CHAPTER 4 SENATE BILL No. 8 An Act concerning the legislative post audit act; relating to certain audits of the pooled
money investment board; amending K.S.A. 46-1106 and repealing the existing section
also repealing K.S.A. 2002 Supp. 75-4264.
      Be it enacted by the Legislature of the State of Kansas:

      Section  1. K.S.A. 46-1106 is hereby amended to read as follows: 46-
1106. (a) (1) A financial-compliance audit shall be conducted each year
of the general purpose financial statements prepared by the division of
accounts and reports for its annual financial report. This audit shall be
conducted in accordance with generally accepted governmental auditing
standards. The resulting written audit report shall be issued as soon after
the end of the fiscal year as is practicable.

      (2) In addition, separate written audit reports on the financial man-
agement practices of the office of the state treasurer and the pooled
money investment board shall be prepared addressing the adequacy of
financial management practices and compliance with applicable state
laws. The separate audit of the pooled money investment board also shall
include a comparative investment performance review and an analysis of
the investment program, including an evaluation of investment policies
and practices and of specific investments in the pooled money investment
portfolio. The analysis of the specific investments in the pooled money
investment portfolio shall review whether such investments meet the in-
vestment priorities of safety, liquidity and performance. The performance
of such investments shall be measured by comparison to an appropriate
market index.

      (3) Copies of such the reports of audits conducted pursuant to this
subsection (a) shall be furnished to the governor, director of accounts and
reports, director of the budget, each state agency, the legislative post audit
committee and other persons or agencies as may be required by law or
by the specifications of the audit.

      (4) Any additional costs associated with preparing the separate ad-
ditional reports on the office of the state treasurer and the pooled money
investment board shall be borne by the office of the state treasurer and
the pooled money investment board in accordance with K.S.A. 46-1121,
and amendments thereto.

      (b) Including financial-compliance audit work conducted as part of
the audit conducted pursuant to subsection (a), financial-compliance au-
dit work shall be conducted at each state agency at least once every three
years as directed by the legislative post audit committee. Written reports
on the results of such auditing shall be furnished to the governor, director
of accounts and reports, director of the budget, the state agency which is
audited, the legislative post audit committee and such other persons or
agencies as may be required by law or by the specifications of the audit.

      (c) Books and accounts of the state treasurer and the director of
accounts and reports, including the bond register of the state treasurer,
may be examined monthly if the legislative post audit committee so de-
termines, and such examination may include detailed checking of every
transaction or test checking.

      Any person receiving tax information under the provisions of subsec-
tion (a) or (b) shall be subject to the same duty of confidentiality imposed
by law upon the personnel of the department of revenue and shall be
subject to any civil or criminal penalties imposed by law for violations of
such duty of confidentiality.

      (d) The post auditor shall report immediately in writing to the leg-
islative post audit committee, governor and attorney general whenever it
appears in the opinion of the post auditor that there may have occurred
any violation of penal statutes or any instances of misfeasance, malfea-
sance or nonfeasance by a public officer or employee disclosed by any
audit or audit work conducted under the legislative post audit act. The
post auditor shall furnish the attorney general all information in the pos-
session of the post auditor relative to any report referred to the attorney
general. The attorney general shall institute and prosecute civil proceed-
ings against any such delinquent officer or employee, or upon such officer
or employee's official bond, or both, as may be needed to recover for the
state any funds or other assets misappropriated. The attorney general shall
also prosecute such ouster and criminal proceedings as the evidence in
the case warrants. Any person receiving tax information under the pro-
visions of this subsection shall be subject to the same duty of confiden-
tiality imposed by law upon the personnel of the department of revenue
and shall be subject to any civil or criminal penalties imposed by law for
violations of such duty of confidentiality.

      (e) The post auditor shall immediately report to the committee on
surety bonds and insurance when any audit or audit work conducted un-
der the legislative post audit act discloses a shortage in the accounts of
any state agency, officer or employee.

      (f) In the discharge of the duties imposed under the legislative post
audit act, the post auditor may require state agencies to preserve and
make available their accounts, records, documents, vouchers, requisitions,
payrolls, canceled checks or vouchers and coupons, and other evidence
of financial transactions.

      (g) In the discharge of the duties imposed under the legislative post
audit act, the post auditor or firm conducting a financial-compliance audit
or conducting other financial-compliance audit work shall have access to
all books, accounts, records, files, documents and correspondence, con-
fidential or otherwise, of any person or state agency subject to the legis-
lative post audit act or in the custody of any such person or state agency.
Except as otherwise provided in this subsection, the post auditor or firm
conducting a financial-compliance audit or other financial-compliance au-
dit work and all employees and former employees of the division of post
audit or firm performing a financial-compliance audit or other financial-
compliance audit work shall be subject to the same duty of confidentiality
imposed by law on any such person or state agency with regard to any
such books, accounts, records, files, documents and correspondence, and
any information contained therein, and shall be subject to any civil or
criminal penalties imposed by law for violations of such duty of confiden-
tiality. The duty of confidentiality imposed on the post auditor and on
firms conducting financial-compliance audits or other financial-compli-
ance audit work and all employees of the division of post audit and all
employees of such firms shall be subject to the provisions of subsection
(d), and the post auditor may furnish all such books, accounts, records,
files, documents and correspondence, and any information contained
therein to the attorney general pursuant to subsection (d). Upon receipt
thereof, the attorney general and all assistant attorneys general and all
other employees and former employees of the office of attorney general
shall be subject to the same duty of confidentiality with the exceptions
that any such information contained therein may be disclosed in civil
proceedings, ouster proceedings and criminal proceedings which may be
instituted and prosecuted by the attorney general in accordance with sub-
section (d), and any such books, accounts, records, files, documents and
correspondence furnished to the attorney general in accordance with sub-
section (d) may be entered into evidence in any such proceedings. Noth-
ing in this subsection shall be construed to supersede any requirement
of federal law.

      (h) Any firm or firms which develop information in the course of
conducting a financial-compliance audit or other financial-compliance au-
dit work which the post auditor is required to report under subsection
(d) or (e) shall immediately report such information to the post auditor.
The post auditor shall then make the report required in subsection (d) or
(e).

      Sec.  2. K.S.A. 46-1106 and K.S.A. 2002 Supp. 75-4264 are hereby
repealed.

      Sec.  3. This act shall take effect and be in force from and after its
publication in the statute book.

Approved March 3, 2003.
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