AB 728, as amended, Hadley. State government: financial reporting.
Existing law, thebegin delete Financial Integrity and State Manager’s Accountability Act of 1983 (FISMA),end deletebegin insert State Leadership Accountability Act,end insert provides that state agency heads are responsible for the establishment and maintenance of a system or systems of internal accounting and administrative control within their agencies, as specified. Existing law requires state agency headsbegin delete covered by the FISMAend delete to, biennially, conduct an internal review and prepare a report on the adequacy of the agency’s systems of internal accounting, administrative control, and monitoring practices. Copies of the reports are required to be submitted to
the Legislature, the California State Auditor, the Controller,begin delete the Treasurer, the Attorney General, the Governor, the director,end deletebegin insert
the Department of Finance, the Secretary of Government Operations,end insert and to the State Library where thebegin delete copies areend deletebegin insert copy isend insert required to be available for public inspection.
This bill would also require the report to be posted on the agency’s Internet Web site within 5 days of finalization.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 13405 of the Government Code is
2amended to read:
(a) To ensure that the requirements of this chapter are
4fully complied with, the head of each state agency that the director
5determines is covered by this section shall, on a biennial basis but
6no later than December 31 of each odd-numbered year, conduct
7an internal review and prepare a report on the adequacy of the
8agency’s systems of internal accounting, administrative control,
9and monitoring practices in accordance with the guide prepared
10by the director pursuant to subdivision (d).
11(b) The report, including the state agency’s response to review
12recommendations, shall be signed by the head of the agency and
13addressed to the agency secretary, or the director for agencies
14without a
secretary. Copies of the reports shall be posted on the
15agency’s Internet Web site within five days of finalization, and
16submitted to the Legislature, the California State Auditor, the
17Controller, the Treasurer, the Attorney General, the Governor, the
18director, and to the State Library where they shall be available for
19public inspection.
20(c) The report shall identify any material inadequacy or material
21weakness in an agency’s systems of internal accounting and
22administrative control that prevents the head of the agency from
23stating that the agency’s systems comply with this chapter. No
24later than 30 days after the report is submitted, the agency shall
25provide to the director a plan and schedule for correcting the
26identified inadequacies and weaknesses, which shall be updated
27every six months until all corrections are completed.
28(d) The director, in consultation with the State Auditor and the
29Controller, shall establish, and may modify from time to time as
30necessary, a system of reporting and a general framework to guide
31state agencies in conducting internal reviews of their systems of
32internal accounting and administrative control.
33(e) The director, in consultation with the State Auditor and the
34Controller, shall establish, and may modify from time to time as
35necessary, a general framework of recommended practices to guide
P3 1state agencies in conducting active, ongoing monitoring of
2processes for internal accounting and administrative control.
begin insertSection 13405 of the end insertbegin insertGovernment Codeend insertbegin insert, as
4amended by Section 18 of Chapter 25 of the Statutes of 2015, is
5amended to
read:end insert
(a) To ensure that the requirements of this chapter are
7fully complied with, each agency head that the Department of
8Finance determines is covered by this section shall, on a biennial
9basis but no later than December 31 of each odd-numbered year,
10conduct an internal review and prepare a report on the adequacy
11of the state agency’s systems of internal control, and monitoring
12practices in accordance with the guide prepared by the Department
13of Finance pursuant to subdivision (d).
14(b) The report, including the state agency’s response to review
15recommendations, shall be signed by the agency head and
16addressed to the agency secretary, or the Director of Finance for
17a state agency without a secretary. An agency head shall submit a
18copy of the report and related
response, pursuant to a method
19determined by the Department of Finance, to the Legislature, the
20California State Auditor, the Controller, the Department of Finance,
21the Secretary of Government Operations, and to the State Library
22where the copy shall be available for public inspection.begin insert A copy of
23the report shall be posted on the agency’s Internet Web site within
24five days of finalization.end insert
25(c) The report shall identify any material inadequacy or material
26weakness in a state agency’s systems of internal control that
27prevents the agency head from stating that the state agency’s
28systems comply with this chapter. Concurrently with the
29submission of the report pursuant to subdivision (b), the state
30agency shall provide to the Department of Finance a plan and
31schedule for correcting the identified inadequacies and weaknesses,
32that shall be
updated every six months until all corrections are
33implemented.
34(d) The Department of Finance in consultation with the
35California State Auditor and the Controller, shall establish, and
36may modify from time to time as necessary, a system of reporting
37and a general framework to guide state agencies in conducting
38internal reviews of their systems of internal control.
39(e) The Department of Finance in consultation with the
40California State Auditor and the Controller, shall establish, and
P4 1may modify from time to time as necessary, a general framework
2of recommended practices to guide state agencies in conducting
3active, ongoing monitoring of processes for internal control.
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