Sub. H.B. No. 2 Summary

• Requires the Auditor of State to conduct performance audits of a minimum of four state agencies each biennium, with at least two from major administrative departments and at least two from other state agencies, excluding legislative, judicial, and certain executive offices.

• Establishes the Leverage for Efficiency, Accountability, and Performance (LEAP) Fund to provide loans to state agencies and local public offices to pay for performance audits, with repayment due one year after audit completion and interest accruing at the state treasury asset reserve fund rate.

• Mandates that audited agencies implement audit recommendations and report to the Governor and legislative leaders within three months if implementation has not commenced; requires agencies to file additional justification reports if recommendations are not fully implemented within one year.

• Requires public comment periods on audits (14 days following release) and directs the Auditor of State to submit annual reports on whether agencies implemented recommendations and the resulting savings.

• Appropriates $1,500,000 to the LEAP Fund for fiscal year 2011, transferred from the Uniform Accounting Network Fund, with enforcement mechanisms allowing the Director of Budget and Management and county auditors to withhold funds from non-compliant agencies and local offices.