AB154 - Creates the Nevada Office of the Inspector General. (BDR 18-334)

A.B. 154 - *AB154* ASSEMBLY BILL NO. 154–ASSEMBLYMEMBER MILLER PREFILED JANUARY 30, 2025 ____________ Referred to Committee on Government Affairs SUMMARY—Creates the Nevada Office of the Inspector General. (BDR 18-334) FISCAL NOTE: Effect on Local Government: Increases or Newly Provides for Term of Imprisonment in County or City Jail or Detention Facility. Effect on the State: Yes. ~ 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; setting forth the powers and duties of the Inspector General and employees of the Office; requiring a state agency or local government to cooperate with and provide assistance to the Inspector General in carrying out those duties; creating the Nevada Office of the Inspector General’s Fund; prohibiting retaliation against certain persons who make a lawful complaint concerning fraud, waste, abuse or corruption in a state agency or local government; 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 on 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 Finance in the Office of the Governor, 1 consisting of the Director of the Office, the Division of Internal Audits and the 2 Budget Division. (NRS 223.400) This bill creates the Nevada Office of the 3 Inspector General as an independent agency. Sections 2-6 of this bill define terms 4 related to the Nevada Office of the Inspector General. Section 7 of this bill creates 5 the Nevada Office of the Inspector General, consisting of the Inspector General and 6 any person employed in the Office. Section 7 also requires the Governor to appoint 7 the Inspector General for a term of 4 years from a list of candidates submitted by 8 the Legislative Commission. Section 8 of this bill requires the Inspector General to 9 – 2 – - *AB154* administer provisions of law governing the Office. Section 9 of this bill: (1) 10 requires the Inspector General to appoint a deputy inspector general and a special 11 counsel who are in the unclassified service of the State; and (2) authorizes the 12 Inspector General, within the limits of available money, to employ such persons in 13 the classified service of the State as he or she deems necessary to provide an 14 appropriate staff for the Office and to enter into contracts with certain professionals 15 for professional services related to the functions of the Office. 16 Section 10 of this bill requires the Inspector General to submit a report to the 17 Governor and the Director of the Legislative Counsel Bureau, on at least a quarterly 18 basis or at the Governor’s request, setting forth any findings, conclusions or 19 recommendations relating to an audit, investigation, inspection or review conducted 20 by the Inspector General. Sections 11 and 27 of this bill transfer from the Division 21 of Internal Audits to the Inspector General the requirement to establish a telephone 22 number to receive information relating to abuse, fraud and waste with respect to the 23 use of public money by state agencies. Section 12 of this bill: (1) requires a state 24 agency or local government, upon request by the Inspector General, to cooperate 25 with and provide assistance to the Inspector General in carrying out his or her 26 duties; and (2) makes any person who willfully prevents, impairs or prohibits the 27 performance of the duties of the Inspector General guilty of a category E felony. 28 Section 13 of this bill authorizes the Inspector General to issue subpoenas. Sections 29 11, 14 and 21 of this bill provide for the confidentiality of: (1) any record 30 maintained by the Inspector General during an investigation; and (2) the identity of 31 any whistleblower. Otherwise, section 14 requires a report of the Inspector General 32 to be made available to the public annually. Section 15 of this bill requires the 33 Legislative Auditor to review a representative sample of audits, investigations and 34 reviews conducted by the Office for conformance with professional standards at 35 least once every 3 years. Section 16 of this bill creates the Nevada Office of the 36 Inspector General’s Fund as a special revenue fund without reversion to the State 37 General Fund. 38 Section 17 of this bill makes it a category E felony to retaliate against certain 39 persons who file a lawful complaint concerning fraud, waste, abuse or corruption 40 within a state agency or local government. 41 Existing law provides that a person commits a gross misdemeanor if he or she 42 uses any threat, force or violence to prevent an executive or administrative officer 43 from performing his or her duties. (NRS 197.090) Section 18 of this bill makes it a 44 category E felony for a person to use any threat, force or violence to prevent the 45 Inspector General or any employee of the Office from performing his or her duties. 46 Sections 19 and 20 of this bill provide that the increased penalty for assault or 47 battery of an officer applies to an assault or battery of the Inspector General or an 48 employee of the Office. (NRS 200.471, 200.481) 49 Section 22 of this bill makes the Inspector General and investigators employed 50 by the Office category II peace officers. 51 Existing law requires the head of each state agency to periodically review and 52 report to the Director of the Office of Finance whether the agency’s system of 53 internal accounting and administrative control is in compliance with the uniform 54 system of internal accounting and administrative control adopted by the Director 55 for state agencies. Existing law further requires the Director to submit a report on 56 the status of internal accounting and administrative controls in state agencies to 57 certain persons. (NRS 353A.025) Section 24 of this bill requires the Director to 58 provide this report to the Inspector General. Section 23 of this bill defines the term 59 “Inspector General” for provisions of the Nevada Revised Statutes relating to 60 internal accounting. 61 Section 25 of this bill requires the Governor to appoint the Inspector General 62 on or before December 1, 2025. 63 – 3 – - *AB154* 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 17, 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 6, 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 funding, 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 12 funding. 13 Sec. 4. “Office” means the Nevada Office of the Inspector 14 General created by section 7 of this act. 15 Sec. 5. “State agency” means an agency, bureau, board, 16 commission, department, division, officer or employee of the 17 Executive Department of State Government. 18 Sec. 6. “Waste” means the squandering of money or 19 resources, whether or not the activity is unlawful. 20 Sec. 7. 1. The Nevada Office of the Inspector General is 21 hereby created. The Nevada Office of the Inspector General 22 consists of the Inspector General and any person employed by the 23 Office. 24 2. The Governor shall appoint the Inspector General for a 25 term of 4 years, and until a successor is appointed and qualified, 26 from a list of three candidates submitted by the Legislative 27 Commission. The Inspector General may be reappointed, and the 28 Legislative Commission shall include the incumbent Inspector 29 General on its list of candidates unless the Commission 30 determines that the incumbent should not be recommended for 31 reappointment for cause, including, without limitation, 32 inefficiency, neglect of duty or malfeasance in office. A vacancy in 33 the position of Inspector General must be filled in the same 34 manner as the original appointment. 35 3. The Inspector General may be removed from office only by 36 impeachment for misdemeanor or malfeasance in office. The 37 Inspector General shall be deemed to be a state officer for the 38 purposes of NRS 283.140 to 283.290, inclusive. 39 4. The Inspector General must have the demonstrated ability 40 to administer a major public agency in the field of auditing, 41 – 4 – - *AB154* investigations, inspections or performance reviews of programs of 1 governmental agencies, including, without limitation: 2 (a) Experience in accounting, auditing, financial analysis, 3 law, management analysis, public administration, investigation, 4 criminal justice administration or any other closely related field; 5 (b) Certification as a Certified Fraud Examiner by the 6 Association of Certified Fraud Examiners, or its successor 7 organization, and as a Certified Inspector General by the 8 Association of Inspectors General, or its successor organization, 9 not later than 18 months after appointment as the Inspector 10 General; and 11 (c) Continued status as a Certified Inspector General by the 12 Association of Inspectors General, or its successor organization, 13 while in office. 14 5. The Inspector General: 15 (a) Is in the unclassified service of the State. 16 (b) Shall devote his or her entire time and attention to the 17 business of his or her office and shall not engage in any other 18 gainful employment or occupation. 19 (c) Is ineligible for elective public office under the government 20 and laws of this State, other than federal office, for 4 years after 21 the date he or she leaves office. 22 Sec. 8. The Inspector General shall administer this chapter 23 and all other provisions of law relating to the functions of the 24 Office. 25 Sec. 9. 1. The Inspector General: 26 (a) Shall appoint a deputy inspector general and a special 27 counsel. The deputy inspector general and special counsel are in 28 the unclassified service of the State. 29 (b) May, within the limits of available money, employ such 30 other persons as he or she deems necessary to provide an 31 appropriate staff for the Office, including, without limitation, 32 auditors, administrative staff, investigators and sworn peace 33 officers. The Inspector General may employ category II peace 34 officers. Any such persons employed pursuant to this paragraph 35 are in the classified service of the State. 36 2. The Inspector General may enter into contracts for the 37 services of certified public accountants, qualified management 38 consultants or other professional experts necessary to 39 independently perform the functions of the Office, within the 40 limits of money available for that purpose. 41 Sec. 10. 1. The Inspector General shall: 42 (a) Establish and maintain a full-time program of auditing, 43 investigation, inspection and performance review of each state 44 agency and local government to provide increased accountability 45 – 5 – - *AB154* and oversight of each state agency and local government and to 1 assist in improving operations and deterring and identifying fraud, 2 waste, abuse or corruption; and 3 (b) Upon request by the Governor, but not less often than 4 quarterly, submit a report to the Governor and to the Director of 5 the Legislative Counsel Bureau for transmittal to the Legislature 6 setting forth any findings and conclusions relating to an audit, 7 investigation, inspection or review specified in subsection 2 and 8 any suggested corrective or remedial actions, including, without 9 limitation, increased oversight, carrying out or modifying any 10 controls for internal management, termination of employment or 11 referral to the Commission on Ethics or the Attorney General 12 when appropriate. 13 2. The Inspector General may: 14 (a) Engage in prevention activities, including, without 15 limitation, the review of legislation, rules, regulations, policies and 16 procedures of a state agency or local government and 17 transactions, training and education conducted by any state 18 agency or local government. 19 (b) Review the reliability and validity of the information 20 provided through the performance measures and standards of any 21 state agency or local government. 22 (c) Conduct a review of the performance measurement system 23 of any state agency or local government. 24 (d) Attend any meeting held by any state agency or local 25 government. 26 (e) Audit the economy, efficiency and effectiveness of the 27 operations and functions of any state agency or local government. 28 (f) Audit, inspect, investigate and review the activities, records, 29 procurements, grants, agreements and other financial 30 arrangements undertaken by any state agency, local government, 31 contractor, grantee or other recipient of money, property or 32 services to be spent or used on behalf of the State or a political 33 subdivision, but not including a natural person who is receiving: 34 (1) Compensation for employment; or 35 (2) An income subsidy with no restriction on his or her use 36 of the money or property. 37 (g) Recommend remedial actions to be taken by any state 38 agency or local government to overcome or correct operating or 39 maintenance deficiencies or inefficiencies identified by the Office. 40 (h) Establish a program for receiving, reviewing and 41 investigating any complaint submitted to the Inspector General 42 concerning any fraud, waste, abuse or corruption within any state 43 agency or local government, including, without limitation, 44 deficiencies in the operation and maintenance of facilities, and 45 – 6 – - *AB154* referral of those complaints to the appropriate state agency or 1 local government. 2 (i) Conduct civil, criminal and administrative investigations. 3 (j) [Text truncated for display. 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