(a)  The legislature hereby finds that:

(1)  Fraud and errors in public and quasi-public programs are more likely to occur from a lack of sufficient internal control structures in the state-authorized public corporations.

(2)  Effective internal control structures provide the basic foundation upon which public accountability must be built.

(3)  An entity’s system of internal control structures consists of policies and procedures designed to provide management with reasonable assurance that the agency achieves its objectives and goals including:

(i)  Reliability of financial reporting;

(ii)  Compliance with applicable laws and regulations; and

(iii)  Effectiveness and efficiency of operations.

(4)  Internal control structures are necessarily dynamic and must be continuously evaluated and, where necessary, improved.

(5)  Reports addressing the adequacy of the internal control structure of each public corporation are necessary to enable the executive branch, the legislature, and the public to evaluate the corporation’s performance of its public and quasi-public responsibilities and accountability.

Terms Used In Rhode Island General Laws 35-20-2

  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Fraud: Intentional deception resulting in injury to another.
  • Public corporation: means any body corporate and politic created or to be created pursuant to statute, including, without limitation, the Rhode Island industrial recreational building authority, the Rhode Island economic development corporation and any subsidiaries thereof, the Rhode Island industrial facilities corporation, the Rhode Island refunding bond authority, the Rhode Island health and educational building authority, the board of governors for higher education, the Rhode Island housing and mortgage finance corporation, the Rhode Island resource recovery corporation, the Rhode Island public transit authority, the Rhode Island student loan authority, the water resources board corporate, the Narragansett Bay water quality management district commission, the Rhode Island health and educational building corporation, the Rhode Island depositors economic protection corporation, the Rhode Island convention center authority, the Rhode Island turnpike and bridge authority, their successors and assigns. See Rhode Island General Laws 35-20-5

(b)  The legislature declares that:

(1)  The management of each public corporation is responsible for establishing and maintaining an adequate internal control structure and policies and procedures for financial reporting.

(2)  Each public corporation shall perform an assessment and produce a report on the effectiveness of the internal control structure and procedures for financial reporting and, when detected, control weaknesses must be promptly corrected.

(3)  All levels of management of the public corporation must be involved in assessing and strengthening the systems of internal control structures to minimize fraud, errors, abuse, and waste of public and quasi-public funds.

History of Section.
P.L. 1995, ch. 86, § 1; P.L. 2015, ch. 165, § 2; P.L. 2015, ch. 196, § 2.