BILL ANALYSIS �
AB 661
Page 1
Date of Hearing: May 1, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 661 (Beth Gaines) - As Amended: April 15, 2013
Policy Committee:
AccountabilityVote:9 - 3
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill adds posting, reporting, and guidance requirements
under the Financial Integrity and State Manager's Accountability
Act of 1983 (FISMA), and sets consequences for noncompliance.
Specifically, this bill:
1)Requires posting the biennial internal FISMA reports on the
agency's web site within five days of finalization.
2)Requires the head of the agency to sign off on the FISMA
reports under penalty of perjury.
3)Suspends the head of the agency without pay if the reports are
not submitted within 30 days of their due dates. The
suspension would end after the agency complies.
4)Requires the agency's head of internal audits or designated
internal control person, who has reasonable cause to believe
false or misleading information was provided during the
preparation of the FISMA report, to notify the Department of
Finance and Joint Legislative Audit Committee in writing of
this concern.
5)Requires the director of the Department of Finance (DOF), when
providing agencies with guidance about conducting FISMA
reports, to specify that the framework shall include auditing
of the agency's assets, liabilities, revenues, and
expenditures, as well as reconciliation of accounting and
budget documents reported to DOF and the State Controller's
Office.
AB 661
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6)Requires agencies to include a financial assessment in the
risk assessment reports that are submitted to DOF.
FISCAL EFFECT
1)On-going costs of approximately $250,000 for workload
associated with DOF processing required reports quickly in
order to determine whether agencies are in compliance with the
requirement in order to suspend the head of the agencies pay
if necessary.
2)Minor costs for all agencies to include a financial assessment
in their risk assessment report regardless of whether or not
it has been deemed a risk.
COMMENTS
1)Purpose . The author introduced this bill in response to recent
news reports related to state agencies' finances. According to
the author's background information, "over many years FISMA
reports were filed and no one spotted these clearly illegal
misuses of state funds."
By increasing reporting requirements and increasing the
penalties for non-compliance with the requirements, the author
hopes to avoid additional incidences of agencies shifting
money and perhaps intentionally underreporting their funds.
This bill requires agency heads to sign off on FISMA reports
under penalty of perjury. Additionally, it establishes
consequences if the FISMA reports are not submitted on time.
Specifically, the head of the agency would be suspended
without pay if reports were not submitted within 30 days of
their due dates. The suspension would end when the agency
complied.
Currently, if an agency does not comply with FISMA, the
agency's program budget manager at DOF is notified. The agency
is included in a list that is posted on DOF's website of
departments that are out of compliance, and the Office of
State Audits and Evaluations works with DOF and the agency to
ensure the agency complies with FISMA in the next reporting
cycle.
AB 661
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2)Financial Integrity and State Manager's Accountability Act of
1983 (FISMA) . FISMA requires state agencies to maintain
effective systems of internal accounting and administrative
controls as an integral part of its management practices. In
each odd-numbered year, agencies must prepare a FISMA report
on the adequacy of the agency's systems of internal
accounting, administrative control, and monitoring practices
in accordance with the guidance prepared by the director of
DOF.
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081