LB360 LB360
2023 2023
LEGISLATURE OF NEBRASKA
ONE HUNDRED EIGHTH LEGISLATURE
FIRST SESSION
LEGISLATIVE BILL 360
Introduced by Cavanaugh, M., 6.
Read first time January 12, 2023
Committee: Government, Military and Veterans Affairs
1 A BILL FOR AN ACT relating to government; to amend sections 81-8,241,
2 81-8,244, and 81-8,245, Revised Statutes Cumulative Supplement,
3 2022; to adopt the Office of Inspector General of Nebraska
4 Procurement Act; to change provisions relating to the Public
5 Counsel; to harmonize provisions; and to repeal the original
6 sections.
7 Be it enacted by the people of the State of Nebraska,
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1 Section 1. Sections 1 to 18 of this act shall be known and may be
2 cited as the Office of Inspector General of Nebraska Procurement Act.
3 Sec. 2. (1) The purpose of the Office of Inspector General of
4 Nebraska Procurement Act is to deter and identify fraud, waste, and abuse
5 in the state's procurement system across all state agencies.
6 (2) It is the intent of the Legislature to:
7 (a) Establish a full-time program of investigation and performance
8 review to provide increased accountability and oversight of state
9 government contracts;
10 (b) Assist in improving the state's procurement management;
11 (c) Provide an independent form of inquiry for concerns regarding
12 the actions of vendors and agencies responsible for the selection,
13 execution, and management of state contracts; and
14 (d) Provide a process for investigation and review to determine if
15 individual complaints and issues of investigation and inquiry reveal a
16 problem in the state's procurement system, not just individual cases,
17 that necessitates legislative action for improved policies and
18 restructuring of state contracting.
19 (3) It is not the intent of the Legislature in enacting the Office
20 of Inspector General of Nebraska Procurement Act to interfere with the
21 duties of the Legislative Auditor or the Legislative Fiscal Analyst or to
22 interfere with the statutorily defined investigative responsibilities or
23 prerogatives of any officer, agency, board, bureau, commission,
24 association, society, or institution of the executive branch of state
25 government, except that the act does not preclude an inquiry on the sole
26 basis that another agency has the same responsibility. The act shall not
27 be construed to interfere with or supplant the responsibilities or
28 prerogatives of the Governor to investigate, monitor, and report on the
29 activities of the agencies, boards, bureaus, commissions, associations,
30 societies, and institutions of the executive branch under his or her
31 administrative direction.
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1 Sec. 3. For purposes of the Office of Inspector General of Nebraska
2 Procurement Act, the following definitions apply:
3 (1) Administrator means a person charged with administration of a
4 program, an office, or a division of a state agency or contracting
5 entity;
6 (2) Contracting entity means any person that enters into a
7 contractual agreement with the State of Nebraska, and includes both
8 private, public, and quasi-governmental entities;
9 (3) Director means the leader of a state agency, including, but not
10 limited to, a chief executive officer, executive director, commissioner,
11 or chair;
12 (4) Inspector General means the Inspector General of Nebraska
13 Procurement appointed under section 4 of this act;
14 (5) Malfeasance means a wrongful act that the actor has no legal
15 right to do or any wrongful conduct that affects, interrupts, or
16 interferes with performance of an official duty;
17 (6) Management means supervision of subordinate employees;
18 (7) Misfeasance means the improper performance of some act that a
19 person may lawfully do;
20 (8) Obstruction means hindering an investigation, preventing an
21 investigation from progressing, stopping or delaying the progress of an
22 investigation, or making the progress of an investigation difficult or
23 slow;
24 (9) Office means the office of Inspector General of Nebraska
25 Procurement and includes the Inspector General and other employees of the
26 office;
27 (10) Procurement system means the process by which state agencies
28 acquire goods and services and participate in the process of contract
29 management and monitoring with the State of Nebraska, including the pre-
30 award, award, and post-award stages. This includes contracts and
31 addendums entered into on an emergency basis;
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1 (11) Record means any recording, in written, audio, electronic
2 transmission, or computer storage form, including, but not limited to, a
3 draft, memorandum, note, report, computer printout, notation, or message,
4 and includes, but is not limited to, medical records, mental health
5 records, case files, clinical records, financial records, and
6 administrative records;
7 (12) Responsible individual means an employee of a state agency or
8 contracting entity responsible for the care or custody of records,
9 documents, and files; and
10 (13) State agency means any state government entity within the
11 executive branch of government, including, but not limited to, a
12 department, division, office, commission, board, or bureau.
13 Sec. 4. (1) The office of Inspector General of Nebraska Procurement
14 is created within the office of Public Counsel for the purpose of
15 conducting investigations, audits, inspections, and other reviews of the
16 Nebraska procurement system. The Inspector General shall be appointed by
17 the Public Counsel with approval from the chairperson of the Executive
18 Board of the Legislative Council and the chairperson of the
19 Appropriations Committee of the Legislature.
20 (2) The Inspector General shall be appointed for a term of five
21 years and may be reappointed. The Inspector General shall be selected
22 without regard to political affiliation and on the basis of integrity,
23 capability for strong leadership, and demonstrated ability in accounting,
24 auditing, financial analysis, law, management analysis, public
25 administration, investigation, or government procurement or other closely
26 related fields. Not later than two years after the date of appointment,
27 the Inspector General shall obtain certification as a Certified Inspector
28 General by the Association of Inspectors General, its successor, or
29 another nationally recognized organization that provides and sponsors
30 educational programs and establishes professional qualifications,
31 certifications, and licensing for inspectors general. During the
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1 Inspector General's employment, the Inspector General shall not be
2 actively involved in partisan affairs.
3 (3) The Inspector General shall employ such investigators and
4 support staff as the Inspector General deems necessary to carry out the
5 duties of the office within the amount available by appropriation through
6 the office. The Inspector General shall be subject to the control and
7 supervision of the Public Counsel, except that removal of the Inspector
8 General shall require approval of the chairperson of the Executive Board
9 of the Legislative Council and the chairperson of the Appropriations
10 Committee of the Legislature.
11 Sec. 5. (1) The office shall:
12 (a) Investigate allegations or incidents of possible fraud, waste,
13 abuse, misconduct, misfeasance, malfeasance, or violations of statutes or
14 of rules or regulations related to any point in the procurement process
15 of a state agency or a contracting entity entering into a contractual
16 agreement with the State of Nebraska; and
17 (b) Audit, inspect, evaluate, investigate, and inspect activities,
18 records and individuals involved with contracts, procurements, grants,
19 agreements, or other financial arrangements with any state agency.
20 (2) Notwithstanding the fact that a criminal investigation, a
21 criminal prosecution, or both are in progress, all law enforcement
22 agencies and prosecuting attorneys shall cooperate with any investigation
23 conducted by the Inspector General and shall, immediately upon request by
24 the Inspector General, provide the Inspector General with copies of all
25 law enforcement reports which are relevant to the Inspector General's
26 investigation. All law enforcement reports which have been provided to
27 the Inspector General pursuant to this section are not public records for
28 purposes of sections 84-712 to 84-712.09 and shall not be subject to
29 discovery by any other person or entity. Except to the extent that
30 disclosure of information is otherwise provided for in the Office of
31 Inspector General of Nebraska Procurement Act, the Inspector General
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1 shall maintain the confidentiality of all law enforcement reports
2 received pursuant to its request under this section. Law enforcement
3 agencies and prosecuting attorneys shall, when requested by the Inspector
4 General, collaborate with the Inspector General regarding all other
5 information relevant to the Inspector General's investigation. If the
6 Inspector General, in conjunction with the Public Counsel, determines it
7 appropriate, the Inspector General may, when requested to do so by a law
8 enforcement agency or prosecuting attorney, suspend an investigation by
9 the office until a criminal investigation or prosecution is completed or
10 has proceeded to a point that, in the judgment of the Inspector General,
11 reinstatement of the Inspector General's investigation will not impede or
12 infringe upon the criminal investigation or prosecution.
13 Sec. 6. (1) Complaints to the office may be made in writing. The
14 office shall also maintain a toll-free telephone line for complaints. A
15 complaint shall be evaluated to determine if it alleges possible fraud,
16 waste, abuse, misconduct, misfeasance, malfeasance, or violation of a
17 statute or of rules and regulations pursuant to section 5 of this act.
18 All complaints shall be evaluated to determine whether a full
19 investigation is warranted.
20 (2) The office shall not conduct a full investigation of a complaint
21 unless:
22 (a) The complaint alleges fraud, waste, abuse, misconduct,
23 misfeasance, malfeasance, or violation of a statute or of rules and
24 regulations pursuant to section 5 of this act;
25 (b) The complaint is against a person or agency within the
26 jurisdiction of the office; and
27 (c) The allegations can be independently verified through
28 investigation.
29 (3) The Inspector General shall determine within fourteen days after
30 receipt of a complaint whether it will conduct a full investigation.
31 Sec. 7. (1) The office shall have access to all information and
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1 personnel necessary to perform the duties of the office.
2 (2) All employees of the state agencies and all owners, operators,
3 managers, supervisors, and employees of contracting entities, and other
4 providers of procurement services shall cooperate with the office.
5 Cooperation includes, but is not limited to, the following:
6 (a) Provision of full access to and production of records and
7 information. Providing access to and producing records and information
8 for the office is not a violation of confidentiality provisions under any
9 law, statute, rule, or regulation if done in good faith under the Office
10 of Inspector General of Nebraska Procurement Act;
11 (b) Fair and honest disclosure of records and information reasonably
12 requested by the office under the act;
13 (c) Encouraging employees to fully comply with reasonable requests
14 of the office in the course of an investigation under the act;
15 (d) Prohibition of retaliation by directors, owners, operators, or
16 managers against employees for providing records or information or filing
17 or otherwise making a complaint to the office; and
18 (e) Not requiring employees to gain supervisory approval prior to
19 filing a complaint with or providing records or information to the
20 office.
21 Sec. 8. The Inspector General may issue a subpoena, enforceable by
22 action in an appropriate court, to compel any person to appear, give
23 sworn testimony, or produce documentary or other evidence deemed relevant
24 to a matter under inquiry. A person thus required to provide information
25 shall be paid the same fees and travel allowances and shall be accorded
26 the same privileges and immunities as are extended to witnesses in the
27 district courts of this state and shall also be entitled to have personal
28 counsel present while being questioned. Any fees associated with counsel
29 present under this section shall not be the responsibility of the office.
30 Sec. 9. (1) A full investigation conducted by the office shall
31 consist of access to and retrieval of all relevant records through
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1 subpoena, compliance with a request of the office, or voluntary
2 production; review of all relevant records; and interviews of all
3 relevant persons. The office may request or subpoena any record necessary
4 for the investigation from a state agency or a contracting entity that is
5 pertinent to an investigation. All case files, licensing files, financial
6 and administrative records, and records required to be maintained
7 pursuant to applicable rules or regulations shall be produced for review
8 by the office in the course of an investigation.
9 (2) Compliance with a request of the office includes:
10 (a) Production of all records requested;
11 (b) A diligent search to ensure that all appropriate records are
12 included;
13 (c) A continuing obligation to immediately forward to the office any
14 relevant records received, located, or generated after the date of the
15 request;
16 (d) Provision of complete and truthful answers to questions posed by
17 the office in the course of an investigation; and
18 (e) Not willfully interfering with or obstructing the investigation.
19 (3) The office shall seek access in a manner that respects the
20 dignity and human rights of all persons involved, maintains the integrity
21 of the investigation, and does not unnecessarily disrupt programs or
22 services. When advance notice to an administrator or the administrator's
23 designee is not provided, the office investigator shall, upon arrival at
24 the state agency office, bureau, or division, the contracting entity, or
25 the location of another provider of procurement services, request that an
26 onsite e