BILL ANALYSIS Ó AB 117 Page 1 Date of Hearing: April 3,2013 ASSEMBLY COMMITTEE ON ACCOUNTABILITY AND ADMINISTRATIVE REVIEW Jim Frazier, Chair AB 117 (Cooley) - As Introduced: January 14, 2013 SUBJECT : State Government: Financial and Administrative Accountability SUMMARY : This bill makes specified legislative findings and directs the Department of Finance (DOF) to establish guidelines for agencies to ensure proper internal monitoring, accounting, and administrative controls within these agencies. Specifically, this bill: 1)Requires DOF put in place guidelines that ensure agency monitors are independent and objective. 2)Requires state agency heads follow standards that facilitate production of timely and accurate financial reports including recommendations for how to achieve greater efficiencies in support of the agency's mission without undermining program effectiveness, quality, or customer satisfaction. 3)Requires DOF put in place guidelines for state agency managers on how the role of independent monitor should be staffed, structured, and its reporting function standardized so it fits within an efficient and normalized agency administrative framework. EXISTING LAW established the Financial Integrity and State Manager's Accountability Act of 1983. Within the Act the Legislature, among other things, declared it to be the policy of the state that each state agency maintains effective systems of internal accounting and administrative control as an integral part of its management practices, and that those systems are evaluated on an ongoing basis through regular and ongoing monitoring processes. FISCAL EFFECT : unknown COMMENTS : According to the author, recent events have highlighted and heightened the importance of continued progress in strengthening the soundness of fiscal auditing and AB 117 Page 2 transparent accountability of state operations. This bill seeks to create stronger guidelines for agencies' internal monitors ensuring that the state follows the same best practices as required in the private sector and gives an additional check on state finances to ensure public funds are wisely spent. The bill accomplishes this by directing DOF to develop guidelines ensuring agency monitors are independent and objective. This includes the consideration of how an independent monitor should be staffed, structured, and utilized in a standardized way to ensure efficiency and fit within an agencies normal administrative framework. Additionally, the bill directs state agency heads use financial reports that include recommendations on how an agency may achieve greater efficiencies without undermining its mission or customer satisfaction. REGISTERED SUPPORT / OPPOSITION : Support None on file Opposition None on file Analysis Prepared by : William Herms / A. & A.R. / (916) 319-3600