BILL NUMBER: SB 262 CHAPTERED 03/29/06 CHAPTER 15 FILED WITH SECRETARY OF STATE MARCH 29, 2006 APPROVED BY GOVERNOR MARCH 29, 2006 PASSED THE ASSEMBLY MARCH 23, 2006 PASSED THE SENATE JANUARY 26, 2006 AMENDED IN SENATE JANUARY 23, 2006 AMENDED IN SENATE JANUARY 12, 2006 AMENDED IN SENATE SEPTEMBER 1, 2005 INTRODUCED BY Senator Dunn FEBRUARY 15, 2005 An act to amend Section 6145 of the Business and Professions Code, relating to attorneys. LEGISLATIVE COUNSEL'S DIGEST SB 262, Dunn State Bar of California: audit. Existing law, the State Bar Act, provides for the licensing and regulation of attorneys by the State Bar of California. Existing law requires the Board of Governors of the State Bar to contract with a nationally recognized independent public accounting firm to conduct an audit of the State Bar's financial statement for each fiscal year. This bill would instead require the Board of Governors to engage the services of an independent national or regional public accounting firm with at least 5 years of experience in governmental auditing to conduct the State Bar audit. The bill would also require the board, in selecting the accounting firm, to consider the value of continuity, along with the risk that continued long-term engagements of an accounting firm may affect the independence of that firm. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 6145 of the Business and Professions Code is amended to read: 6145. (a) The board shall engage the services of an independent national or regional public accounting firm with at least five years experience in governmental auditing for an audit of its financial statement for each fiscal year. The financial statement shall be promptly certified under oath by the Treasurer of the State Bar, and a copy of the audit and financial statement shall be submitted within 120 days of the close of the fiscal year to the board, to the Chief Justice of the Supreme Court, and to the Assembly and Senate Committees on Judiciary. The audit shall examine the receipts and expenditures of the State Bar and the State Bar sections, to assure that the receipts of the sections are being applied, and their expenditures are being made, in compliance with subdivision (a) of Section 6031.5, and that the receipts of the sections are applied only to the work of the sections. The audit also shall examine the receipts and expenditures of the State Bar to ensure that the funds collected on behalf of the Conference of Delegates of California Bar Associations as the independent successor entity to the former Conference of Delegates of the State Bar are conveyed to that entity, that the State Bar has been paid or reimbursed for the full cost of any administrative and support services provided to the successor entity, including the collection of fees or donations on its behalf, and that no mandatory dues are being used to fund the activities of the successor entity. In selecting the accounting firm, the board shall consider the value of continuity, along with the risk that continued long-term engagements of an accounting firm may affect the independence of that firm. (b) The board shall contract with the Bureau of State Audits to conduct a performance audit of the State Bar's operations from July 1, 2000, to December 31, 2000, inclusive. A copy of the performance audit shall be submitted by May 1, 2001, to the board, to the Chief Justice of the Supreme Court, and to the Assembly and Senate Committees on Judiciary. Every two years thereafter, the board shall contract with the Bureau of State Audits to conduct a performance audit of the State Bar's operations for the respective fiscal year, commencing with January 1, 2002, through December 31, 2002, inclusive. A copy of the performance audit shall be submitted within 120 days of the close of the fiscal year for which the audit was performed to the board, to the Chief Justice of the Supreme Court, and to the Assembly and Senate Committees on Judiciary. For the purposes of this subdivision, the Bureau of State Audits may contract with a third party to conduct the performance audit. This subdivision is not intended to reduce the number of audits the Bureau of State Audits may otherwise be able to conduct.