AB33 - Creates the Nevada Office of the Inspector General. (BDR 18-435)

A.B. 33 - *AB33* ASSEMBLY BILL NO. 33–COMMITTEE ON GOVERNMENT AFFAIRS (ON BEHALF OF THE STATE CONTROLLER) PREFILED NOVEMBER 15, 2024 ____________ Referred to Committee on Government Affairs SUMMARY—Creates the Nevada Office of the Inspector General. (BDR 18-435) FISCAL NOTE: Effect on Local Government: May have Fiscal Impact. Effect on the State: Yes. CONTAINS UNFUNDED MANDATE (§ 14) (NOT REQUESTED BY AFFECTED LOCAL GOVERNMENT) ~ EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. AN ACT relating to governmental administration; creating the Nevada Office of the Inspector General and the position of Inspector General; setting forth the powers and duties of the Inspector General and employees of the Office; requiring a state agency, local government or nonprofit organization to cooperate with and provide assistance to the Inspector General in carrying out those duties; prohibiting retaliation against certain persons who make a lawful complaint concerning fraud, waste, abuse or corruption within a state agency, local government or nonprofit organization; prohibiting certain acts to deter or prevent the Inspector General or an employee of the Office from performing his or her duty; imposing increased penalties for certain acts of assault or battery of the Inspector General or an employee of the Office; providing penalties; and providing other matters properly relating thereto. Legislative Counsel’s Digest: Existing law creates the Office of the State Controller, whose duties include, 1 without limitation, administering the State’s accounting system, processing and 2 recording the State’s financial transactions, conducting audits and recommending 3 – 2 – - *AB33* plans for the support of public credit, promoting frugality and economy, and better 4 management and understanding of the fiscal affairs of the State. (Nev. Const. Art. 5 5, § 19; chapter 227 of NRS) This bill creates the Nevada Office of the Inspector 6 General within the Office of the State Controller with the authority to audit, 7 investigate, inspect and review the performance of any state agency, local 8 government or nonprofit organization that receives public money. 9 Section 9 of this bill creates the Nevada Office of the Inspector General, 10 consisting of the Inspector General and any person employed by the Office. Section 11 9 also requires the Inspector General to be appointed for a term of 4 years by 12 unanimous agreement of the Lieutenant Governor, State Treasurer and State 13 Controller. Section 10 of this bill requires the Inspector General to administer the 14 provisions of law governing the Office. Section 11 of this bill: (1) requires the 15 Inspector General to appoint a deputy inspector general and a special counsel who 16 are in the unclassified service of the State; and (2) authorizes the Inspector General, 17 within the limits of available money, to employ such persons in the classified 18 service of the State as he or she deems necessary to provide an appropriate staff for 19 the Office and to enter into contracts with certain professionals for professional 20 services related to the functions of the Office. Sections 3-8 of this bill define terms 21 relating to the Nevada Office of the Inspector General. Section 2 of this bill sets 22 forth the applicability of those definitions to sections 2-19 of this bill. 23 Section 12 sets forth certain responsibilities and duties of the Inspector 24 General, including: (1) establishing and maintaining a full-time program of 25 auditing, investigation, inspection and performance review of each state agency, 26 local government and nonprofit organization; (2) submitting a report to the State 27 Controller and the Director of the Legislative Counsel Bureau, on at least a 28 quarterly basis or at the State Controller’s request, setting forth any findings, 29 conclusions or recommendations relating to an audit, investigation, inspection or 30 review conducted by the Inspector General; and (3) immediately reporting certain 31 problems that require immediate attention and any suggested corrective or remedial 32 actions. 33 Sections 13 and 31 of this bill transfer from the Division of Internal Audits of 34 the Office of Finance to the Inspector General the requirement to establish a 35 telephone number to receive information relating to abuse, fraud and waste with 36 respect to public money received and used by state agencies, local governments or 37 nonprofit organizations. Section 14: (1) requires a state agency, local government 38 or nonprofit organization, upon request by the Inspector General, to cooperate with 39 and provide assistance to the Inspector General in carrying out his or her duties; 40 and (2) makes any person who willfully prevents, impairs or prohibits the 41 performance of the duties of the Inspector General guilty of a category E felony. 42 Section 15 authorizes the Inspector General to issue subpoenas. 43 Sections 13, 16 and 22 of this bill provide for the confidentiality of: (1) any 44 record maintained by the Inspector General during an investigation; and (2) the 45 identity of any whistleblower. Otherwise, section 16 requires a report of the 46 Inspector General to be made available to the public annually. Section 17 of this 47 bill requires the Legislative Auditor to review at least once every 5 years a 48 representative sample of the audits, investigations, inspections and reviews 49 conducted by the Nevada Office of the Inspector General to ensure conformance 50 with certain professional standards. 51 Section 18 of this bill makes it a category E felony to retaliate against certain 52 persons who file a lawful complaint concerning fraud, waste, abuse or corruption 53 within a state agency, local government or nonprofit organization. 54 Under existing law, a person commits a gross misdemeanor if he or she uses 55 any threat, force or violence to prevent an executive or administrative officer from 56 performing his or her duties. (NRS 197.090) Section 19 of this bill makes it a 57 – 3 – - *AB33* category E felony for a person to use any threat, force or violence to prevent the 58 Inspector General or any employee of the Office from performing his or her duties. 59 Sections 20 and 21 of this bill provide that the increased penalty for assault or 60 battery of an officer applies to an assault or battery of the Inspector General or an 61 employee of the Office. 62 Section 23 of this bill makes the Inspector General and any person employed as 63 an investigator by the Office category II peace officers. 64 Under existing law, the head of each state agency must periodically review and 65 report to the Director of the Office of Finance whether the agency’s system of 66 internal accounting and administrative control is in compliance with the uniform 67 system of internal accounting and administrative control adopted by the Director 68 for state agencies. Existing law further requires the Director to submit a report on 69 the status of internal accounting and administrative controls in state agencies to 70 certain persons. (NRS 353A.020) Section 24 of this bill requires the Director to 71 provide this report to the Inspector General. Sections 25-29 of this bill require 72 certain state agencies and local governments to provide the Inspector General with 73 certain reports. 74 Section 28 of this bill: (1) requires the Lieutenant Governor, State Treasurer 75 and State Controller to appoint the Inspector General on or before December 1, 76 2025; and (2) provides that the State Controller is the acting Inspector General until 77 the appointment is made. 78 THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. Title 18 of NRS is hereby amended by adding 1 thereto a new chapter to consist of the provisions set forth as 2 sections 2 to 19, inclusive, of this act. 3 Sec. 2. As used in this chapter, unless the context otherwise 4 requires, the words and terms defined in sections 3 to 8, inclusive, 5 of this act have the meanings ascribed to them in those sections. 6 Sec. 3. “Local government” means any political subdivision 7 of this State that receives any public money, including, without 8 limitation, any county, city, town, board, airport authority, 9 regional transportation commission, fire protection district, 10 irrigation district, school district or other special district that 11 performs a governmental function and receives any public money. 12 Sec. 4. “Nonprofit organization” means an organization that 13 is recognized as exempt pursuant to the provisions of 26 U.S.C. § 14 501(c)(3) and receives public money. 15 Sec. 5. “Office” means the Nevada Office of the Inspector 16 General created by section 9 of this act. 17 Sec. 6. “Public money” means any money deposited with a 18 depository by the State Treasurer and includes, without limitation, 19 any money which is received by a state agency or local 20 government from the Federal Government for distribution and use 21 by or in this State pursuant to federal law or federal regulation. 22 – 4 – - *AB33* Sec. 7. “State agency” means an agency, bureau, board, 1 commission, department, division, officer or employee of the 2 Executive Department of the State Government. 3 Sec. 8. “Waste” means the squandering of money or 4 resources, whether or not the activity is unlawful. 5 Sec. 9. 1. The Nevada Office of the Inspector General is 6 hereby created within the Office of the State Controller. The 7 Nevada Office of the Inspector General consists of the Inspector 8 General appointed pursuant to subsection 2 and any person 9 employed by the Office. 10 2. The Inspector General must be appointed by the 11 unanimous agreement of the Lieutenant Governor, State 12 Treasurer and State Controller for a term of 4 years from a list 13 submitted by the State Controller of not less than three but not 14 more than five candidates who each possess the abilities required 15 by subsection 4, as determined by the Attorney General. The 16 Inspector General may be reappointed, and the State Controller 17 shall include the incumbent Inspector General on the list of 18 candidates unless the State Controller determines that the 19 incumbent should not be recommended for reappointment for 20 cause, including, without limitation, inefficiency or neglect of 21 duty. A vacancy in the position must be filled in the same manner 22 as the original appointment. 23 3. The Inspector General may be removed from office only by 24 impeachment for misdemeanor or malfeasance in office. The 25 Inspector General shall be deemed to be a state officer for 26 purposes of NRS 283.140 to 283.290, inclusive. 27 4. The Inspector General must have the demonstrated ability 28 to administer a major public agency in the field of auditing, 29 investigations, inspections or performance review of programs of 30 governmental agencies, including, without limitation: 31 (a) Experience in accounting, auditing, financial analysis, 32 law, management analysis, public administration, investigation, 33 criminal justice administration or any other closely related field; 34 (b) Certification as a Certified Fraud Examiner by the 35 Association of Certified Fraud Examiners, or its successor 36 organization, and as a Certified Inspector General by the 37 Association of Inspectors General, or its successor organization, 38 not later than 18 months after appointment as the Inspector 39 General; and 40 (c) Continued status as a Certified Inspector General by the 41 Association of Inspectors General, or its successor organization, 42 while in office. 43 5. The Inspector General: 44 (a) Is in the unclassified service of the State. 45 – 5 – - *AB33* (b) Shall devote his or her entire time and attention to the 1 business of his or her office and shall not engage in any other 2 gainful employment or occupation. 3 (c) Is ineligible for elective public office under the government 4 and laws of this State, other than federal office, for 4 years after 5 the date he or she leaves office. 6 Sec. 10. The Inspector General shall administer this chapter 7 and all other provisions of law relating to the functions of the 8 Office. 9 Sec. 11. 1. The Inspector General: 10 (a) Shall appoint a deputy inspector general and a special 11 counsel. The deputy inspector general and special counsel are in 12 the unclassified service of the State. 13 (b) May, within the limits of available money, employ such 14 persons he or she deems necessary to provide an appropriate staff 15 for the Office, including, without limitation, auditors, 16 administrative staff and investigators. Any such persons employed 17 pursuant to this paragraph are in the classified service of the 18 State. 19 2. The Inspector General may enter into contracts for the 20 services of certified public accountants, qualified management 21 consultants or other professional experts necessary to 22 independently perform the functions of the Office, within the 23 limits of money available for that purpose. 24 Sec. 12. 1. The Inspector General shall: 25 (a) Establish and maintain a full-time program of auditing, 26 investigation, inspection and performance review of each state 27 agency, local government and nonprofit organization to provide 28 increased accountability and oversight of each state agency, local 29 government and nonprofit organization and to assist in improving 30 operations and deterring and identifying fraud, waste, abuse or 31 corruption; 32 (b) Upon request by the State Controller, but not less often 33 than quarterly, submit a report to the State Controller and to the 34 Director of the Legislative Counsel Bureau for transmittal to the 35 Legislature setting forth any findings and conclusions relating to 36 an audit, investigation, inspection or review specified in subsection 37 2 and any suggested corrective or remedial actions, including, 38 without limitation, increased oversight, carrying out or modifying 39 any controls for internal management, termination of employment 40 or referral to the Commission on Ethics or the Attorney General 41 when appropriate; and 42 (c) If the Inspector General determines during the course of 43 his or her duties that there is a problem that requires immediate 44 attention within a state agency, local governmen [Text truncated for display. 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