BILL ANALYSIS Ó
AB 253
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Date of Hearing: April 27, 2011
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Cameron Smyth, Chair
AB 253 (Smyth) - As Amended: April 14, 2011
SUBJECT : Local agencies: accounting.
SUMMARY : Establishes the Committee on City Accounting
Procedures, specifies the membership of the Committee, and
requires the State Controller, in consultation with the
Committee, to prescribe uniform accounting and reporting
procedures for cities. Specifically, this bill :
1)Establishes the Committee on City Accounting Procedures
(Committee), consisting of
10 members appointed by the Controller, including:
a) Five city finance officers;
b) Three city managers;
c) One public auditor; and,
d) One member who is an individual with a demonstrated
history of professional experience analyzing local
government financial data produced by the Controller.
2)States that the members of the Committee shall serve without
compensation, but shall be reimbursed for their necessary
traveling and other expenses incurred in attending the
meetings of the Committee, to be paid for by the city of which
the member is an officer.
3)Requires the Controller to designate a member of the Committee
to serve as chairperson, and specifies that the Committee
shall meet at the call of the chairperson, with written notice
of the meeting given at least 10 calendar days prior to the
date of the meeting.
4)Provides that the Committee may discuss topics that include,
but are not limited to, financial transaction reports.
5)Requires the Controller, in collaboration with the Committee,
to prescribe uniform accounting and reporting procedures that
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conform to generally accepted accounting procedures for
cities.
6)Requires the procedures to be adopted under the provisions in
code related to administrative regulations and rulemaking for
the Office of Administrative Law, and requires the procedures
to be published in the California Code of Regulations either
in their entirety or by reference.
EXISTING LAW :
1)Establishes the Committee on County Accounting Procedures,
consisting of 10 members appointed by the State Controller, to
serve at the pleasure of the Controller, as follows:
a) Five of the members shall be county auditors;
b) Three shall be county administrative officers; and,
c) Two shall be members of a county board of supervisors.
2)States that the members of the Committee on County Accounting
Procedures shall serve without compensation but shall be
reimbursed for their necessary traveling and other expenses
incurred in attending meetings of the committee, and such
expenses shall be paid by the county of which the member is an
officer.
3)Requires the Controller to prescribe for counties uniform
accounting procedures conforming to the Generally Accepted
Accounting Principles (GAAP) and requires the procedures to be
adopted under the provisions in code related to administrative
regulations and rulemaking by the Office of Administrative
Law.
4)Requires the Controller to prescribe such procedures after
consultation with and approval by the Committee on County
Accounting Procedures.
5)Requires the Controller to appoint an advisory committee
consisting of seven local governmental officers to assist him
or her in developing complete and adequate records.
6)Requires the officer of each local agency who has charge of
the financial records to furnish to the Controller a report of
all the financial transactions of the local agency during the
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next preceding fiscal year.
7)Requires the Controller to compile and publish reports of the
financial transactions of each county, city, and special
district, respectively, within this state, together with any
other matter he or she deems of public interest, and requires
the reports to include the appropriations limits and the total
annual appropriations subject to limitation of the counties,
cities, and special districts.
8)Requires the Controller to prescribe uniform accounting and
reporting procedures applicable to special districts, except
for those that substantially follow a system of accounting
prescribed by the Public Utilities Commission or the Federal
Power Commission, and requires the Controller to prescribe
these procedures only after consultation with and approval of
a local governmental advisory committee established in current
law.
FISCAL EFFECT : Unknown
COMMENTS :
1)This bill, sponsored by State Controller John Chiang, creates
the Committee on City Accounting Procedures and requires the
State Controller, in consultation with the new Committee, to
prescribe uniform accounting and reporting procedures for
cities. The bill, in addition to making several conforming
and technical changes to existing law, also specifies the
membership of the Committee and gives the Committee the
authority to discuss topics included, but not limited to
financial transaction reports.
2)The creation of the Committee in this bill is directly modeled
off of existing law for counties. The Controller has had the
authority to prescribe county accounting procedures since 1959
(Chapter 1883, Statutes of 1959). This same 1959 statute also
created the Committee on County Accounting Procedures,
specified the membership of the Committee, and specified
reimbursement procedures for members of the Committee.
The Controller has similar authority in existing law with
respect to special districts. The Controller collects
financial transaction reports from counties and cities
pursuant to existing law. This authority was expanded to
include special districts in 2003 ÝSB 1068, Committee on Local
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Government, Chapter 126]. While the Controller's office
provides special districts with guidelines, they do not
prescribe formal standards, like those for counties.
3)Current law requires local agencies to provide a report of all
the financial transactions of the local agency during the
previous fiscal year to the Controller. Current law also
requires the Controller to compile and publish reports of the
financial transactions of each county, city, and special
district. The annual financial transactions data published by
the State Controller is the most comprehensive, and in some
cases, the only source of financial data for California's
local governments. The Legislature, Legislative Analyst's
Office, local officials, grand juries, policy organizations,
and other observers all rely on these reports.
4)Support arguments: While current law requires cities to submit
annual financial reports, it does not require them to adhere
to the same standards of accounting. The State Controller's
office already works with county governments in a similar
fashion and notes that "these efforts with counties have
proven very successful in establishing reliable and effective
financial reporting standards."
Opposition arguments: There are currently 481 cities in
California that vary widely in their financial structure,
level of services, and provision of services, in addition to
other characteristics like size and population. It may be
challenging for the Committee on City Accounting Procedures to
capture all of these variations adequately, creating a
situation where one size does not fit all.
REGISTERED SUPPORT / OPPOSITION :
Support
State Controller's Office ÝSPONSOR]
Howard Jarvis Taxpayers Association
Opposition
None on file
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958
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