BILL ANALYSIS Ó
AB 253
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ASSEMBLY THIRD READING
AB 253 (Smyth)
As Amended April 14, 2011
Majority vote
LOCAL GOVERNMENT 9-0 APPROPRIATIONS 17-0
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|Ayes:|Smyth, Alejo, Bradford, |Ayes:|Fuentes, Harkey, |
| |Campos, Davis, Gordon, | |Blumenfield, Bradford, |
| |Hueso, Knight, Norby | |Charles Calderon, Campos, |
| | | |Davis, Donnelly, Gatto, |
| | | |Hall, Hill, Lara, |
| | | |Mitchell, Nielsen, Norby, |
| | | |Solorio, Wagner |
| | | | |
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SUMMARY : Establishes the Committee on City Accounting
Procedures (Committee), specifies the membership of the
Committee, and requires the State Controller (Controller), in
consultation with the Committee, to prescribe uniform accounting
and reporting procedures for cities. Specifically, this bill :
1)Establishes the 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.
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5)Requires the Controller, in collaboration with the Committee,
to prescribe uniform accounting and reporting procedures that
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
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the financial records to furnish to the Controller a report of
all the financial transactions of the local agency during the
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 : According to the Assembly Appropriations
Committee, there are administrative costs to the State
Controller of approximately $450,000 to implement the provisions
of this bill.
COMMENTS : 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.
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 and reimbursement procedures for members of that
committee.
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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 Government)
Chapter 126, Statutes of 2003]. While the Controller's office
provides special districts with guidelines, they do not
prescribe formal standards, like those for counties.
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.
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.
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958
FN: 0000909
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