GENERAL ASSEMBLY OF NORTH CAROLINA
1997 SESSION
S.L. 1997-71
AN ACT TO AMEND THE STATUTES ON SPECIAL RESPONSIBILITY CONSTITUENT INSTITUTIONS IN THE UNIVERSITY OF NORTH CAROLINA SYSTEM TO CLARIFY THE ROLE OF THE OFFICE OF THE STATE AUDITOR.
The General Assembly of North Carolina enacts:
Section 1. G.S. 116-30.1 reads as rewritten:
"§ 116-30.1. Special responsibility constituent institutions.
The Board of Governors of The University of North Carolina,
acting on recommendation made by the President of The University of North
Carolina after consultation by him with the State Auditor, may designate one or
more constituent institutions of The University as special responsibility
constituent institutions. That designation shall be based on an express
finding by the Board of Governors that each institution to be so designated has
the management staff and internal financial controls that will enable it to
administer competently and responsibly all additional management authority and
discretion to be delegated to it. The Board of Governors, on
recommendation of the President, shall adopt rules prescribing management
staffing standards and internal financial controls and safeguards, including
the lack of any significant exceptions or audit findings in the annual
financial audit by the State Auditor's Office, that must be met by a
constituent institution before it may be designated a special responsibility
constituent institution and must be maintained in order for it to retain that
designation. These rules shall not be designed to prohibit participation
by a constituent institution because of its size. These rules shall
establish procedures for the President and his staff to review the annual
financial audit reports or any other reports, special reports,
electronic data processing reports, or performance reports reports,
management letters, or any other report issued by the State Auditors Auditor's
Office for each special responsibility constituent institution. The
President shall take immediate action regarding reported weaknesses in the
internal control structure, deficiencies in the accounting records, and
noncompliance with rules and regulations. In any instance where such
audit exceptions significant findings are identified, the President
shall notify the Chancellor of the particular special responsibility
constituent institution that such exceptions must be resolved to the
satisfaction of the State Auditor and the institution must make
satisfactory progress in resolving the findings, as determined by the
President of The University University, after consultation with the
State Auditor, within a three-month period commencing with the date of
receipt of the published financial audit report. report, any other
audit report, or management letter. If the exceptions are not
satisfactorily resolved satisfactory progress is not made within a
three-month period, the President of The University shall recommend to the
Board of Governors at its next meeting that the designation of the particular
institution as a special responsibility constituent institution be terminated
until such time as the exceptions are resolved to the satisfaction of the
State Auditor and the President of The University of North Carolina. Carolina,
after consultation with the State Auditor. However, once the
designation as a special responsibility constituent institution has been
withdrawn by the Board of Governors, reinstatement may not be effective until
the beginning of the following fiscal year at the earliest. Any actions
taken by the Board of Governors with respect to withdrawal or reinstatement of
an institution's status as a special responsibility constituent institution shall
be reported immediately to the Joint Legislative Education Oversight Committee.
The rules established under this section shall include review
by the President, after and consultation with the State Auditor,
the Director of the Office of State Personnel, and the Director of the Division
of State Purchasing and Contracts in ascertaining whether or not a constituent
institution has the management staff and internal financial controls to
administer the additional authorities authorized under G.S. 116-30.2, 116-30.4,
and 143-53.1. Such review and consultation must take place no less frequently
than once each biennium."
Section 2. This act is effective when it becomes law.
In the General Assembly read three times and ratified this the 14th day of May, 1997.
s/ Marc Basnight
President Pro Tempore of the Senate
s/ Harold J. Brubaker
Speaker of the House of Representatives
s/ James B. Hunt, Jr.
Governor
Approved 9:53 a.m. this 22nd day of May, 1997