S06269 / A09768
STATE OF NEW YORK
________________________________________________________________________
S. 6269 A. 9768
SENATE - ASSEMBLY
February 7, 2002
___________
IN SENATE -- Introduced by Sens. LAVALLE, LEIBELL, BALBONI -- read twice
and ordered printed, and when printed to be committed to the Committee
on Civil Service and Pensions
IN ASSEMBLY -- Introduced by M. of A. DiNAPOLI, ABBATE -- read once and
referred to the Committee on Governmental Employees
AN ACT to amend the retirement and social security law and the executive
law, in relation to limitations on auditors of state agencies
The People of the State of New York, represented in Senate and Assem-
bly, do enact as follows:
1 Section 1. This act shall be known and may be cited as the "Account-
2 ability in Auditing Act of 2002".
3 § 2. The retirement and social security law is amended by adding a new
4 section 13-a to read as follows:
5 § 13-a. Audits of retirement system; limitations on auditors. No
6 auditor who audits the activities and operations of any retirement
7 system continued by this article shall:
8 a. provide non-audit services to such retirement system;
9 b. audit the activities and operations of such retirement system for
10 more than seven years; and
11 c. accept employment from such retirement system for a period of at
12 least two years following the most recent date such auditor audits such
13 retirement system, but in no event shall this prohibition to accept
14 employment be deemed as a prohibition to prevent such auditor from being
15 employed to perform a new, repeat or additional audit of the activities
16 and operations of such retirement system.
17 § 3. The retirement and social security law is amended by adding a new
18 section 313-a to read as follows:
19 § 313-a. Audits of retirement system; limitations on auditors. No
20 auditor who audits the activities and operations of any retirement
21 system continued by this article shall:
22 a. provide non-audit services to such retirement system;
23 b. audit the activities and operations of such retirement system for
24 more than seven years; and
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD14623-04-2
S. 6269 2 A. 9768
1 c. accept employment from such retirement system for a period of at
2 least two years following the most recent date such auditor audits such
3 retirement system, but in no event shall this prohibition to accept
4 employment be deemed as a prohibition to prevent such auditor from being
5 employed to perform a new, repeat or additional audit of the activities
6 and operations of such retirement system.
7 § 4. The executive law is amended by adding a new section 170-a to
8 read as follows:
9 § 170-a. Audit of state agencies; limitations on auditors. No auditor
10 who audits the activities and operations of any department, bureau,
11 board, commission, authority or any other agency or instrumentality of
12 the state shall:
13 1. provide non-audit services to such department, bureau, board,
14 commission, authority or any other agency or instrumentality;
15 2. audit the activities and operations of such department, bureau,
16 board, commission, authority or any other agency or instrumentality for
17 more than seven years; and
18 3. accept employment from such department, bureau, board, commission,
19 authority or any other agency or instrumentality for a period of at
20 least two years following the most recent date such auditor audits the
21 activities and operations of such department, bureau, board, commission,
22 authority or any other agency or instrumentality but in no event shall
23 this prohibition to accept employment be deemed as a prohibition to
24 prevent such auditor from being employed to perform a new or additional
25 audit of the activities and operations of such department, bureau,
26 board, commission, authority or agency or instrumentality of the state.
27 § 5. This act shall take effect immediately but shall apply only to an
28 audit or non-audit service that first commences on or after the effec-
29 tive date of this act pursuant to a contract entered into on or after
30 such date.
FISCAL NOTE.--This bill, the "Accountability in Auditing Act of 2002",
would amend the Retirement and Social Security Law and the Executive
Law.
Insofar as it would affect the New York State and Local Retirement
Systems, it would provide that auditors who audit the activities and
operations of the Systems shall not provide non-audit services to the
Systems, nor audit the activities and operations of the Systems for more
than seven years. In addition, an auditing firm shall not accept employ-
ment from the Systems for a period of at least two years following the
most recent date such auditor audits the Systems.
If this bill is enacted, there will be no additional costs to employ-
ers of the New York State and Local Retirement Systems.
This estimate, dated February 6, 2002 and intended for use only during
the 2002 Legislative Session, is Fiscal Note No. 2002-149 prepared by
the Actuary for the New York State and Local Employees' Retirement
System and New York State and Local Police and Fire Retirement System.
NEW YORK STATE SENATE
INTRODUCER'S MEMORANDUM IN SUPPORT
submitted in accordance with Senate Rule VI. Sec 1
RETRIEVE BILL
BILL NUMBER: S6269
SPONSOR: LAVALLE
TITLE OF BILL: An act to amend the retirement and social security law
and the executive law, in relation to limitations on auditors of state
agencies
PURPOSE: This bill would place certain limitations upon auditors who
audit the activities and operations of certain State and Local Retire-
ment Systems and any department, bureau, board, commission, authority or
any other agency or instrumentality of the State.
SUMMARY OF PROVISIONS: Section one of this bill would provide that
this law would be known and may be cited as the Accountability in Audit-
ing Act of 2002.
Sections two and three of the bill would add two new sections 13-a and
313-a to the Retirement and Social Security Law to provide that no audi-
tor who audits the activities and operations of any Retirement System
shall:
(1) provide non-audit services to such Retirement System;
(2) audit the activities and operations of such Retirement System for
more than seven (7) years; and
(3) accept employment from such Retirement System for a period of at
least two years following the most recent date such auditor audits such
Retirement System; however, in no event would this prohibition be deemed
to prevent such auditor from being employed to perform a new, repeat or
additional audit of the activities and operation of such Retirement
System.
Section four of the bill would add a new section 170-a to the executive
law to provide identical auditing restrictions on any auditor who audits
the activities and operation of any State Agency.
JUSTIFICATION: Recent news reports are replete with incidents where
the absence of accounting and auditing restrictions have caused severe
damage to pension benefits and citizen savings. This bill would estab-
lish important safeguards to ensure that such accounting and auditing
practices do not occur with respect to Public Pension Funds and New York
State Public Assets, thereby protecting such important public interests.
LEGISLATIVE HISTORY: This is a new bill for 2002.
EFFECTIVE DATE: This act would take effect immediately but would
apply only to an audit or non audit service that first commences on or
after the effective date of this act pursuant to a contract entered into
on or after such date.