§ 45-10-5.3 - Failure to file audit report – Enforcement and penalty.
SECTION 45-10-5.3
§ 45-10-5.3 Failure to file audit report– Enforcement and penalty. – (a) Failure to file the duplicate audit report as prescribed in § 45-10-4shall result in a sanction being imposed equal to ten thousand dollars($10,000) per month or a monthly sanction equal to one-twelfth (1/12) of theproduct of one percent (1%) of the general revenue sharing funds received bythe municipality from the state in the prior fiscal year, whichever is greater.This penalty shall be calculated from the due date of the audit or any approvedextension date until the date the report is filed as required. The penaltyfunds shall be paid by the municipality to the general treasurer who shalldeposit the funds into a restricted receipts account. If the municipality failsto promptly pay the penalty, the general treasurer is authorized to withholdthose amounts from state aid otherwise due to the municipality uponcertification by the auditor general of the amount of the penalty. Both theauditor general and the general treasurer shall have standing to bring anaction in the Providence County superior court to enforce payment of thepenalty provided for under this section.
(b) In addition to the penalty for late filing, if themunicipality fails to comply with the provisions of this chapter by filing theaudit report as required under this chapter, the auditor general, in his or herdiscretion, is authorized to provide for the completion of the audit. In thatevent, the auditors and/or the municipality shall transmit the audit workpapersto the auditor general within ten (10) days of his or her request. Theworkpapers shall include, but not be limited to, the work product customarilygenerated in the course of an audit under generally accepted auditing standardsand practices, as well as any papers, schedules, or documents created orprovided by or to the auditors in the conduct of audit field work. Themunicipality shall bear the cost of the audit to be completed by the auditorgeneral or an independent audit firm engaged by the auditor general to completethe audit. The payment of this cost shall be deducted from state aid fundsotherwise due to the municipality.
(c) If the auditor and/or the municipality refuses totransmit the workpapers as provided in this section, the auditor general shallhave standing to petition the presiding justice of the Rhode Island superiorcourt for an order compelling the immediate transmission of the workpapers tothe auditor general. Upon the filing of that petition, the court shall schedulea hearing on an expedited basis, no more than ten (10) days after the filing ofthe petition. The court shall order the transmission of the workpapers and thedraft of the audit report, if any, to the auditor general upon the auditorgeneral's certification to the court that:
(1) The audit report was not completed and filed as requiredunder the law;
(2) Requests for extension to file were denied by the auditorgeneral; and
(3) The auditors and/or the municipality have failed orrefused to transmit the workpapers and/or preliminary draft of the report.
(d) Failure to transmit the workpapers and/or draft auditreport after the issuance of a court order will constitute criminal contempt ofcourt, and will empower the court to impose any and all criminal sanctionsincluding imprisonment and/or monetary penalties consistent with the existingpower and authority of the superior court to impose those sanctions under law.Any monetary penalty imposed shall be paid into the restricted receipts accountestablished pursuant to this section for the payment of late penalties.
(e) The state controller shall establish the restrictedreceipts account for the deposit of penalties and costs under this section, andthe disbursement of funds from this account shall be for the purpose oftraining government finance personnel, and to reimburse and/or pay audit costsand the cost of monitoring and enforcing compliance with this chapter.Disbursements from the account shall require the authorization of the auditorgeneral.