AB 625 Assembly Bill

BILL NUMBER: AB 625	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 26, 2015

INTRODUCED BY   Assembly Member Bonta

                        FEBRUARY 24, 2015

   An act  to amend Section 42127.3 of the Education Code, 
relating to schools.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 625, as amended, Bonta.  School districts: audits and
findings.   School finance: school di   strict
budgets.  
   (1) Existing law requires a school district to adopt a budget for
the subsequent fiscal year, as specified. Existing law requires the
county superintendent of schools to examine the adopted budget, make
certain determinations related to the adopted budget, and approve,
conditionally approve, or disapprove the adopted budget for each
school district, as specified.  
   If the adopted budget is conditionally approved or disapproved,
existing law specifies a process for revising the budget. If the
county superintendent of schools disapproves the revised budget,
existing law requires him or her to call for the formation of a
budget review committee, as specified. Existing law requires the
budget review committee to review the proposed budget of the school
district and the underlying fiscal policies of the school district
and to transmit to the Superintendent of Public Instruction, the
county superintendent of schools, and the governing board of the
school district either a recommendation that the school district
budget be approved or a report disapproving the school district
budget and setting forth recommendations for revisions to the school
district budget, as specified.  
   If the budget review committee disapproves the school district
budget, existing law authorizes the governing board of the school
district to submit a response to the Superintendent, as specified,
and, based upon the recommendations of the budget review committee
and any response to those recommendations provided by the governing
board of the school district, requires the Superintendent to either
approve or disapprove the budget. If the Superintendent disapproves
the budget, existing law requires the Superintendent to notify the
governing board of the school district in writing of the reasons for
that disapproval and requires the county superintendent of schools to
take certain actions as necessary, including, among others,
determining whether there are any financial problem areas and
employing, subject to approval by the Superintendent, a certified
public accounting firm to investigate financial problem areas. 

   This bill would add appointing a fiscal adviser to perform
specified duties of the county superintendent of schools to the list
of actions a county superintendent of schools is required to take as
necessary. To the extent this bill would impose additional duties on
a county superintendent of schools, the bill would impose a
state-mandated local program. The bill would also make various
nonsubstantive changes.  
   (2)The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.  
   This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.  
   Existing law requires the county superintendent of schools to
report to the Superintendent of Public Instruction on the financial
condition of a school district if the county superintendent
determines a school district may be unable to meet its financial
obligations for the current or 2 subsequent fiscal years or if a
school district has a qualified or negative certification. Existing
law requires the county superintendent to take at least one of
certain actions and all actions that are necessary to ensure that the
district meets its financial obligations.  
   This bill would state the intent of the Legislature to enact
legislation that reforms the audit procedures and findings for a
school district that has been taken over by the State of California.

   Vote: majority. Appropriation: no. Fiscal committee:  no
  yes  . State-mandated local program:  no
  yes  .


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

   SECTION 1.    Section 42127.3 of the  
Education Code   is amended to read: 
   42127.3.  (a) If the budget review committee established pursuant
to Sections 42127.1 and 42127.2 recommends approval of the school
district budget, the county superintendent of schools shall accept
the recommendation of the budget review committee and approve the
budget.
   (b) If the budget review committee established pursuant to
Sections 42127.1 and 42127.2 disapproves the school district budget,
the  school district  governing board  of the
school district  , not later than five working days after
receipt of the report described in paragraph (2) of subdivision (b)
of Section 42127.2, may submit a response to the Superintendent,
including any revisions to the adopted final budget and any other
proposed actions to be taken as a result of the recommendations of
the budget review committee. Based upon the recommendations of the
budget review committee and any response to those recommendations
provided by the governing board of the school district, the
Superintendent shall either approve or disapprove the budget. If the
Superintendent disapproves the budget, he or she shall notify the
governing board of the school district in writing of the reasons for
that disapproval and, until the county superintendent  of schools
 certifies the  school  district's first interim
report pursuant to Section 42131, the county superintendent of
schools shall do the following as necessary:
   (1) Not later than November 30, develop and adopt, in consultation
with the Superintendent and the governing board of the school
district, a fiscal plan and budget that will govern the  school
 district and will allow the  school  district to meet
its financial obligations, both in the current fiscal year and with
regard to the  school  district's multiyear financial
commitments. The Superintendent may extend the date by which the
county superintendent of schools is required to develop and adopt a
fiscal plan and budget. The governing board of the school district
shall govern the operation of the  school  district for the
current fiscal year in accordance with that adopted budget.
   (2) Cancel purchase orders, prohibit the issuance of nonsalary
warrants, and otherwise stay or rescind any action that is
inconsistent with the budget adopted pursuant to paragraph (1). The
county superintendent of schools shall inform the governing board of
the school district in writing of his or her justification for any
exercise of authority under this paragraph.
   (3) Monitor and review the operation of the school district. 
   (4) Appoint a fiscal adviser to perform any or all of the duties
of the county superintendent of schools prescribed by this section.
 
   (4) 
    (5)  Determine the need for additional staff and may
employ, subject to approval by the Superintendent, short-term
analytical assistance or expertise to validate financial information
if the  school  district staff does not have the expertise
or staff. 
   (5) 
    (6)  Require the school district to encumber all
contracts and other obligations, to prepare appropriate cashflow
analyses and monthly or quarterly budget revisions, and to
appropriately record all receivables and payables. 
   (6) 
    (7)  Determine whether there are any financial problem
areas and may employ, subject to approval by the Superintendent, a
certified public accounting firm to investigate financial problem
areas. 
   (7) 
    (8)  Withhold compensation of the members of the
governing board  of the school district  and the 
superintendent of the school  district  superintendent
 for failure to provide requested financial information. A
forfeiture may be appealed to the Superintendent pursuant to
subdivision (b) of Section 42127.6.
   (c) If, during the selection of the budget review committee or
during the committee's review of the budget, an agreement is reached
between the governing board of the school district and the county
superintendent of schools, and the school district revises its budget
to comply with this agreement, the county superintendent of schools
shall approve the  school  district budget and the budget
review committee selection, or its review of the budget, shall be
canceled.
   (d) The school district shall pay 75 percent and the county office
of education shall pay 25 percent of the actual administrative
expenses incurred pursuant to subdivision (b), or costs associated
with improving the  school  district's financial management
practices. The Superintendent shall develop, and distribute to
affected school districts and county offices of education, advisory
guidelines regarding the appropriate amount of any fees charged
pursuant to this subdivision.
   (e) This section shall not be construed to authorize the county
superintendent of schools to abrogate any provision of a collective
bargaining agreement that was entered into by a school district
 prior to   before  the date upon which the
county superintendent of schools disapproved the budget of the
school district pursuant to subdivision (b).
   SEC. 2.    If the Commission on State Mandates
determines that this act contains costs mandated by the state,
reimbursement to local agencies and school districts for those costs
shall be made pursuant to Part 7 (commencing with Section 17500) of
Division 4 of Title 2 of the Government Code. 
  SECTION 1.    It is the intent of the Legislature
to enact legislation that reforms the audit procedures and findings
for a school district that has been taken over by the State of
California.