PRINTER'S NO. 2620
No. 2081 Session of 1978
INTRODUCED BY REED, BELLOMINI, MILANOVICH, PRATT, COWELL,
KERNICK, KUKOVICH, MILLIRON, MELUSKEY, BROWN, GRAY,
MANMILLER, PICCOLA, ZITTERMAN, KOWALYSHYN, WISE, ZELLER,
DiCARLO, STEWART, STUBAN, DeWEESE AND BITTINGER,
FEBRUARY 21, 1978
REFERRED TO COMMITTEE ON STATE GOVERNMENT, FEBRUARY 21, 1978
AN ACT
1 Amending the act of April 9, 1929 (P.L.343, No.176), entitled
2 "An act relating to the finances of the State government;
3 providing for the settlement, assessment, collection, and
4 lien of taxes, bonus, and all other accounts due the
5 Commonwealth, the collection and recovery of fees and other
6 money or property due or belonging to the Commonwealth, or
7 any agency thereof, including escheated property and the
8 proceeds of its sale, the custody and disbursement or other
9 disposition of funds and securities belonging to or in the
10 possession of the Commonwealth, and the settlement of claims
11 against the Commonwealth, the resettlement of accounts and
12 appeals to the courts, refunds of moneys erroneously paid to
13 the Commonwealth, auditing the accounts of the Commonwealth
14 and all agencies thereof, of all public officers collecting
15 moneys payable to the Commonwealth, or any agency thereof,
16 and all receipts of appropriations from the Commonwealth and
17 imposing penalties; affecting every department, board,
18 commission, and officer of the State government, every
19 political subdivision of the State, and certain officers of
20 such subdivisions, every person, association, and corporation
21 required to pay, assess, or collect taxes, or to make returns
22 or reports under the laws imposing taxes for State purposes,
23 or to pay license fees or other moneys to the Commonwealth,
24 or any agency thereof, every State depository and every
25 debtor or creditor of the Commonwealth," providing for
26 postaudits of agencies receiving State aid and conferring
27 powers and imposing duties on the Department of the Auditor
28 General.
29 The General Assembly of the Commonwealth of Pennsylvania
1 hereby enacts as follows:
2 Section 1. Section 402, act of April 9, 1929 (P.L.343,
3 No.176), known as "The Fiscal Code," amended May 31, 1957
4 (P.L.237, No.115) and March 18, 1971 (P.L.109, No.4), is amended
5 to read:
6 Section 402. Audits of Affairs of Departments, Boards and
7 Commissions.--Except as may otherwise be provided by law it
8 shall be the duty of the Department of the Auditor General to
9 make all audits of transactions after their occurrence, which
10 may be necessary, in connection with the administration of the
11 financial affairs of the government of this Commonwealth, with
12 the exception of those of the Department of the Auditor General.
13 It shall be the duty of the Governor to cause such audits to be
14 made of the affairs of the Department of the Auditor General.
15 At least one audit shall be made each year of the affairs of
16 every department, board, and commission of the executive branch
17 of the government, and all collections made by departments,
18 boards, or commissions, and the accounts of every State
19 institution, shall be audited quarterly.
20 Special audits of the affairs of all departments, boards,
21 commissions, or officers, may be made whenever they may, in the
22 judgment of the Auditor General, appear necessary, and shall be
23 made whenever the Governor shall call upon the Auditor General
24 to make them.
25 Copies of all audits made by the Department of the Auditor
26 General shall be promptly submitted to the Governor.
27 If at any time the Department of the Auditor General shall
28 find that any department, board or commission receiving, or
29 entitled to receive, an appropriation of money payable out of
30 any fund in the State Treasury, or receiving, or entitled to
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1 receive, any portion of any State tax for any purpose
2 whatsoever, has expended, or contracted or otherwise agreed for
3 the expenditure of the same, by any means whatsoever, for any
4 purpose other than that for which it was appropriated or
5 received, it shall forthwith notify the Governor and State
6 Treasurer, and shall have the right to commence any action at
7 law or equity to enjoin the expenditure or further expenditure
8 of said money and to cause such sums to be recovered and paid to
9 the State Treasurer.
10 Unless the Department of the Auditor General shall fail or
11 refuse to make annual, quarterly, or special audits, as
12 hereinabove required, it shall be unlawful for any other
13 administrative department, any independent administrative board
14 or commission, or any departmental administrative or advisory
15 board or commission, to expend any money appropriated to it by
16 the General Assembly for any audit of its affairs, or, in the
17 case of departments, of any boards or commissions connected with
18 them, except for the reimbursement of the General Fund for
19 audits made by the Department of the Auditor General as provided
20 by law, or for the payment of the compensation and expenses of
21 such auditors as are regularly employed as part of the
22 administrative staffs of such departments, boards, or
23 commissions, respectively.
24 Section 2. Section 403 of the act is amended to read:
25 Section 403. [Audits] Postaudits of Agencies Receiving State
26 Aid.--The Department of the Auditor General shall have the
27 power, and its duty shall be, to [audit] conduct postaudits of
28 the accounts and records of every person, association,
29 corporation, and public agency, receiving an appropriation of
30 money, payable out of any fund in the State Treasury, or
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1 entitled to receive any portion of any State tax for any purpose
2 whatsoever, as far as may be necessary to satisfy the department
3 that the money received was expended or is being expended for no
4 purpose other than that for which it was paid. Copies of all
5 such audits shall be furnished to the Governor.
6 If at any time the department shall find that any money
7 received by any person, association, corporation, or public
8 agency, has been expended for any purpose other than that for
9 which it was paid, it shall forthwith notify the Governor, and
10 [shall decline to approve any further requisition for the
11 payment of any appropriation, or any further portion of any
12 State tax, to such person, association, corporation or public
13 agency, until an amount equal to that improperly expended shall
14 have been expended for the purpose for which the money
15 improperly expended was received from the State Treasury] the
16 State Treasurer, and shall have the right to disallow
17 expenditures made for purposes other than the purposes of the
18 appropriation or receipt of State taxes, and shall cause such
19 sums to be recovered and paid by such person, association,
20 corporation or public agency to the State Treasurer, through the
21 commencement by the department of any action at law or equity to
22 recover the same.
23 Section 3. Section 1406 of the act is amended by adding a
24 subsection to read:
25 Section 1406. Action to Recover Transfer Inheritance Taxes
26 and other Debts Due or Property Escheating to the
27 Commonwealth.--* * *
28 (d) Whenever the Department of the Auditor General shall
29 determine, in the performance of the duties imposed on the
30 department by sections 402 and 403, that an appropriation of
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1 money payable out of any fund in the State Treasury, or any
2 portion of any State tax, has been expended, or that a contract
3 or other agreement has been made for the expenditure of the same
4 for any purpose other than that for which it was appropriated,
5 paid, or received, the Department of the Auditor General shall
6 have the power, and its duty shall be, to cause to be commenced,
7 in the name of the Commonwealth, in any court of the
8 Commonwealth having jurisdiction, any appropriate action at law
9 or equity to enjoin the expenditure, or further expenditure of
10 such sums, and to cause such sums to be recovered and paid to
11 the State Treasurer.
12 Section 4. This act shall take effect immediately.
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