BILL NUMBER: SB 736	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 26, 2011
	AMENDED IN SENATE  MARCH 21, 2011

INTRODUCED BY   Senator Cannella

                        FEBRUARY 18, 2011

   An act to amend Section 12440.1 of the Government Code, relating
to the California State University.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 736, as amended, Cannella. California State University:
trustees.
   Existing law authorizes the Trustees of the California State
University to draw from funds appropriated to the university, for use
as a revolving fund, amounts necessary to make payments of
obligations of the university directly to vendors. Existing law
requires the Trustees of the California State University to contract
with one or more public accounting firms to conduct a systemwide and
individual campus annual financial statement audit.
   This bill would instead require the Trustees of the California
State University to contract with one or more public accounting firms
to conduct a systemwide annual financial statement audit in
accordance with generally accepted accounting principles and subject
to specified criteria, as well as other required compliance audits.
This bill would delete the requirement that at least 10 individual
campus audits be conducted on a rotating basis, and each campus be
audited at least once every 2 years.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

  SECTION 1.  Section 12440.1 of the Government Code is amended to
read:
   12440.1.  (a) The trustees, in conjunction with the Controller,
shall implement a process that allows any campus or other unit of the
university to make payments of obligations of the university from
its revolving fund directly to all of its vendors. Notwithstanding
Article 5 (commencing with Section 16400) of Chapter 2 of Part 2 of
Division 4 of Title 2, or any other law, the trustees may draw from
funds appropriated to the university, for use as a revolving fund,
amounts necessary to make payments of obligations of the university
directly to vendors. In any fiscal year, the trustees shall obtain
the approval of the Director of Finance to draw amounts in excess of
10 percent of the total appropriation to the university for that
fiscal year for use as a revolving fund.
   (b) Notwithstanding Sections 925.6, 12410, and 16403, or any other
law, the trustees shall maintain payment records for three years and
make those records available to the Controller for postaudit review,
as needed.
   (c) (1) Notwithstanding Section 8546.4 or any other law, the
trustees shall contract with one or more public accounting firms to
conduct a systemwide annual financial statement audit in accordance
with generally accepted accounting principles (GAAP), as well as
other required compliance audits without obtaining the approval of
any other state officer or entity.
   (2) Each campus' statement of net assets, statement of revenues,
expenses, and changes in net assets, and statement of cashflows shall
be included as an addendum to the annual systemwide audit. 
Summary information on transactions with auxiliary organizations for
each campus shall also be included in the addendum.  Any
additional information necessary shall be provided upon 
request, to the extent available.   request. 
   (d) The internal and independent financial statement audits of the
trustees shall test compliance with procurement procedures and the
integrity of the payments made. The results of these audits shall be
included in the biennial report required by Section 13405.
   (e) As used in this section:
   (1) "Trustees" means the Trustees of the California State
University.
   (2) "University" means the California State University.