BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 1305
                                                                  Page  1

          Date of Hearing:   May 1, 2013

           ASSEMBLY COMMITTEE ON ACCOUNTABILITY AND ADMINISTRATIVE REVIEW
                                 Jim Frazier, Chair
                    AB 1305 (Gray) - As Amended:  April 22, 2013 
           
          SUBJECT  :   CA State Auditor: duties: audits 

           SUMMARY  :   Requires the California State Auditor (CSA) to  
          conduct audits of five state departments each year in addition  
          to audits required by statute or requested by the Legislature.  

          Specifically,  this bill  :  

          1)Requires the CSA to conduct audits of five departments each  
            year based on a methodology developed by the CSA. 
          2)Audits could examine state agencies' compliance with law and  
            regulations related to safeguarding assets as well as ensuring  
            transparency and complete and accurate reporting of financial  
            data.
          3)At a minimum, the audits shall determine the extent to which  
            fund balances are reconciled and accurately reported, and if  
            agreements with private entities and individuals are properly  
            managed. 

           EXISTING LAW  : Current law requires the State Auditor to conduct  
          audits as directed by statute and audits assigned by the Joint  
          Legislative Audit Committee (JLAC). 

           FISCAL EFFECT  :   Unknown

           COMMENTS  :   This bill would require the CSA to conduct audits of  
          five state departments each year based on a methodology  
          developed by the CSA. Generally, the audits that the CSA  
          conducts are either mandated by statutes or discretionary. An  
          example of a mandated audit that the CSA conducts is the state's  
          annual financial audit, as this work is required by Government  
          Code.

          In contrast, discretionary audits are assigned by the  
          Legislature through the Joint Legislative Audit Committee  
          (JLAC). Under this process, any member of the Legislature or  
          committee of the Legislature can request an audit by submitting  
          a letter to the chair of JLAC. Since JLAC is a joint committee,  
          majorities of members from both the Assembly and Senate must  








                                                                  AB 1305
                                                                  Page  2

          approve the audit request for it to be assigned to the CSA.

          This bill would sidestep JLAC's regular process, in which  
          legislators discuss potential audits and vote if they should be  
          conducted. Furthermore, the bill would cede legislative  
          authority by requiring the CSA to determine - at its sole  
          discretion - which departments it would audit each year.

          Additionally, audit work required under this bill could reduce  
          the number of JLAC audits that the CSA could conduct in a timely  
          manner. 

                  

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          None on file

           Opposition 
           
          None on file
           
          Analysis Prepared by  :    Scott Herbstman / A. & A.R. / (916)  
          319-3600