System of accounting and reporting
Sec. 2. The state board of accounts shall formulate, prescribe, and install a system of accounting and reporting in conformity with this chapter, which must comply with the following:
(1) Be uniform for every public office and every public account of the same class and contain written standards that an entity that is subject to audit must observe.
(2) Exhibit true accounts and detailed statements of funds collected, received, obligated, and expended for or on account of the public for any and every purpose whatever, and by all public officers, employees, or other individuals.
(3) Show the receipt, use, and disposition of all public property and the income, if any, derived from the property.
(4) Show all sources of public income and the amounts due and received from each source.
(5) Show all receipts, vouchers, contracts, obligations, and other documents kept, or that may be required to be kept, to prove the validity of every transaction.
Sec. 3. Separate accounts shall be kept for every appropriation or fund of the state or any municipality. Separate accounts shall also be kept for each department, undertaking, enterprise, institution, and public service industry.
(Formerly: Acts 1909, c.55, s.3.) As amended by Acts 1980, P.L.30, SEC.3.
Financial reports; approval of budget or supplemental appropriation
Sec. 4. (a) The state examiner shall require from every municipality and every state or local governmental unit, entity, or instrumentality financial reports covering the full period of each fiscal year. These reports shall be prepared, verified, and filed with the state examiner not later than sixty (60) days after the close of each fiscal year. The reports must be in the form and content prescribed by the state examiner and filed electronically in the manner prescribed under IC 5-14-3.8-7.
(b) The department of local government finance may not approve the budget of a political subdivision or a supplemental appropriation for a political subdivision until the political subdivision files an annual report under subsection (a) for the preceding calendar year.
(Formerly: Acts 1909, c.55, s.4.) As amended by Acts 1980, P.L.30, SEC.4; P.L.3-1986, SEC.9; P.L.44-1991, SEC.1; P.L.50-2000, SEC.2; P.L.189-2005, SEC.1; P.L.176-2009, SEC.3; P.L.172-2011, SEC.11; P.L.137-2012, SEC.8.
(Repealed by Acts 1980, P.L.30, SEC.19.)
Forms of reports
Sec. 6. The state board of accounts shall formulate, prescribe, and approve the forms for reports required to be made by this chapter. The state examiner shall annually furnish to the officers required to make reports by this chapter such printed blanks and forms, on which
shall be indicated the information required, together with suitable
printed instructions for filling out the same.
(Formerly: Acts 1909, c.55, s.6.) As amended by Acts 1980, P.L.30, SEC.5.
Field examiners; private examiners
Sec. 7. (a) The state examiner shall appoint assistants not exceeding the number required to administer this article. The assistants are to be known as "field examiners" and are at all times subject to the order and direction of the state examiner. Field examiners shall inspect and examine accounts of all state agencies, municipalities, and other governmental units, entities, or instrumentalities.
(b) The state examiner may engage or allow the engagement of private examiners to the extent the state examiner determines necessary to satisfy the requirements of this article. These examiners are subject to the direction of the state examiner while performing examinations under this article.
(c) The state examiner may engage experts to assist the state board of accounts in carrying out its responsibilities under this article.
(Formerly: Acts 1909, c.55, s.7.) As amended by Acts 1980, P.L.30, SEC.6; P.L.3-1986, SEC.10.
Sec. 8. All appointments of field examiners shall be made solely upon the ground of fitness and without regard to the political affiliation of the appointee. The state board of accounts is empowered to make and establish, and from time to time alter and amend, by-laws, rules and regulations for the proper enforcement of the provisions of this article and other laws placing duties and responsibilities on the state board of accounts.
(Formerly: Acts 1909, c.55, s.8.) As amended by Acts 1980, P.L.30, SEC.7; P.L.100-2012, SEC.17.
Financial examinations; required inquiries; inefficiencies encountered; witnesses; records; process
Sec. 9. (a) The state examiner, personally or through the deputy examiners, field examiners, or private examiners, shall examine all accounts and all financial affairs of every public office and officer, state office, state institution, and entity.
(b) An examination of an entity deriving:
(1) less than fifty percent (50%); or
(2) subject to subsection (h), at least fifty percent (50%) but less than two hundred thousand dollars ($200,000) if the entity is organized as a not-for-profit corporation;
of its disbursements during the period subject to an examination from
appropriations, public funds, taxes, and other sources of public
expense shall be limited to matters relevant to the use of the public
money received by the entity.
(c) The examination of an entity described in subsection (b) may be waived or deferred by the state examiner if the state examiner determines in writing that all disbursements of public money during the period subject to examination were made for the purposes for which the money was received. However, the:
(1) Indiana economic development corporation created by IC 5-28-3 and the corporation's funds, accounts, and financial affairs; and
(2) department of financial institutions established by IC 28-11-1-1 and the department's funds, accounts, and financial affairs;
shall be examined biennially by the state board of accounts.
(d) On every examination under this section, inquiry shall be made as to the following:
(1) The financial condition and resources of each municipality, office, institution, or entity.
(2) Whether the laws of the state and the uniform compliance guidelines of the state board of accounts established under section 24 of this chapter have been complied with.
(3) The methods and accuracy of the accounts and reports of the person examined.
The examinations shall be made without notice.
(e) If during an examination of a state office under this chapter the examiner encounters an inefficiency in the operation of the state office, the examiner may comment on the inefficiency in the examiner's report.
(f) The state examiner, deputy examiners, any field examiner, or any private examiner, when engaged in making any examination or when engaged in any official duty devolved upon them by the state examiner, is entitled to do the following:
(1) Enter into any state, county, city, township, or other public office in this state, or any entity, agency, or instrumentality, and examine any books, papers, documents, or electronically stored information for the purpose of making an examination.
(2) Have access, in the presence of the custodian or the custodian's deputy, to the cash drawers and cash in the custody of the officer.
(3) During business hours, examine the public accounts in any depository that has public funds in its custody pursuant to the laws of this state.
(g) The state examiner, deputy examiner, or any field examiner, when engaged in making any examination authorized by law, may issue subpoenas for witnesses to appear before the examiner in person or to produce books, papers, or other records (including records stored in electronic data processing systems) for inspection and examination. The state examiner, deputy examiner, and any field examiner may administer oaths and examine witnesses under oath
orally or by interrogatories concerning the matters under
investigation and examination. Under the authority of the state
examiner, the oral examinations may be transcribed with the
reasonable expense paid by the examined person in the same manner
as the compensation of the field examiner is paid. The subpoenas
shall be served by any person authorized to serve civil process from
any court in this state. If a witness duly subpoenaed refuses to attend,
refuses to produce information required in the subpoena, or attends
and refuses to be sworn or affirmed, or to testify when called upon
to do so, the examiner may apply to the circuit court having
jurisdiction of the witness for the enforcement of attendance and
answers to questions as provided by the law governing the taking of
(h) This subsection applies to audited years beginning after June 30, 2009. The definitions in IC 20-24-1 apply throughout this subsection. Appropriations, public funds, taxes, and other sources of public money received by a nonprofit corporation as a charter school or organizer of a charter school for the purposes of a charter school may not be counted for the purpose of applying subsection (b)(2). Unless the nonprofit corporation receives other public money that would qualify the nonprofit corporation for a full examination of all accounts and financial affairs of the entity under subsection (b)(2), an examination of a charter school or organizer of a charter school must be limited to matters relevant to the use of the public money received for the charter school. This subsection does not prohibit the state examiner, personally or through the deputy examiners, field examiners, or private examiners, from examining the accounts in which appropriations, public funds, taxes, or other sources of public money are applied that are received by a nonprofit corporation as a charter school or organizer of a charter school relating to the operation of the charter school.
(Formerly: Acts 1909, c.55, s.9; Acts 1945, c.176, s.3.) As amended by Acts 1978, P.L.2, SEC.506; Acts 1980, P.L.30, SEC.8; P.L.3-1986, SEC.11; P.L.63-1989, SEC.1; P.L.70-1995, SEC.1; P.L.39-1996, SEC.3; P.L.50-1999, SEC.1; P.L.4-2005, SEC.25; P.L.213-2007, SEC.2; P.L.217-2007, SEC.2; P.L.172-2011, SEC.12; P.L.280-2013, SEC.3.
Grounds for examination; retaliation for making sworn statement prohibited
Sec. 9.5. (a) The state examiner may not undertake an examination of a public office, officer, or institution based on the allegation of an individual, organization, or institution that a violation of the law has occurred unless:
(1) the individual or representative of the organization or institution makes the allegation in the form of a sworn statement that the individual or representative believes the allegation to be true; or
(2) the state examiner has probable cause to believe that a
violation of the law has occurred.
(b) A public office, officer, or institution may not retaliate against an employee of the state or a political subdivision for making the sworn statement described in subsection (a).
As added by P.L.51-1985, SEC.1.
Withdrawal or removal of counties from solid waste management districts
Sec. 9.7. (a) The state examiner, personally or through the deputy examiners, field examiners, or private examiners, shall examine the division under IC 13-21-4-4 of the responsibility for legal obligations entered into by a joint solid waste management district upon the withdrawal or removal of a county from the district.
(b) Not later than one hundred twenty (120) days after the effective date of the withdrawal or removal, the state examiner shall issue a report of the examination under subsection (a) to:
(1) the board of directors of the joint solid waste management district; and
(2) the executive of the county that withdrew or was removed from the joint solid waste management district.
(c) A report under this section may be used as evidence in an action seeking to enforce the payment of legal obligations entered into by a joint solid waste management district.
As added by P.L.74-2002, SEC.1.
Failure to file report; interference with examiners; offense
Sec. 10. A public officer who:
(1) fails to make, verify, and file with the state examiner any report required by this chapter;
(2) fails to follow the directions of the state examiner in keeping the accounts of the officer's office;
(3) refuses the state examiner, deputy examiner, field examiner, or private examiner access to the books, accounts, papers, documents, cash drawer, or cash of the officer's office; or
(4) interferes with an examiner in the discharge of the examiner's official duties;
commits a Class B infraction and forfeits office.
(Formerly: Acts 1909, c.55, s.10.) As amended by Acts 1978, P.L.2, SEC.507; P.L.3-1986, SEC.12.
Records of money collected; public inspection
Sec. 11. There shall be kept in the office of each public officer, board, commission, agency, instrumentality, and institution in this state, a record of money collected for the public treasury, the forms and records for which, for each class of offices, shall be devised and formulated by the state board of accounts. Such records as are provided for in this section shall be public records and must be
accessible to the public during regular office hours.
(Formerly: Acts 1909, c.55, s.11.) As amended by Acts 1980, P.L.30, SEC.9.
(Repealed by Acts 1980, P.L.30, SEC.19.)
Warrants or checks of state or municipality; receipts or quietus; correctness of claims
Sec. 13. Each officer having authority to draw the warrant or check of the state or of any municipality referred to in this chapter in disbursing its funds, or who has authority to execute the receipt or quietus of the state or of such municipality in settlement with public officers or with debtors, before presenting the same for allowance to the board or other authority required to pass upon the same, shall make an examination of all claims as to their form, the authentication thereof as required by law, whether they are based upon contract or statutory authority, and as to their apparent correctness, and upon presenting the same to file therewith his certificate in writing as to such matters in respect to each and all of such claims. Where the authority to pass upon and allow such claim is lodged in such officer, he shall, before drawing a warrant or check therefor, certify to the correctness thereof over his official signature. Before issuing the receipt or quietus of the state or municipality to any debtor or any officer making settlement, he shall examine the report, account or settlement sheet upon which settlement is made, and require of such debtor or officer, or to otherwise secure, all such information, accounts, vouchers or exhibits as shall be necessary to satisfy such officer issuing such receipt or quietus of the correctness of such report, account or settlement sheet, and to certify thereon that he has made such examination and is satisfied as to its correctness, and no such warrant, check, receipt, or quietus shall be issued by any such officer until such certificate shall have been executed and filed with such claim, report, account or settlement sheet. Where it is not practical for the officer to certify to the correctness of each revenue or claim document, the state board of accounts may prescribe other methods of preaudit to be performed before approval by the officer or his employees.
(Formerly: Acts 1909, c.55, s.13.) As amended by Acts 1980, P.L.30, SEC.10.
Salaries and traveling expenses of state examiner, deputies, and assistants
Sec. 14. The salaries and necessary traveling expenses of the state examiner, his deputies, and assistants when engaged in the business of the state shall be paid as otherwise provided by law.
(Formerly: Acts 1909, c.55, s.15.) As amended by Acts 1980, P.L.30,
Bonds and crime policies for faithful performance
Sec. 15. (a) The state examiner, deputy examiners, and field examiners shall each give bond for the faithful performance of the examiner's duties, as follows:
(1) The state examiner in the sum of five thousand dollars ($5,000), to be approved by the governor.
(2) Each deputy examiner in the sum of three thousand dollars ($3,000), to be approved by the governor.
(3) Each field examiner in the sum of one thousand dollars ($1,000), to be approved by the state examiner. However, field examiners may be covered by a blanket bond or crime insurance policy endorsed to include faithful performance under IC 5-4-1-15.1 subject to approval of the state examiner.
(b) The commissioner of insurance shall prescribe the form of the bonds or crime policies required by this section.
(Formerly: Acts 1909, c.55, s.16; Acts 1967, c.268, s.1.) As amended by P.L.3-1986, SEC.13; P.L.49-1995, SEC.6.
Sec. 16. (a) As used in this article, "municipality" means any county, township, city, town, school corporation, special taxing district, or other political subdivision of Indiana.
(b) As used in this article, "state" means any board, commission, department, division, bureau, committee, agency, governmental subdivision, military body, authority, or other instrumentality of the state, but does not include a municipality.
(c) As used in this article, "public office" means the office of any and every individual who for or on behalf of the state or any municipality or any public hospital holds, receives, disburses, or keeps the accounts of the receipts and disbursements of any public funds.
(d) As used in this article, "public officer" means any individual who holds, receives, disburses, or is required by law to keep any account of public funds or other funds for which the individual is accountable by virtue of the individual's public office.
(e) As used in this article, "entity" means any provider of goods, services, or other benefits that is:
(1) maintained in whole or in part at public expense; or
(2) supported in whole or in part by appropriations or public funds or by taxation.
The term does not include the state or a municipality (as defined in this section).
(f) As used in this article, a "public hospital" means either of the following:
(1) An institution licensed under IC 16-21 and which is owned by the state or an agency of the state or one which is a
municipal corporation. A hospital is a municipal corporation if
its governing board members are appointed by elected officials
of a municipality.
(2) A state institution (as defined in IC 12-7-2-184).
(Formerly: Acts 1909, c.55, s.17.) As amended by Acts 1980, P.L.30, SEC.12; P.L.3-1986, SEC.14; P.L.2-1992, SEC.52; P.L.2-1993, SEC.44.
(Repealed by Acts 1978, P.L.2, SEC.521.)
Examinations without notice; disclosure; offense
Sec. 18. All examinations under this chapter shall be made without notice to the officers whose accounts are to be examined, and without notice to any clerk, deputy, employee, or other person employed in or connected with the office or the business of such an officer. A person who recklessly communicates knowledge of any proposed examination of any public account to the officer in charge of the account or to any other unauthorized person commits a Class B misdemeanor.
(Formerly: Acts 1909, c.55, s.19.) As amended by Acts 1978, P.L.2, SEC.509.
Copyrighting uniform bookkeeping system; purchase of public office supplies
Sec. 19. No system for uniform bookkeeping or any book, record, or form which may be adopted after April 5, 1909, shall be copyrighted unless it shall be deemed expedient by the governor that a copyright be procured in the name of the state, and if any such copyright be procured, the acceptance by the state or by any municipality of any bid for printed supplies of any sort shall operate as a license from the state to the successful bidder to manufacture any such copyrighted books, records, or forms included in such bid for public use without payment of royalty. All public books, records, and stationery used in the offices for which examination is provided in this chapter shall be purchased by the state, municipality, or institution after the manner provided by law.
(Formerly: Acts 1909, c.55, s.20.) As amended by P.L.25-1986, SEC.36.
(Repealed by Acts 1980, P.L.30, SEC.19.)
Mandatory adoption of uniform system; refusal to adopt or failure to use; offense; penalty
Sec. 21. All public officers shall adopt and use the books, forms, records, and systems of accounting and reporting adopted by the state board of accounts, when directed so to do by the board, and all forms, books, and records shall be purchased by those officers in the manner provided by law. An officer who refuses to provide such books, forms, or records, fails to use them, or fails to keep the accounts of his office as directed by the board commits a Class C infraction and forfeits his office.
(Formerly: Acts 1909, c.55, s.22.) As amended by Acts 1978, P.L.2, SEC.510.
Existing duties; effect of chapter
Sec. 22. The provisions of this chapter shall not be construed to relieve any officer of any duties required by law of him on April 5, 1909, with relation to the auditing of public accounts or the disbursement of public funds, but the provisions of this chapter shall be construed to be supplemental to all provisions of law existing on April 5, 1909, safeguarding the care and disbursement of public funds; and provided further, that the provisions of this chapter shall not be construed to limit or curtail the power of the governor of the state under laws existing on April 5, 1909, to make examination or investigation of any public office or to require reports therefrom.
(Formerly: Acts 1909, c.55, s.23.) As amended by P.L.25-1986, SEC.37.
(Repealed by P.L.5-1988, SEC.35.)
Uniform compliance guidelines for examinations and reports
Sec. 24. (a) The state board of accounts shall establish in writing uniform compliance guidelines for the examinations and reports required by this chapter. The uniform compliance guidelines must include the standards that an entity must observe to avoid a finding that is critical of the entity for a reason other than the entity's failure to comply with a specific law.
(b) The state board of accounts may not establish guidelines for the auditing of an entity that are inconsistent with any federal audit guidelines that govern the entity.
(c) The state board of accounts must distribute the uniform compliance guidelines to each entity that the state board of accounts may audit.
(d) If the state board of accounts engages or authorizes the engagement of a private examiner to perform an examination under this chapter, the examination and report must comply with the uniform compliance guidelines established under subsection (a). If a person subject to examination under this chapter engages a private examiner, the contract with the private examiner must require the
examination and report to comply with the uniform compliance
guidelines established under subsection (a).
(e) The state or a municipality may not request proposals for performing examinations of an entity that is subject to examination under this chapter unless the request for proposals has been submitted to and approved by the state board of accounts.
(f) The state or a municipality may not enter into a contract with an entity subject to examination under this chapter if the contract does not permit the examinations and require the reports prescribed by this chapter.
As added by P.L.3-1986, SEC.15. Amended by P.L.39-1996, SEC.4.
Annual examinations; biennial examinations
Sec. 25. (a) Examinations under this chapter shall be conducted annually for the following:
(1) The state.
(4) Towns with a population greater than five thousand (5,000).
(5) Public hospitals.
(b) Subject to section 9 of this chapter, examinations under this chapter shall be conducted biennially for:
(1) municipalities; and
that are not listed in subsection (a).
As added by P.L.3-1986, SEC.16. Amended by P.L.2-1991, SEC.27.
Examination reports; requisites; performance of public works; powers of board
Sec. 26. (a) If a state office, municipality, or other entity has authority to contract for the construction, reconstruction, alteration, repair, improvement, or maintenance of a public work, the state board of accounts shall include in each examination report concerning the state office, municipality, or entity:
(1) an opinion concerning whether the state office, municipality, or entity has complied with IC 5-16-8; and
(2) a brief description of each instance in which the state office, municipality, or entity has exercised its authority under IC 5-16-8-2(b) or IC 5-16-8-4.
(b) If a municipality or a county performs a public work by means of its own workforce under IC 36-1-12-3, the state board of accounts shall include the following in each examination report concerning the municipality or county:
(1) An opinion concerning whether the municipality or county has complied with IC 36-1-12-3 for each public work performed by the entity's own workforce.
(2) A brief description of each public work that the municipality or county has performed with its own workforce under
IC 36-1-12-3, including a calculation of the actual cost of each
public work under IC 36-1-12-3.
(3) An opinion concerning whether the municipality or county has complied with IC 36-1-12-19 in calculating the actual costs of a public work project performed under IC 36-1-12-3.
(c) If a state agency performs a public work by means of its own workforce under IC 4-13.6-5-4, the state board of accounts shall include the following in each examination report concerning the agency:
(1) An opinion concerning whether the agency has complied with IC 4-13.6-5-4 for each public work performed by the agency's own workforce.
(2) A brief description of each public work that the agency has performed with its own workforce under IC 4-13.6-5-4, including a calculation of the actual cost of each public work under IC 4-13.6-5-4.
(3) An opinion concerning whether the agency has complied with IC 4-13.6-5-4(c) in calculating the actual costs of a public work project performed under IC 4-13.6-5-4.
(d) If a state educational institution performs a public work by means of its own workforce under IC 5-16-1-1.5, the state board of accounts shall include the following in each examination report concerning the state educational institution:
(1) An opinion concerning whether the state educational institution has complied with IC 5-16-1-1.5 for each public work performed by the state educational institution's own workforce.
(2) A brief description of each public work that the state educational institution has performed with its own workforce under IC 5-16-1-1.5, including a calculation of the actual cost of each public work under IC 5-16-1-1.5.
(3) An opinion concerning whether the state educational institution has complied with IC 5-16-1-1.5 in calculating the actual costs of a public work project performed under IC 5-16-1-1.5.
(e) The state board of accounts may exercise any of its powers under this chapter concerning public accounts to carry out this section, including the power to require a uniform system of accounting or the use of forms prescribed by the state board of accounts.
As added by P.L.63-1987, SEC.1. Amended by P.L.172-2011, SEC.13.
Local government internal controls; requirements for violations
Sec. 27. (a) As used in this section, "local government" means county, city, town, or township.
(b) In the compliance guidelines authorized under section 24 of this chapter, the state board of accounts shall define the acceptable minimum level of: