BILL ANALYSIS Ó
SENATE COMMITTEE ON EDUCATION
Carol Liu, Chair
2013-2014 Regular Session
BILL NO: SB 581
AUTHOR: Wyland
AMENDED: April 8, 2013
FISCAL COMM: No HEARING DATE: April 17, 2013
URGENCY: No CONSULTANT:Kathleen Chavira
SUBJECT : Bond Accountability.
SUMMARY
This bill expands local reporting requirements relative to the
constitutionally required financial and performance audits
which must be completed for bond authorizations which are
approved by voters under the provisions of Proposition 39.
BACKGROUND
Article XI, section 18 of the California Constitution, as
amended by voter initiative measure (Proposition 39, November
2000) authorizes a school district, community college
district, or county office of education to incur bond
indebtedness for the construction, reconstruction,
rehabilitation, or replacement of school facilities, with the
approval of 55 percent of the voters of the district or
county. Article XIII A provides that this vote threshold only
applies if, among other things, the local bond measure
includes a specific list of school projects to be funded and
requires the authorizing board to conduct annual, independent
financial and performance audits until all bond funds have
been spent to ensure they are used exclusively for the
projects listed in the measure. Current law provides that a
Citizen's Oversight Committee (COC) be established to, among
other things, receive and review copies of the
constitutionally required annual independent financial and
performance audits. (EC § 15278)
Current law requires the governing board of the school
district, without expending bond funds, to provide the COC
with any necessary technical and administrative assistance and
sufficient resources to publicize the COC conclusions. All
committee proceedings shall be open to the public and notice
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to the public shall be provided in the same manner as the
proceedings of the governing board. The COC is required to
issue regular reports at least once a year, on its activities,
and minutes of the proceedings of the COC and all documents
received and reports issued are required to be a matter of
public record and to be made available on an Internet website
maintained by the governing board. (EC §15280)
Current law requires that the independent financial and
performance audits required by Proposition 39 be conducted in
accordance with the Government Auditing Standards issued by
the Comptroller General of the United States and be submitted
by March 31 each year. (EC §15286)
ANALYSIS
This bill :
1) Requires a school district governing board to provide the
citizen's oversight committee (COC) a response to any and
all findings, recommendations, and concerns addressed in
the constitutionally required annual, independent
performance and financial audits under Proposition 39
within three months of receiving the audits.
2) Requires submission of a copy of the draft and final
Proposition 39 audits for the preceding fiscal year to
the COC at the same time they are submitted to the school
or community college district.
STAFF COMMENTS
1) What's the problem ? According to the author, a local
bond oversight committee has struggled to keep track of
construction project spending from a $644 million
construction bond passed in the Sweetwater Union High
School District (district) in 2006. The author reports
that the district borrowed millions of dollars from the
construction funds over a three year period in order to
pay for teacher salaries and maintenance upkeeps.
According to the author, during this time the district
did not respond to the bond oversight committee concerns,
findings and recommendations, did not provide a financial
report in 2012, and, though a model form for reporting
expenditures was collaboratively developed by the
committee and school district to ensure the committee
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could understand and track expenditures, the district
used a form that bore no relation to that agreed upon.
This bill would allow for the bond oversight committee to
be better engaged in the audit process by providing
access to information with sufficient time to conduct an
appropriate analysis, allowing the oversight committee to
fulfill their role under Proposition 39.
2) Existing remedies ? Current law provides that any
individual who has paid property taxes within a school or
community college district may take an action to obtain a
restraining order preventing any expenditure of proceeds
received from the sale of bonds if it appears that
expenditures are for purposes other than those specified
in the voter authorized bond proposal (Education Code
§15284). It is unclear whether the Citizen's Oversight
Committee in the Sweetwater Union High School District
pursued such recourse.
SUPPORT
California League of Bond Oversight Committees
CalTax
Howard Jarvis Taxpayers Association
OPPOSITION
None received on this version.