BILL ANALYSIS Ó
SB 801
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Date of Hearing: July 3, 2013
ASSEMBLY COMMITTEE ON ACCOUNTABILITY AND ADMINISTRATIVE REVIEW
Jim Frazier, Chair
SB 801 (Roth) - As Amended: June 26, 2013
SENATE VOTE : 36-0
SUBJECT : Department of Finance: reports: crimes.
SUMMARY : Directs the Department of Finance (DOF) to annually
require each department head, or designee, responsible for
auditing the accounts of a state entity, as specified, to
certify under penalty of perjury that the budgeting and
accounting information provided to the DOF reconciles to the
year-end finance reports submitted to the State Controller's
Office (SCO). Subjects an individual who willfully makes and
subscribes a certification that he or she knows to be false to
the penalties for perjury established in the Penal Code.
EXISTING LAW :
1)Provides the DOF with general powers of supervision over all
matters concerning the financial and business policies of the
state.
2)Makes the Director of the DOF responsible for coordinating
state agency internal audits and identifying when agencies are
required to comply with federally mandated audits. Requires
the Director of the DOF, in coordinating the internal auditors
of state agencies, to ensure that these auditors utilize the
"Standards for the Professional Practices of Internal
Auditing."
3)Requires state agencies to prepare and maintain financial and
accounting data for inclusion in the Governor's Budget, Budget
Act, and related documents, as specified, according to the
methods and bases provided in regulations, budget letters, and
other directives of the DOF.
4)Directs the DOF to 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
SCO, as specified.
SB 801
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5)Deems every person guilty of a misdemeanor who fails or
neglects to make, verify, and file any report as required by
the DOF; who fails or neglects to follow the directions of the
DOF in keeping the accounts of his/her office; or, who refuses
to permit the examination of, or access to, the records,
files, books, accounts, papers, documents or cash drawers of
his/her office by a representative of the DOF or in any way
interferes with such examination.
6)Requires specified public auditing officers, pursuant to
Government Code section 1094, to require certification under
penalty of perjury for specified government accounting audits,
and makes any individual who willfully makes and subscribes a
certification which he/she knows to be false guilty of a
felony and, upon conviction, subject to the penalties
prescribed for perjury in the Penal Code.
7)Makes perjury a felony punishable by imprisonment for two,
three, or four years, depending on the underlying offense.
FISCAL EFFECT : The current version of this bill has not yet
been analyzed by a fiscal committee.
COMMENTS : According to the author, this bill is intended to
improve accountability with regard to state agencies' finances.
The author states that the recent underreporting of funds by the
Department of Parks and Recreation and the Department of
Forestry and Fire Protection underscores the need to ensure that
state agencies have appropriate controls in place to provide
accurate financial information to the DOF and the SCO.
As the Governor's chief fiscal policy adviser, the DOF directs
the efforts of preparing the annual Governor's Budget while the
SCO compiles the State's financial statements. Both agencies
report fund balance information in annual reports that are based
on information prepared by state departments. According to a
March 2013 Budget Letter from DOF, it is critical that
departments' submittal to the SCO reflects correct and
reconciled information. The budget letter states that
departments are responsible for ensuring that data included in
both the budget schedules and year-end financial statements are
identical unless permitted by law or DOF has approved a
difference.
Current DOF protocols require department heads or designees to
SB 801
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certify under penalty of perjury that past and prior year
budgeting and accounting information provided to DOF reconciles
to year-end financial reports submitted to the SCO. The SCO
also requires year-end financial reports to be certified under
penalty of perjury. While Government Code section 1094 requires
certification under penalty of perjury for specified government
accounting audits, this bill would explicitly clarify that DOF
has the statutory authority to require these certifications.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
None on file
Analysis Prepared by : Cassie Royce / A. & A.R. / (916)
319-3600