BILL NUMBER: AB 1689	CHAPTERED  08/09/01

	CHAPTER  169
	FILED WITH SECRETARY OF STATE  AUGUST 9, 2001
	APPROVED BY GOVERNOR  AUGUST 8, 2001
	PASSED THE SENATE  JULY 21, 2001
	PASSED THE ASSEMBLY  MAY 24, 2001

INTRODUCED BY   Committee on Jobs, Economic Development, and the
Economy (Reyes (Chair), Cogdill (Vice Chair), Ashburn, Cardoza, Chan,
Cohn, Correa, Diaz, Florez, Keeley, Leach, Liu, Oropeza, and Wyman)

                        MARCH 5, 2001

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


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1689, Committee on Jobs, Economic Development, and the Economy.
    California State University:  vendors:  direct payment.
   Existing law authorizes the trustees of the California State
University, prior to January 1, 2002, to 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.

   This bill would delete the time limitation for this authorization,
thereby extending the authorization indefinitely.


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


  SECTION 1.  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 of Title 2, 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) Notwithstanding Sections 925.6, 12410, and 16403, or any other
provision of law, the trustees shall maintain payment records for
three years and make those records available to the Controller for
postaudit review, as needed.
   (c) Notwithstanding Section 8546.4 or any other provision of law,
the trustees shall contract with one or more public accounting firms
to conduct systemwide and individual campus annual financial
statement and 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.
   (d) 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:
   (1) "Trustees" means the Trustees of the California State
University.
   (2) "University" means the California State University.