HB 5399 — To modify the state auditing practices of the volunteer and part-volunteer fire departments

Any grantee failing to file a required report or sworn statement of expenditures within the two-year period asperiod as provided in this section for state grant funds is barred 4 CS for HB 5399 from subsequently receiving state grants until the grantee has filed the report or sworn statement of expenditures and is otherwise in compliance with the provisions of this section.

All grantors shall provide a list of grantees and subgrantees to the State Auditor and all other information regarding state grant funds and grantees as required by law or rule.

(e)(1) The state agency grantor administering the state grant shall notify the grantee of the Intr HB 2024R3172 reporting requirements set forth in this section.

Confirmation may be accomplished by accessing the computerized database provided for in thisprovided for in this section.

5 CS for HB 5399 (4) The grantor and State Auditor shall maintain copies of reports and sworn statements of expenditures required by this section and make the reports or sworn statements of expenditures available for public inspection, as well as for use in audits and performance reviews of the grantor.

(5) Stop payment procedures – The State Auditor, in cooperation with state grant-making agencies,agencies grantors, shall promulgate legislative, procedural, and interpretive rules in accordance with the provisions of §29A-3-1 et seq.

Intr HB 2024R3172 and (D) Procedures for notification to the grantee or subgrantee of the issuance of a stop payment order, the lifting of a stop payment order, and any other related information.

(6) Informal Conference – Whenever a grantor agency reasonably believes that state grant funds are subject to recovery, the grantor agency shall provide the grantee the opportunity for at least one informal conference to determine the facts and issues and to resolve any conflicts before taking any formal recovery actions.

(7) Formal Procedures for Recovery – (A) If a grantor agency determines that certain state grant funds are to be recovered, then, prior to taking any action to recover the state grant funds, the grantor agency shall provide the grantee of the funds a written notice of the intended recovery.

(B) A grantee shall have 35 days from the receipt of the notice required in paragraph (A) of this subdivision to return the state grant funds or request a hearing in writing to show why recovery is not justified or proper.

6 CS for HB 5399 (C) If a grantee requests a hearing pursuant to paragraph (B) of this subdivision, then:

of this code, and be presided over by the grantor agency head director or their designee;

(D)(i) If a grantee requests a hearing pursuant to paragraph (B) of this subdivision then the grantor agency may not take any action of recovery until at least 35 days after the grantor agency Intr HB 2024R3172 has issued a final recovery order pursuant to the requirements of paragraph (C) of this subdivision.

(ii) If a grantee does not return the state grant funds or request a hearing as permitted in paragraph (B) of this subdivision, then the grantor agency may proceed with recovery of the state grant funds identified in the notice issued pursuant to the requirements of paragraph (A) of this subdivision, at any time after the expiration of the 35 day request period established in paragraph (B) of this subdivision.

(8) Recovery of State Grant Funds by Grantor Agency – Any state grant funds which have been misspent or are being improperly held are subject to recovery by the grantor agency which made the grant.

The grantor agency making the grant shall take affirmative and timely action to recover all misspent or improperly held state grant funds.

In order to effectuate the recovery of such state grant funds, the grantor agency making the grant may use any one or a combination of the following:

(A) Offset the amounts against existing state grants or future state grants to be made by the grantor agency making the recovery;

7 CS for HB 5399 (B) Request offsets of the amounts from existing state grants or future state grants to be made by other grantor agencies;agencies grantors;

(D) Remove the grantee from the grantor agency’s programs and debar the grantee’s participation in future state grant programs for a period not to exceed three years or until removed from the West Virginia debarred list;

or (E) Request further action under subdivision (9) of this subsection to recover state grant funds and otherwise enforce all applicable laws.

(9) Recovery of State Grant Funds – The Attorney General, independently or on behalf of the State Auditor, may take any action within his or her authority to recover any state grant funds which have been misapplied or are being improperly held and have all the powers of collection established in this act in addition to any other powers authorized by law, including, without Intr HB 2024R3172 limitation, to file lawsuits to recover state grant funds.

(10) All state grant funds, whose use is not restricted by law or otherwise appropriated, which are recovered by the grantor, or State Auditor, and expired or unexpended state grant funds remaining at state grant completion or termination, shall be deposited in a special revenue fund, which is hereby created and established in the State Treasury to be known as the Grant Recovery Fund.

State granting agencies Grantors shall not impose additional or inconsistent requirements unless specifically required by state or federal law.

8 CS for HB 5399 (12) Conflicts of interest – The State Auditor shall adopt rules regarding conflict of interest policies for state grants.

Grantors, grantees, and subgrantees must disclose in writing any potential conflicts of interest to the grant applicant prior to awarding the state grant.

(f)(1) Any state agency grantor administering a state grant shall, in the manner designated by the Statethe State Auditor, notify the Statethe Auditor ofState Auditor of the maximum amount of funds to be disbursed, the identity of the grantee authorized to receive the funds, the grantee’s fiscal year and federal employer identification number, and the purpose and nature of the state grant within 30 days of making the state grant or authorizing the disbursement of the funds, whichever is later.

(3) The State Auditor shall maintain a the West Virginia debarred list identifying grantees who have failed to Intr HB 2024R3172 file reports and sworn statements required by this section.

The list shall be in the form of a computerized database that shall be accessible by state agencies grantors and the public over the Internet, unless public disclosure would violate federal law or regulations.

9 CS for HB 5399 (j) Prohibition on use of state grant funds for prohibited political activity – (1) For the purpose of this section, “prohibited"prohibited political activity”activity" means activity directed toward the success or failure of a political party, candidate for political office, or ballot issue, and includes, without limitation, express advocacy for the election or defeat of a political party, candidate, or ballot issue.

(2) Grantors, grantees, subgrantees, and personnel thereof shall not knowingly use state grant funds, or goods or services purchased with state grant funds, to engage, either directly or indirectly, in a prohibited political activity.

(3) Grantors, grantees, subgrantees and personnel thereof shall not be knowingly compensated from state grant funds for time spent engaging in a prohibited political activity.

§ 501(c)(4) receiving a state grant from the state from engaging in any federally permissible activity regarding advocacy, indirect and direct lobbying, and political activity, provided Intr HB 2024R3172 that the specific funds acquired by a state grant from the state or grantor shall not be used for those activities that are permitted by federal law but prohibited by this section.

(5) A grantor, grantee, subgrantee, or personnel thereof who knowingly uses state grant funds for prohibited political activity in violation of this section is guilty of a felony and, upon conviction thereof, shall be fined not less than $1,000 nor more than $5,000 or imprisoned in a state correctional facility for not less than one year nor more than five years, or both fined and imprisoned.

(k) Reporting – Effective on or before December 31, 20222022, and every three years thereafter, the State Auditor shall submit to the Joint Legislative Committee on Government and Finance a report that demonstrates the efficiencies, cost savings, and reductions in fraud, waste and abuse.

10 CS for HB 5399 (3) Any savings realized as a result of the implementation of this act;

and (6) The overall number of state grants awarded that given year and the total amount of dollars awarded by each state agency.agency grantor.

§12-4-14b.§12-4-14a.

Workers' Compensation Subsidy for Volunteer Fire Departments;

creation of program;

Auditor to administer.

[Repealed.] §12-4-14b.

Intr HB 2024R3172 “Formula distribution” means a distribution of money to volunteer and part-volunteer fire companies or departments made pursuant to §33-3-14d, §33-3-33, and §33-12C-7 of this code;

— Every volunteer and part-volunteer fire company or department seeking to receive formula distributions or an equipment and training grant shall file copies of bank statements and check images from the company’s or department’s state funds 11 CS for HB 5399 accounts for the previous calendar year with the Legislative Auditor on or before February 1 of each year.

(d) State Auditor Scope of Audits- Whenever the State Auditor performs an audit of a volunteer or part-volunteer fire company or department for any purpose, the Auditor shall also Intr HB 2024R3172 conduct an audit of other state funds received by the company or department pursuant to §33-3- 14d, §33-3-33, and §33-12C-7 of this code.

12 CS for HB 5399 (2) Failure to cooperate with a review or audit conducted by the Legislative State Auditor;

Prior to each subsequent quarterly disbursement of funds by the Treasurer, the Legislative State Auditor shall notify each delinquent company or department twice Intr HB 2024R3172 per each quarter in which the company or department is delinquent.

— If, in the course of an audit or review by the Legislative State Auditor, a volunteer or part-volunteer fire company or department fails to provide documentation of its accounts and expenditures in response to a request of the Legislative State Auditor, the Legislative State Auditor shall notify the State Treasurer who shall withhold payment of any amount that would otherwise be distributed to the company or department under the provisions of §33-3-14d, §33-3-33, and §33-12C-7 of this code, from any other state funding source until the 13 CS for HB 5399 Legislative State Auditor informs the State Treasurer that the company or department has cooperated with the review or audit.

If the Treasurer receives notice that the volunteer or part-volunteer fire company or department has come into compliance in less than one year from the date of deposit into this special revenue account, then the Treasurer shall release Intr HB 2024R3172 and distribute the withheld amounts to the company or department, except that any interest that has accrued thereon shall be credited to the general revenue of the state.

— If the Legislative State Auditor determines that a volunteer or part-volunteer fire company or department has used formula distribution money for purposes not 14 CS for HB 5399 authorized by §8-15-8b of this code or has used equipment and training grant money for purposes not authorized by the grant program, the Legislative State Auditor shall give a written notice of noncompliance to the company or department.

(k) Unlawful misuse of fire department property- Any person that is convicted of petit or grand larceny pursuant to §61-3-13 of this code or embezzlement pursuant to §61-3-20 of this code, for the unlawful fraudulent conversion or taking of any money or other property of any volunteer or part-volunteer fire department, in addition to any other criminal penalty invoked by a Intr HB 2024R3172 court, shall be required by the court to pay restitution to the fire department double the amount of the value of any money or other property lost or taken.

15 CS for HB 5399 “NOTICE- Any person convicted of theft or embezzlement of any money or other asset of the fire department, in addition to other penalties incurred by law, shall be required to reimburse the fire department double the amount of the value of the property taken.

Intr HB 2024R3172 (2) After June 30, 2005, through December 31, 2005, for the purpose of providing additional revenue for volunteer fire departments, part-volunteer fire departments and to provide additional revenue to the Public Employees Insurance Agency and municipal pension plans, there is hereby authorized and imposed on and after July 1, 2005, on the policyholder of any fire insurance policy or casualty insurance policy issued by any insurer, authorized or unauthorized, or by any risk retention group, a policy surcharge equal to one percent of the taxable premium for each such policy.

16 CS for HB 5399 (3) After December 31, 2005, for the purpose of providing additional revenue for volunteer fire departments and part-volunteer fire departments, there is hereby authorized and imposed on the policyholder of any fire insurance policy or casualty insurance policy issued by any insurer, authorized or unauthorized, or by any risk retention group, a policy surcharge equal to fifty-five one hundredths of one percent of the taxable premium for each such policy.

(c) Any person failing or refusing to collect and remit to the commissioner any policy surcharge and whose surcharge payments are not postmarked by the due dates for quarterly filing Intr HB 2024R3172 is liable for a civil penalty of up to $100 for each day of delinquency, to be assessed by the commissioner.

The net proceeds of this portion of the tax and the interest thereon, after appropriation by the Legislature, shall be distributed quarterly on the first day of the 17 CS for HB 5399 months of January, April, July, and October to each volunteer fire company or department on an equal share basis by the State Treasurer.

(A) The names and addresses of all volunteer and part-volunteer fire companies and Intr HB 2024R3172 departments within the state which meet the eligibility requirements established in §8-15-8a of this code during the preceding quarter;

18 CS for HB 5399 (C) A full accounting of each volunteer and part-volunteer fire company and department eligible to receive a distribution under this section’s revenues and expenditures for the last two calendar years;

(e) (f) Notwithstanding any other provision of this subsection, each volunteer and part- volunteer fire company and department shall implement the State Auditor’s West Virginia Checkbook fiscal reporting system on or before January 1, 2026, in order to remain eligible to receive any funds pursuant to this section.

(f)(e) (g)The allocation, distribution, and use of revenues provided in the Fire Protection Fund are subject to the provisions of §8-15-8a and §8-15-8b of this code.

Intr HB 2024R3172 NOTE:

The purpose of this bill is to modify state auditing practices and requirements to facilitate efficient financial management of volunteer and part-volunteer fire departments;

directing state audit functions of these departments to the State Auditor;

freezing state funding to any fire departments that fail to cooperate with a state audit;

requiring that both the fire chief and treasurer sign any sworn statements required to be submitted to the state auditor;

requiring that volunteer and part-volunteer fire departments be audited at least once every 5 years;

providing for restitution be paid to volunteer and part-time fire departments double the amount of property unlawfully stolen or embezzled;

requiring posting a notice of this penalty in volunteer and part-volunteer fire departments;

and establishing a pilot project to evaluate how volunteer and part-volunteer fire departments implement the State Auditor’s Checkbook accounting system.

Strike-throughs indicate language that would be stricken from a heading or the present law and underscoring indicates new language that would be added.