Bill Text: CA SB503 | 2009-2010 | Regular Session | Introduced

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

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Bill Title: State General Obligation Bond Law: audits.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Vetoed) 2010-09-29 - In Senate. To unfinished business. (Veto) [SB503 Detail]

Download: California-2009-SB503-Introduced.html

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BILL NUMBER: SB 503	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Kehoe

                        FEBRUARY 26, 2009

   An act to add Section 16794 to the Government Code, relating to
general obligation bonds.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 503, as introduced, Kehoe. State General Obligation Bond Law:
audits.
   The State General Obligation Bond Law sets forth the procedures
for the issuance and sale of bonds governed by its provisions and for
the disbursal of the proceeds of the sale of those bonds. Existing
law provides for various oversight and reporting requirements for the
expenditure of state funds, including the proceeds of bonds.
   This bill would, effective July 1, 2010, require the Controller,
on or before April 30, 2011, and on or before April 30, annually
thereafter, to choose one or more bond projects funded from certain
bond acts to be the subject of an audit, pursuant to certain
procedures. The Controller would be required annually to assign 10
auditor positions to conduct these audits. The Controller would be
authorized to examine any record of any agency, contractor, and other
specified parties that relates to the use of bond proceeds and would
be required, by April 30 of each year, to prepare an audit plan for
the following fiscal 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 16794 is added to the Government Code, to read:

   16794.  (a) On or before April 30, 2011, and on or before April
30, annually thereafter, the Controller shall choose one or more
projects funded from one, or more, of the following bond acts to be
the subject of an audit pursuant to this section, in accordance with
the audit plan specified in subdivision (f):
   (1) The Highway Safety, Traffic Reduction, Air Quality, and Port
Security Bond Act of 2006 (Chapter 12.49 (commencing with Section
8879.20) of Division 1).
   (2) The Housing and Emergency Shelter Trust Fund Act of 2006 (Part
12 (commencing with Section 53540) of Division 31 of the Health and
Safety Code).
   (3) The Kindergarten-University Public Education Facilities Bond
Act of 2006 (Part 69 (commencing with Section 101000) of the
Education Code).
   (4) The Disaster Preparedness and Flood Prevention Bond Act of
2006 (Chapter 1.699 (commencing with Section 5096.800) of Division 5
of the Public Resources Code).
    (5) The Safe Drinking Water, Water Quality and Supply, Flood
Control, River and Coastal Protection Bond Act of 2006 (Division 43
(commencing with Section 75001) of the Public Resources Code).
   (b) When conducting an audit pursuant to this section, the
Controller shall audit the bond project in order to ensure that the
project is implemented in an efficient, cost-effective, and timely
way and that bond proceeds are spent in a manner that is legal and
consistent with the provisions of the authorizing measures. Based on
these audits, the Controller shall make recommendations to the
Legislature and responsible departments and agencies about how to
improve implementation of bond projects.
   (c) For the purpose of conducting an audit under this section, the
Controller shall be given access to, and is authorized to examine,
any record of any agency, contractor, subcontractor, vendor, or other
individual or entity receiving, directly or indirectly, bond
proceeds if the record is related to the use of those proceeds. For
this purpose, the Controller has the same authority to access
records, and be subject to the same provisions on disclosure of
records, as provided for the State Auditor in Article 1 (commencing
with Section 8543) of Chapter 6.5 of Division 1.
   (d) The department or agency responsible for the project being
audited shall reimburse the Controller for the actual cost of
conducting the audit from the proceeds of bonds allocated for
administrative purposes for that project. To cover the cost of each
audit, the Controller shall use only those funds allocated for the
particular project being audited and not funds allocated for any
other project.
   (e) Any audit conducted by the Controller pertaining to Chapter
1.699 (commencing with Section 5096.800) and Division 43 (commencing
with Section 75001) of the Public Resources Code shall complement,
and not replace, the independent audits specified by Sections
5096.953 and 75078 of the Public Resources Code. To eliminate audit
duplication and streamline the audit process, the agencies authorized
to conduct independent audits under these provisions shall first
consider contracting with the Controller to conduct any independent
audit. Funding for an audit authorized by Section 75078 of the Public
Resources Code shall be subject to the administrative cost share
limitation specified in Section 75070.5 of the Public Resources Code.

    (f) The Controller shall, by April 30 of each year, prepare an
audit plan for the following fiscal year specifying the projects that
will be subject to an audit pursuant to this section, the
responsible departments or agencies to be audited, and an estimated
completion date of the audits. The Controller shall annually assign
10 auditor positions to conduct the audits specified by this section.
If the audit plan identifies a need for additional auditors, the
Controller may request funding in the annual Budget Bill for
additional auditors.
   (g) It is the intent of the Legislature that the savings to the
state from implementing recommendations made as a result of audits
required by this section fully offset the cost of conducting the
audits.
   (h) This section shall become operative on July 1, 2010.