BILL ANALYSIS Ó
Bill No: AB
1218
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2013-2014 Regular Session
Staff Analysis
AB 1218 Author: Gray
As Amended: April 16, 2013
Hearing Date: June 25, 2013
Consultant: Art Terzakis
SUBJECT
California State Auditor
DESCRIPTION
AB 1218 adds clarity to existing law by authorizing the
California State Auditor (CSA), after performing an audit,
to conduct follow-up audit work that is related to the
audits' original findings and recommendations.
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. [SB 1395 - Rubio,
Chapter 281 of 2012 renamed the BSA as the "California
State Auditor's Office" (CSA).]
To assure its independence, the CSA is free from the
control of the Executive and Legislative branches; the
Milton Marks "Little Hoover" Commission oversees its
administrative operations. The CSA, 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 CSA also conducts financial and performance audits as
AB 1218 (Gray) continued
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directed by statute, and other government audits requested
by the Joint Legislative Audit Committee (JLAC). The CSA
has the explicit authority to audit any entity that
receives state funds. Consequently, it sometimes audits at
the local government level. In addition, the CSA
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 AB 1218: This measure, sponsored by the
California State Auditor's Office, would authorize the CSA
to conduct follow-up work related to original audit
findings and recommendations. While the CSA conducts
follow-up work under current authority granted by the
Government Code, this measure would clarify that authority
by making it explicit. According to the CSA, this change
is sought so entities subject to follow-up work clearly
understand the authority and grant the CSA appropriate
access.
PRIOR/RELATED LEGISLATION
SB 1395 (Rubio), Chapter 281, Statutes of 2012. Renamed
the "Bureau of State Audits" as the "California State
Auditor's Office" and made other minor code maintenance
changes.
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
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Finance to the 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. (Held in this Committee at Author's
Request)
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: As of June 21, 2013:
California State Auditor's Office
OPPOSE: None on file as of June 21, 2013.
FISCAL COMMITTEE: Senate Appropriations Committee
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