Amended in Senate May 28, 2013

Amended in Senate May 8, 2013

Amended in Senate April 1, 2013

Senate Bill No. 302

Introduced by Senator Cannella

(Coauthors: Senators Gaines and Huff)

February 15, 2013

An act to amend begin delete Sections end delete begin insert Section end insert 14501 begin delete and 14502.1 end delete of, to add Sections 38087, 38096, 38097, 38098, and 38104 to, and to repeal Sections 38092 and 38102 of, the Education Code, relating to school cafeterias.

LEGISLATIVE COUNSEL’S DIGEST

SB 302, as amended, Cannella. School cafeterias: cafeteria fund.

(1) Existing law requires the Controller, in consultation with the Department of Finance and the State Department of Education, to develop a plan to review and report on financial and compliance audits, and with representatives of other entities, to recommend the statements and other information to be included in the audit reports filed with the state by local educational agencies, and to propose the content of an audit guide begin insert . For these purposes, existing law defines “compliance audit” as an audit that ascertains and verifies whether or not specific funds provided have been properly disbursed and expended and includes the verification of specific information end insert .

This bill would additionally require begin delete compliance audits and the audit guide end delete begin insert a end insert begin insert compliance audit end insert to include begin insert the verification of end insert cafeteria fund expenditures.

(2) Existing law authorizes the governing board of any school district to establish cafeterias in the schools under its jurisdiction and authorizes the moneys received for the sale of food or for any services performed by the cafeterias to be paid into the county treasury to the credit of the cafeteria fund of the particular school district. Existing law requires the cafeteria fund to be used only for those expenditures authorized by the governing board of the school district that are defined in the California School Accounting Manual.

This bill would require the State Department of Education to assess its food services workload and staffing needs for purposes of carrying out the state’s oversight responsibilities of cafeteria funds and to request sufficient federal funding to hire the appropriate number of staff based on that assessment. The bill would require the department to prepare simplified guidelines that address most of the common acceptable and unacceptable charges to cafeteria funds. The bill would require the department to post on its Internet Web site all enforcement actions for the misappropriation of cafeteria funds. The bill would require a school district to maintain all financial records related to its cafeteria fund for 5 years, thereby imposing a state-mandated local program. The bill would prohibit a school district from withholding from its food service director any financial records involving school nutrition programs.

(3) Existing law authorizes the governing board of any school district with an average daily attendance of over 100,000 to allow as an expenditure from its cafeteria fund a share of money agreed upon pursuant to a contract that is generated from the joint sale of items between the cafeteria and an associated student body student store.

This bill would repeal that provision.

(4) Existing law authorizes the governing board of any school district operating school cafeterias to establish and maintain a cafeteria fund reserve for the purchase, lease, maintenance, or replacement of cafeteria equipment, as specified.

This bill would repeal that provision.

(5) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

SECTION 1.  

Section 14501 of the Education Code is amended
to read:

14501.  

(a) As used in this chapter, “financial and compliance
audit” shall be consistent with the definition provided in the
“Standards for Audits of Governmental Organizations, Programs,
Activities, and Functions” promulgated by the Comptroller General
of the United States. Financial and compliance audits conducted
under this chapter shall fulfill federal single audit requirements.

(b) As used in this chapter, “compliance audit” means an audit
that ascertains and verifies whether or not funds provided through
apportionment, contract, or grant, either federal or state, have been
properly disbursed and expended as required by law or regulation,
or both, and includes the verification of each of the following:

(1) The reporting requirements for the sufficiency of textbooks
or instructional materials, or both, as defined in Section 60119.

(2) Teacher misassignments pursuant to Section 44258.9.

(3) The accuracy of information reported on the School
Accountability Report Card required by Section 33126. The
requirements set forth in paragraphs (1), (2), and (4) and this
paragraph shall be added to the audit guide requirements pursuant
to subdivision (b) of Section 14502.1.

(4) Cafeteria fund expenditures pursuant to Chapter 3
(commencing with Section 38080) of Part 23 of Division 3 of Title
2.

begin delete

SEC. 2.  

Section 14502.1 of the Education Code is amended to
read:

14502.1.  

(a) The Controller, in consultation with the
Department of Finance and the department, shall develop a plan
to review and report on financial and compliance audits. The plan
shall commence with the 2003-04 fiscal year for audits of school
districts, other local educational agencies, and the offices of county
superintendents of schools. The Controller, in consultation with
the Department of Finance, the department, and representatives
of the California School Boards Association, the California
Association of School Business Officials, the California County
Superintendents Educational Services Association, the California
Teachers Association, and the California Society of Certified Public
Accountants, shall recommend the statements and other information
to be included in the audit reports filed with the state, and shall
propose the content of an audit guide to carry out the purposes of
this chapter. A supplement to the audit guide may be suggested in
the audit year, following the above process, to address issues
resulting from new legislation in that year that changes the
conditions of apportionment. The proposed content of the audit
guide and any supplement to the audit guide shall be submitted by
the Controller to the Education Audit Appeals Panel for review
and possible amendment.

(b) The audit guide and any supplement shall be adopted by the
Education Audit Appeals Panel pursuant to the rulemaking
procedures of the Administrative Procedure Act as set forth in
Chapter 3.5 (commencing with Section 11340) of Part 1 of Division
3 of Title 2 of the Government Code. It is the intent of the
Legislature that, for the 2003-04 fiscal year, the audit guide be
adopted by July 1 of the fiscal year to be audited. A supplemental
audit guide may be adopted to address legislative changes to the
conditions of apportionment. It is the intent of the Legislature that
supplements be adopted before March 1 of the audit year.
Commencing with the 2004-05 fiscal year, and each fiscal year
thereafter, the audit guide shall be adopted by July 1 of the fiscal
year to be audited. A supplemental audit guide may be adopted to
address legislative changes to the conditions of apportionment.
The supplements shall be adopted before March 1 of the audit
year. To meet these goals and to ensure the accuracy of the audit
guide, the process for adopting emergency regulations set forth in
Section 11346.1 of the Government Code may be followed to
adopt the guide and supplemental audit guide. It is the intent of
the Legislature that once the audit guide has been adopted for a
fiscal year, as well as any supplement for that year, thereafter only
suggested changes to the audit guide and any additional
supplements need be adopted pursuant to the rulemaking
procedures of the Administrative Procedure Act. The audit guide
and any supplement shall be issued in booklet form and may be
made available by any means deemed appropriate. The Controller
and consultants in the development of the suggested audit guide
and any supplement shall work cooperatively on a timeline that
will allow the Education Audit Appeals Panel to meet the July 1
and March 1 issuance dates. Consistent with current practices for
development of the audit guide before the 2003-04 fiscal year, the
Controller shall provide for the adoption of procedures and
timetables for the development of the suggested audit guide, any
supplement, and the format for additions, deletions, and revisions.

(c) For the audit of school districts or county offices of education
electing to take formal action pursuant to Sections 22714 and
44929, the audit guide content proposed by the Controller shall
include, but not be limited to, the following:

(1) The number and type of positions vacated.

(2) The age and service credit of the retirees receiving the
additional service credit provided by Sections 22714 and 44929.

(3) A comparison of the salary and benefits of each retiree
receiving the additional service credit with the salary and benefits
of the replacement employee, if any.

(4) The resulting retirement cost, including interest, if any, and
postretirement health care benefits costs, incurred by the employer.

(d) The Controller shall annually prepare a cost analysis, based
on the information included in the audit reports for the prior fiscal
year, to determine the net savings or costs resulting from formal
actions taken by school districts and county offices of education
pursuant to Sections 22714 and 44929 and shall report the results
of the cost analysis to the Governor and the Legislature by April
1 of each year.

(e) All costs incurred by the Controller to implement subdivision
(c) shall be absorbed by the Controller.

(f) On or before July 1, 2014, the Education Audit Appeals
Panel shall revise the audit guide to include clear and
comprehensive guidance on what school districts may or may not
do with moneys in a cafeteria fund pursuant to Chapter 3
(commencing with Section 38080) of Part 23 of Division 3 of Title
2 and applicable federal law.

(g) This section shall become operative July 1, 2003, and shall
apply to the preparation of the audit guide for school district audits
commencing with the 2003-04 fiscal year.

end delete

begin delete SEC. 3. end delete
begin insert SEC. 2. end insert   

Section 38087 is added to the Education Code, to read:

38087.  

The department shall assess its food services workload
and staffing needs for purposes of carrying out the state’s oversight
responsibilities in accordance with federal law and regulations
adopted by the United States Department of Agriculture and shall
request sufficient federal funding to hire the appropriate number
of staff based on that assessment.

begin delete SEC. 4. end delete
begin insert SEC. 3. end insert   

Section 38092 of the Education Code is repealed.

begin delete SEC. 5. end delete
begin insert SEC. 4. end insert   

Section 38096 is added to the Education Code, to read:

38096.  

(a) The department shall prepare simplified guidelines
that address most of the common acceptable and unacceptable
charges to cafeteria funds.

(b) The department shall post on its Internet Web site all
enforcement actions for the misappropriation of cafeteria funds.

begin delete SEC. 6. end delete
begin insert SEC. 5. end insert   

Section 38097 is added to the Education Code, to read:

38097.  

A school district shall maintain all financial records
related to its cafeteria fund for five years.

begin delete SEC. 7. end delete
begin insert SEC. 6. end insert   

Section 38098 is added to the Education Code, to read:

38098.  

This chapter does not authorize a school district to
charge a food service program any charge prohibited by state or
federal law or regulation or guidance.

begin delete SEC. 8. end delete
begin insert SEC. 7. end insert   

Section 38102 of the Education Code is repealed.

begin delete SEC. 9. end delete
begin insert SEC. 8. end insert   

Section 38104 is added to the Education Code, to read:

38104.  

A school district shall not withhold from its food service
director any financial records involving school nutrition programs.

begin delete SEC. 10. end delete
begin insert SEC. 9. end insert   

If the Commission on State Mandates determines that
this act contains costs mandated by the state, reimbursement to
local agencies and school districts for those costs shall be made
pursuant to Part 7 (commencing with Section 17500) of Division
4 of Title 2 of the Government Code.