BILL NUMBER: SB 584	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Wyland

                        FEBRUARY 22, 2013

   An act to amend Section 14502.1 of, and to add Section 17076.12
to, the Education Code, relating to school facilities.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 584, as introduced, Wyland. School facilities: financial and
performance audits.
   (1) Existing law requires the Controller, in consultation with the
Department of Finance, the State Department of Education, and
representatives of certain nongovernmental organizations, to
recommend the statements and other information to be included in the
audit reports filed with the state, and to propose the content of an
audit guide that is required to be submitted by the Controller to the
Education Audits Appeal Panel for review and possible amendment.
   This bill would require the Controller, on or before January 1,
2015, and in consultation with the State Allocation Board, the
Department of Finance, and the State Department of Education, to
submit content to the Education Audits Appeal Panel to be included in
the audit guide, Standards and Procedures for Audits of California
K-12 Local Educational Agencies 2015-16, that is related to specified
financial and performance audits required for school facility
projects.
   (2) The California Constitution limits the maximum amount of any
ad valorem tax on real property to 1% of the full cash value of the
property except for ad valorem taxes or assessments that pay the
interest and redemption charges on bonded indebtedness incurred by a
school district, community college district, or county office of
education for the construction, rehabilitation, or replacement of
school facilities approved by 55% of the voters if the proposition
includes specified accountability requirements, including, but not
limited to, a requirement that the governing board of either the
school district or community college district or county office of
education conduct annual independent performance and financial
audits. Existing law requires, by March 31 of each year, the annual,
independent financial and performance audits for the preceding fiscal
year to be submitted to a citizens' oversight committee that is
required to be established if a proposition is approved by the
voters, as described above.
   Existing law also requires a school district that has received any
funds pursuant to the Leroy F. Greene School Facilities Act of 1998
(the act) to submit an annual summary report of the expenditure of
state funds and of district matching funds until all state funds and
district matching funds are expended, and then the school district is
required to submit a final report to the State Allocation Board.
   This bill would also require a school district that has received
any funds or apportionments pursuant to the act to submit annual
independent financial and performance audits to the State Allocation
Board for the preceding fiscal year to ensure that the funds have
been expended only in accordance with the act. The bill would
prohibit a school district that does not annually submit these audits
from receiving funds or apportionments pursuant to the act.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  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 State Department of Education, 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 education agencies, and the offices of county
superintendents of schools. The Controller, in consultation with the
Department of Finance, the State Department of Education, and
representatives of the California School Boards Association, the
California Association of School Business Officials, the California
County Superintendents Educational Service Association, the
California Teachers Association, 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 Audits Appeal Panel for review and
possible amendment.
   (b) The audit guide and any supplement shall be adopted by the
Education Audits Appeal 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 audits
appeal 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, 22714.5,   22714 and  44929,
 and 44929.1,  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 
22714,22714.5, 44929, and 44929.1   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, 22714.5, 44929, and 44929.1
  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) 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.  
    (f) On or before January 1, 2015, the Controller, in consultation
with the State Allocation Board, the Department of Finance, and the
State Department of Education, shall submit content to the Education
Audits Appeal Panel to be included in the audit guide, Standards and
Procedures for Audits of California K-12 Local Educational Agencies
2015-16, that is related to the financial and performance audits
required for school facility projects, as described in Sections 15286
and 17076.12. 
  SEC. 2.  Section 17076.12 is added to the Education Code, to read:
   17076.12.  (a) A school district that has received any funds or
apportionments pursuant to this chapter shall submit annual,
independent financial and performance audits for the preceding fiscal
year to the board to ensure that the funds have been expended only
in accordance with this chapter.
   (b) If a school district fails to annually submit the audits
required by subdivision (a), the school district shall be prohibited
from receiving funds or apportionments pursuant to this chapter.