Bill Text: CA AB450 | 2011-2012 | Regular Session | Amended

California Assembly Bill 450 (Prior Session Legislation)

NOTE: There are more recent revisions of this legislation. Read Latest Draft

Bill Title: California State University: food service contracts.

Spectrum: Partisan Bill (Democrat 8-0)

Status: (Vetoed) 2011-10-08 - Vetoed by Governor. [AB450 Detail]

Download: California-2011-AB450-Amended.html

BILL NUMBER: AB 450	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MAY 2, 2011

INTRODUCED BY   Assembly Member Wieckowski

                        FEBRUARY 15, 2011

   An act to amend  Section 89036 of the Education Code, and to
amend  Section 12440.1 of the Government Code, relating to the
California State University.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 450, as amended, Wieckowski. California State University:
audits.
   (1) Existing law requires the Trustees of the California State
University to maintain records of certain vendor payments for 3 years
and make those records available to the Controller for postaudit
review, as needed  , and to contract with one or more public
accounting firms to conduct specified financial statement and
compliance audits without obtaining the approval of any other state
officer or entity  . 
   This bill would provide that the trustees, in conjunction with the
Controller, have the right, at reasonable times and upon reasonable
notice, to examine the books, records, and other compilations of data
of a services contractor, as defined, that relate to the provisions
and requirements of all service contracts.  
   (2) Existing law authorizes the trustees to enter into agreements
for the performance of acts or for the furnishing of services,
facilities, materials, goods, supplies, or equipment, under certain
conditions. The trustees are required to prescribe policies and
procedures for the acquisition of services, facilities, materials,
goods, supplies, or equipment, subject to specified criteria. 

   This bill would require the policies and procedures for the
acquisition of services to specify that any direct or indirect
rebates from a 3rd party be fully disclosed and credited to the
campus or other unit of the university and be available for review as
part of any audit conducted under specified provisions. 

   This bill instead would require the trustees to maintain those
records for 5 years.  
   (2) Existing law requires the trustees to contract with one or
more public accounting firms to conduct specified financial statement
and compliance audits without obtaining the approval of any other
state officer or entity. Internal and independent financial statement
audits of the trustees are required to test compliance with
procurement procedures and the integrity of the payments made.
 
   This bill would require the trustees to contract with the public
accounting firms pursuant to an open bidding process, and would
specify that the Department of Finance shall have final approval over
the selection of the accounting firm. It would require the internal
and independent financial statement audits of the trustees to be
conducted using generally accepted accounting principles. It would
also delete the requirement of a test of compliance with procurement
procedures and the integrity of the payments made, and instead would
require that the audits include a determination of these factors.
 
   (3) Existing law requires at least 10 individual campus audits to
be conducted on a rotating basis, and requires each campus to be
audited at least once every 2 years.  
   This bill would delete these provisions and instead would require
that in addition to an annual statewide system audit, each campus be
audited at least once every year. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 89036 of the  
Education Code   is amended to read: 
   89036.  (a) (1) The trustees may enter into agreements with any
public or private agency, officer, person, or institution,
corporation, association, or foundation for the performance of acts
or for the furnishing of services, facilities, materials, goods,
supplies, or equipment by or for the trustees or for the joint
performance of an act or function or the joint furnishing of services
and facilities by the trustees and the other party to the agreement.

   (2)  (A)    Notwithstanding any other provision
of law, the trustees shall prescribe policies and procedures for the
acquisition of services, facilities, materials, goods, supplies, or
equipment. The policies and procedures of the trustees for the
acquisition of materials, goods, supplies, or equipment shall include
competitive means for obtaining best value while complying with
legislative intent regarding competitive bids or proposals as it is
expressed in Article 3 (commencing with Section 10300) of Chapter 2
of Part 2 of Division 2 of the Public Contract Code, and may include
the use of financing arrangements. 
   (B) The policies and procedures for the acquisition of services
shall specify that any direct or indirect rebates from a third party
shall be fully disclosed and credited to the campus or other unit of
the university, and be available for review as part of any audit
conducted pursuant to Section 89045 or Section 12440.1 of the
Government Code. 
   (3) The trustees may enter into agreements with the federal
government or any agency thereof in accordance with the procedures
prescribed by the federal government or agency in order to receive
the benefits of any federal statute extending benefits to the
California State University or to California State University
students, including, but not necessarily limited to, both of the
following:
   (A) Agreements with any agency of the federal government for the
education of persons in the service of the federal government.
   (B) Agreements with any agency of the federal government for the
education of veterans. These agreements shall provide for payment of
the maximum amount permitted under the act, or acts, of Congress
under which the agreement is entered into.
   (4) Notwithstanding any other provision of law, the trustees have
all power necessary to perform any acts, and comply with conditions,
required or imposed by the federal government in order to receive the
benefits. The trustees are vested with all necessary power and
authority to cooperate with any agency of the federal government in
the administration of any applicable act of Congress and rules and
regulations adopted thereunder.
   (b) Notwithstanding any other provision of law, the trustees have
all power necessary to award contracts to one or more contractors, at
any one or more campuses, for the collection of delinquent education
loans required to be repaid under federal law.
   SECTION 1.   SEC. 2.   Section 12440.1
of the Government Code is amended to read:
   12440.1.  (a) The trustees, in conjunction with the Controller,
shall implement a process that allows any campus or other unit of the
university to make payments of obligations of the university from
its revolving fund directly to all of its vendors. Notwithstanding
Article 5 (commencing with Section 16400) of Chapter 2 of Part 2 of
Division 4, or any other provision of law, the trustees may draw from
funds appropriated to the university, for use as a revolving fund,
amounts necessary to make payments of obligations of the university
directly to vendors. In any fiscal year, the trustees shall obtain
the approval of the Director of Finance to draw amounts in excess of
10 percent of the total appropriation to the university for that
fiscal year for use as a revolving fund. 
   (b) The trustees, in conjunction with the Controller, shall have
the right at reasonable times and upon reasonable notice to examine
the books, records, and other compilations of data of the services
contractor that relate to the provisions and requirements of all
service contracts, including records related to any rebates received
by a contractor from a third party as a consequence of, or incidental
to, a contract.  
   (b) 
    (c)  Notwithstanding Sections 925.6, 12410, and 16403,
or any other provision of law, the trustees shall maintain payment
records for  five   three  years and make
those records available to the Controller for postaudit review, as
needed. 
   (c) 
    (d)  Notwithstanding Section 8546.4 or any other
provision of law, the trustees shall, pursuant to an open bidding
process, contract with one or more public accounting firms to conduct
systemwide and individual campus annual financial statement and
 compliance audits, with the Department of Finance to have
final approval over the selection of the accounting firm. In addition
to an annual systemwide audit, each campus shall be audited at least
once every year. 
    (d)     The internal
and independent financial statement audits of the trustees, conducted
using generally accepted accounting principles, shall include a
determination of compliance with   compliance audits
without obtaining the approval of any other state officer or entity.
At least 10 individual campus audits shall be conducted on a rotating
basis, and each campus shall be audited at least once every two
years. 
    (e)     The internal and independent
financial statement audits of the trustees shall test compliance with
 procurement procedures and the integrity of the payments made.
The results of these audits shall be included in the biennial report
required by Section 13405. 
   (e) As used in this section:  
   (f) As used in this section, the following terms have the
following meanings:  
   (1) "Rebate" includes any return of monetary value, including, but
not limited to, any volume discounts, allowances, or discount
purchase incentives.  
   (2) "Services contractor" includes a contractor providing food,
janitorial, laundry, maintenance, window cleaning, or landscape
services.  
   (1) 
    (3)  "Trustees" means the Trustees of the California
State University. 
   (2) 
    (4)  "University" means the California State University.