Creating an Office of Internal Audit attached to the Department of Employee Trust Funds, the official text

2025 - 2026 LEGISLATURE
LRB-4795/1
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2025 ASSEMBLY BILL 793
December 23, 2025 - Introduced by Representatives Franklin, Born, Behnke, Dittrich, Duchow, Gundrum, Knodl, Moses, Murphy, O'Connor and Wichgers, cosponsored by Senator Wanggaard. Referred to Committee on State Affairs.

An Act to amend 15.165 (title), 16.50 (3) (b), 16.505 (1) (intro.), 20.923 (7) (intro.) and 20.923 (7) (a); to create 15.165 (5), 16.505 (2d), 40.03 (1) (dm), 40.03 (4m) and 230.08 (2) (pb) of the statutes; relating to: creating an Office of Internal Audit attached to the Department of Employee Trust Funds.

Analysis by the Legislative Reference Bureau
This bill creates an Office of Internal Audit attached to the Department of Employee Trust Funds and provides for an internal auditor within that office. Under the bill, the office plans and conducts audits of activities and programs administered by ETF, among other responsibilities.
The bill requires the Employee Trust Funds Board to appoint an internal auditor outside the classified service who reports directly to the board. Currently, the internal auditor for ETF reports to the secretary of ETF. Under the bill, the internal auditor is assigned to general senior executive group 1, which is the same group to which the assistant deputy secretary of ETF is assigned.
For further information see the state fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

Section 1. 15.165 (title) of the statutes is amended to read:
15.165 (title) Same; attached boards and offices.
Section 2. 15.165 (5) of the statutes is created to read:
15.165 (5) Office of internal audit. There is created an office of internal audit that is attached to the department of employee trust funds under s. 15.03. The office shall be under the direction and supervision of an internal auditor who shall be appointed by the employee trust funds board and serve outside the classified service. The internal auditor shall report directly to the employee trust funds board.
Section 3. 16.50 (3) (b) of the statutes is amended to read:
16.50 (3) (b) No change in the number of full-time equivalent positions authorized through the biennial budget process or other legislative act may be made without the approval of the joint committee on finance, except for position changes made by the governor under s. 16.505 (1) (c), (2), or (2j), by the investment board under s. 16.505 (2g), by the employee trust funds board under s. 16.505 (2d), or by the board of regents of the University of Wisconsin System under s. 16.505 (2m) or (2p).
Section 4. 16.505 (1) (intro.) of the statutes is amended to read:
16.505 (1) (intro.) Except as provided in subs. (2), (2d), (2g), (2j), (2m), and (2p), no position, as defined in s. 230.03 (11), regardless of funding source or type, may be created or abolished unless authorized by one of the following:
Section 5. 16.505 (2d) of the statutes is created to read:

16.505 (2d) The employee trust funds board may create or abolish a full-time equivalent internal auditor position or portion thereof funded from revenues appropriated under s. 20.515 (1) (w).
Section 6. 20.923 (7) (intro.) of the statutes is amended to read:
20.923 (7) General senior executive positions. (intro.) The salary ranges for the director and the executive assistant of the Wisconsin Technical College System and for the secretary, deputy secretary, and assistant deputy secretary, and internal auditor of the department of employee trust funds shall be contained in the recommendations of the administrator of the division of personnel management in the department of administration under s. 230.12 (3) (e). The board of the Wisconsin Technical College System shall set the salaries for the director and executive assistant of the Wisconsin Technical College System within the range to which the positions are assigned to recognize merit, to permit orderly salary progression, and to recognize competitive factors. The employee trust funds board shall set the salary salaries for the secretary and the internal auditor of the department of employee trust funds within the range to which the each position is assigned to recognize merit, to permit orderly salary progression, and to recognize competitive factors. The salary of the deputy secretary of the department of employee trust funds and the salary of the assistant deputy secretary of the department of employee trust funds shall be set in accordance with subs. (8) and (9), respectively. The salary of any incumbent in the positions identified in pars. (a) and (b) may not exceed the maximum of the salary range for the group to which the position is assigned. The positions are assigned as follows:
Section 7. 20.923 (7) (a) of the statutes is amended to read:

20.923 (7) (a) The positions assigned to general senior executive group 1 are the executive assistant of the Wisconsin Technical College System and, the assistant deputy secretary of the department of employee trust funds, and the internal auditor of the department of employee trust funds.
Section 8. 40.03 (1) (dm) of the statutes is created to read:
40.03 (1) (dm) Shall develop and implement policies, principles, and directives for the office of internal audit and fix the compensation of the internal auditor provided for under s. 15.165 (5).
Section 9. 40.03 (4m) of the statutes is created to read:
40.03 (4m) Office of internal audit. (a) The office of internal audit shall provide independent assurance that the public employee trust fund assets under the control of the department are safeguarded for the purpose of ensuring the fulfillment of the benefit commitments to individuals under this chapter.
(b) The internal auditor may review any activity, information, or record of the department that relates to the administration of the fund.
(c) The internal auditor shall plan and conduct audit activities, including external audits, risk assessments, research projects, and management reviews, under the direction of the board and in accordance with policies, principles, and directives determined by the board.
(d) The internal auditor shall monitor the department’s compliance with applicable legal requirements and contracts entered into by the department and the board.
(e) Notwithstanding s. 230.08 (2) (pb), if an employee of the department
holding the position of internal auditor in the classified service has achieved permanent status in class before the effective date of this paragraph .... [LRB inserts date], and is appointed by the employee trust funds board under s. 15.165 (5) while serving in that position in the unclassified service, that employee shall retain reinstatement privileges as set forth in s. 230.33 (1m). An employee of the department holding the position of internal auditor in the classified service on the effective date of this paragraph .... [LRB inserts date], who has not achieved permanent status in class in any position at the department on that date, shall have reinstatement privileges as set forth in s. 230.33 (1m) if the employee successfully completes service equivalent to the probationary period required in the classified service for the position that such an employee holds on that date.
Section 10. 230.08 (2) (pb) of the statutes is created to read:
230.08 (2) (pb) The internal auditor appointed under s. 15.165 (5).
Section 13. Nonstatutory provisions.
(1) Incumbent internal auditor. The individual holding the position of internal auditor in the department of employee trust funds on the day before the effective date of this subsection shall continue to serve in that position until an internal auditor is appointed under s. 15.165 (5).
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