BILL ANALYSIS                                                                                                                                                                                                    Ó


          |SENATE RULES COMMITTEE            |                        SB 801|
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                                    THIRD READING

          Bill No:  SB 801
          Author:   Roth (D)
          Amended:  4/17/13
          Vote:     21

           SENATE PUBLIC SAFETY COMMITTEE  :  7-0, 4/30/13
          AYES: Hancock, Anderson, Block, De León, Knight, Liu, Steinberg

           SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8

           SUBJECT  :    Department of Finance:  reports:  crimes

           SOURCE  :     Author

           DIGEST  :    This bill clarifies that the Department of Finance  
          (DOF) has the authority to require certifications, signed under  
          penalty of perjury, that budgeting information provided to the  
          DOF reconciles to the information submitted to the State  
          Controller's Office (Controller). 

           ANALYSIS  :    

          Existing law:

          1. Provides that there is in the State Government a DOF.

          2. Provides that the DOF 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  


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             institution of such investigations and proceedings as it  
             deems proper to conserve the rights and interests of the  

          3. Requires that the Director of DOF shall be responsible for  
             coordinating state agency internal audits and identifying  
             when agencies are required to comply with federally mandated  
             audits.  The Director of DOF, in coordinating the internal  
             auditors of state agencies, shall ensure that these auditors  
             utilize the "Standards for the Professional Practices of  
             Internal Auditing." 

          4. 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 DOF. . . .  The DOF shall implement  
             procedures, that facilitate annual reconciliations of General  
             Fund and special fund balances between those provided by a  
             state agency to the DOF and to the State Controller.  In the  
             Governor's Budget documents, appendices thereof, or other  
             directives, the DOF shall 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."

          5. Provides that every person is guilty of a misdemeanor who:

             A.    Fails or neglects to make, verify and file with the  
                DOF any report required by this part.

             B.    Fails or neglects to follow the directions of the DOF  
                in keeping the accounts of his/her 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/her office by a  
                representative of the DOF or in any way interferes with  
                such examination.

          6. Provides that "(e)very officer whose duty it is to audit and  
             allow the accounts of other state, county, or city officers  



                                                                     SB 801

             shall, before allowing such accounts, require each of such  
             officers to make and file with him/her an affidavit or  
             certificate under penalty of perjury that he has not violated  
             any of the provisions of this article, and any individual who  
             willfully makes and subscribes such certificate to an account  
             which he/she 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." 

          7. Provides that perjury is a felony punishable by imprisonment  
             for two, three or four years. 

          This bill requires the DOF to require each officer whose duty it  
          is to audit the accounts of a state agency as specified, to  
          provide a certification under penalty of perjury to the DOF that  
          the budgeting and accounting information provided reconciles to  
          the information submitted to the Controller's Office.  

          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 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  

             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  



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             accounting information provided to the department  
             reconciles to the year-end finance reports submitted to  
             the State Controller's office.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  Yes

          JG:d  5/14/13   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  NONE RECEIVED

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