NC S446

Expands the definition of "agency head" to include the President of the Community College System and the State Controller, and removes the Superintendent of Public Instruction from the definition.

Broadens the definition of "state agency" to include all executive branch units and the Community College System Office, while excluding units of local government.

Modifies internal audit requirements to "promote" effective internal controls and "determine if" programs comply with laws, rather than "implement" and "ensure" compliance.

Changes the Director of Internal Auditing reporting structure to allow reporting to the agency head, chief deputy/chief administrative assistant, or governing board/subcommittee, instead of solely the agency head.

Adds new confidentiality protections for internal audit work papers and establishes a Class 2 misdemeanor for obstruction of audits or providing false reports to internal auditors.