Fla. Stat. § 11.45
(1) As used in this section, the term:
(g) "Performance audit" means an examination of a program, activity, or function of a governmental entity, conducted in accordance with applicable government auditing standards or auditing and evaluation standards of other appropriate authoritative bodies. The term includes an examination of issues related to:
1. Economy, efficiency, or effectiveness of the program.
2. Structure or design of the program to accomplish its goals and objectives.
3. Adequacy of the program to meet the needs identified by the Legislature or governing body.
4. Alternative methods of providing program services or products.
5. Goals, objectives, and performance measures used by the agency to monitor and report program accomplishments.
6. The accuracy or adequacy of public documents, reports, or requests prepared under the program by state agencies.
7. Compliance of the program with appropriate policies, rules, or laws.
8. Any other issues related to governmental entities as directed by the Legislative Auditing Committee.
(3) (a)1. The Auditor General shall annually make financial audits of the accounts and records of all state agencies, as defined in this section, of all district school boards in counties with populations of fewer than 125,000, according to the most recent federal decennial statewide census, and of all district boards of trustees of community colleges. The Auditor General shall, at least every other year, make operational audits of the accounts and records of all state agencies, as defined in this section. The Auditor General shall, at least once every 3 years, make financial audits of the accounts and records of all district school boards in counties with populations of 125,000 or more. For each of the 2 years that the Auditor General does not make the financial audit, each district school board shall contract for an independent certified public accountant to perform a financial audit as defined in paragraph (1)(b). This section does not limit the Auditor General's discretionary authority to conduct performance audits of these governmental entities as authorized in subparagraph 3. A district school board may select an independent certified public accountant to perform a financial audit as defined in paragraph (1)(b) notwithstanding the notification provisions of this section. In addition, a district school board may employ an internal auditor to perform ongoing financial verification of the financial records of a school district, who must report directly to the district school board or its designee. The Auditor General shall, at a minimum, provide to the successor independent certified public accountant of a district school board the prior year's working papers, including documentation of planning, internal control, audit results, and other matters of continuing accounting and auditing significance, such as the working paper analysis of balance sheet accounts and those relating to contingencies.
2. Each charter school established under s. 228.056 shall have an annual financial audit of its accounts and records completed within 12 months after the end of its fiscal year by an independent certified public accountant retained by it and paid from its funds. The independent certified public accountant who is selected to perform an annual financial audit of the charter school shall provide a copy of the audit report to the district school board, the Department of Education, and the Auditor General. A management letter must be prepared and included as a part of each financial audit report. The Auditor General may, pursuant to his or her own authority or at the direction of the Joint Legislative Auditing Committee, conduct an audit of a charter school.
3. The Auditor General may at any time make financial audits and performance audits of the accounts and records of all governmental entities created pursuant to law. The audits referred to in this subparagraph must be made whenever determined by the Auditor General, whenever directed by the Legislative Auditing Committee, or whenever otherwise required by law or concurrent resolution. A district school board, expressway authority, or bridge authority may require that the annual financial audit of its accounts and records be completed within 12 months after the end of its fiscal year. If the Auditor General is unable to meet that requirement, the Auditor General shall notify the school board, the expressway authority, or the bridge authority pursuant to subparagraph 5.
4. The Office of Program Policy Analysis and Government Accountability within the Office of the Auditor General shall maintain a schedule of performance audits of state programs. In conducting a performance audit of a state program, the Office of Program Policy Analysis and Government Accountability, when appropriate, shall identify and comment upon alternatives for accomplishing the goals of the program being audited. Such alternatives may include funding techniques and, if appropriate, must describe how other states or governmental units accomplish similar goals.
5. If by July 1 in any fiscal year a district school board or local governmental entity has not been notified that a financial audit for that fiscal year will be performed by the Auditor General pursuant to subparagraph 3., each municipality with either revenues or expenditures of more than $100,000, each special district with either revenues or expenditures of more than $50,000, and each county agency shall, and each district school board may, require that an annual financial audit of its accounts and records be completed, within 12 months after the end of its respective fiscal year, by an independent certified public accountant retained by it and paid from its public funds. An independent certified public accountant who is selected to perform an annual financial audit of a school district must report directly to the district school board or its designee. A management letter must be prepared and included as a part of each financial audit report. Each local government finance commission, board, or council, and each municipal power corporation, created as a separate legal or administrative entity by interlocal agreement under s. 163.01(7), shall provide the Auditor General, within 12 months after the end of its fiscal year, with an annual financial audit report of its accounts and records and a written statement or explanation or rebuttal concerning the auditor's comments, including corrective action to be taken. The county audit shall be one document that includes a separate audit of each county agency. The county audit must include an audit of the deposits into and expenditures from the Public Records Modernization Trust Fund. The Auditor General shall tabulate the results of the audits of the Public Records Modernization Trust Fund and report a summary of the audits to the Legislature annually.
6. The governing body of a municipality, special district, or charter school must establish an auditor selection committee and competitive auditor selection procedures. The governing board may elect to use its own competitive auditor selection procedures or the procedures outlined in subparagraph 7.
7. The governing body of a noncharter county or district school board that retains a certified public accountant must establish an auditor selection committee and select an independent certified public accountant according to the following procedure:
a. For each noncharter county, the auditor selection committee must consist of the county officers elected pursuant to s. 1(d), Art. VIII of the State Constitution, and one member of the board of county commissioners or its designee.
b. The committee shall publicly announce, in a uniform and consistent manner, each occasion when auditing services are required to be purchased. Public notice must include a general description of the audit and must indicate how interested certified public accountants can apply for consideration.
c. The committee shall encourage firms engaged in the lawful practice of public accounting who desire to provide professional services to submit annually a statement of qualifications and performance data.
d. Any certified public accountant desiring to provide auditing services must first be qualified pursuant to law. The committee shall make a finding that the firm or individual to be employed is fully qualified to render the required services. Among the factors to be considered in making this finding are the capabilities, adequacy of personnel, past record, and experience of the firm or individual.
e. The committee shall adopt procedures for the evaluation of professional services, including, but not limited to, capabilities, adequacy of personnel, past record, experience, results of recent external quality control reviews, and such other factors as may be determined by the committee to be applicable to its particular requirements.
f. The public must not be excluded from the proceedings under this subparagraph.
g. The committee shall evaluate current statements of qualifications and performance data on file with the committee, together with those that may be submitted by other firms regarding the proposed audit, and shall conduct discussions with, and may require public presentations by, no fewer than three firms regarding their qualifications, approach to the audit, and ability to furnish the required services.
h. The committee shall select no fewer than three firms deemed to be the most highly qualified to perform the required services after considering such factors as the ability of professional personnel; past performance; willingness to meet time requirements; location; recent, current, and projected workloads of the firms; and the volume of work previously awarded to the firm by the agency, with the object of effecting an equitable distribution of contracts among qualified firms, provided such distribution does not violate the principle of selection of the most highly qualified firms. If fewer than three firms desire to perform the services, the committee shall recommend such firms as it determines to be qualified.
i. If the governing board receives more than one proposal for the same engagement, the board may rank, in order of preference, the firms to perform the engagement. The firm ranked first may then negotiate a contract with the board giving, among other things, a basis of its fee for that engagement. If the board is unable to negotiate a satisfactory contract with that firm, negotiations with that firm shall be formally terminated, and the board shall then undertake negotiations with the second-ranked firm. Failing accord with the second-ranked firm, negotiations shall then be terminated with that firm and undertaken with the third-ranked firm. Negotiations with the other ranked firms shall be undertaken in the same manner. The board, in negotiating with firms, may reopen formal negotiations with any one of the three top-ranked firms, but it may not negotiate with more than one firm at a time. The board shall also negotiate on the scope and quality of services. In making such determination, the board shall conduct a detailed analysis of the cost of the professional services required in addition to considering their scope and complexity. For contracts over $50,000, the board shall require the firm receiving the award to execute a truth-in-negotiation certificate stating that the rates of compensation and other factual unit costs supporting the compensation are accurate, complete, and current at the time of contracting. Such certificate shall also contain a description and disclosure of any understanding that places a limit on current or future years' audit contract fees, including any arrangements under which fixed limits on fees will not be subject to reconsideration if unexpected accounting or auditing issues are encountered. Such certificate shall also contain a description of any services rendered by the certified public accountant or firm of certified public accountants at rates or terms that are not customary. Any auditing service contract under which such a certificate is required must contain a provision that the original contract price and any additions thereto shall be adjusted to exclude any significant sums by which the board determines the contract price was increased due to inaccurate or incomplete factual unit costs. All such contract adjustments shall be made within 1 year following the end of the contract.
j. If the board is unable to negotiate a satisfactory contract with any of the selected firms, the committee shall select additional firms, and the board shall continue negotiations in accordance with this subsection until an agreement is reached.
8. At the conclusion of the audit field work, the independent certified public accountant shall discuss with the head of each local governmental entity or the chair's designee or with the chair of the district school board or the chair's designee, or with the chair of the board of the charter school or the chair's designee, as appropriate, all of the auditor's comments that will be included in the audit report. If the officer is not available to discuss the auditor's comments, their discussion is presumed when the comments are delivered in writing to his or her office. The auditor shall notify each member of the governing body of a local governmental entity for which deteriorating financial conditions exist which may cause a condition described in s. 218.503(1) to occur if actions are not taken to address such conditions.
9. The officer's written statement of explanation or rebuttal concerning the auditor's comments, including corrective action to be taken, must be filed with the governing body of the local governmental entity, district school board, or charter school within 30 days after the delivery of the financial audit report.
10. The Auditor General, in consultation with the Board of Accountancy, shall adopt rules for the form and conduct of all financial audits subject to this section and conducted by independent certified public accountants. The Auditor General, in consultation with the Department of Education, shall develop a compliance supplement for the financial audit of a district school board conducted by an independent certified public accountant. The rules for audits of local governmental entities and district school boards must include, but are not limited to, requirements for the reporting of information necessary to carry out the purposes of the Local Government Financial Emergencies Act as stated in s. 218.501.
11. Any local governmental entity or district school board financial audit report required under subparagraph 5. or charter school financial audit report required under subparagraph 2. and the officer's written statement of explanation or rebuttal concerning the auditor's comments, including corrective action to be taken, must be submitted to the Auditor General within 45 days after delivery of the audit report to the local governmental entity, district school board, or charter school, but no later than 12 months after the end of the fiscal year. If the Auditor General does not receive the financial audit report within the prescribed period, he or she must notify the Legislative Auditing Committee that the governmental entity or charter school has not complied with this subparagraph. Following notification of failure to submit the required audit report or items required by rule adopted by the Auditor General, a hearing must be scheduled by rule of the committee. After the hearing, the committee shall determine which governmental entities or charter schools will be subjected to further state action. If it finds that one or more governmental entities or charter schools should be subjected to further state action, the committee shall:
a. In the case of a local governmental entity, district school board, or charter school, request the Department of Revenue and the Department of Banking and Finance to withhold any funds payable to such governmental entity or charter school until the required financial audit is received by the Auditor General.
b. In the case of a special district, notify the Department of Community Affairs that the special district has failed to provide the required audits. Upon receipt of notification, the Department of Community Affairs shall proceed pursuant to ss. 189.421 and 189.422.
12.a. The Auditor General, in consultation with the Board of Accountancy, shall review all audit reports submitted pursuant to subparagraph 11. The Auditor General shall request any significant items that were omitted in violation of a rule adopted by the Auditor General. The items must be provided within 45 days after the date of the request. If the Auditor General does not receive the requested items, he or she shall notify the Joint Legislative Auditing Committee.
b. The Auditor General shall notify the Governor and the Joint Legislative Auditing Committee of any audit report reviewed by the Auditor General which contains a statement that the local governmental entity or district school board is in a state of financial emergency as provided in s. 218.503. If the Auditor General, in reviewing any audit report, identifies additional information which indicates that the local governmental entity or district school board may be in a state of financial emergency as provided in s. 218.503, the Auditor General shall request appropriate clarification from the local governmental entity or district school board. The requested clarification must be provided within 45 days after the date of the request. If the Auditor General does not receive the requested clarification, he or she shall notify the Joint Legislative Auditing Committee. If, after obtaining the requested clarification, the Auditor General determines that the local governmental entity or district school board is in a state of financial emergency as provided in s. 218.503, he or she shall notify the Governor and the Joint Legislative Auditing Committee.
c. The Auditor General shall annually compile and transmit to the President of the Senate, the Speaker of the House of Representatives, and the Joint Legislative Auditing Committee a summary of significant findings and financial trends identified in audits of local governmental entities, district school boards, and charter schools performed by the independent certified public accountants.
13. In conducting a performance audit of any agency, the Auditor General shall use the Agency Strategic Plan of the agency in evaluating the performance of the agency.
(c) The Auditor General shall at least every 2 years make a performance audit of the local government financial reporting system, which, for the purpose of this chapter, means the reporting provisions of this subsection and subsection (4); s. 27.3455(1) and (2); part VII of chapter 112; s. 163.05; s. 166.241; chapter 189; parts III and V of chapter 218; and s. 925.037(5). The performance audit shall analyze each component of the reporting system separately and analyze the reporting system as a whole. The purpose of such an audit is to determine the accuracy, efficiency, and effectiveness of the reporting system in achieving its goals and objectives and to make recommendations to the local governments, the Governor, and the Legislature as to how the reporting system can be improved and how program costs can be reduced. Such goals and objectives must include, but need not be limited to, the timely, accurate, uniform, and cost-effective accumulation of financial and other information that can be used by the members of the Legislature and other appropriate officials in order to:
1. Compare and contrast revenue sources and expenditures of local governmental entities;
2. Assess the fiscal impact of the formation, dissolution, and activity of special districts;
3. Evaluate the fiscal impact of state mandates on local governmental entities;
4. Assess financial or economic conditions of local governmental entities; and
5. Improve communication and coordination among state agencies and local governmental entities.
(d) Whenever a local governmental entity requests the Auditor General to conduct an audit of all or part of its operations and the Auditor General conducts the audit under his or her own authority or at the direction of the Legislative Auditing Committee, the expenses of the audit shall be paid by the local governmental entity. The Auditor General shall estimate the cost of the audit. Fifty percent of the cost estimate shall be paid by the local governmental entity before the initiation of the audit and deposited into the General Revenue Fund of the state. After the completion of the audit, the Auditor General shall forward the actual cost of the audit to the local governmental entity. The local governmental entity shall remit the remainder of the cost of the audit to the Auditor General for deposit into the General Revenue Fund of the state. If the local governmental entity fails to pay the cost of the audit, the Auditor General shall notify the Legislative Auditing Committee. Following the notification, the committee may schedule a hearing. After the hearing, the committee shall determine if the local governmental entity should be subject to further state action. If the committee determines that the local governmental entity should be subject to further state action, the committee shall:
1. In the case of a local governmental entity, request the Department of Revenue and the Department of Banking and Finance to withhold any funds payable to the governmental entity until the required payment is received by the Auditor General.
2. In the case of a special district, notify the Department of Community Affairs that the special district has failed to pay for the cost of the audit. Upon receipt of notification, the Department of Community Affairs shall proceed pursuant to the provisions specified in ss. 189.421 and 189.422.
(c) The audit report must make special mention of:
1. Any violation of the laws within the scope of the audit; and
2. Any illegal or improper expenditure, any improper accounting procedures, all failures to properly record financial transactions, and all other inaccuracies, irregularities, shortages, and defalcations.
(10) The Auditor General shall provide annually a list of those special districts which are in compliance with this section and a list of those special districts which are not in compliance with this section for the Special District Information Program of the Department of Community Affairs.
1Note.--The part of this sentence that followed the word "Representatives" was deleted by s. 26, ch. 96-318.
History.--s. 6, ch. 67-470; s. 6, ch. 69-82; s. 1, ch. 72-6; ss. 1, 2, ch. 73-234; s. 1, ch. 75-122; s. 1, ch. 76-73; s. 1, ch. 77-102; s. 2, ch. 79-183; ss. 1, 3, 6, ch. 79-589; s. 1, ch. 81-167; s. 1, ch. 83-55; s. 1, ch. 83-106; s. 1, ch. 84-241; s. 1, ch. 85-80; s. 14, ch. 86-204; s. 2, ch. 86-217; s. 1, ch. 87-114; s. 4, ch. 89-87; s. 30, ch. 89-169; s. 9, ch. 90-110; s. 19, ch. 90-227; s. 65, ch. 91-45; s. 17, ch. 91-282; s. 2, ch. 91-429; s. 91, ch. 92-142; s. 136, ch. 92-279; s. 55, ch. 92-326; s. 15, ch. 94-249; s. 1309, ch. 95-147; s. 1, ch. 95-214; s. 1, ch. 95-380; s. 12, ch. 95-396; s. 26, ch. 96-318; s. 1, ch. 96-324; s. 21, ch. 97-96; s. 1, ch. 97-111; s. 1, ch. 97-255; s. 26, ch. 97-271; s. 3, ch. 99-333.
Note.--Former s. 11.186.