§ 116-30.1. Special responsibility constituent institutions. - North Carolina Statutes

§ 116‑30.1.  Special responsibility constituentinstitutions.

The Board of Governors of The University of North Carolina, acting onrecommendation made by the President of The University of North Carolina afterconsultation by him with the State Auditor, may designate one or moreconstituent institutions of The University as special responsibilityconstituent institutions. That designation shall be based on an express findingby the Board of Governors that each institution to be so designated has themanagement staff and internal financial controls that will enable it toadminister competently and responsibly all additional management authority anddiscretion to be delegated to it. The Board of Governors, on recommendation ofthe President, shall adopt rules prescribing management staffing standards andinternal financial controls and safeguards, including the lack of anysignificant findings in the annual financial audit by the State Auditor'sOffice, that must be met by a constituent institution before it may bedesignated a special responsibility constituent institution and must bemaintained in order for it to retain that designation. These rules shall not bedesigned to prohibit participation by a constituent institution because of itssize. These rules shall establish procedures for the President and his staff toreview the annual financial audit reports, special reports, electronic dataprocessing reports, performance reports, management letters, or any otherreport issued by the State Auditor's Office for each special responsibilityconstituent institution. The President shall take immediate action regardingreported weaknesses in the internal control structure, deficiencies in theaccounting records, and noncompliance with rules and regulations. In any instancewhere significant findings are identified, the President shall notify theChancellor of the particular special responsibility constituent institutionthat the institution must make satisfactory progress in resolving the findings,as determined by the President of The University, after consultation with theState Auditor, within a three‑month period commencing with the date ofreceipt of the published financial audit report, any other audit report, ormanagement letter. If satisfactory progress is not made within a three‑monthperiod, the President of The University shall recommend to the Board ofGovernors at its next meeting that the designation of the particularinstitution as a special responsibility constituent institution be terminateduntil such time as the exceptions are resolved to the satisfaction of thePresident of The University of North Carolina, after consultation with theState Auditor. However, once the designation as a special responsibilityconstituent institution has been withdrawn by the Board of Governors,reinstatement may not be effective until the beginning of the following fiscalyear at the earliest. Any actions taken by the Board of Governors with respectto withdrawal or reinstatement of an institution's status as a specialresponsibility constituent institution shall be reported immediately to theJoint Legislative Education Oversight Committee.

The rules established under this section shall include review by thePresident, after consultation with the State Auditor, the Director of theOffice of State Personnel, and the Director of the Division of State Purchasingand Contracts in ascertaining whether or not a constituent institution has themanagement staff and internal financial controls to administer the additionalauthorities authorized under G.S. 116‑30.2, 116‑30.4, and 143‑53.1.Such review and consultation must take place no less frequently than once eachbiennium. (1991, c. 689, s.206.2(a); 1993 (Reg. Sess., 1994), c. 591, s. 10(a); 1996, 2nd Ex. Sess., c.18, s. 7.4(k); 1997‑71, s. 1.)