BILL ANALYSIS Ó SENATE COMMITTEE ON GOVERNANCE AND FINANCE Senator Robert M. Hertzberg, Chair 2015 - 2016 Regular ------------------------------------------------------------------ |Bill No: |AB 341 |Hearing |6/10/15 | | | |Date: | | |----------+---------------------------------+-----------+---------| |Author: |Achadjian |Tax Levy: |No | |----------+---------------------------------+-----------+---------| |Version: |5/5/15 |Fiscal: |No | ------------------------------------------------------------------ ----------------------------------------------------------------- |Consultant|Weinberger | |: | | ----------------------------------------------------------------- LOCAL GOVERNMENTS' FINANCIAL TRANSACTIONS REPORTS Makes several changes to the statutes requiring local governments to report annual financial information to the State Controller's Office. Background The State Controller must compile and publish reports of the financial transactions of local governments, including counties, cities, special districts, and joint powers authorities. Local governments must, within 90 to 110 days of the end of their respective fiscal years, furnish the State Controller with annual reports of their financial transactions. Because the deadlines by which local governments must submit annual financial transactions data to the State Controller often fall before the date on which audited financial information for the prior fiscal year is available, the data submitted to the Controller is often imprecise and requires revisions before it is published by the Controller. Local officials want the Legislature to change the timelines for submitting some local financial information to the Controller and make additional changes to state law to ensure that local government financial transactions information is more accurate and accessible when it is made available to the public. AB 341 (Achadjian) 5/5/15 Page 2 of ? Proposed Law I. Local government reports to the Controller . Current law requires the officer of each local agency who has charge of the agency's financial records to furnish to the State Controller a report of all the local agency's financial transactions during the prior fiscal year. The report must be filed either within 90 days of the end of a local agency's fiscal year or, if it is filed electronically, within 110 days of the end of a local agency's fiscal year. Assembly Bill 341: Extends, to seven months after the end of a local agency's fiscal year, the deadline for submitting to the Controller an annual report of a local agency's financial transactions. Requires the report to contain underlying data from audited financial statements prepared in accordance with generally accepted accounting principles, if the data is available. Current law requires that, upon the completion of the annual report submitted to the Controller's Office, a local government's legislative body must cause copies of the report to be prepared and the clerk of the legislative body must furnish a copy to any person requesting it. Assembly Bill 341, as an alternative to furnishing paper copies of the report upon request, allows a legislative body to post the report in a conspicuous location on its Internet Website. Current law requires that the annual report submitted to the Controller, must state the annual compensation of a local agency's elected officials, officers, and employees in accordance with reporting instructions developed by the Controller, in consultation with affected local agencies. Assembly Bill 341 requires that a local agency must submit to the Controller, specified annual compensation information for the previous calendar year no later than April 30th. II. Controller's published reports . Current law requires the Controller, subject to specified statutory requirements, to compile and publish annual reports of the financial transactions of each county, city, and special district on or before August 1st, September 1st, and October 1st respectively following the AB 341 (Achadjian) 5/5/15 Page 3 of ? end of the annual reporting period. Assembly Bill 341 instead requires the Controller to compile and publish reports, of the financial transactions of each county, city, and special district on or before November 1st of each year following the end of the annual reporting period. III. Other provisions . Assembly Bill 341 repeals a provision of law which establishes a separate reporting deadline, for a local agency that reports specified information to the Office of Statewide Health Planning and Development. Assembly Bill 341 repeals an obsolete deadline, for a community redevelopment agency to submit annual financial transactions information to the Controller. Assembly Bill 341 makes other technical and conforming changes to current law. State Revenue Impact No estimate. Comment 1. Purpose of the bill . Because current law requires local governments to submit annual financial transactions reports to the State Controller within 90 to 110 days of the end of a fiscal year, those reports typically are submitted before the completion of an independent audit of the prior year's fiscal transactions. After independent audits are completed, local governments frequently have to resubmit reports to the Controller's Office with additional or corrected information that is identified in the audit. Submitting incomplete or unaudited data can create confusion for the public and additional work for both the State Controller's office and the local agency staff to update information to reflect final audits. By extending the period of time during which a local agency can submit the report to the Controller's office and requiring that the report will contain data from audited financial statements, if the data is available, AB 341 will provide the public with more accurate information about local governments' financial transactions and saves public agencies' AB 341 (Achadjian) 5/5/15 Page 4 of ? time and resources. Assembly Actions Assembly Local Government Committee: 9-0 Assembly Floor: 74-0 Support and Opposition (6/4/15) Support : California Special Districts Association; California State Association of Counties; League of California Cities. Opposition : Unknown. -- END -