(a) The Secretary of the Department of Inspector General is directed to make continuing studies and investigations of the operation of state agencies and to make recommendations to the General Assembly, the Legislative Council, and the Governor about improvements which should be made in order to:
(1) Safeguard against excessive expenditures of appropriations and funds;
(2) Promote economy, efficiency, and control in the operation of state agencies; and
(3) Accomplish the purposes of this chapter as intended by the General Assembly.
(b) The Internal Audit Section created under the Department of Finance and Administration by Governor's Executive Order 99-08 and transferred to the Department of Inspector General by a cabinet-level department transfer under § 25-43-1002 shall conduct its audits using the suggested standards for the professional practice of internal auditing as adopted by the Institute of Internal Auditors.
(c) The Internal Audit Section shall:
(1) Review the financial and operating controls and the transactions of state agencies to determine the level of conformity with established laws, standards, rules, and procedures;
(2) Review the various functions within an enterprise to appraise the efficiency and economy of operations and the effectiveness with which those functions achieve the stated objectives, including without limitation a review of established internal control activities;
(3) Investigate reported occurrences of fraud, embezzlement, theft, waste, abuse, or mismanagement of state resources;
(4) Recommend controls to prevent occurrences of fraud, embezzlement, theft, waste, abuse, or mismanagement of state resources;
(5) Assist state agencies to resolve areas of concern;
(6) Assist state agencies in establishing appropriate internal controls that will prevent errors or irregularities;
(7) Provide objective analysis, appraisals, and recommendations concerning the activities it reviews; and
(8) Perform other functions as directed by the Governor or the secretary.
(d) After an audit is completed, the Internal Audit Section shall file a written final report concerning the actions and determinations made under this section with:
(1) The secretary;
(2) The Governor;
(3) The State Board of Finance; and
(4) Arkansas Legislative Audit.
(e) Employees of the Internal Audit Section shall:
(1) Be employed by the secretary as employees of the Department of Inspector General; and
(2) Serve at the pleasure of the secretary.
(f)
(1) All internal audit documentation, including notes, memoranda, preliminary drafts of audit reports, and other data gathered in the preparation of internal audit reports by the Internal Audit Section, are privileged and confidential and are exempt from the Freedom of Information Act of 1967, § 25-19-101 et seq., except as provided in subdivision (f)(2) of this section.
(2)
(A) The exemption shall not apply to completed internal audits of the Internal Audit Section after a final report of the internal audit has been presented to:
(i) The secretary;
(ii) The Governor or the Governor's designee;
(iii) The board; or
(iv) Arkansas Legislative Audit.
(B) The final report and copies of any supporting documentation shall then be open to public inspection and copying, except for documents that are exempt from disclosure under other law.
(g)
(1) The Internal Audit Section shall conduct an annual project review and efficiency study of the Arkansas Department of Transportation to include without limitation a review of the processes, procedures, procurement processes, projects, appeals procedures and expenditures.
(2) The results of a study under this section shall be reported to the Legislative Council no later than October 1 of each year, with the first report to be submitted by October 1, 2021.