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PRINTER'S NO. 4407
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2878
Session of
2020
INTRODUCED BY GROVE, SEPTEMBER 23, 2020
REFERRED TO COMMITTEE ON STATE GOVERNMENT, SEPTEMBER 23, 2020
AN ACT
Amending the act of April 9, 1929 (P.L.177, No.175), entitled
"An act providing for and reorganizing the conduct of the
executive and administrative work of the Commonwealth by the
Executive Department thereof and the administrative
departments, boards, commissions, and officers thereof,
including the boards of trustees of State Normal Schools, or
Teachers Colleges; abolishing, creating, reorganizing or
authorizing the reorganization of certain administrative
departments, boards, and commissions; defining the powers and
duties of the Governor and other executive and administrative
officers, and of the several administrative departments,
boards, commissions, and officers; fixing the salaries of the
Governor, Lieutenant Governor, and certain other executive
and administrative officers; providing for the appointment of
certain administrative officers, and of all deputies and
other assistants and employes in certain departments, boards,
and commissions; providing for judicial administration; and
prescribing the manner in which the number and compensation
of the deputies and all other assistants and employes of
certain departments, boards and commissions shall be
determined," providing for miscellaneous provisions and for
recovery audits.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of April 9, 1929 (P.L.177, No.175), known
as The Administrative Code of 1929, is amended by adding an
article to read:
ARTICLE XXVIII-I
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MISCELLANEOUS PROVISIONS
Section 2801-I. Recovery audits.
(a) Schedule of recovery audit.--
(1) The secretary shall establish a schedule for the
review of Commonwealth agency expenditures for improper
payments and payment recovery for a Commonwealth agency that
has $50,000,000 or more in payments to individuals, vendors
or entities.
(2) For the review under this section, the secretary
shall contract with an auditor to perform a recovery audit of
payments by a Commonwealth agency to individuals, vendors or
entities.
(b) Contract for auditor.--A contract for an auditor:
(1) May p rovide for reasonable compensation for services
provided under the contract, which may include compensation
as determined by the application of a specified percentage of
the total amount of State money recovered during the recovery
audit.
(2) May permit or require the auditor to pursue a
judicial action in a court within or outside this
Commonwealth to recover an overpaid amount.
(3) May allow for the performance of existing payment
auditing procedures.
(4) Shall not allow a recovery audit of a payment during
the 90-day period after the date the payment was made.
(c) C onfidential information.--A Commonwealth agency being
audited by an auditor shall provide the auditor with any
confidential information in the custody of the Commonwealth
agency or secretary that is necessary for the performance of the
recovery audit. The following shall apply:
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(1) The auditor shall be subject to restrictions
regarding the disclosure of classified information under this
section. These restrictions shall be included as part of the
terms of the contract made between the secretary and
Commonwealth agency.
(2) If the auditor discloses classified information, the
auditor shall be guilty of a misdemeanor of the third degree.
(d) R ecovery of Federal money.--Federal money recovered
during a recovery audit shall be expended or returned in
accordance with rules associated with the program associated
with the Federal money.
(e) Report.--Within seven days of receiving a report
regarding a recovery audit from an auditor, the secretary shall
transmit, by electronic means or otherwise, a copy of the
recovery audit performed by the auditor to the following:
(1) The Governor.
(2) The Inspector General.
(3) The General Assembly.
(f) Requirements for auditors.--
(1) The terms of a contract between a Commonwealth
agency and an auditor under this section shall provide for
the prohibition on a conflict or interest between the auditor
and any Commonwealth agency or program that the auditor is
contracted to audit.
(2) An auditor shall have experience in performing
recovery audits for public entities that successfully
recovered public money.
(3) An auditor shall perform a recovery audit in
accordance with the Single Audit Act of 1984 (31 U.S.C. ยง
7501 et seq.) and government auditing standards and practices
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required by the United States Government Accountability
Office.
(g) Rules and guidelines.--The secretary shall adopt rules
or guidelines necessary for the implementation of this section.
(h) Definitions.--As used in this section, t he following
words and phrases shall have the meanings given to them in this
subsection unless the context clearly indicates otherwise:
"Auditor." A private auditor or auditing firm with
experience in performing a recovery audit and hired under this
section to review a Commonwealth agency's expenditures.
"Commonwealth agency." A department, office, board,
commission or agency under the direct or policy supervision of
the Governor.
"Improper payment." A payment that should not have been made
by a Commonwealth agency or a contractor with a Commonwealth
agency under statutory, contractual, administrative or other
legal applicable requirements, including any of the following:
(1) An overpayment.
(2) An underpayment.
(3) A payment to an ineligible recipient.
(4) A payment for an ineligible service.
(5) A payment for a duplicative or redundant service.
(6) A payment for services not received.
(7) A payment for goods and services that does not
utilize or was not given available discounts.
(8) Invoice or pricing errors.
(9) The failure to comply with a purchasing agreement.
"R ecovery audit." A financial management technique used to
identify improper payments made by a Commonwealth agency with
respect to individuals, vendors or entities in connection with a
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payment activity.
"Secretary." The Secretary of the Budget of the
Commonwealth.
Section 2. This act shall take effect in 180 days.
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