BILL NUMBER: AB 2510	CHAPTERED  08/01/08

	CHAPTER  244
	FILED WITH SECRETARY OF STATE  AUGUST 1, 2008
	APPROVED BY GOVERNOR  AUGUST 1, 2008
	PASSED THE SENATE  JULY 3, 2008
	PASSED THE ASSEMBLY  JULY 14, 2008
	AMENDED IN SENATE  JUNE 30, 2008
	AMENDED IN SENATE  JUNE 11, 2008
	AMENDED IN ASSEMBLY  APRIL 17, 2008

INTRODUCED BY   Assembly Member La Malfa

                        FEBRUARY 21, 2008

   An act to amend Section 26909 of the Government Code, relating to
local government.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2510, La Malfa. Local government: special districts: audits.
   Existing law requires the county auditor to make an annual audit
of the accounts and records of every special district, as specified,
except that a special district may, with unanimous approval of the
board of supervisors, replace the annual audit with a biennial audit
covering a 2-year period or, if the district's annual budget does not
exceed an amount specified by the board of supervisors, an audit
covering a 5-year period.
   This bill would recast those provisions and would authorize the
use of the biennial audit; the 5-year audit, if the district's annual
revenues do not exceed an amount specified by the board of
supervisors; an audit conducted at intervals specified by the county
auditor; or a financial review in accordance with specified
procedures, if the special district revenues and expenditures are
transacted through the county's financial system and the special
district's annual revenues do not exceed $150,000.


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

  SECTION 1.  Section 26909 of the Government Code is amended to
read:
   26909.  (a) (1) The county auditor shall either make or contract
with a certified public accountant or public accountant to make an
annual audit of the accounts and records of every special district
within the county for which an audit by a certified public accountant
or public accountant is not otherwise provided. In each case, the
minimum requirements of the audit shall be prescribed by the
Controller and shall conform to generally accepted auditing
standards.
   (2) Where an audit of a special district's accounts and records is
made by a certified public accountant or public accountant, the
minimum requirements of the audit shall be prescribed by the
Controller and shall conform to generally accepted auditing
standards, and a report thereof shall be filed with the Controller
and with the county auditor of the county in which the special
district is located. The report shall be filed within 12 months of
the end of the fiscal year or years under examination.
   (3) Any costs incurred by the county auditor, including contracts
with, or employment of, certified public accountants or public
accountants, in making an audit of every special district pursuant to
this section shall be borne by the special district and shall be a
charge against any unencumbered funds of the district available for
the purpose.
   (4) For a special district that is located in two or more
counties, the provisions of this subdivision shall apply to the
auditor of the county in which the treasury is located.
   (5) The county controller, or ex officio county controller, shall
effect this section in those counties having a county controller, or
ex officio county controller.
   (b) A special district may, by unanimous request of the governing
board of the special district, with unanimous approval of the board
of supervisors, replace the annual audit required by this section
with one of the following, performed in accordance with professional
standards, as determined by the county auditor:
   (1)  A biennial audit covering a two-year period.
   (2) An audit covering a five-year period, if the special district'
s annual revenues do not exceed an amount specified by the board of
supervisors.
   (3) An audit conducted at specific intervals, as recommended by
the county auditor, that shall be completed at least once every five
years.
   (c) (1) A special district may, by unanimous request of the
governing board of the special district, with unanimous approval of
the board of supervisors, replace the annual audit required by this
section with a financial review, in accordance with the appropriate
professional standards, as determined by the county auditor, if the
following conditions are met:
   (A) All of the special district's revenues and expenditures are
transacted through the county's financial system.
   (B) The special district's annual revenues do not exceed one
hundred fifty thousand dollars ($150,000).
   (2) If the board of supervisors is the governing board of the
special district, it may, upon unanimous approval, replace the annual
audit of the special district required by this section with a
financial review in accordance with the appropriate professional
standards, as determined by the county auditor, if the special
district satisfies the requirements of subparagraphs (A) and (B) of
paragraph (1).
   (d) Notwithstanding the provisions of this section, a special
district shall be exempt from the requirement of an annual audit if
the financial statements are audited by the Controller to satisfy
federal audit requirements.