Chapter 04 - Territorial Audit Office

Chapter 04 - Territorial Audit Office

4.0401 Definitions.

As used in this chapter unless the context requires otherwise:

(a) “Agencies” or “agency” means any board, department, office, commission, committee, or agency created by the Constitution, statutes, or executive orders of the Governor.

(b) “Audit” means an independent examination of books, performance, documents, records and other evidence relating to the receipt, possession, obligation, disbursement. Expenditure, or use of public funds by any agency or any activity of any agency or relating to any contract or grant to which any agency is a party, including any operations relating to the transactions. “Audit” includes financial compliance audits, economy and efficiency audits, and program results audits or any combination thereof as the territorial auditors may deem appropriate.

(c) “Investigation” means an inquiry into specified acts or allegations of impropriety, malfeasance, misfeasance, or nonfeasance in the obligation, expenditure, receipt or use of public funds or into specified financial transactions or practices which may involve impropriety, malfeasance, misfeasance, or nonfeasance.

(d) “Public funds” means any money, credit, or gifts in kind, from whatever source derived, used directly or indirectly for the support of any agency.

4.0402 Office established.

There is established as an independent agency a territorial audit office, which shall be under the direction of the Territorial Auditor. The office includes the Territorial Auditor and his staff.

4.0403 Territorial auditor.

The Territorial Auditor must be a person experienced and competent in governmental auditing, financial management, or government operations and budgeting. The Territorial Auditor shall be a certified public accountant or a certified internal auditor holding a current certificate from any state of the United States.

4.0404 Appointment and term of office.

The Governor appoints the Territorial Auditor, who shall be confirmed by the Legislature. The Territorial Auditor shall serve a term of 4 years from the date of his appointment by the Governor. No person shall serve as Territorial Auditor for more than 8 years, whether consecutive or not. No person shall serve as Territorial Auditor, or as Acting Territorial Auditor without being confirmed by the Legislature, for more than 180 days, whether consecutive or not, in any calendar year.

4.0405 Removal.

The Territorial Auditor can be removed from office only by the Governor and with the affirmative vote of two-thirds of the members of each House of the Legislature, and only for one or more of the following causes: conviction of a misdemeanor or a felony, mental or physical incapacity, malfeasance, misfeasance, nonfeasance or unethical actions or conduct, or pursuant to subsection 4.0418 of this chapter.

4.0406 Salary.

The salary of the Territorial Auditor shall not be reduced during his term of office.

4.0407 Employees.

Other than contract employees, such assistants and other staff as may be necessary shall be career employees within the limits of appropriations.

4.0408 Outside specialists may be hired.

The Territorial Auditor may obtain the services of independent certified public accountants, qualified management consultants or other professional persons, as he deems necessary to assist him in carrying out his duties. Independent specialists shall be used for any audit involving the territorial audit office, or with respect to which the Territorial Auditor or the territorial audit office has a conflict of interest, including an audit of any agency, contract, or grant for which the Territorial Auditor has had management responsibility or in which he was employed during 2 years preceding the time period covered by the audit, or during the 2 years preceding or subsequent to the audit time period.

4.0409 Annual plan.

The annual workplan of the territorial audit office may be amended at any time by the Territorial Auditor within the limits of available appropriations, without advance notice or permission from any person or agency.

4.0410 Clearance of all auditing services required by government agencies.

All audits required for or sought by a government agency shall be cleared through the territorial audit office.

4.0411 Audit standards.

(a) The audit standards shall be consistent with the provisions of this act and with generally accepted auditing standards. The audit standards shall incorporate the standards for audit of governmental organizations. Programs, activities, and functions published from time to time by the United States General Accounting Office, including those standards issued by the American Institute of Certified Public Accountants referred to therein.

(b) All audits conducted or caused to be conducted by the Territorial Auditor shall be performed with the highest degree of professionalism and with strict avoidance of any degree of partisanship or bias.

4.0412 Audit procedures and requirements.

(a) At the conclusion of an audit, the Territorial Auditor or his designee shall discuss the audit with the officials whose agency, grant, contract, or activity was subjected to the audit and submit to them a list of his proposed findings which may be included in the audit report. The preliminary audit and proposed findings shall not be made public prior to the receipt of comments from the agencies solicited. If the officials are not available for personal receipt of the list of audit findings, then delivery shall be deemed made when it is delivered to the agency. The agency shall submit to the Territorial Auditor within 30 days after the receipt of the list of findings its written statement of explanation or rebuttal concerning any of the adverse or critical audit findings, including any corrective action to be taken to preclude a recurrence of any adverse findings. The Territorial Auditor shall publish the substance of the agency response in the audit report.

(b) An audit report shall make special mention of:

(1) any apparent violation of laws within the scope of the audit; and

(2) any improper expenditures, any improper accounting procedures, all failures to properly record financial transactions, and all other inaccuracies, irregularities, shortages, and defalcations.

(c) Specific allegations naming a person involved in improper or illegal acts found in connection with an audit shall be included in a separate confidential special report which

shall be transmitted only to the attorney general and federal agencies when applicable.

4.0413 Audit reports.

Each report on a financial and compliance audit or an economy and efficiency performance audit must include a statement of the scope of the audit, the findings resulting from the audit the underlying cause and the significance thereof, and an explanation or rebuttal submitted by the agency audited. A copy of each report must be submitted to the Governor, the President of the Senate, the Speaker of the House, and the head of the audited agency. If the audit discloses an apparent violation of a criminal statute, a copy of the report shall also be submitted to the Attorney General. Audit reports are public records.

4.0414 Investigation reports.

Each report on an investigation must be submitted to the Governor, the President of the Senate, the Speaker of the House, the head of the agency or agencies investigated, and the Attorney General.

4.0415 Annual report.

The Territorial Auditor shall report on his activities and findings to the Legislature and the Governor at least once every calendar year, and this report shall be made public.

4.0416 Funding for the territorial audit office.

Adequate funds will be provided to allow the territorial auditor to carry out the responsibilities of the territorial audit office.

4.0417 Budget.

(a) The Territorial Auditor shall prepare a budget in the same form as other agencies of the American Samoa government and shall be subject to the same budget ceilings. The budget of the Territorial Audit Office shall be included in the Governor’s budget submission to the Legislature. The Territorial Auditor shall have authority within budget limitation to approve expenditures.

(b) If it should be necessary to obtain funds in excess of the balance in the budget account, a supplemental budget request shall be submitted to the Governor for presentation to the Legislature.

4.0418 Prohibitions.

(a) The Territorial Auditor and the managers may not;

(1) become a candidate for elective public office;

(2) hold any other public office, by appointment or otherwise, except for appointments on governmental advisory boards or study commissions or as otherwise expressly authorized by law;

(3) be actively involved in the affairs of a political party;

(4) actively participate in a political campaign for a public office;

(5) hold a legal, equitable, creditor or debtor interest in a partnership, firm, or other entity which contracts with the territorial audit office during his term of office;

(6) have a direct or indirect financial or economical interest in the transaction of an agency audited by the territorial audit office during his term of office (written disclosure of any such interest and formal disqualification from participation in a post audit involving that agency may constitute compliance with this paragraph if the interest is either insubstantial or results directly from an interest held before assuming the position in the territorial audit office);

(7) conduct or supervise a post audit of any agency for which he was responsible or by which he was employed or with which he contracted during the preceding two years; or

(8) make or report publicly any charges of nonfeasance, misfeasance or malfeasance in office of a public official or illegal conduct of a person unless he knows of reasonable grounds, based on accepted auditing and accounting standards, for such charges.

(b) A violation of this section is cause for removal from office.

4.0419 Access to records.

The Territorial Auditor, or an employee or contractor of the Territorial Audit Office so designated in writing by the Territorial Auditor, shall have the power to inspect and make copies of books, records or files of all territorial agencies, and any and all instruments and documents pertaining to the functions of the Territorial Audit Office. This includes computerized records. If such records are classified as confidential by any laws of the territory, the territorial audit office shall be required to maintain their confidentiality and to use such records only for the purpose of developing general statistics and evaluations or other necessary findings.

4.0420 Transition.

The existing Territorial Audit Office is terminated 10 days after the effective date of this act, and all office space, appropriations, equipment and records of the existing territorial audit office are then transferred to the newly created Territorial Audit Office. Within 10 days of the effective date of this act, the Governor shall designate a person as Territorial Auditor or acting Territorial Auditor to take office upon the termination of the existing Territorial Audit Office. Within 30 days after the new Territorial Auditor or acting Territorial Auditor takes office, persons to serve as section managers and other employees must be appointed, and a workplan for the remainder of the current fiscal year must be prepared.