A bill drafted in response to the alleged misuse of $3.5 million by administrators at the Timpanogos Mental Health Center has been endorsed by an interim committee of the Legislature.

The bill, already prefiled by Sen. LaRay McAllis-ter, R-Orem, would set specific requirements for local government audits and make the state auditor responsible for setting guidelines for local authorities to use in selecting an auditor.The law currently requires annual audits of local government entities but does not detail what should be included in the report. Among the proposed requirements is a statement by the auditor assuring compliance.

Although the bill was unanimously approved by the Interim Appropriations Committee on Wednesday, questions were raised about the qualifications that would be required of the auditors.

Rep. Nolan Karras, R-Roy, reminded lawmakers that having someone not trained to perform government audits examine the records at Timpanogos may have kept authorities from uncovering the apparent misuse of funds sooner.

Karras, a Certified Public Accountant, said he is not sure the bill goes far enough in mandating qualification requirements. The bill itself only mandates that the auditor be a CPA.

"I don't mind giving local (governments) authority on their money," Karras said, adding that if local entities are receiving state funds, there should be "doggone strict guidelines."

State Auditor Tom Allen said that requiring the auditors to give a so-called statement of "positive assurance" that there are no problems within an audited entity would help insure they do a better job.

"Now, we operate under the assumption that if they don't say anything, it's OK," Allen told lawmakers.

Action was not taken by the Interim Appropriations Committee on a second bill filed by McAllister that deals with government audits. That bill would give county auditors the authority to audit all county departments, clarifying a state law written many years ago that does not include many modern-day divisions.

A third bill dealing only with audits of local mental health authorities, drafted by Legislator Auditor General Wayne Welsh, was not discussed. That bill would give the state auditor reponsibility for the audits.