Rhode Island General Laws
Chapter 45-10 - Audit of Accounts and Installation of Systems
Section 45-10-5.3. - Failure to file audit report — Enforcement and penalty.

§ 45-10-5.3. Failure to file audit report — Enforcement and penalty.
(a) Failure to file the duplicate audit report as prescribed in § 45-10-4 shall result in a sanction being imposed equal to ten thousand dollars ($10,000) per month or a monthly sanction equal to one-twelfth (1/12) of the product of one percent (1%) of the general revenue sharing funds received by the municipality from the state in the prior fiscal year, whichever is greater. This penalty shall be calculated from the due date of the audit or any approved extension date until the date the report is filed as required. The penalty funds shall be paid by the municipality to the general treasurer who shall deposit the funds into a restricted receipts account. If the municipality fails to promptly pay the penalty, the general treasurer is authorized to withhold those amounts from state aid otherwise due to the municipality upon certification by the auditor general of the amount of the penalty. Both the auditor general and the general treasurer shall have standing to bring an action in the Providence County superior court to enforce payment of the penalty provided for under this section.
(b) In addition to the penalty for late filing, if the municipality fails to comply with the provisions of this chapter by filing the audit report as required under this chapter, the auditor general, in his or her discretion, is authorized to provide for the completion of the audit. In that event, the auditors and/or the municipality shall transmit the audit workpapers to the auditor general within ten (10) days of his or her request. The workpapers shall include, but not be limited to, the work product customarily generated in the course of an audit under generally accepted auditing standards and practices, as well as any papers, schedules, or documents created or provided by or to the auditors in the conduct of audit field work. The municipality shall bear the cost of the audit to be completed by the auditor general or an independent audit firm engaged by the auditor general to complete the audit. The payment of this cost shall be deducted from state aid funds otherwise due to the municipality.
(c) If the auditor and/or the municipality refuses to transmit the workpapers as provided in this section, the auditor general shall have standing to petition the presiding justice of the Rhode Island superior court for an order compelling the immediate transmission of the workpapers to the auditor general. Upon the filing of that petition, the court shall schedule a hearing on an expedited basis, no more than ten (10) days after the filing of the petition. The court shall order the transmission of the workpapers and the draft of the audit report, if any, to the auditor general upon the auditor general’s certification to the court that:
(1) The audit report was not completed and filed as required under the law;
(2) Requests for extension to file were denied by the auditor general; and
(3) The auditors and/or the municipality have failed or refused to transmit the workpapers and/or preliminary draft of the report.
(d) Failure to transmit the workpapers and/or draft audit report after the issuance of a court order will constitute criminal contempt of court, and will empower the court to impose any and all criminal sanctions including imprisonment and/or monetary penalties consistent with the existing power and authority of the superior court to impose those sanctions under law. Any monetary penalty imposed shall be paid into the restricted receipts account established pursuant to this section for the payment of late penalties.
(e) The state controller shall establish the restricted receipts account for the deposit of penalties and costs under this section, and the disbursement of funds from this account shall be for the purpose of training government finance personnel, and to reimburse and/or pay audit costs and the cost of monitoring and enforcing compliance with this chapter. Disbursements from the account shall require the authorization of the auditor general.
History of Section.P.L. 2002, ch. 414, § 2.

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