LRB-1099/2
MPG:eev:jf
2013 - 2014 LEGISLATURE
February 19, 2013 - Introduced by Joint Legislative Audit Committee. Referred
to Joint Legislative Audit Committee.
SB27,2,2 1An Act to repeal 13.53 (2) (d), 13.94 (1) (a), 13.94 (1) (d), 13.94 (1) (f), 13.94 (1)
2(g), 13.94(1) (k), 13.94 (1) (mm), 13.94 (1) (n), 13.94 (1) (q), 13.94 (8) (d) 3., 49.19
3(11m) (e), 49.67 (7m), 101.973 (11), 115.52 (7), 115.525 (7), 118.153 (6), 119.23
4(7) (e) 2. and 229.8273 (6); to renumber and amend 119.23 (7) (e) 1.; to amend
513.94 (1) (b), 13.94 (1) (br) 1., 13.94 (1) (br) 2., 13.94 (1) (c), 13.94 (1) (dg), 13.94
6(1) (dm), 13.94 (1) (eg), 13.94 (1) (em), 13.94 (1) (L), 13.94 (1s) (a), 13.94 (1s) (b),
713.94 (1s) (bm), 18.10 (11), 39.15 (2), 39.46 (1), 119.23 (6m) (b) 3. d., 120.135 (4)
8(a) and 565.37 (1); and to create 13.94 (1) (br) 3., 13.94 (1) (t), 13.94 (1s) (c) 7.,
913.94 (1s) (c) 8. and 71.78 (4) (s) of the statutes; relating to: the authority and
10responsibilities of the Legislative Audit Bureau and state auditor, eliminating
11certain expired audit requirements, and requiring confidentiality during

1investigations of reports made to the state fraud, waste, and mismanagement
2hotline.
Analysis by the Legislative Reference Bureau
Under current law, the Legislative Audit Bureau (LAB), headed by the state
auditor, is responsible for auditing state agencies and certain other entities. LAB
conducts various kinds of financial audits and also conducts performance evaluation
audits to determine, among other things, whether a given program is yielding
intended results. This bill makes a number of changes to the laws governing LAB,
including the following:
1. Under current law, LAB is required to perform a financial audit of the records
of each state agency and authority at least once every five years and a financial audit
of the records of other public and quasi-public entities, including any entity that
receives more than 50 percent of its annual budget from the state, at the state
auditor's discretion or when LAB is so directed. The bill eliminates that five-year
timeline and requires LAB to perform all of those audits at the state auditor's
discretion or as the Joint Legislative Audit Committee (JLAC) directs.
2. Current law also requires LAB to perform, among other audits, (a) an annual
financial audit of the State Fair Park Board and certain private entities with which
that board may contract; (b) an annual financial audit of certain Department of
Health Services grants; (c) a biennial financial audit of the central accounting
records of the Department of Administration (DOA); (d) a biennial financial audit of
the Medical College of Wisconsin's expenditures of state moneys; (e) a biennial
financial audit of the Higher Education Aids Board's contract for dental education;
(f) a biennial performance evaluation audit of the Division of Gaming in DOA; and
(g) a biennial performance evaluation audit of the state lottery.
The bill requires LAB to perform all of those audits at the discretion of the state
auditor or as JLAC directs, not on an annual or biennial basis. The bill also adds an
annual financial audit of the University of Wisconsin System.
3. The bill eliminates a number of LAB audits under current law, including (a)
an annual financial audit of the Division of Gaming; (b) a biennial financial audit of
cash on hand and securities deposited in the state treasury or otherwise accounted
for by the secretary of administration; (c) a biennial financial audit of DOA's books
compared to moneys in the vaults of the state treasury or other state depositories;
(d) a financial audit of moneys transferred from a school district's capital
improvement fund; (e) unspecified audits to be performed at the direction of the
Government Accountability Board; and (f) several one-time performance evaluation
and financial audits that have expired or been completed.
4. Current law requires LAB to monitor state agencies' purchases and report
to JLAC at least once every five years concerning the extent to which agency
purchases were of materials, supplies, or equipment manufactured outside of the
United States. The bill replaces that five-year reporting requirement with the

requirement that LAB make such a report to JLAC at the state auditor's discretion
or as JLAC directs.
5. Current law requires LAB to maintain a toll-free hotline to receive reports
of fraud, waste, and mismanagement in state government. LAB must relay those
reports to an LAB employee or an appropriate state agency for investigation. LAB's
records concerning the identity of a person who makes a report to the hotline are
confidential. Under the bill, LAB must also keep such a report and investigation,
including any information arising from the investigation, confidential while the
investigation is pending, except as necessary to conduct the investigation.
6. Finally, under current law, certain officials and state agencies may have
access to Wisconsin taxpayers' tax records maintained by the Department of
Revenue. The bill authorizes LAB and its employees to have access to those tax
records to the extent necessary to carry out LAB's duties under the law.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB27,1 1Section 1. 13.53 (2) (d) of the statutes is repealed.
SB27,2 2Section 2. 13.94 (1) (a) of the statutes is repealed.
SB27,3 3Section 3. 13.94 (1) (b) of the statutes is amended to read:
SB27,4,64 13.94 (1) (b) Audit At the state auditor's discretion or as the joint legislative
5audit committee directs, audit
the records of every state each department, board,
6commission, independent agency or authority at least once each 5 years and audit
7the records of other departments as defined in sub. (4) when the state auditor deems
8it advisable or when he or she is so directed and, in conjunction therewith, reconcile
9the records of the department audited with those of the department of
10administration
. Audits of the records of a county, city, village, town, or school district
11may be performed only as provided in par. (m). Within 30 days after After completion
12of any such audit under this paragraph, the bureau shall file with the chief clerk of
13each house of the legislature, the governor, the department of administration, the
14legislative reference bureau, the joint committee on finance, the legislative fiscal

1bureau, and the department audited, a detailed report thereof of the audit, including
2its the bureau's recommendations for improvement and efficiency and including
3specific instances, if any, of illegal or improper expenditures. The chief clerks shall
4distribute the report to the joint legislative audit committee, the appropriate
5standing committees of the legislature, and the joint committee on legislative
6organization.
SB27,4 7Section 4. 13.94 (1) (br) 1. of the statutes is amended to read:
SB27,4,218 13.94 (1) (br) 1. Maintain a toll-free telephone number with voice mail at the
9bureau's office to receive reports of fraud, waste, and mismanagement in state
10government. Except as provided in subd. 2., the bureau shall relay these reports to
11the appropriate bureau employee for investigation. If the bureau has a bureau
12employee investigate the report, the employee may, subject to subd. 3., consult with
13any state department, board, commission, or independent agency for any purpose
14related to the investigation. The bureau shall publicize the toll-free telephone
15number on the bureau's Web Internet site. The bureau shall maintain records that
16permit the release of information provided by informants while protecting the
17identity of the informant. Any records maintained by the bureau that relate to the
18identity of informants shall be only for the confidential use of the bureau in the
19administration of this section, unless the informant expressly agrees to release the
20records. Appearance in court as a witness shall not be considered consent by an
21informant to release confidential records maintained by the bureau.
SB27,5 22Section 5. 13.94 (1) (br) 2. of the statutes is amended to read:
SB27,5,323 13.94 (1) (br) 2. In lieu of requiring a bureau employee to conduct an
24investigation of a report received under subd. 1., the bureau may refer a report to a
25state department, board, commission, or independent agency for investigation. The

1state department, board, commission, or independent agency shall conduct the
2investigation and deliver the results of the investigation to the bureau in a timely
3manner.
SB27,6 4Section 6. 13.94 (1) (br) 3. of the statutes is created to read:
SB27,5,85 13.94 (1) (br) 3. The bureau shall at all times before an investigation of a report
6received under subd. 1. is completed keep confidential the report and investigation
7and any information arising from the investigation, except as necessary to conduct
8the investigation.
SB27,7 9Section 7. 13.94 (1) (c) of the statutes is amended to read:
SB27,5,1610 13.94 (1) (c) Audit At the state auditor's discretion or as the joint legislative
11audit committee directs, audit
the central accounting records of the department of
12administration at least once every 2 years. A detailed report of such audit shall be
13filed as provided by par. (b), and copies shall be provided to each member or
14member-elect of the legislature and shall be available in limited number to the
15public. The bureau shall also prepare a summary of such audit report, for
16distribution in the same manner as the Wisconsin Blue Book under s. 35.84.
SB27,8 17Section 8. 13.94 (1) (d) of the statutes is repealed.
SB27,9 18Section 9. 13.94 (1) (dg) of the statutes is amended to read:
SB27,5,2119 13.94 (1) (dg) Annually, by October 1 At the state auditor's discretion or as the
20joint legislative audit committee directs
, perform a financial audit of expenditures
21made under the grants for dental services under s. 250.10.
SB27,10 22Section 10. 13.94 (1) (dm) of the statutes is amended to read:
SB27,6,223 13.94 (1) (dm) Annually At the state auditor's discretion or as the joint
24legislative audit committee directs
, perform a financial audit of the state fair park

1board and of any private corporation with which the board contracts under s. 42.01
2(4) (b).
SB27,11 3Section 11. 13.94 (1) (eg) of the statutes is amended to read:
SB27,6,94 13.94 (1) (eg) Annually conduct a financial audit of the division of gaming in
5the department of administration and biennially
At the state auditor's discretion or
6as the joint legislative audit committee directs,
conduct a performance evaluation
7audit of the division of gaming in the department of administration. The legislative
8audit bureau shall file a copy of each audit report under this paragraph with the
9department of justice and with the distributees specified in par. (b).
SB27,12 10Section 12. 13.94 (1) (em) of the statutes is amended to read:
SB27,6,1911 13.94 (1) (em) Annually conduct a financial audit of the state lottery, and, to
12the extent of the department of revenue's participation, of any multijurisdictional
13lotteries in which the state participates under ch. 565, and biennially at the state
14auditor's discretion or as the joint legislative audit committee directs,
conduct a
15performance audit of the state lottery and, to the extent of the department of
16revenue's participation, of those multijurisdictional lotteries, as provided in s. 565.37
17(1). The legislative audit bureau shall file a copy of each audit report under this
18paragraph with the department of justice and with the distributees specified in par.
19(b).
SB27,13 20Section 13. 13.94 (1) (f) of the statutes is repealed.
SB27,14 21Section 14. 13.94 (1) (g) of the statutes is repealed.
SB27,15 22Section 15. 13.94(1) (k) of the statutes is repealed.
SB27,16 23Section 16. 13.94 (1) (L) of the statutes is amended to read:
SB27,7,524 13.94 (1) (L) Monitor and review purchases and purchasing procedures of state
25departments, boards, commissions and independent agencies, and, at the state

1auditor's discretion or as the joint legislative audit committee directs,
report to the
2joint legislative audit committee at least once every 5 years concerning the extent to
3which state departments, boards, commissions and independent agencies purchased
4purchase materials, supplies, or equipment manufactured outside of the United
5States since the date of the preceding report.
SB27,17 6Section 17. 13.94 (1) (mm) of the statutes is repealed.
SB27,18 7Section 18. 13.94 (1) (n) of the statutes is repealed.
SB27,19 8Section 19. 13.94 (1) (q) of the statutes is repealed.
SB27,20 9Section 20. 13.94 (1) (t) of the statutes is created to read:
SB27,7,1210 13.94 (1) (t) Annually conduct a financial audit of the University of Wisconsin
11System. The legislative audit bureau shall file a copy of each audit report under this
12 paragraph with the distributees specified in par. (b).
SB27,21 13Section 21. 13.94 (1s) (a) of the statutes is amended to read:
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