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PRINTER'S NO. 4399
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2879
Session of
2020
INTRODUCED BY GROVE, SEPTEMBER 18, 2020
REFERRED TO COMMITTEE ON PROFESSIONAL LICENSURE,
SEPTEMBER 18, 2020
AN ACT
Amending the act of May 26, 1947 (P.L.318, No.140), entitled "An
act relating to the practice of public accounting; providing
for the examination, education and experience requirements
for certification of certified public accountants and for the
licensing of certified public accountants, public accountants
and firms; requiring continuing education and peer review;
providing for the organization and ownership of firms and for
the procedures and grounds for discipline and reinstatement
of licensees; prescribing the powers and duties of the State
Board of Accountancy and the Department of State; providing
for ownership of working papers and confidentiality;
regulating the professional responsibility of licensees;
defining unlawful acts and acts not unlawful; providing
penalties; and repealing existing laws," providing for local
government accounting.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of May 26, 1947 (P.L.318, No.140), known
as the CPA Law, is amended by adding a section to read:
Section 15.1. Local Government Accounting.--(a) The board
shall adopt standards for municipalities which shall establish
minimally required internal control systems for municipalities
to promote financial accountability and transparency, including
the following:
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(1) Control environment.
(2) Risk assessment.
(3) Control activities.
(4) Information and communication.
(5) Monitoring.
(b) Not later than six months after the effective date of
this section, the board shall adopt training materials for the
personnel of a municipality to implement the standards under
this section.
(c) The following shall apply:
(1) Not later than one year after the effective date of this
section, a municipality shall adopt the standards issued by the
board under this section, and the chief financial officer of a
municipality shall certify to the board the following:
(i) The municipality has adopted the standards issued by the
board.
(ii) Each of the personnel required to receive the training
for internal control standards established by the board has
completed its training.
(2) Certification under this section may be transmitted to
the board electronically.
(d) Not less than thirty days after the end of a
municipality's fiscal year, the municipality shall submit a
report on municipal finances and internal control systems to:
(1) The board.
(2) The Auditor General.
(3) The Department of Community and Economic Development .
(4) The General Assembly.
(e) The board shall notify the Governor and the State
Treasurer if a municipality has failed to adopt the minimally
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required internal control standards established under this
section. The following shall apply:
(1) The Governor shall direct Commonwealth agencies to
suspend part or all of the payments of State funds which the
municipality was to receive until the municipality adopts the
internal control standards established under this section.
(2) A Commonwealth agency shall notify the State Treasurer
of the suspended payment under paragraph (1) and the State
Treasurer may not release the funds until notified by the board
that the municipality has adopted the standards for internal
controls under this section.
(f) If upon review of the report by a municipality under
subsection (d) the board finds erroneous or irregular material
variances, losses, shortages or thefts of municipal or
governmental funds, the board shall:
(1) Determine the amount of funds involved and report the
amount to the appropriate government and law enforcement
officials.
(2) Determine the internal control weaknesses of the
municipality that contributed to or was responsible for the
board's finding under this subsection.
(3) Make written recommendations to the municipality on how
the municipality may correct the issue and strengthen internal
controls to prevent future occurrences of the finding by the
board.
(g) The board shall promulgate rules and regulations
necessary for the implementation of this section.
(h) The following words and phrases when used in this
section shall have the meanings given to them in this subsection
unless the context clearly indicates otherwise:
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"Commonwealth agency." An agency of the executive branch
under the direct or policy supervision of the Governor.
"Municipality." A county, city, township, borough, school
district or political subdivision of the Commonwealth.
"Personnel." An officer or employe of a municipality whose
official duties include receiving, processing, depositing,
disbursing or otherwise having access to money belonging to:
(1) The Federal Government.
(2) The Commonwealth.
(3) A municipality or governmental entity.
Section 2. This act shall take effect in 180 days.
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