WEST VIRGINIA LEGISLATURE
2024 REGULAR SESSION
Committee Substitute for House Bill 5399
By Delegates Rohrbach, Statler, Mallow, DeVault,
Petitto, Jennings, Heckert, Miller, Summers,
Hillenbrand, and Householder [Originating in the Committee on Finance; Reported on February 21, 2024]
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1 A BILL to repeal §12-4-14a of the Code of West Virginia,1931, as amended, and to amend and
2 reenact §12-4-14 and §12-4-14b of said code; and to amend and reenact §33-3-33 of said
3 code, all relating to duties of the State Auditor; repealing section creating terminated
4 program; directing state audit functions of volunteer and part-volunteer fire departments to
5 the State Auditor; requiring certain periodic audits; prohibiting distributing state funds to
6 volunteer and part-volunteer fire departments that fail to comply with audit requirements;
7 providing for restitution be paid to volunteer and part-volunteer fire departments double the
8 amount of property unlawfully taken; requiring posting a notice of penalty in volunteer and
9 part-volunteer fire departments; establishing a pilot project of volunteer and part-volunteer
10 fire departments to evaluate implementation of the State Auditor’s Checkbook accounting
11 system; clarifying what grants are subject to reporting requirements of the Grant
12 Transparency and Accountability Act; defining terms; and making other technical
13 clarifications.
Be it enacted by the Legislature of West Virginia:
CHAPTER 12. PUBLIC MONEYS AND SECURITIES.
ARTICLE 4. ACCOUNTS, REPORTS, AND GENERAL PROVISIONS.
§12-4-14. West Virginia Grant Transparency and Accountability Act; Accountability of
grantees receiving state funds or grants; procedures, reporting, auditing,
investigations, and recovery; sworn statements by volunteer fire departments; rule making, criminal penalties.
1 (a) This section may be cited as The West Virginia Grant Transparency and Accountability
2 Act. The West Virginia Grant Transparency and Accountability Act is intended to develop a
3 coordinated, nonredundant process for the effective oversight and monitoring of state grant
4 recipients, thereby ensuring quality programs and limiting fraud, waste, and abuse.
5 (b) For the purposes of this section:
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6 (1) "Grantor" means a state spending unit awarding a state grant.
7 (2) "Grantee" means any entity receiving a state grant, including a state spending unit,
8 local government, corporation, partnership, association, individual, or other legal entity.
9 (3) "Subgrantee" means an entity, including a state spending unit, local government,
10 corporation, partnership, association, individual, or other legal entity, who that receives grant
11 money from a grantee who that was awarded a state grant.
12 (4) "Report" means an engagement, such as an agreed-upon procedures engagement or
13 other attestation engagement, performed and prepared by a certified public accountant to test
14 whether state grants were spent as intended. The term "report" does not mean a full-scope audit or
15 review of the person entity receiving the state funds grant.
16 (5) "State grant" means funding provided by a state spending unit grantor, regardless of
17 the original source of the funds, to a grantee upon application for a specific purpose. The term
18 "state grant" does not include: (A) Payments for goods and services purchased by a state
19 spending unit; (B) compensation to state employees and public officials; (C) reimbursements to
20 state employees and public officials for travel or incidental expenses; (D) grants of student aid; (E)
21 government transfer payments; (F) direct benefits provided under state insurance and welfare
22 programs; (G) funds reimbursed to a person for expenditures made for qualified purposes when
23 receipts for the expenditures are required prior to receiving the funds; (H) retirement benefits; and
24 (I) federal pass-through funds that are subject to the federal Single Audit Act Amendments of
25 1996, 31 U.S.C. § 7501 et seq., and the funds required to match the federal funds; The term "state
26 grant" does not include formula; (J) distributions to volunteer and part-volunteer fire departments
27 and fire companies made pursuant to §33-3-14d, §33-3-33, §33-12C-7 of this code; and does not
28 include; (K) money received from the Fire Service Equipment and Training Fund as provided in
29 §29-3-5f of this code; and (L) grants made by the West Virginia Water Development Authority.
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30 (6) "West Virginia debarred list" means the list maintained by the State Auditor that
31 contains the names of individuals and entities that are ineligible, either temporarily or permanently,
32 from receiving an award of state grant funds from the state.
33 (7) "State Auditor" means the State Auditor of West Virginia, by himself or herself, or by any
34 person appointed, designated, or approved by the State Auditor to perform the service.
35 (8) "Stop payment order" means a communication from the state grant-making agency
36 grantor to the State Auditor and the State Treasurer, following procedures established by the State
37 Auditor, causing the cessation of payments to a grantee or subgrantee as a result of the grantee or
38 subgrantee’s failure to comply with one or more terms of the state grant or subgrant, violations of
39 law, or the initiation of an audit or investigation.
40 (9) "Stop payment procedure" means the procedure created by the State Auditor which
41 effects a stop payment order or the lifting of a stop payment order.
42 (c)(1) Any grantee who receives one or more state grants in the amount of $50,000 or more
43 in the aggregate in a state’s fiscal year shall file with the grantor and the State Auditor a report of
44 the disbursement of the state grant funds. When the grantor causes an audit, by an independent
45 certified public accountant, to be conducted of the state grant funds, the audit is performed using
46 generally accepted government auditing standards, and a copy of the audit is available for public
47 inspection, no report is required to be filed under this section. An audit performed that complies
48 with Office of Management and Budget circular A-133, and submitted within the period provided in
49 this section may be substituted for the report.
50 (2) Any grantee who receives a state grant in an amount less than $50,000 or who is not
51 required to file a report because an audit has been conducted or substituted as provided by
52 subdivision (1) of this subsection shall file with the grantor and State Auditor a sworn statement of
53 expenditures made under the state grant.
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54 (3) Subgrant of state grant funds – If any grantee obtains state grant funds and grants any
55 part or all of those funds to a subgrantee for a specific purpose or purposes, the granted funds
56 shall be treated as a state grant.
57 (4) Reports and sworn statements of expenditures required by this section shall be filed
58 within two years of the end of the grantee’s fiscal year in which the disbursement of state grant
59 funds by the grantor was made. The report shall be made by an independent certified public
60 accountant at the cost of the grantee. State grant funds may be used to pay for the report if the
61 applicable grant provisions allow. The scope of the report is limited to showing that the state grant
62 funds were spent for the purposes intended when the state grant was made.
63 (5) In the event the State Auditor determines that applicable reporting or record keeping
64 provisions for state grants are delinquent or not in compliance with this code, the State Auditor
65 shall notify the State Treasurer and no further state grant funds appropriated to the grantor agency
66 under the specific state grant shall be encumbered or expended until such time as the State
67 Auditor determines that all applicable reporting or record keeping provisions are brought into
68 compliance: Provided, That such suspension of funding does not violate federal law or regulations
69 or unreasonably prevent or detrimentally impact the ability of the agency grantor to receive federal
70 support or funding.
71 (6) Each State grant-making agency grantor shall designate a Chief Accountability Officer,
72 to the extent possible from within its existing staff, who shall serve as a liaison to the State Auditor
73 and shall be responsible for the state agency’s grantor’s implementation of and compliance with
74 the law, rules, and terms of state grants. Such position may be held concurrently with any other
75 designated position.
76 (d)(1) Grantor agencies Grantors or the State Auditor shall issue stop payment orders for
77 failure to file required reports. Any grantee failing to file a required report or sworn statement of
78 expenditures within the two-year period as provided in this section for state grant funds is barred
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79 from subsequently receiving state grants until the grantee has filed the report or sworn statement
80 of expenditures and is otherwise in compliance with the provisions of this section.
81 (2) Any grantor of a state grant shall report any grantee failing to file a required report or
82 sworn statement of expenditures within the required period provided in this section to the State
83 Auditor for purposes of debarment from receiving state grants.
84 (3) The State Auditor shall maintain a searchable and publicly accessible database listing
85 all awarded state grants. All grantors shall provide a list of grantees and subgrantees to the State
86 Auditor and all other information regarding state grant funds and grantees as required by law or
87 rule.
88 (e)(1) The state agency grantor administering the state grant shall notify the grantee of the
89 reporting requirements set forth in this section.
90 (2) All grantors awarding state grants shall, prior to awarding a state grant verify that the
91 grantee is not barred from receiving state grants pursuant to this section. The verification process
92 shall, at a minimum, include:
93 (A) A requirement that the grantee seeking the state grant provide a sworn statement from
94 an authorized representative that the grantee has filed all reports and sworn statements of
95 expenditures for state grants received as required under this section; and
96 (B) Confirmation from the State Auditor by the grantor that the grantee has not been
97 identified as one who has failed to file a report or sworn statement of expenditures under this
98 section. Confirmation may be accomplished by accessing the computerized database provided for
99 in this section.
100 (3) If any report or sworn statement of expenditures submitted pursuant to the
101 requirements of this section provides evidence of a reportable condition or violation, the grantor
102 shall provide a copy of the report or sworn statement of expenditures to the State Auditor within 30
103 days of receipt by the grantor.
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104 (4) The grantor and State Auditor shall maintain copies of reports and sworn statements of
105 expenditures required by this section and make the reports or sworn statements of expenditures
106 available for public inspection, as well as for use in audits and performance reviews of the grantor.
107 (5) Stop payment procedures – The State Auditor, in cooperation with state grant-making
108 agencies grantors, shall promulgate legislative, procedural, and interpretive rules in accordance
109 with the provisions of §29A-3-1 et seq. of this code in implementing the provisions of this section
110 which shall include, but not be limited to:
111 (A) Procedures concerning issuing and lifting stop payments and other corrective actions;
112 (B) Factors to be considered in determining whether to issue a stop payment order
113 including whether or not a stop payment order is in the best interest of the state;
114 (C) Factors to be considered in determining whether a stop payment order should be lifted;
115 and
116 (D) Procedures for notification to the grantee or subgrantee of the issuance of a stop
117 payment order, the lifting of a stop payment order, and any other related information.
118 (6) Informal Conference – Whenever a grantor agency reasonably believes that state grant
119 funds are subject to recovery, the grantor agency shall provide the grantee the opportunity for at
120 least one informal conference to determine the facts and issues and to resolve any conflicts before
121 taking any formal recovery actions.
122 (7) Formal Procedures for Recovery –
123 (A) If a grantor agency determines that certain state grant funds are to be recovered, then,
124 prior to taking any action to recover the state grant funds, the grantor agency shall provide the
125 grantee of the funds a written notice of the intended recovery. This notice shall identify the funds
126 and the amount to be recovered and the specific facts which permit recovery.
127 (B) A grantee shall have 35 days from the receipt of the notice required in paragraph (A) of
128 this subdivision to return the state grant funds or request a hearing in writing to show why recovery
129 is not justified or proper.
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130 (C) If a grantee requests a hearing pursuant to paragraph (B) of this subdivision, then:
131 (i) The hearing shall be conducted under §29A-5-1 et seq. of this code, and be presided
132 over by the grantor agency head director or their designee;
133 (ii) The grantor agency shall hold the hearing at which the grantee or designated
134 representative may present evidence and witnesses to show why recovery should not be
135 permitted; and
136 (iii) After the conclusion of the hearing, the grantor agency shall make a final decision and
137 issue a written final recovery order in compliance with §29A-5-3 of this code and send a copy of the
138 order to the grantee and the State Auditor.
139 (D)(i) If a grantee requests a hearing pursuant to paragraph (B) of this subdivision then the
140 grantor agency may not take any action of recovery until at least 35 days after the grantor agency
141 has issued a final recovery order pursuant to the requirements of paragraph (C) of this subdivision.
142 (ii) If a grantee does not return the state grant funds or request a hearing as permitted in
143 paragraph (B) of this subdivision, then the grantor agency may proceed with recovery of the state
144 grant funds identified in the notice issued pursuant to the requirements of paragraph (A) of this
145 subdivision, at any time after the expiration of the 35 day request period established in paragraph
146 (B) of this subdivision.
147 (8) Recovery of State Grant Funds by Grantor Agency – Any state grant funds which have
148 been misspent or are being improperly held are subject to recovery by the grantor agency which
149 made the grant. The grantor agency making the grant shall take affirmative and timely action to
150 recover all misspent or improperly held state grant funds. In order to effectuate the recovery of
151 such state grant funds, the grantor agency making the grant may use any one or a combination of
152 the following:
153 (A) Offset the amounts against existing state grants or future state grants to be made by
154 the grantor agency making the recovery;
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155 (B) Request offsets of the amounts from existing state grants or future state grants to be
156 made by other grantor agencies grantors;
157 (C) Initiate any debt collection method authorized by law against any private person,
158 business, or entity;
159 (D) Remove the grantee from the grantor agency’s programs and debar the grantee’s
160 participation in future state grant programs for a period not to exceed three years or until removed
161 from the West Virginia debarred list; or
162 (E) Request further action under subdivision (9) of this subsection to recover state grant
163 funds and otherwise enforce all applicable laws.
164 (9) Recovery of State Grant Funds – The Attorney General, independently or on behalf of
165 the State Auditor, may take any action within his or her authority to recover any state grant funds
166 which have been misapplied or are being improperly held and have all the powers of collection
167 established in this act in addition to any other powers authorized by law, including, without
168 limitation, to file lawsuits to recover state grant funds.
169 (10) All state grant funds, whose use is not restricted by law or otherwise appropriated,
170 which are recovered by the grantor, or State Auditor, and expired or unexpended state grant funds
171 remaining at state grant completion or termination, shall be deposited in a special revenue fund,
172 which is hereby created and established in the State Treasury to be known as the Grant Recovery
173 Fund. The moneys in the fund, with all interest or other earnings thereon, shall be expended only
174 upon appropriation by the Legislature.
175 (11) The State Auditor has authority to promulgate procedural and interpretive rules and
176 propose legislative rules for promulgation in accordance with the provisions of §29A-3-1 et seq. of
177 this code to assist in implementing the provisions of this section. The rules shall set forth uniform
178 administrative requ