BILL ANALYSIS Ó AB 625 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 625 (Bonta) As Amended July 1, 2015 Majority vote -------------------------------------------------------------------- |ASSEMBLY: | 76-0 |(May 26, 2015) |SENATE: |39-0 | (July 9, 2015) | | | | | | | | | | | | | | | -------------------------------------------------------------------- Original Committee Reference: ED. SUMMARY: Requires the State Controller, the Superintendent of Public Instruction (SPI), and the school district superintendent to meet before each audit of a school district that has received an emergency apportionment to discuss the terms of the audit and the timeline under which it will proceed. The Senate amendments clarify that the provisions of this bill apply to audits conducted by the State Controller and avoid chaptering out changes to the same section of the Education Code made by the local control funding formula budget trailer bill (SB 78 (Budget and Fiscal Review Committee), Chapter 19, Statutes of 2015). FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs. AB 625 Page 2 COMMENTS: The annual audits that are required of districts that have received an emergency apportionment are in lieu of the annual audits otherwise required. Information provided by the author's office shows that these audits are usually late. In fact, of the 38 due dates of audits for five different districts in receivership, only four have been completed by the due date. The others have been late by periods ranging from 43 days to 961 days (more than two and a half years). Late audits can cause several problems for districts, including: 1)A lower credit rating, resulting in higher interest rates (a credit rating agency did not give the Oakland Unified School District a credit rating at all, due to the absence of a current audit). 2)Difficulty in projecting financial needs, because the current financial condition is not known. 3)Compounded audit exceptions, because problems are not identified in time to be corrected prior to the next year's audits. 4)Difficulty in locating old records, especially in districts that has experience excessive staff turnover due to being in receivership. This bill is sponsored by the SPI, whose intent is to establish communication between the SPI and the Controller prior to an audit to develop a plan, establish coordination, and help ensure that needed documentation is available and shared in order to meet the audit's deadline. Analysis Prepared by: Rick Pratt / ED. / (916) 319-2087 FN: 0001143 AB 625 Page 3