BILL ANALYSIS                                                                                                                                                                                                    Ó






                                                       Bill No:  SB 
          1395
          
                 SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
                       Senator Roderick D. Wright, Chair
                           2011-2012 Regular Session
                                 Staff Analysis


          SB 1395  Author:  Rubio
          As Amended:  April 17, 2012
          Hearing Date:  April 24, 2012
          Consultant:  Art Terzakis


                                     SUBJECT  
                                 State Auditor

                                   DESCRIPTION
           
          SB 1395 renames the "Bureau of State Audits" as the "State 
          Auditor's Office" and makes other minor code maintenance 
          changes. 

                                   EXISTING LAW


           Senate Bill 37 (Maddy) Chapter 12, Statutes of 1993, 
          (Government Code 8543), created the Bureau of State Audits 
          (BSA) as part of the Executive Branch.  To assure its 
          independence, the BSA is free from the control of the 
          Executive and Legislative branches; the Milton Marks 
          "Little Hoover" Commission oversees its administrative 
          operations.  The BSA, under the direction of the State 
          Auditor, performs an annual examination (single audit) of 
          the State's general-purpose financial statements as 
          prepared by the State Controller's Office.  The federal 
          government, as a condition of receiving federal funds, 
          requires this audit.  The single audit also includes a 
          review of major federal programs for compliance with 
          federal laws and regulations, and recommendations to 
          improve the State's financial systems and internal control.


          The BSA also conducts financial and performance audits as 
          directed by statute, and other government audits requested 




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          by the Joint Legislative Audit Committee (JLAC).  The BSA 
          has the explicit authority to audit any entity that 
          receives state funds.  Consequently, it sometimes audits at 
          the local government level.  In addition, the BSA 
          administers the "Reporting of Improper Governmental 
          Activities Act," which includes a hotline for anonymous 
          reporting.

          Existing law provides that the State Auditor is appointed 
          by the Governor, from a list submitted by the Joint 
          Legislative Audit Committee, to a four-year term.

                                    BACKGROUND
           
           Purpose of SB 1395:   According to the author's office, this 
          measure is simply intended to rename the "Bureau of State 
          Audits" as the "State Auditor's Office."  
           Staff Comments:   As this measure moves through the 
          legislative process, the author may wish to consider adding 
          a provision restricting expenditures on the name change 
          until existing supplies, logos, and such are exhausted or 
          unserviceable, thereby minimizing costs associated with the 
          change. 

                                PRIOR LEGISLATION
           
           AB 187 (Lara) Chapter 451, Statutes of 2011.   Subject to 
          specified conditions, authorized the State Auditor to 
          establish a high-risk local government agency audit program 
          to identify, audit, and issue reports on any local 
          government agency, including any city, county, or special 
          district, or any publicly created entity that the State 
          Auditor identifies as being at high risk for the potential 
          of waste, fraud, abuse, or mismanagement or that has major 
          challenges associated with its economy, efficiency, or 
          effectiveness.
           
          SB 1314 (Wyland) 2007-08 Session.   Would have transferred 
          audit and evaluation duties within the Department of 
          Finance to the Bureau of State Audits (BSA) and renamed the 
          BSA as the Bureau of State Audits and Evaluations (BSAE) 
          with responsibility for auditing the performance of state 
          programs and managers and for recommending actions to 
          correct any inefficiencies or ineffectiveness that may 
          exist.  (Held in this Committee at Author's Request)
           




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          SB 1452 (Speier) Chapter 452, Statutes of 2006.   Updated 
          the auditing standards for state and local agencies and 
          enacted the Omnibus Audit Accountability Act of 2006 which 
          established a process whereby the Legislature would be 
          informed when auditor recommendations are being ignored or 
          not implemented by state agencies. 
           
          SB 1437 (Speier) Chapter 251, Statutes of 2004.  Authorized 
          the State Auditor to establish a high-risk government 
          agency audit program for the purpose of identifying, 
          auditing, and issuing reports on any state agency that the 
          auditor identifies as high risk for the potential of waste, 
          fraud, abuse, and mismanagement, or that has major 
          challenges associated with its economy, efficiency, or 
          effectiveness. 

           SB 37 (Maddy) Chapter 12, Statutes of 1993.   Created the 
          Bureau of State Audits under the direction of the Little 
          Hoover Commission - many of the duties and power of the 
          Office of Auditor General were passed to the Bureau of 
          State Audits.  This was done in response to the passage of 
          Proposition 140 which had the effect of greatly reducing 
          the size and scope of the Auditor General's office.

           SUPPORT:   Bureau of State Audits (sponsor)

           OPPOSE:   None on file as of April 20, 2012.

           FISCAL COMMITTEE:   Senate Appropriations Committee

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