BILL NUMBER: SB 1437	CHAPTERED  08/23/04

	CHAPTER  251
	FILED WITH SECRETARY OF STATE  AUGUST 23, 2004
	APPROVED BY GOVERNOR  AUGUST 23, 2004
	PASSED THE ASSEMBLY  AUGUST 4, 2004
	PASSED THE SENATE  MAY 19, 2004
	AMENDED IN SENATE  MAY 13, 2004
	AMENDED IN SENATE  APRIL 1, 2004

INTRODUCED BY   Senator Speier

                        FEBRUARY 19, 2004

   An act to add Section 8546.5 to the Government Code, relating to
the State Auditor.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1437, Speier.  State Auditor:  high-risk agencies.
   Existing law establishes the Bureau of State Audits headed by the
State Auditor to examine and report on financial statements of the
executive branch of state government, and to perform other related
duties.
   This bill would authorize the State Auditor to establish a
high-risk government agency audit program for the purpose of
identifying, auditing, and issuing reports on any state agency that
the auditor identifies as high risk for the potential of waste,
fraud, abuse, and mismanagement, or that have major challenges
associated with their economy, efficiency, or effectiveness.  The
bill would authorize the State Auditor to issue audit reports with
recommendations for improvement in state agencies identified as at
high risk not less than once every 2 years, and to require state
agencies identified as high risk to periodically report to the
auditor regarding the status of recommendations for improvement made
by the auditor or other state oversight agencies.


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


  SECTION 1.  Section 8546.5 is added to the Government Code, to
read:
   8546.5.  (a) The State Auditor may establish a high-risk
government agency audit program for the purpose of identifying,
auditing, and issuing reports on any agency of the state, whether
created by the California Constitution or otherwise, that the State
Auditor identifies as being at high risk for the potential of waste,
fraud, abuse, and mismanagement or that has major challenges
associated with its economy, efficiency, or effectiveness.
   (b) In addition to identifying an agency as high risk on the basis
of weaknesses identified in audit and investigative reports produced
by the bureau, the State Auditor may consult with the Legislative
Analyst, the Milton Marks "Little Hoover" Commission on California
State Government Organization and Economy, the Office of Inspector
General within the Department of Corrections, the Department of
Finance, and other state agencies that have oversight
responsibilities over any other agency of the state, in identifying
state agencies that are at high risk.
   (c) The State Auditor shall notify the Joint Legislative Audit
Committee whenever it identifies a state agency as at high risk.
   (d) The State Auditor may issue audit reports with recommendations
for improvement in state agencies identified as at high risk not
less than once every two years.
   (e) The State Auditor may require state agencies identified as
high risk to periodically report to the auditor regarding the status
of recommendations for improvement made by the State Auditor or other
state oversight agencies.