The proposed bill mandates that all public entities in South Dakota, including state agencies, boards, commissions, departments, and educational institutions, must undergo a forensic audit conducted by the Department of Legislative Audit if there is probable cause of financial misconduct, such as fraud or embezzlement. This determination will follow a preliminary investigation of credible allegations. The bill allows the Department of Legislative Audit to either conduct the audit itself or authorize an independent auditor with expertise in forensic accounting to perform the audit.

The forensic audit will encompass a thorough examination of the public entity's financial transactions during the relevant time period, an evaluation of internal controls and risk management systems, and detailed documentation of any findings related to financial misconduct or irregularities. Additionally, the audit will include recommendations for improvements to prevent future issues. The results of the audit must be reported as specified in existing law, and any costs incurred for the audit will be the responsibility of the public entity being audited.