BILL ANALYSIS �
SENATE COMMITTEE ON PUBLIC SAFETY
Senator Loni Hancock, Chair S
2013-2014 Regular Session B
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SB 801 (Roth)
As Amended April 17, 2013
Hearing date: April 30, 2013
Government Code
AA:mc
STATE BUDGETING AND ACCOUNTING INFORMATION:
CERTIFICATION
HISTORY
Source: Author
Prior Legislation: None
Support: Unknown
Opposition:None known
KEY ISSUE
SHOULD THE DEPARTMENT OF FINANCE BE EXPRESSLY REQUIRED BY STATUTE TO
OBTAIN STATE ACCOUNTING AUDITS PURSUANT TO CERTIFICATION SIGNED
UNDER PENALTY OF PERJURY, AS SPECIFIED?
PURPOSE
The purpose of this bill is to statutorily provide that the
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Department of Finance "annually require each officer whose duty
it is to audit the accounts of a state agency, department,
office, bureau, or other state entity to provide a
certification, signed under penalty of perjury, to the
department that the budgeting and accounting information
provided to the department reconciles to the year-end finance
reports submitted to the Controller's office."
Current law provides that there is in the State Government a
Department of Finance. (Gov. Code � 13000.)
Current law provides that the Department of Finance has general
powers of supervision over all matters concerning the financial
and business policies of the State and whenever it deems it
necessary, or at the instance of the Governor, shall institute
or cause the institution of such investigations and proceedings
as it deems proper to conserve the rights and interests of the
State. (Gov. Code � 13070.)
Current law requires that the Director of Finance shall be
responsible for coordinating state agency internal audits and
identifying when agencies are required to comply with federally
mandated audits. The Director of Finance, in coordinating the
internal auditors of state agencies, shall ensure that these
auditors utilize the "Standards for the Professional Practices
of Internal Auditing." (Gov. Code � 13071.)
Current law requires state agencies to "prepare and maintain
financial and accounting data for inclusion in the Governor's
Budget, Budget Act and related documents, and the
budgetary-legal basis annual report (as specified), according to
the methods and bases provided in regulations, budget letters,
and other directives of the Department of Finance. . . . The
Department of Finance shall implement procedures, consistent
with this section, that facilitate annual reconciliations of
General Fund and special fund balances between those provided by
a state agency to the Department of Finance and to the
Controller. In the Governor's Budget documents, appendices
thereof, or other directives, the Department of Finance shall
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ensure that adjustments of prior-year fund balances and
accounting methods are clearly noted in some fashion in order to
ensure the closest possible comparability of these documents
with past and future budgetary-legal basis annual reports."
(Gov. Code � 13344.)
Current law provides that every person is guilty of a
misdemeanor who:
(a) Fails or neglects to make, verify and file with the
Department of Finance any report required by this part.
(b) Fails or neglects to follow the directions of the
Department of Finance in keeping the accounts of his office.
(c) Refuses to permit the examination of or access to the
records, files, books, accounts, papers, documents or cash
drawers or cash of his office by a representative of the
Department of Finance or in any way interferes with such
examination.
Conviction of any such misdemeanor is punishable by a fine of
not less than $100 nor more than $1,000, or by imprisonment in
the county jail for not less than 30 days, or both. (Gov. Code
� 13030.)
Current law provides that "(e)very officer whose duty it is to
audit and allow the accounts of other state, county, or city
officers shall, before allowing such accounts, require each of
such officers to make and file with him an affidavit or
certificate under penalty of perjury that he has not violated
any of the provisions of this article, and any individual who
wilfully makes and subscribes such certificate to an account
which he knows to be false as to any material matter shall be
guilty of a felony and upon conviction thereof shall be subject
to the penalties prescribed for perjury by the Penal Code of
this State." (Gov. Code � 1094.)
Current law provides that perjury is a felony punishable by
imprisonment for two, three or four years. (Penal Code � 126.)
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This bill would require the Department of Finance to "annually
require each officer whose duty it is to audit the accounts of a
state agency, department, office, bureau, or other state entity
to provide a certification, signed under penalty of perjury, to
the department that the budgeting and accounting information
provided to the department reconciles to the year-end finance
reports submitted to the Controller's office."
RECEIVERSHIP/OVERCROWDING CRISIS AGGRAVATION
For the last several years, severe overcrowding in California's
prisons has been the focus of evolving and expensive litigation
relating to conditions of confinement. On May 23, 2011, the
United States Supreme Court ordered California to reduce its
prison population to 137.5 percent of design capacity within two
years from the date of its ruling, subject to the right of the
state to seek modifications in appropriate circumstances.
Beginning in early 2007, Senate leadership initiated a policy to
hold legislative proposals which could further aggravate the
prison overcrowding crisis through new or expanded felony
prosecutions. Under the resulting policy known as "ROCA" (which
stands for "Receivership/ Overcrowding Crisis Aggravation"), the
Committee held measures which created a new felony, expanded the
scope or penalty of an existing felony, or otherwise increased
the application of a felony in a manner which could exacerbate
the prison overcrowding crisis. Under these principles, ROCA
was applied as a content-neutral, provisional measure necessary
to ensure that the Legislature did not erode progress towards
reducing prison overcrowding by passing legislation which would
increase the prison population. ROCA necessitated many hard and
difficult decisions for the Committee.
In January of 2013, just over a year after the enactment of the
historic Public Safety Realignment Act of 2011, the State of
California filed court documents seeking to vacate or modify the
federal court order issued by the Three-Judge Court three years
earlier to reduce the state's prison population to 137.5 percent
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of design capacity. The State submitted in part that the, ". .
. population in the State's 33 prisons has been reduced by over
24,000 inmates since October 2011 when public safety realignment
went into effect, by more than 36,000 inmates compared to the
2008 population . . . , and by nearly 42,000 inmates since 2006
. . . ." Plaintiffs, who opposed the state's motion, argue in
part that, "California prisons, which currently average 150% of
capacity, and reach as high as 185% of capacity at one prison,
continue to deliver health care that is constitutionally
deficient." In an order dated January 29, 2013, the federal
court granted the state a six-month extension to achieve the
137.5 % prisoner population cap by December 31st of this year.
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In an order dated April 11, 2013, the Three-Judge Court denied
the state's motions, and ordered the state of California to
"immediately take all steps necessary to comply with this
Court's . . . Order . . . requiring defendants to reduce overall
prison population to 137.5% design capacity by December 31,
2013."
The ongoing litigation indicates that prison capacity and
related issues concerning conditions of confinement remain
unresolved. However, in light of the real gains in reducing the
prison population that have been made, although even greater
reductions are required by the court, the Committee will review
each ROCA bill with more flexible consideration. The following
questions will inform this consideration:
whether a measure erodes realignment;
whether a measure addresses a crime which is directly
dangerous to the physical safety of others for which there
is no other reasonably appropriate sanction;
whether a bill corrects a constitutional infirmity or
legislative drafting error;
whether a measure proposes penalties which are
proportionate, and cannot be achieved through any other
reasonably appropriate remedy; and
whether a bill addresses a major area of public safety
or criminal activity for which there is no other
reasonable, appropriate remedy.
COMMENTS
1. Stated Need for This Bill
The author states:
Last year it was discovered that the California
Department of Parks and Recreation amassed a secret
surplus of more than $20 million over 12 years.
Recently, it was also revealed that the California
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Department of Forestry and Fire Protection misreported
$3.6 million. This money was hidden and misreported
at a time when the economic recession forced billions
in budget cuts to state programs affecting families
and Californians in need.
In both instances, required reporting documents were
submitted to the state Department of Finance and money
desperately needed for specific programs and the
state's general fund during the severe economic
recession were misreported. The Department of Finance
has audited other departments and more than $200
million were hidden in one way or another to protect
agencies facing state budget cuts.
Senate Bill 801 would clarify that the Department of
Finance has the authority to require a certification,
signed under penalty of perjury, that the budgeting
and accounting information provided to the department
reconciles to the year-end finance reports submitted
to the State Controller's office.
2. Current Practice; What This Bill Would Do
As explained in a Budget Letter dated March 8, 2013, to all
Agency Secretaries, Department Directors, Departmental Budget
Officers, Departmental Accounting Officers, and Department of
Finance Budget Staff, current Finance protocols require the
certification of past and prior year budgeting and accounting
information under penalty of perjury. (See Forms DF-117A and
Form DF-117U; See also, Govt. Code 1094.) Similarly, the State
Controller's Office requires that year-end financial reports be
certified under penalty of perjury. Perjury is a felony
punishable by incarceration for two, three or four years.
(Penal Code � 126.)
Government Code section 1094 requires certification under
penalty of perjury for specified government accounting audits.
As noted above, the Department of Finance now requires
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certification of past and prior year budgeting and accounting
information under penalty of perjury. This bill would clarify
the statutory authority for this certification.
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