The Department of the Auditor General shall have the power, and its duty shall be, to audit the accounts and records of every person, association, corporation, and public agency, receiving an appropriation of money, payable out of any fund in the State Treasury, or entitled to receive any portion of any State tax for any purpose whatsoever, as far as may be necessary to satisfy the department that the money received was expended or is being expended for no purpose other than that for which it was paid. Copies of all such audits shall be furnished to the Governor.

If at any time the department shall find that any money received by any person, association, corporation, or public agency, has been expended for any purpose other than that for which it was paid, it shall forthwith notify the Governor, and shall decline to approve any further requisition for the payment of any appropriation, or any further portion of any State tax, to such person, association, corporation or public agency, until an amount equal to that improperly expended shall have been expended for the purpose for which the money improperly expended was received from the State Treasury.

If an audit completed by the department under this section makes recommendations, any person, association, corporation or public agency being audited shall submit a response to the department detailing adoption of such recommendations, or the reason why recommendations have not been adopted, within one hundred and twenty business days of the publication of the audit. The department shall provide notice to the subject of an audit sixty business days after the date of the audit's publication that future appropriations could be denied for the person, association, corporation or public agency if a response is not made.

The department shall regularly notify the Governor, the chairperson and minority chairperson of the Appropriations Committee of the Senate and the chairperson and minority chairperson of the Appropriations Committee of the House of Representatives of responses received, accompanied by any comments the department may wish to submit. The department shall post responses to the department's publicly accessible Internet website. The Governor, the chairperson and minority chairperson of the Appropriations Committee of the Senate and the chairperson and minority chairperson of the Appropriations Committee of the House of Representatives may consider this response when determining whether future appropriations to the person, association, corporation or public agency will be considered.

If the person, association, corporation or public agency does not respond to the department within one hundred and twenty business days from the date of the publication of the audit, the department shall notify the Governor, the chairperson and minority chairperson of the Appropriations Committee of the Senate and the chairperson and minority chairperson of the Appropriations Committee of the House of Representatives. The Governor, the chairperson and minority chairperson of the Appropriations Committee of the Senate and the chairperson and minority chairperson of the Appropriations Committee of the House of Representatives may consider a failure to respond to the audit when determining whether future appropriations to the person, association, corporation or public agency will be considered.

The department shall work with the Governor, the chairperson and minority chairperson of the Appropriations Committee of the Senate and the chairperson and minority chairperson of the Appropriations Committee of the House of Representatives to determine the most effective method to communicate information concerning responses to the department's audit recommendations based on the type of audit and significance of the recommendations.