BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     AB 625


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          CONCURRENCE IN SENATE AMENDMENTS


          AB  
          625 (Bonta)


          As Amended  July 1, 2015


          Majority vote


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          |ASSEMBLY:  | 76-0 |(May 26, 2015) |SENATE: |39-0  | (July 9, 2015)  |
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          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.  










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          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









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