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Fiscal Control and Internal Auditing Act

Eastern Illinois University

NCA Self StudyCriterion 2 DocumentsEastern Illinois University Year 2014Fiscal Control and Internal Auditing ActIllinois General AssemblyThis paper is posted at The Keep.http://thekeep.eiu.edu/eiunca integrity docs/42  Home    Legislation & Laws    Senate    House    My Legislation    Site Map     Bills & Resolutions    Compiled Statutes    Public Acts    Legislative Reports    IL Constitution    Legislative Guide    Legislative Glossary   Search By Number (example: HB0001)Go  Search TipsSearch By KeywordGo Alternate Search Search TipsAdvanced Search   Illinois Compiled StatutesBack to Article Listing  Public Acts  Search  Guide  Disclaimer  Printer-Friendly VersionInformation maintained by the Legislative Reference BureauUpdating the database of the Illinois Compiled Statutes (ILCS) is an ongoing process. Recent lawsmay not yet be included in the ILCS database, but they are found on this site as Public Acts soonafter they become law. For information concerning the relationship between statutes and Public Acts,refer to the Guide.Because the statute database is maintained primarily for legislative drafting purposes, statutorychanges are sometimes included in the statute database before they take effect. If the source note atthe end of a Section of the statutes includes a Public Act that has not yet taken effect, the version ofthe law that is currently in effect may have already been removed from the database and you shouldrefer to that Public Act to see the changes made to the current law.FINANCE(30 ILCS 10/) Fiscal Control and Internal Auditing Act.      (30 ILCS 10/Art. 1 heading)ARTICLE 1. GENERAL PROVISIONS.    (30 ILCS 10/1001) (from Ch. 15, par. 1001)     Sec. 1001. Short title. This Act may be cited as the Fiscal Control and InternalAuditing Act. (Source: P.A. 86-936.)    (30 ILCS 10/1002) (from Ch. 15, par. 1002)     Sec. 1002. Public policy. It is the policy of this State that the chief executiveofficer of every State agency is responsible for effectively and efficiently managingthe agency and establishing and maintaining an effective system of internal control. (Source: P.A. 86-936.)    (30 ILCS 10/1003) (from Ch. 15, par. 1003)     Sec. 1003. Definitions.     (a) "Designated State agencies" include the offices of the Secretary of State, theState Comptroller, the State Treasurer, and the Attorney General, the State Board ofEducation, the State colleges and universities, the Illinois Toll Highway Authority, theIllinois Housing Development Authority, the public retirement systems, the IllinoisStudent Assistance Commission, the Illinois Finance Authority, the EnvironmentalProtection Agency, the Capital Development Board, the Department of Military Affairs,the State Fire Marshal, and each Department of State government created in Article 5,Section 5-15 of the Civil Administrative Code of Illinois.     (b) "State agency" means that term as defined in the Illinois State Auditing Act, asnow or hereafter amended, except the judicial branch which shall be covered bysubsection (c) of Section 2001 and Section 3004 of this Act.     (c) "Chief executive officer" includes, respectively, the Secretary of State, theState Comptroller, the State Treasurer, the Attorney General, the StateSuperintendent of Education, such chief executive officers as are designated by thegoverning board of each State college and university, the executive director of theIllinois Toll Highway Authority, and the executive director of the Illinois HousingDevelopment Authority, as well as the chief executive officer of each designated otherState agency. (Source: P.A. 96-795, eff. 7-1-10 (see Section 5 of P.A. 96-793 for the effective dateof changes made by P.A. 96-795).)      (30 ILCS 10/Art. 2 heading)ARTICLE 2. INTERNAL AUDITING.    (30 ILCS 10/2001) (from Ch. 15, par. 2001)     Sec. 2001. Program of internal auditing.     (a) Each designated State agency as defined in Section 1003(a) shall maintain afull-time program of internal auditing. In the event that a designated State agency ismerged, abolished, reorganized, or renamed, the successor State agency shall alsobe a designated State agency.    (a-5) Within 30 days after the effective date of this amendatory Act of the 96thGeneral Assembly, each chief internal auditor transferred under Executive Order 2003-10 to the Department of Central Management Services shall be transferred to theauditor's designated State agency, and if an auditor does not have a designated Stateagency or has more than one designated State agency, then the chief executiveofficer of a State agency shall appoint such person as the chief internal auditor of aState agency. A chief internal auditor transferred under this amendatory Act of the96th General Assembly shall be appointed to a 5-year term beginning on the effectivedate of this amendatory Act of the 96th General Assembly.    The rights of employees and of the State and its agencies under the PersonnelCode and applicable collective bargaining agreements or under any pension retirementor annuity plan shall not be affected by this amendatory Act of the 96th GeneralAssembly.    All books, records, papers, documents, property (real and personal), unexpendedappropriations, and pending business pertaining to the functions transferred by thisamendatory Act of the 96th General Assembly shall be delivered to the respectiveState agency pursuant to the direction of the chief executive officer of that Stateagency.     (b) The chief executive officer of a State agency is not relieved from theresponsibility for maintaining an effective internal control system merely because thatState agency is not designated and required to have a full-time program of internalauditing under this Act. Agencies which do not have full-time internal audit programsmay have internal audits performed by the Department of Central ManagementServices.     (c) The Supreme Court will establish by its rulemaking authority or byadministrative order a full-time program of internal auditing of State-funded activities ofthe judicial branch, which is consistent with the intent of this Article. (Source: P.A. 96-795, eff. 7-1-10 (see Section 5 of P.A. 96-793 for the effective dateof changes made by P.A. 96-795).)    (30 ILCS 10/2002) (from Ch. 15, par. 2002)     Sec. 2002. Qualifications of chief internal auditor.     (a) The chief executive officer of each designated State agency shall appoint achief internal auditor with a bachelor's degree, who is either:         (1) a certified internal auditor by examination or a    certified public accountant and who has at least 4 years of progressivelyresponsible professional auditing experience; or        (2) an auditor with at least 5 years of progressively    responsible professional auditing experience.    (b) The chief internal auditor shall report directly to the chief executive officer andshall have direct communications with the chief executive officer and the governingboard, if applicable, in the exercise of auditing activities. All chief internal auditors andall full-time members of an internal audit staff shall be free of all operational duties.     (c) The chief internal auditor shall serve a 5-year term beginning on the date of theappointment. A chief internal auditor may be removed only for cause after a hearingbefore the Executive Ethics Commission concerning the removal. Any chief internalauditor who is appointed to replace a removed chief internal auditor may serve onlyuntil the expiration of the term of the removed chief internal auditor. The annual salaryof a chief internal auditor cannot be diminished during the term of the chief internalauditor. (Source: P.A. 96-795, eff. 7-1-10 (see Section 5 of P.A. 96-793 for the effective dateof changes made by P.A. 96-795).)    (30 ILCS 10/2003) (from Ch. 15, par. 2003)     Sec. 2003. Internal auditing program requirements.     (a) The chief executive officer of each designated State agency shall ensure thatthe internal auditing program includes:         (1) A two-year plan, identifying audits scheduled for    the pending fiscal year, approved by the chief executive officer before thebeginning of the fiscal year. By September 30 of each year the chief internal auditorshall submit to the chief executive officer a written report detailing how the auditplan for that year was carried out, the significant findings, and the extent to whichrecommended changes were implemented.        (2) Audits of major systems of internal accounting    and administrative control conducted on a periodic basis so that all major systemsare reviewed at least once every 2 years. The audits must include testing of:            (A) the obligation, expenditure, receipt, and use        of public funds of the State and of funds held in trust to determine whether thoseactivities are in accordance with applicable laws and regulations; and            (B) grants received or made by the designated        State agency to determine that the grants are monitored, administered, andaccounted for in accordance with applicable laws and regulations.        (3) Reviews of the design of major new electronic    data processing systems and major modifications of those systems before theirinstallation to ensure the systems provide for adequate audit trails andaccountability.        (4) Special audits of operations, procedures,    programs, electronic data processing systems, and activities as directed by thechief executive officer or by the governing board, if applicable.    (b) Each chief internal auditor shall have, in addition to all other powers or dutiesauthorized by law, required by professional ethics or standards, or assignedconsistent with this Act, the powers necessary to carry out the duties required by thisAct. (Source: P.A. 86-936.)    (30 ILCS 10/2004) (from Ch. 15, par. 2004)     Sec. 2004. Consultations by internal auditor. Each chief internal auditor mayconsult with the Auditor General, the Department of Central Management Services,the Commission on Government Forecasting and Accountability, the appropriationscommittees of the General Assembly, the Governor's Office of Management andBudget, or the Internal Audit Advisory Board on matters affecting the duties orresponsibilities of the chief internal auditor under this Act. (Source: P.A. 93-1067, eff. 1-15-05.)    (30 ILCS 10/2005) (from Ch. 15, par. 2005)     Sec. 2005. Internal Audit Advisory Board.     (a) An 11 member Internal Audit Advisory Board is created.     (b) The composition of the Board shall be as follows:         (1) the chief internal auditor of the Department of    Central Management Services;        (2) the chief internal auditor of the Office of the    State Comptroller;        (3) the chief internal auditor of the Office of the    Secretary of State;        (4) the chief internal auditor of the Office of the    State Treasurer;        (5) the chief internal auditor of the Office of the    Attorney General; and        (6) 6 chief internal auditors appointed by the    Governor.At least one of the members appointed by the Governor must be an employee of aState college or university or university governing board.     (c) The initial appointments by the Governor of the 6 chief internal auditors whoshall be members of the Board shall be made before the next February 1 after thedate this Act takes effect and shall be as follows: 2 appointments for three-yearterms, 2 appointments for two-year terms, and 2 appointments for one-year terms.After the initial terms each member appointed by the Governor shall serve a three-year term.     (d) A vacancy shall exist whenever a member ceases to be employed in theposition which qualified the member for appointment. Vacancies shall be filled in thesame manner as the original appointment. Persons appointed to fill a vacancy shallserve the balance of the unexpired term.     (e) The Board shall select a chairman from its members, who shall serve for a one-year term as chairman. Board members shall receive no additional compensation fortheir services, but shall be reimbursed by their employing agency for expensesnecessarily incurred in the performance of their duties as Board members.     (f) The Board shall be responsible for:         (1) promulgating a uniform set of professional    standards and a code of ethics (based on the standards and ethics of the Instituteof Internal Auditors, the General Accounting Office, and other professionalstandards as applicable) to which all State internal auditors must adhere;        (2) serving as a clearinghouse for the correlation of    internal audit training needs and training designed to meet those needs; and        (3) coordinating peer review activities among the    State's internal audit units.(Source: P.A. 86-936.)      (30 ILCS 10/Art. 3 heading)ARTICLE 3. FISCAL CONTROLS.    (30 ILCS 10/3001) (from Ch. 15, par. 3001)     Sec. 3001. Internal controls required. All State agencies shall establish andmaintain a system, or systems, of internal fiscal and administrative controls, whichshall provide assurance that:         (1) resources are utilized efficiently, effectively,    and in compliance with applicable law;        (2) obligations and costs are in compliance with    applicable law;        (3) funds, property, and other assets and resources    are safeguarded against waste, loss, unauthorized use, and misappropriation;        (4) revenues, expenditures, and transfers of assets,    resources, or funds applicable to operations are properly recorded and accountedfor to permit the preparation of accounts and reliable financial and statistical reportsand to maintain accountability over the State's resources; and        (5) funds held outside the State Treasury are    managed, used, and obtained in strict accordance with the terms of their enablingauthorities and that no unauthorized funds exist.(Source: P.A. 86-936.)    (30 ILCS 10/3002) (from Ch. 15, par. 3002)     Sec. 3002. Certification guidelines for chief executive officers.     (a) By the next March 1 after the date this Act takes effect, the Comptroller, inconsultation with the Director of Central Management Services, shall establishguidelines for:         (1) the evaluation by State agencies of their systems    of internal fiscal and administrative controls to determine whether the systemscomply with the requirements of Section 3001; and        (2) the certification by chief executive officers    required by Section 3003.    (b) The guidelines must be approved by the Legislative Audit Commission and maybe modified, as needed, with the Commission's approval. (Source: P.A. 86-936.)    (30 ILCS 10/3003) (from Ch. 15, par. 3003)     Sec. 3003. Certification by chief executive officers.     (a) By May 1 of each year, each chief executive officer of all State agencies shall,on the basis of an evaluation conducted in accordance with guidelines establishedunder Section 3002, prepare and transmit to the Auditor General a certification that:         (1) the systems of internal fiscal and administrative    controls of the State agency fully comply with the requirements of this Act; or        (2) the systems of internal fiscal and administrative    controls of the State agency do not fully comply with the requirements of this Act.    (b) If the systems do not fully comply with the requirements of this Act, thecertification shall include a report describing any material weaknesses in the systemsof internal fiscal and administrative controls and the plans and schedule for correctingthe weaknesses, or a statement of the reasons why the weaknesses cannot becorrected. (Source: P.A. 86-936.)    (30 ILCS 10/3004) (from Ch. 15, par. 3004)     Sec. 3004. The Supreme Court will establish by its rulemaking authority or byadministrative order procedures to annually assess the adequacy of internal controlsfor State-funded activities of the judicial branch, using procedures consistent with theintent of this Article. (Source: P.A. 86-936.)TopHome | Legislation & Laws | House | Senate | My Legislation | Disclaimers | Email  This site is maintained for the Illinois General Assembly by theLegislative Information System, 705 Stratton Building, Springfield, Illinois 62706217-782-3944   217-782-2050 (TTY) 

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Fiscal Control and Internal Auditing Act

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