House committee substitute to the 1st edition makes the following changes.

Makes organizational changes to the existing and proposed new elements of the definition of audit in GS 147-64.4. Adds a new requirement for audits to include at least one of the four described elements. Moves the provisions of subdivision d. into the body of subsection (2a), except no longer provides that an audit can include all elements or fewer. Regarding the new information systems element, adds that the audit must verify that information systems and applications are efficient State agency needs.

Regarding the proposed confidentiality provisions in GS 147-64.6(d)(2), specifies that work papers and supportive materials are not public record, regardless of whether they are maintained by the State Auditor's office in its audit files or retained by State Archives. 

Amends new GS 147-64.6E, pertaining to corrective action that may be taken by the State Auditor for any deficiency, to require the State Auditor to include recommendations to the State agency to correct each deficiency (was, deficiencies generally) if the State Auditor finds that the agency is deficient (was, not adhering) to the practices examined by GS 147-64.6(b). Makes technical changes.