AS PASSED BY COMMITTEE

AMENDED

ARIZONA STATE SENATE

RESEARCH STAFF
BRANDI PEPLINSKI
TO:

MEMBERS OF THE SENATE

DATE:

March 19, 2015

LEGISLATIVE RESEARCH
ASSISTANT ANALYST
GOVERNMENT COMMITTEE
Telephone: (602) 926-3171

SUBJECT:

Strike everything amendment to H.B. 2420, relating to the office of the inspector
general; powers; duties.
________________________________________________________________________________
Purpose
Establishes the Office of the State Inspector General.
Background
The Association of Inspectors General (AIG) is a non-profit, membership organization for
agencies and professionals in the inspector general community. The AIG establishes and maintains
the Principles and Standards for Offices of Inspectors General. The AIGs Principles and
Standards establish criteria for creating and administering inspector general offices consistent with
best practices within the inspector general profession.
According to the AIGs website, the AIG has identified approximately 200 public offices
dedicated to government accountability and oversight across 40 states, including the District of
Columbia. Arizona currently has an Office of Inspector General of the Medicaid Agency and that
office is responsible for the integrity of the $9 billion Arizona Health Care Cost Containment
System (AHCCCS), Arizona's Medicaid program and is also responsible for handling reports of
fraud and abuse of the AHCCCS program.
There may be a fiscal impact to the state General Fund associated with this legislation due to
the establishment of a new office and appointed officer.
Provisions
1.

Establishes the Office of the Inspector General and requires the Governor to appoint the
Inspector General to serve at the pleasure of the Governor and report directly to the Governor.

2. Requires the Inspector General to satisfy the following requirements:

a) have at least 10 years of demonstrated ability in management analysis, public
administration, investigations or criminal justice administration or other closely related
disciplines; and
b) not have held any political party office within two years immediately preceding the
appointment.
3. Requires the Inspector General to be selected without regard to political affiliation.

STRIKER MEMO - Amended

H.B. 2420
Page 2
4. Specifies that the Inspector General is eligible to receive compensation.
5. Directs the Inspector General to perform the following powers and duties:
a) examine and investigate the operations, management and affairs of state agencies;
b) conduct investigations and examinations of contractors, subcontractors, grantees or
subgrantees of state agencies regarding waste, fraud, abuse or allegations of criminal or civil
wrongdoing that impact the state;
c) periodically review policies and procedures, monitor operations and make recommendations
for improvement of state government;
d) receive complaints of fraud, waste, abuse, mismanagement and misconduct involving state
agencies and determine whether investigation is warranted and establish a system for
anonymous reporting; and
e) submit an annual report that describes the efforts made by the office toward preventing and
detecting criminal misconduct, fraud, waste and abuse in state government to the Governor
and the Legislature and a copy to the Secretary of State.
6. Requires the Inspector General, following any examination, review or audit, to allow the
affected state agency an opportunity to provide comments before the release of a report and
requires the annual report to include the response of state agencies, if any.
7. Directs all officers and employees of state agencies to extend full cooperation and all reasonable
assistance to the Inspector General.
8. Specifies that the Office of the Inspector General may sue and be sued and that the Inspector
Generals authority is subject to the Arizona Rules of Civil Procedure.
9. Allows the Inspector General to do the following:
a) administer oaths and issue subpoenas to obtain testimony, records and other necessities to
perform required duties; and
b) apply to the appropriate court for enforcement of subpoenas or for sanctions for a partys
failure to comply.
10. Requires the Inspector General to have access to all nonprivileged records, information,
electronically stored data, reports, plans, projections, matters, contracts, memoranda,
correspondence and any other materials of a state agency.
11. Establishes that the Inspector General is deemed to be an authorized representative and agent of
each state agency for the following purposes:
a) examining and investigating the records of all contractors, subcontractors, grantees or
subgrantees of the state agency; and
b) obtaining access to any records of the state agency in the possession of a third party,
including bank account records.
12. Requires the Inspector General and the Inspector Generals employees to carry credentials and
badges that identify their employment with the office.
13. Requires the Office of the Inspector General to do the following:

STRIKER MEMO - Amended

H.B. 2420
Page 3
a) adhere to professional standards for initiating and conducting audits, investigations,
inspections and reviews that must be consistent with standards adopted by an AIG; and
b) develop an operations manual that contains standards.
14. Designates the Office of the Inspector General as a law enforcement agency that confers all
investigative powers and privileges appurtenant to a law enforcement agency under state law.
15. Includes the following in the powers and privileges of the Office of the Inspector General:
a) access to computer systems;
b) access to information maintained for the use of law enforcement personnel; and
c) access to any information contained in the criminal history records and identification files of
the Department of Public Safety (DPS).
16. Gives the Office oversight authority and review responsibilities for investigations performed by
the Office within the following state agencies and entities:
a) Department of Corrections (DOC);
b) DPS;
c) Department of Economic Security (DES);
d) Department of Transportation (ADOT);
e) Arizona Health Care Cost Containment System Administration (AHCCCSA);
f) Department of Child Safety (DCS); and
g) any internal compliance or enforcement units within other state agencies.
17. Directs the Inspector General to establish an Inspector General Advisory Council (Council)
consisting of the following members:
a) the Inspector General or the Inspector Generals designee;
b) the director of DOC or the directors designee;
c) the director of DPS or the directors designee;
d) the director of ADOT or the directors designee;
e) the director of AHCCCSA or the directors designee; and
f) the director of DCS or the directors designee.
18. Requires that the records prepared or obtained by the Inspector General in connection with a
conducted investigation be confidential and protected from disclosure.
19. Specifies that a privilege established by law may not be waived to any records obtained by the
Inspector General and that all records and information deemed confidential by other law and
obtained by the Inspector General and are to remain confidential.
20. Establishes that any person who knowingly, intentionally or recklessly makes public any
confidential information or record in violation of the aforementioned provisions is guilty of a
class one misdemeanor.
21. Defines office and state agency.
22. Makes a purpose statement.

STRIKER MEMO - Amended

H.B. 2420
Page 4
23. Terminates the Council on July 1, 2023.
24. Terminates the Office of the Inspector General on July 1, 2025.
25. Repeals Title 41, Chapter 53 on January 1, 2026.
26. Becomes effective on the general effective date.
Amendments Adopted by Committee

Adopted the strike everything amendment.

Senate Action
GOV
CRS/BP/ls

3/18/15

DPA/SE

4-3-0-0