130-RICR — Auditor General

Chapter 00

Subchapter 00

130-RICR-00-00-1 Maximum Levy – Standards and Procedures for Certification of an Emergency Situation in Accordance with R.I. Gen. Laws § 44-5-2 (as amended) for Rhode Island Cities and Towns and for Certain Fire Districts (when specified by law)

130-RICR-00-00-1 § 1.1 General

A.Under the provision of R.I. Gen. Laws § 44-5-2 (as amended), a municipal entity (see Definitions) may not adopt a levy that exceeds four percent (4%) of the prior year tax levy unless certain statutory conditions are met.

B.Statutory Conditions: A municipal entity subject to R.I. Gen. Laws § 44-5-2 (as amended), may experience financial conditions in the nature of an emergency that require an increase in the tax levy in excess of the four percent (4%) statutory limit. The existence of the emergency must be certified by the Auditor General.

C.The Department of Revenue has established procedures for monitoring compliance with R.I. Gen. Laws § 44-5-2 (as amended) and for certifying such conditions as require the Department's certification under the law.

D.In accordance with R.I. Gen. Laws § 44-5-2 (as amended) and the Administrative Procedures Act, the Auditor General adopts the following standards and procedures for the certification of an emergency situation.

History

• Periodic Refile — effective from 2022-01-04 to current
• Amendment — effective from 2018-12-09 to 01/04/2022
• Amendment — effective from 2007-07-04 to 12/09/2018
• EMERGENCY RULE Amendment — effective from 2007-03-21 to 07/04/2007
• Periodic Refile — effective from 2001-12-27 to 07/04/2007

130-RICR-00-00-1 § 1.2 Definitions

A.For purposes of this regulation, the following terms shall have the following meanings:

1.“Municipal entity” means cities and towns and certain fire districts (when specified by law).

2."General fund budget" means those amounts appropriated by a municipal entity for its annual financial operations, including debt service and appropriations to the school district (including regional).

3."Statutory property tax limit" means the maximum municipal percentage tax levy increase of 4% is available without an approved exemption.

4."Maximum property tax levy" means the maximum dollar value of the tax levy on real estate and tangible personal property available by application of the statutory property tax limit increase.

5."Emergency situation" is an event in which the municipal entity incurred or expects to incur, in the upcoming fiscal year, expenditures of an emergency nature which caused or will cause the tax levy to increase by an amount which exceeds the percentage increase as specified in R.I. Gen. Laws § 44-5-2(a) or (b), as amended. Expenditures in the nature of an emergency are those extraordinary in nature, and/or not reasonably foreseeable. The municipal entity shall request that the Auditor General certify the emergency and approve its request to exceed the maximum property tax levy based on said emergency.

a.To qualify as an emergency, the financial impact of the event on the proposed property tax levy shall be equal to or greater than one quarter of one percent (1/4%) of the general fund budget or $100,000, whichever is lower, and must require financing from that general fund budget. The decision as to whether an event is an emergency situation should be based on a consideration and evaluation of all relevant and pertinent facts, including the legislative intent of R.I. Gen. Laws § 44-5-2, as amended, and the standards and procedures set forth herein.

b.The chief executive officer and finance director of the municipal entity subject to R.I. Gen. Laws § 44-5-2 (as amended) (as well as, the school superintendent and school business manager, when applicable) shall provide a written certification as to the financial facts in support of the request to the Auditor General. The municipal entity shall also certify that no other line items in the budget can be reduced, thereby avoiding the need to exceed the specified statutory limit. This certification shall be in a form prescribed by the Auditor General.

c.Pursuant to R.I. Gen. Laws § 44-5-2 as amended, an emergency shall be deemed to exist when the municipal entity experiences or anticipates health insurance costs, retirement contributions or utility expenditures which exceed the prior fiscal year's health insurance costs, retirement contributions or utility expenditures by a percentage greater than three (3) times the percentage increase as specified in R.I. Gen. Laws § 44-5-2(b). In these cases, the amount of the budget item expenditure to be considered as an emergency is the amount of the increase which exceeds three times the amount of the statutory limit. [Example: For the fiscal 2020 budget year, an increase in health insurance costs in excess of 12% of the amount in the fiscal year 2019 budget would categorically qualify for emergency approval.]

d.In addition to § 1.2(A)(5)(c) of this Part above, other events may be evaluated and deemed an emergency if they satisfy the criteria listed below. The following is a non-exhaustive list of the type of events which could be considered as an emergency situation:

(1)Extraordinary judgment on a claim against the municipal entity.

(2)Natural disaster (e.g., flood, fire, blizzard) or vandalism causing loss beyond insured amounts.

(3)Regulatory order requiring improvement of deficiencies in violation of safety, health standards, etc. (e.g., toxic wastes found in water, asbestos in schools).

(4)Court order.

(5)Unforeseen significant increase in budgeted cost of widely used product due to national or regional price increase (e.g., oil) requiring supplemental tax levy.

(6)Requirement that a municipal entity undertakes a new state or federally mandated program not funded by the state or federal government.

(7)Change in requirements of Generally Accepted Accounting Principles which would result in an accumulated deficit in excess of state statute (e.g., changes in how expenditures are recognized, property tax revenue recognition, etc.).

(8)Sudden demographic shifts which would require a change in services rendered (e.g., a significant change in school enrollment).

(9)Other unforeseen or unexpected events which are not the result of managerial decisions but are rather beyond the control of management, similar to those listed. The events must be identified as emergencies by the municipal entity and certified as such by the Auditor General.

History

• Periodic Refile — effective from 2022-01-04 to current
• Amendment — effective from 2018-12-09 to 01/04/2022
• Amendment — effective from 2007-07-04 to 12/09/2018
• EMERGENCY RULE Amendment — effective from 2007-03-21 to 07/04/2007
• Periodic Refile — effective from 2001-12-27 to 07/04/2007

130-RICR-00-00-1 § 1.3 Notification of an Emergency Situation

A.The municipal entity shall notify the Auditor General if it experiences or anticipates an emergency situation or situations.

B.The notification shall be given at least sixty (60) days prior to the date for approval of the budget, or upon occurrence if less than sixty (60) days.

C.The notification shall be in writing and signed by the chief executive officer of the municipal entity.

D.The notification shall identify each emergency situation.

E.The notification shall be suitably documented (including forms required by the Office of the Auditor General):

1.The documentation shall include, at a minimum, the facts considered by the municipal entity; the amount of the general fund budget; the amount of the maximum property tax levy allowed under R.I. Gen. Laws § 44-5-2, as amended (i.e., prior year levy plus the statutory limit); the dollar impact on the general fund budget of each emergency situation; availability of other revenue sources; and the amount by which the maximum levy would be exceeded.

2.The municipal entity shall also identify any levy in excess of the statutory limit resulting from conditions allowed under R.I. Gen. Laws § 44-5-2 and which have been certified by the Department of Revenue. Such conditions include a loss of non-property tax revenue, an increase in debt service expenditures, or a substantial growth in the tax base.

History

• Periodic Refile — effective from 2022-01-04 to current
• Amendment — effective from 2018-12-09 to 01/04/2022
• Amendment — effective from 2007-07-04 to 12/09/2018
• EMERGENCY RULE Amendment — effective from 2007-03-21 to 07/04/2007
• Periodic Refile — effective from 2001-12-27 to 07/04/2007

130-RICR-00-00-1 § 1.4 Certification by the Auditor General

The Auditor General will respond in writing, no later than thirty (30) days after receipt of the notification by the municipal entity. The Auditor General shall either certify the existence of the emergency situation to the Department of Revenue or deny certification. The Auditor General shall state the reasons for denial.

History

• Periodic Refile — effective from 2022-01-04 to current
• Amendment — effective from 2018-12-09 to 01/04/2022
• Amendment — effective from 2007-07-04 to 12/09/2018
• EMERGENCY RULE Amendment — effective from 2007-03-21 to 07/04/2007
• Periodic Refile — effective from 2001-12-27 to 07/04/2007

130-RICR-00-00-1 § 1.5 Appeals

A.Appeals to Rules - Any person may petition the Auditor General, requesting the amendment or repeal of any rule herein adopted.

B.Appeals to Decisions - Any official may petition the Auditor General for review of his decision on any request filed in accordance with the rules herein adopted.

C.Filing of Appeals - All appeals to rules or decisions shall be made in writing to the Auditor General stating the nature and reason for said appeal.

D.Hearings - Within five (5) calendar days of the receipt of an appeal, the Auditor General shall notify the petitioner of a date upon which said appeal shall be heard.

E.Administrative Procedures - All hearings and procedures shall comply with the requirements of R.I. Gen. Laws Chapter 42-35 entitled "Administrative Procedures".

History

• Periodic Refile — effective from 2022-01-04 to current
• Amendment — effective from 2018-12-09 to 01/04/2022
• Amendment — effective from 2007-07-04 to 12/09/2018
• EMERGENCY RULE Amendment — effective from 2007-03-21 to 07/04/2007
• Periodic Refile — effective from 2001-12-27 to 07/04/2007

130-RICR-00-00-2 Policies And Procedures For 340b Drug Program Reporting And Audit And Compliance And Enforcement Provisions Of R.I. Gen. Laws Chapter 5-19.3.

130-RICR-00-00-2 § 2.1 General

A.R.I. Gen. Laws Chapter 5-19.3 entitled “Defending Affordable Prescription Drug Costs Act” mandates specific reporting requirements in R.I. Gen. Laws § 5-19.3-6 for covered entities of Rhode Island that participate in the federal 340B program. Those reporting requirements mandate the submission to the Office of the Governor, the Speaker of the House, the President of the Senate, and the Auditor General a report that includes a minimum of the following information:

1.The aggregated acquisition cost for all prescription drugs that the 340B covered entity obtained through the 340B program during the previous calendar year;

2.The aggregated payment amount that the 340B covered entity received for drugs, under the 340B program and dispensed or administered to patients enrolled in commercial and Medicare Supplemental plans;

3.The aggregated payment amount that the 340B covered entity made:

a.To contract pharmacies to dispense drugs to its patients under the 340B program during the previous calendar year;

b.To any other outside vendor for managing, administering, or facilitating any aspect of the 340B covered entity's drug program during the previous calendar year; and

c.For all other expenses related to administering the 340B program, including staffing, operational, and administrative expenses, during the previous calendar year.

4.The names of all vendors, including split billing vendors, and contract pharmacies, with which the 340B covered entity contracted to provide services associated with the covered entity's 340B program participation during the previous calendar year;

5.The number of claims for all prescription drugs the 340B covered entity obtained through the 340B program during the previous calendar year, including the total number of claims and the number of claims reported by commercial and Medicare Supplemental plans;

6.A description of the ways in which the 340B entity uses savings from its participation in the 340B program to benefit patients and/or its community through programs, projects, and services funded in whole or in part by savings from the 340B program;

7.A description of any and all material breaches, changes in 340B eligibility status, and/or the U.S. Department of Health and Human Services, Health Resources and Services Administration's ("HRSA") 340B program or manufacturer audits during the previous calendar year;

8.A description of the 340B covered entity's self-audit and oversight of its participation in the 340B program in compliance with the HRSA 340B program rules and guidance; and

9.Such additional information as the General Assembly or Auditor General may request.

B.R.I. Gen. Laws § 5-19.3-7 also authorizes the Auditor General to:

1.Investigate complaints and take appropriate actions to ensure compliance with this Chapter; and

2.Promulgate rules and regulations necessary to carry out the provisions of this Chapter.

History

• Adoption — effective from 2026-02-17 to current

130-RICR-00-00-2 § 2.2 Authority

A.By the virtue of the authority vested in the Auditor General by R.I. Gen. Laws § 5-19.3-7, the Auditor General hereby issues the following rules and regulations relating to reporting and audit, and compliance and enforcement provisions within R.I. Gen. Laws Chapter 5-19.3.

History

• Adoption — effective from 2026-02-17 to current

130-RICR-00-00-2 § 2.3 Definitions

A.For purposes of this Part and related Appendix A, the following terms are defined as provided in R.I. Gen. Laws § 5-19.3-2:

1."340B contract pharmacy" means a pharmacy, as defined in R.I. Gen. Laws § 5-19.1-2, that dispenses 340B drugs on behalf of a 340B-covered entity under contract.

2."340B covered entity" means an entity participating or authorized to participate in the federal 340B drug discount program, as described in 42 U.S.C. § 256b.

3.“340B Drug” means a drug that has been subject to any offer for reduced prices by a manufacturer pursuant to 42 U.S.C § 256b and is purchased by a covered entity as defined in 42 U.S.C § 256b(a)(4).

4."Health insurer" means every nonprofit medical service corporation, hospital service corporation, health maintenance organization, or other insurer offering or insuring health services.

5."Pharmaceutical manufacturer" means any person or entity that manufactures or sells prescription drugs, directly or through another person or entity, in this state.

6."Pharmacy benefit manager" or "PBMs" means an entity doing business in the state that contracts to administer or manage prescription-drug benefits on behalf of any carrier that provides prescription-drug benefits to residents of this state.

History

• Adoption — effective from 2026-02-17 to current

130-RICR-00-00-2 § 2.4 Purpose and Scope

A.These rules and regulations supplement R.I. Gen. Laws Chapter 5-19.3 as authorized under R.I. Gen. Laws § 5-19.3-7.

History

• Adoption — effective from 2026-02-17 to current

130-RICR-00-00-2 § 2.5 Reporting - Policies and Procedures

A.To facilitate statutory reporting requirements, covered entities (as defined at § 2.3 of this Part) must complete and submit the 340B Drug Pricing Program – Mandated Covered Entity Reporting (Annual Report), included as Appendix A to this policy.

B.The mandated annual report can be found at the website of the RI Auditor General (https://www.oag.ri.gov/) under the tab for 340B Drug Pricing Program Reporting. The annual report can also be obtained by request by emailing the Office of the Auditor General at [email protected]. The annual report is provided in excel to allow covered entities flexibility in expanding or adding data to meet their individual reporting needs. The annual report includes the minimum information required by R.I. Gen. Laws § 5-19.3-6, however, covered entities can include additional data or narratives within their annual reports when submitted.

C.R.I. Gen. Laws § 5-19.3-6 mandates that annual reports be submitted for the calendar year ending December 31st with the first report due for the period ending December 31, 2025.

D.Covered entities must submit reporting for the registered parent (corporate entity) authorized in the 340B program, inclusive of all provider locations participating in the 340B Drug Pricing Program.

E.Covered entities can elect to report amounts in the 340B reporting template on a cash or accrual basis of accounting.

F.Covered entities are required to submit the annual report on or before April 1st for the preceding calendar year.

G.The reporting template must be completed and submitted to the Office of the Auditor General by email ([email protected]) as a:

1.PDF file for purposes of public posting as the covered entity’s annual report on the website of the Office of the Auditor General; and

2.Via the original excel template for Auditor General data compilation needed to administer its statutory duties relating to the law.

H.For reporting consistency, the Office of the Auditor General will communicate the availability of each covered entity’s annual report on the website of the Office of the Auditor General to the Office of the Governor, the Speaker of the House, the President of the Senate and the respective covered entity officials upon posting as required by R.I. Gen. Laws § 5-19.3-6.

I.As mandated by R.I. Gen. Laws § 5-19.3-6, all submitted reports will be posted on the Auditor General’s website. The Auditor General will post a minimum of the 5 most recent annual report submissions for each covered entity.

J.Any questions regarding 340B Drug Pricing Program – Mandated Covered Entity Reporting can be submitted to the Office of the Auditor General at [email protected].

History

• Adoption — effective from 2026-02-17 to current

130-RICR-00-00-2 § 2.6 Compliance, Audit, and Enforcement - Policies and Procedures

A.The Office of the Auditor General will perform the following relative to compliance and enforcement pursuant to R.I. Gen. Laws Chapter 5-19.3:

1.Monitor covered entity compliance with mandated reporting requirements and report to the General Assembly.

2.Take appropriate actions to ensure compliance with mandated reporting requirements. Failure to submit the Annual Report in the format described above will be deemed non-compliance with R.I. Gen. Laws § 5-19.3-6 and may subject the covered entity to compliance action, which may include but shall not be limited to, posting a record of the noncompliance on the Auditor General’s website, reporting the noncompliance to the General Assembly, referring the covered entity to the responsible state licensing body and/or the Department of the Attorney General for any further action they deem warranted.

B.Requirements for covered entities subject to compliance audits or inquiries in relation to their participation in the 340B Drug Pricing Program:

1.Covered entities are required to provide to the Auditor General supporting data and documentation in connection with compliance or performance audits, or inquiries by the Office of the Auditor General.

2.Covered entities are required to provide supporting data and documentation requested by the Auditor General or contracted auditors in the performance of audits or inquiries authorized under R.I. Gen. Laws Chapter 5-19.3.

C.Processing of Complaints Alleging Violations of R.I. Gen. Laws § 5-19.3-6:

1.Complaints alleging violation of the reporting and audit requirements mandated by R.I. Gen. Laws § 5-19.3-6 shall be filed with the Rhode Island Office of the Auditor General at [email protected] who shall investigate complaints and refer violations to the appropriate enforcement authorities, when appropriate.

2.Complaints shall specify in sufficient detail the facts in supporting the alleged violation and shall cite the specific section of R.I. Gen. Laws § 5-19.3-6, which is alleged to have been violated. Each complaint shall identify the name, address, and full contact information of the complainant and shall be signed and notarized.

3.The complainant shall provide any and all documents and other evidence that form the basis of the complaint.

D.Processing of Complaints Alleging Discriminatory Actions in Violation of R.I. Gen. Laws §§ 5-19.3-3 and 5-19.3-5:

1.Complaints alleging violation of R.I. Gen. Laws § 5-19.3-3 (Prohibition of certain discriminatory actions related to reimbursement of 340B covered entities and 340B contract pharmacies) and R.I. Gen. Laws § 5-19.3-5 (Prohibition on certain discriminatory actions by a pharmaceutical manufacturer, agent, or affiliate of such manufacturer related to 340B entities), shall be filed with the Rhode Island Department of the Attorney General, which may investigate such complaints and take any action it deems necessary to effectuate the purposes of R.I. Gen. Laws Chapter 5-19.3.

2.Complaints shall specify in sufficient detail the facts in support of the alleged violation and shall cite the specific sections of R.I. Gen. Laws §§ 5-19.3-3 and/or 5-19.3-5 alleged to have been violated. Each complaint shall include the name, address, and full contact information of the complainant, and shall be signed and notarized.

3.The complainant shall provide any and all documents and other evidence that form the basis of the complaint.

E.Nothing in these policies and procedures shall preclude the complainant from exercising any other rights or remedies that may be available under state or federal law.

F.Nothing in these policies and procedures shall preclude the Rhode Island Department of the Attorney General from enforcing any provision of R.I. Gen. Laws Chapter 5-19.3, or from seeking other relief authorized by the statute or common law.

G.Nothing in these policies and procedures shall be construed or applied in a manner that conflicts with any applicable federal law or regulatory guidance.

History

• Adoption — effective from 2026-02-17 to current