Manager of Internal Controls is in theunclassified service of this state and serves at the pleasure of the Chief.

3. The Chief shall establish the powers and duties ofthe Manager of Internal Controls.

(Added to NRS by 2001, 942)

NRS 353A.055 Dutiesof Division; prohibited acts.

1. The Divisionshall:

(a) Determinethe adequacy of the system of internal accounting, administrative control andfinancial management of each agency to which the Division provides training andassistance.

(b) Adoptregulations, approved by the Committee, requiring the provision of training toany employee of an agency who is responsible for administering budgetaryaccounts. The training must address:

(1) Thelaws and regulations of this state and the Federal Government applicable to theoperations of the agency.

(2) Internalaccounting, administrative controls and financial management.

(3) Techniquesto address the adequacy of controls of the agency.

(c) Develop andadminister a procedure to evaluate the effectiveness of any training providedto an agency.

(d) Providetechnical assistance to agencies in developing and carrying out their systemsof internal accounting, administrative controls and financial management.

(e) Prepareseparate reports for each agency which summarize the results of the trainingand assistance provided to the agency.

2. TheDivision shall not:

(a) Provide anyservices to an agency that is under the direct control or administration of aconstitutional officer unless the constitutional officer requests such services.

(b) Conduct investigations, but shall refer suchmatters to the appropriate agency.

(Added to NRS by 1995, 397; A 1997, 505; 1999, 2891)

NRS 353A.065 Annualreport.

1. Within 90days after the end of each fiscal year, the Chief shall submit an annual reportto the Committee for its approval which:

(a) Lists theagencies to which the Division provided training and assistance;

(b) Separatelylists any other activities undertaken by the Division that are related to theprovision of training and assistance and the status of those activities;

(c) Contains alist of the final reports that have been submitted pursuant to NRS 353A.085;

(d) Contains aseparate list of any other activities undertaken by the Division that arerelated to the final reports submitted pursuant to NRS 353A.085 and the status of thoseactivities; and

(e) Describesthe accomplishments of the Division.

2. The Chiefshall provide a copy of the annual report to the:

(a) Committee;

(b) Director;

(c) InterimFinance Committee; and

(d) Legislative Auditor.

(Added to NRS by 1995, 398; A 1997, 505; 1999, 2892)

NRS 353A.075 Agencyto make records available to Division; limitation.

1. Except asotherwise provided in subsection 2, upon the request of the Chief or hisauthorized representative, all officers and employees of each executive branchagency shall make available to the Division all books, accounts, claims,reports, vouchers or other records of information, confidential or otherwise,in the possession or control of the agency.

2. This section does not authorize the Chief or hisauthorized representative to have access to any books, accounts, claims,reports, vouchers or other records or information of any business or activitywhich NRS 665.130 and 668.085 require to be kept confidential.

(Added to NRS by 1999, 2888)

NRS 353A.085 Preliminaryfindings and recommendations of audit; written statement of acceptance,explanation or rebuttal from agency; final report; confidentiality.

1. After each audit is completed, the Chief or hisdesignated representative shall submit a copy of the preliminary findings andrecommendations of the audit to the head of the audited agency. Within 10working days after receipt of the preliminary findings and recommendations, thehead of the agency shall submit to the Chief a written statement of acceptance,explanation or rebuttal concerning the findings. The Chief shall include thestatement of the head of the agency in the final report.

2. The Chief shall submit a final report to theCommittee and the head of the audited agency.

3. Except as otherwise provided in NRS 353A.031 to 353A.100, inclusive, the Chief shall notdisclose the content of any audit before the final report is submitted to theCommittee pursuant to subsection 2 except in the case of alleged illegal actswhich must be reported immediately upon discovery.

(Added to NRS by 1999, 2888)

NRS 353A.090 Correctiveactions. Within 6 months after the date thatthe final report is submitted pursuant to NRS353A.085, if corrective action is recommended for an agency, the Chiefshall determine whether appropriate corrective actions are being taken andwhether those actions are achieving the desired result. The Chief shall informthe Committee and the head of the audited agency of the effect of anycorrective actions taken.

(Added to NRS by 1999, 2888)

NRS 353A.100 Chiefto maintain file of copies of reports; confidentiality.

1. The Chiefshall keep or cause to be kept a complete file of copies of all reports ofaudits, examinations, investigations and all other reports or releases issuedby him.

2. All workingpapers from an audit are confidential and may be destroyed by the Chief 5 yearsafter the report is issued, except that the Chief:

(a) Shallrelease such working papers when subpoenaed by a court of competentjurisdiction;

(b) Shall makesuch working papers available to the Legislative Auditor upon his request; and

(c) May make such working papers available forinspection by an authorized representative of any other governmental entity fora matter officially before him.

(Added to NRS by 1999, 2889)

 

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