Bill Text: CA AB2729 | 2017-2018 | Regular Session | Amended

California Assembly Bill 2729 (Prior Session Legislation)

Bill Title: California State Auditor.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Engrossed - Dead) 2018-08-08 - In committee: Hearing postponed by committee. [AB2729 Detail]

Download: California-2017-AB2729-Amended.html

Amended IN Senate June 19, 2018

Amended IN Assembly April 19, 2018

Amended IN Assembly April 04, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill

No. 2729

Introduced by Assembly Members Muratsuchi and Gipson

February 15, 2018

An act to amend Section 8546.10 of the Government Code, relating to state government.

LEGISLATIVE COUNSEL'S DIGEST

AB 2729, as amended, Muratsuchi. California State Auditor.

Existing law establishes the California State Auditor’s Office, headed by the appointed California State Auditor and under the direction of the Milton Marks “Little Hoover” Commission on California State Government Organization and Economy, with specified duties that include, among others, conducting financial and performance audits as directed by statute. Existing law also establishes the State Audit Fund as a continuously appropriated fund for the expenses of the office. Existing law authorizes the auditor to establish a high-risk local government agency audit program for the purpose of identifying, auditing, and issuing reports on any local government agency he or she identifies as at high risk for, among other basis, fraud and abuse. Existing law requires the office to be responsible for the state costs associated with the program and further requires an audit conducted pursuant to the program to be approved by the Joint Legislative Audit Committee.

This bill would further require the auditor to obtain approval from the Joint Legislative Audit Committee to conduct any initial assessments, audits, and followup audit work at a local government agency. This bill would additionally authorize the California State Auditor, if in the course of work at a local agency the California State Auditor determines the local agency to be adequately addressing relevant risk factors or determines it is not a high-risk local agency, to conduct limited audit work or discontinue audit work at a local agency, as specified. authorize the California State Auditor to conduct an initial assessment at a local government agency prior to conducting an audit, during which he or she may gather any publicly available information from a local government agency and any information, including any interviews, that the local government agency is willing to provide, for the purpose of identifying whether or not it is a high-risk local government agency. The bill would require the California State Auditor, before beginning an initial assessment at a local government agency, to notify the Joint Legislative Audit Committee in writing which local government agency will be assessed.

Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO

The people of the State of California do enact as follows:

SECTION 1.

Section 8546.10 of the Government Code is amended to read:

8546.10.

(a) The California State Auditor may establish a high-risk local government agency audit program for the purpose of identifying, auditing, and issuing reports on any local government agency, including, but not limited to, any city, county, special district, or any publicly created entity, whether created by the California Constitution or otherwise, that the California State Auditor identifies as being at high risk for the potential of waste, fraud, abuse, or mismanagement or that has major challenges associated with its economy, efficiency, or effectiveness.

(b) In addition to identifying a local government agency as high risk on the basis of weaknesses identified in audit and investigative reports produced by the office, the California State Auditor may consult with the Controller, Attorney General, and other state agencies that have oversight responsibilities over any local government agency, in identifying local governments that are at high risk.

(c) The California State Auditor’s Office shall be responsible for the state costs associated with the high-risk local government agency audit program, shall conduct the program as funds permit, and shall only conduct the program to the extent that it does not interfere with duties related to mandated audits and requests from the Joint Legislative Audit Committee, and shall obtain approval from the Joint Legislative Audit Committee, as specified in subdivision (f), to conduct any initial assessments, audits, and followup audit work at a local government agency. Committee.

(d) (1) The California State Auditor shall notify the Joint Legislative Audit Committee whenever he or she identifies a local government as at high risk.

(2) The California State Auditor shall provide the Joint Legislative Audit Committee, at a public hearing of the committee, an annual update of all audits in progress.

(3) If a local government agency has taken significant corrective measures for deficiencies identified by the California State Auditor, that agency shall be removed from the high-risk local government agency audit program.

(e) Notwithstanding the requirements of Section 10231.5, if the California State Auditor establishes the program provided for in this section and the California State Auditor determines that a local agency is at high risk, the California State Auditor shall issue audit reports at least once every two years with recommendations for improvement in such a local government so identified.

(f) ~~(1)Initial assessments, audits,~~ Audits and followup audit work at a local government agency conducted pursuant to this section shall be approved by the Joint Legislative Audit Committee.

(2)Following approval pursuant to paragraph (1), if, in the course of work, the California State Auditor determines a local agency to be adequately addressing relevant risk factors or determines the local agency is not a high-risk local agency, the California State Auditor may, at his or her discretion, discontinue the audit work or limit all audit work at a local agency. The California State Auditor shall notify the Joint Legislative Audit Committee in writing of any decision to limit all audit work or discontinue work at a local agency.
(g) (1) The California State Auditor may conduct an initial assessment at a local government agency prior to conducting an audit, during which he or she may gather any publicly available information from a local government agency and any information, including any interviews, that the local government agency is willing to provide, for the purpose of identifying whether or not it is a high-risk local government agency.
(2) Before beginning an initial assessment at a local government agency, the California State Auditor shall notify the Joint Legislative Audit Committee in writing which local government agency will be assessed.