Bill Text: CA SB1259 | 2011-2012 | Regular Session | Amended
Bill Title: Developmental disabilities: regional centers.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2012-05-24 - Held in committee and under submission. [SB1259 Detail]
Download: California-2011-SB1259-Amended.html
BILL NUMBER: SB 1259 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 30, 2012
AMENDED IN SENATE MARCH 29, 2012
INTRODUCED BY Senator Emmerson
FEBRUARY 23, 2012
An act to amend Section 4652.5 add and
repeal Section 4652.6 of the Welfare and Institutions Code,
relating to developmental disabilities.
LEGISLATIVE COUNSEL'S DIGEST
SB 1259, as amended, Emmerson. Developmental disabilities:
regional centers.
Existing law, the Lanterman Developmental Disabilities Services
Act, requires the State Department of Developmental Services to enter
into 5-year contracts with regional centers to render specified
services. The act requires an entity receiving payments of $250,000
or more, but not more than $500,000, from a regional center to obtain
either an independent audit or independent review report of its
financial statements for the period. An entity receiving payments of
$500,000 or more is required to obtain an independent audit. Existing
law requires a copy of the audit or report to be provided to the
vendoring regional center within 30 days of completion of the audit
or review.
This bill would instead require, for fiscal years ending
on or after July 1, 2011, that an entity that receives payments of at
least $2,000,000 obtain an independent audit of its financial
statements and provide a copy to the vendoring regional center within
9 months of the end of the entity's fiscal year. The bill would also
require the department to randomly select entities that are subject
to, but fail to meet, the audit requirements and perform a billing
audit of the selected entities , until July
1, 2016, authorize exemptions from the above-described independent
audit or review requirements of one or 2 years, if specified
conditions are met .
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 4652.6 is added to the
Welfare and Institutions Code , to read:
4652.6. (a) Notwithstanding Section 4652.5, an entity that is
subject to the independent audit or review requirements of Section
4652.5 because the entity receives payments from one or more regional
centers of an amount that is at a minimum of two hundred fifty
thousand dollars ($250,000), but not more than one million dollars
($1,000,000), may apply to the regional center for an exemption from
the independent audit and independent review requirements, subject to
all of the following conditions:
(1) If the independent audit for the prior year resulted in an
unqualified opinion or an unqualified opinion with explanatory
language, the entity shall receive a two-year exemption.
(2) If the independent audit for the prior year resulted in a
qualified opinion and the regional center determines that material
issues raised in the independent audit do not have an impact on
regional center-funded services, the entity shall receive a one-year
exemption. However, the entity and the regional center shall continue
to address issues raised in this independent audit, regardless of
whether the exemption is granted.
(b) Notwithstanding Section 4652.5, an entity that is subject to
the independent review requirements of Section 4652.5 because the
entity receives payments from one or more regional centers of an
amount that is at a minimum of two hundred fifty thousand dollars
($250,000), but less than five hundred thousand dollars ($500,000),
may apply to the regional center for, and obtain, a two-year
exemption from the independent review requirement if the regional
center does not find issues that have an impact on regional center
services in the prior year's independent review.
(c) Regional centers shall notify the department of any exemption
granted to an entity that is the subject of a qualified opinion
report.
(d) This section shall become inoperative on July 1, 2016, and, as
of January 1, 2017, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2017, deletes or
extends the dates on which it becomes inoperative and is repealed.
SECTION 1. Section 4652.5 of the Welfare and
Institutions Code is amended to read:
4652.5. (a) (1) For fiscal years ending on or after July 1, 2011,
an entity that receives payments from one or more regional centers
shall contract with an independent accounting firm to obtain an
independent audit of its financial statementswhen the amount received
from the regional center or regional centers during the entity's
fiscal year is at a minimum of two million dollars ($2,000,000).
(2) This requirement does not apply to payments made using usual
and customary rates, as defined by Title 17 of the California Code of
Regulations, for services provided by regional centers.
(3) This requirement does not apply to state and local
governmental agencies, the University of California, or the
California State University.
(b) An entity subject to subdivision (a) shall provide copies of
the independent audit required by subdivision (a), and accompanying
management letters, to the vendoring regional center within nine
months of the end of the entity's fiscal year for which the audit is
required.
(c) Regional centers receiving the audit reports required by
subdivision (b) shall review and require resolution by the entity for
issues identified in the report that have an impact on regional
center services. Regional centers shall take appropriate action, up
to termination of vendorization, for lack of adequate resolution of
issues.
(d) Regional centers shall notify the department of all qualified
opinion reports or reports noting significant issues that directly or
indirectly impact regional center services within 30 days after
receipt. Notification shall include a plan for resolution of issues.
(e) For purposes of this section, an independent audit of
financial statements shall be performed by an independent accounting
firm and shall cover, at a minimum, all of the following:
(1) An inquiry as to the entity's accounting principles and
practices and methods used in applying them.
(2) An inquiry as to the entity's procedures for recording,
classifying, and summarizing transactions and accumulating
information.
(3) Analytical procedures designed to identify relationships or
items that appear to be unusual.
(4) An inquiry about budgetary actions taken at meetings of the
board of directors or other comparable meetings.
(5) An inquiry about whether the financial statements have been
properly prepared in conformity with generally accepted accounting
principles and whether any events subsequent to the date of the
financial statements would have a material effect on the statements
under review.
(6) Working papers prepared in connection with a review of
financial statements describing the items covered as well as any
unusual items, including their disposition.
(f) The department shall, in the course of its normal audits,
randomly select entities that are subject to, but fail to meet the
requirements of, this section and perform a billing audit.
(g) The department shall, in the course of its normal audits, not
consider a request for adjustments to rates submitted in accordance
with Title 17 of the California Code of Regulations by an entity
receiving payments from one or more regional centers solely to fund
either anticipated or unanticipated changes required to comply with
this section.
