Topic:
STATE AID; ACCOUNTANTS; AUDITORS;
Location:
ACCOUNTING;

OLR Research Report


Connecticut General Assembly



OFFICE OF LEGISLATIVE RESEARCH

June 4, 1998 98-R-0706

FROM: John Rappa, Principal Analyst

RE: Statutory Audit Requirements for State Funding Recipients You asked us to list the statutes imposing audit requirements on entities receiving state funds or regulated by state agencies. You also wanted to know if these statutes specify who must perform the audit.

Table 1 lists the statutes imposing audit requirements. Most identify the type of auditor who must perform the audit (e.g., independent certified public accountant), while others leave this to the agency. A computer search generated the list.

Table 1: Statutory Audit Requirements Governing State Funding Recipients

Statute

Requirement

Auditor

1-122

Quasi-public agency boards must contract annually for compliance audit

Any person, firm, or corporation

4-37f (8)

Foundations established by state agencies must undergo periodic audits depending upon their total annual revenues

Independent certified public accountant or the state auditors, at the agency's request

4-124(f)

Regional councils of elected officials must undergo annual audits if their total annual revenues exceed $200,000

Licensed public accountant meeting independence standards for government auditing

4-231(a)

Municipalities, special districts, regional planning agencies, and other specified entities receiving more that $100,000 in state and federal funds must undergo an annual audit unless other laws and regulations require biennial audits. These audits are in lieu of any financial or financial and compliance audits required under other state laws and regulations

Agency must designated an independent auditor who is: (1) an external state, municipal, or agency auditor who meets independence standards for government auditing or (2) an individual who meets government auditing standards

7-127f

Nonprofit agencies receiving neighborhood youth center grants must comply with the above

Same as above

7-237f

Transit districts must undergo annual audits

Licensed public accountant meeting independence standards for government auditing

7-240

Municipalities must keep revenues from municipal waterworks systems in a separate account, which must be annually audited

“Competent auditor”

7-392

Municipalities, special districts, regional planning agencies, and municipal utilities must undergo periodic audits depending on their total annual revenues

Licensed public accountant meeting independence standards for government auditing

7-392 (d)

Economic and community development commissioner must audit each housing authority at least once every two years

Licensed public accountant meeting independence standards for government auditing

7-394a(d)

Grant agreements between state agencies and municipalities, regional school districts, special districts, and regional planning organizations, or other specified entities must impose auditing requirements specified in 4-230

Agency must designated an independent auditor who is: (1) an external state, municipal, or agency auditor who meets independence standards for government auditing or (2) an individual who meets government auditing standards

8-219d

Economic and community development commissioner can require nonprofit organizations receiving grants for administrative expenses and technical assistance to undergo annual performance audits

Independent accounting or management consulting firm

Table 1 (Continued)

Statute

Requirement

Auditor

8-253a(6)

Municipal and nonprofit developers borrowing funds from the Connecticut Housing Finance Authority (CHFA) must undergo an audit certifying project completion costs

CHFA

8-435(d)

Economic and community development commissioner can audit state-funded housing projects

Department of Economic and Community Development

10-66g

Regional educational service centers must be audited in the same manner as local and regional school districts

Independent auditor

10-76m

State Board of Education must audit payment claims submitted by boards of education for certain special education expenses

Certified public accountants

10-202f

Boards of education receiving dropout prevention grants must file financial audits with education commissioner

Commissioner determines the form for performing the audit.

10-264h

Capital expenditure grants for interdistrict magnet school facility projects must be audited upon project completion

Commissioner must provide for final audit

10-266r

Boards of education receiving priority school district grants must submit a financial audit to the education commissioner

Commissioner determines the form for performing the audit

10-266u

Priority school district grants for extending school building hours for academic enrichment must be annually audited.

The district board must provide for a financial audit as part of the local government single audit process

10-287

State Board of Education must audit grants for school construction projects

State Board of Education performs audit, which must be done before it can make the final grant payment.

10a-38

Private colleges receiving state grants must submit audits to the Board of Governors of Higher Education

Independent certified public accountant

10a-194

Connecticut Health and Educational Facilities Authority must undergo annual audit

Certified public accountants

10a-253

University of Connecticut Health Center Finance Corporation must undergo an annual audit

Certified public accountants

12-637a

Organizations receiving over $25,000 in contributions under the Neighborhood Assistance Act must undergo post project audit

Organization is responsible for the audit

12-802(d)

Connecticut Lottery Corporation must undergo annual audit

Independent certified public accountant

13b-34a

Private bus companies receiving state subsidies are subject to state and federal audits

State and federal auditors

Table 1 (Continued)

Statute

Requirement

Auditor

17b-78(c)

Organizations receiving matching state grants for human resource development programs must undergo annual audits

Agency must designated an independent auditor who is: (1) an external state, municipal, or agency auditor who meets independence standards for government auditing or (2) an individual who meets government auditing standards

22-11

Cooperative extension councils receiving annual $2,000 grants

University of Connecticut must periodically audit grants

22-37a

Connecticut Egg Council, Inc.'s fund is subject to audit by agriculture commission

Agriculture commissioner

22-54s

Assessments levied on apple producers to fund marketing of Connecticut produced apples

Apple Marketing Board must annually appoint an auditor

22a-478(m)

Municipalities receiving water quality funds must comply with audit requirements

Environmental protection commissioner determines the requirements

32-9e(h)

Business receiving small or minority business set-aside contracts are subject to audits

Economic and community development commissioner; the Commission on Human Rights and Opportunities can also audit financial, corporate, and business records

32-11a

Connecticut Development Authority (CDA) funds subject to annual audit

State auditors; CDA board can also arrange for annual audits by certified public accountants

32-39(18)

Connecticut Innovation, Inc. (CII) can audit its funds, including those granted or invested in other organizations, such as colleges or businesses

CII determines the audit requirements

32-42

CII's funds subject to audit

State auditors and state treasurer

32-203

Lower Fairfield County Convention Center Authority and its projects are subject to state audit

Statute does not specify state agency

32-210

Lower Fairfield County Convention Center Authority's activities subject to annual compliance audit

Person, firm, or corporation hired by authority

32-282

Regional development corporation receiving CDA funds must have their books and accounts annually audited

Independent certified public accountant

32-305(a)

Regional tourism districts and other specified entities receiving lodgings tax revenues must submit annually submit full audit of books and accounts to Connecticut Tourism Council

Independent certified public accountant

Table 1 (Continued)

Statute

Requirement

Auditor

32-433

Connecticut Coastline Port Authority accounts subject to examination and audit

State treasurer can examine the authority and the state auditors can must annually audit its accounts

36a-86

Banks must have their books, records, accounts, and affairs annually audited, and must submit a copy of audit report to banking commissioner

Certified public accountants or holders of certificates of authority as public accountants selected by bank's governing board

36a-473

Banking commissioner may examine out-of-state credit unions doing business in Connecticut or require them to submit annual audit

Statute does not specify who must conduct annual audit

36a-631

Nondepository financial institutions must include annual audit among documents submitted to banking commissioner

Independent certified public accountant

38a-54

Insurance companies must submit annual audits to insurance commissioner

Independent certified public accountant, according specifications set in regulations

38a-253

Out-of-state risk retention group doing business in Connecticut must submit annual audit upon insurance commissioner's request.

Statute does not specify who must perform audit, but it does require other specified documents to be prepared by independent public accounts

38a-481(e)(3)

Health insurers' premium rates must be supported by loss ratio results that have been independently audited for specified periods.

Certified public accountant or member of the American Academy of Actuaries

38a-556

Health Reinsurance Association can periodically audit financial statements its receives and must undergo annual audit

Independent certified public accountant

38a-579

Dental plan providers must meet insurance commissioner cost accounting and auditing standards

Audit requirements determined by commissioner

38-293

Liquidators include auditing books and records of insurer's agents that pertain to insurer's business

Liquidator determines audit requirements

38a-951

Superior Court can audit insurance commissioners books relating to a receivership

Superior Court determines audit requirement

38a-1010

Workers' compensation self-insurance groups must submit audited financial statements to commissioner

Independent certified public accountant

38a-1014

Workers' compensation self-insurance groups must undergo annual audits to verify proper classifications, experience rating, payrolls, and rates

Auditor must be acceptable to insurance commissioner

45a-475

Trust funds held by a town subject to municipal audit

Licensed public accountant meeting independence standards for government auditing

JR:pa