BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 253
                                                                  Page  1

          Date of Hearing:   May 11, 2011

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                    AB 253 (Smyth) - As Amended:  April 14, 2011 

          Policy Committee:                              Local 
          GovernmentVote:9-0

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:              

           SUMMARY  

          This bill 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.  The appointees are to 
            be city finance officers, city managers and others involved in 
            municipal finance.  

          2)Requires the Controller, in collaboration with the Committee, 
            to prescribe uniform accounting and reporting procedures that 
            conform to generally accepted accounting procedures for 
            cities.

          3)Requires the uniform accounting and reporting procedures be 
            adopted as administrative regulations and requires the 
            procedures be published in the California Code of Regulations 
            either in their entirety or by reference.

           FISCAL EFFECT  

          Administrative costs to the State Controller of approximately 
          $450,000 to implement the provisions of AB 253.

           COMMENTS  

           1)Purpose.   This bill, sponsored by State Controller John 








                                                                  AB 253
                                                                  Page  2

            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.  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."
              
           2)Background.   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.  


           Analysis Prepared by  :    Roger Dunstan / APPR. / (916) 319-2081