h_sa_2017a_2017-03-29t13:31:46z0 Hearing Summary

Date: 03/29/2017

Location: LSB A

01:32 PM -- HB17-1223



Representative Kraft-Tharp and Representative Saine, co-prime bill sponsors, presented House Bill 17-1223. Recommended by the Legislative Audit Committee, the bill directs the Office of the State Auditor (OSA) to establish and administer a telephone number, fax number, email address, mailing address, or internet-based form to allow people to report allegations of fraud committed by a state employee or state contracted individual. No person who submits an allegation of fraud to the hotline is required to submit their name or contact information, and the OSA cannot publically disclose the identity of any individual who contacts the hotline without express permission. This restriction does not apply when the OSA makes a disclosure to a law enforcement agency, a district attorney, the Attorney General in connection with a criminal investigation or fraud by a Medicaid provider or contractor, or the Department of Health Care Policy and Financing in cases involving a Medicaid recipient.



After an initial screening of a fraud allegation, the OSA must consult and coordinate with the affected state agency. After receiving a referral from the OSA, it is the responsibility of the state agency to take appropriate action in response to the referral and report back to the OSA. At the request of a state agency, the OSA can either participate in or conduct an investigation of a hotline call. In these cases, the following requirements apply:



• at all times the OSA has access to all of the information maintained by the agency directly related to the scope of the investigation;

• the OSA must report the results of the investigation to the head of the affected agency;

• if the investigation finds evidence of alleged fraud that exceeds $100,000, the OSA must report the results of the investigation to the Legislative Audit Committee; and

• the OSA must immediately report any illegal transactions or misuse or embezzlement of public funds or property to a law enforcement agency, a district attorney, or the Attorney General.



The OSA is required to publicize the existence and purpose of the hotline on the official its official website. Additionally, the OSA must prepare and maintain workpapers to document the purpose and activities of their office in connection with hotline calls and investigations. Commencing in FY 2018-19, the OSA must prepare an annual report to the Legislative Audit Committee summarizing activity related to the fraud hotline.



No disciplinary action can be taken against a state employee or employee of an entity under contract with the state for the disclosure of information to the fraud hotline. This does not apply to an employee who disclosed false information.



Representative Saine provided a handout to the committee (Attachment A).



17HouseState0329AttachA.pdf



01:34 PM -- Dianne Ray, State Auditor, testified on the bill. Auditor Ray answered questions from the committee.





01:37 PM



Representative Kraft-Tharp explained amendment L.001 (Attachment B). Representative Saine answered questions from the committee. Auditor Ray returned to the table to answer additional questions from the committee.



17HouseState0329AttachB.pdf

01:42 PM



Representative Kraft-Tharp and Representative Saine made concluding remarks about the bill.