BILL ANALYSIS
AB 548
Page 1
ASSEMBLY THIRD READING
AB 548 (Krekorian)
As Amended June 1, 2009
Majority vote
LOCAL GOVERNMENT 7-0 APPROPRIATIONS 13-3
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|Ayes:|Caballero, Knight, |Ayes:|De Leon, Ammiano, Charles |
| |Arambula, Davis, Duvall, | |Calderon, Davis, Fuentes, |
| |Krekorian, Skinner | |Hall, John A. Perez, |
| | | |Price, Skinner, Solorio, |
| | | |Audra Strickland, |
| | | |Torlakson, Krekorian |
| | | | |
|-----+--------------------------+-----+---------------------------|
| | |Nays:|Nielsen, Duvall, Harkey |
| | | | |
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SUMMARY : Deletes the option that permits the Controller, in
specified circumstances, to begin an audit of a reimbursement
claim for actual costs within four years of the initial payment
of a claim rather than the date on which the claim is filed or
last amended.
EXISTING LAW :
1)Requires the Commission on State Mandates (Commission) to hear
and decide upon a claim by a local agency or school district
that the local agency or school district is entitled to be
reimbursed by the state for costs mandated by the state.
2)Requires the Controller to initiate an audit of a
reimbursement claim for actual costs filed by a local agency
or a school district no later than three years after the date
that the actual reimbursement claim is filed or last amended,
whichever is later, unless no funds are appropriated or no
payment is made to a claimant for the program for the fiscal
year for which the claim is filed, in which case the time for
the Controller to initiate an audit is required to run from
the date of the initial payment of the claim.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, there is no direct effect on the Controller.
AB 548
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However, to the extent that (a) some audit issues may take years
to develop and (b) controller audits often result in major
reductions in claim payments, the stricter audit deadlines may
result in significantly reduced state mandate reimbursement
savings.
COMMENTS : After the Commission issues a decision on the claim,
more time has to pass before the reimbursement funds are free
from the possibility of an audit by the Controller's Office
(CO). While such an audit is required to be initiated within
three years, current law provides two different points in time
at which this three-year period begins to run, depending on
whether or not funds are appropriated or paid out for the fiscal
year in which the claim is filed. Therefore, the local agencies
and school districts hold off on allocating the mandate
reimbursement funds until after the audit period.
This bill streamlines the mandate audit process by eliminating
the bifurcated method
for determining when the audit period begins to run and by
extending the audit period from three years to four years. The
principle behind this appears to be that, because the decision
to appropriate or pay out funds for an approved reimbursement
claim is not made by the claimant, it seems a point of basic
fairness that the claimant not be kept under the shadow of a
possible audit for an extended period of time because of a
decision made elsewhere.
The CO states that this bill's removal of the authorization for
the CO to delay an audit of reimbursement funds until the local
agency has received payment would mean that in some
circumstances the CO would be required to conduct an audit
before a local agency has received the reimbursement claim
funds. For example, currently the CO has been auditing up to
seven years for the Standardized Testing and Reporting Program
and the Animal Adoption Program because the Legislature did not
fund these programs in a timely manner. The Legislature may
wish to consider whether the shortened timeframe for the CO's
audit of reimbursement funds serves the interests of all local
agencies.
Analysis Prepared by : Jennifer R. Klein / L. GOV. / (916)
319-3958
AB 548
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FN: 0001249