BILL NUMBER: AB 728	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JULY 2, 2015
	AMENDED IN ASSEMBLY  APRIL 8, 2015

INTRODUCED BY   Assembly Member Hadley

                        FEBRUARY 25, 2015

   An act to amend Section 13405 of the Government Code, relating to
state government.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 728, as amended, Hadley. State government: financial reporting.

   Existing law, the  Financial Integrity and State Manager's
Accountability Act of 1983 (FISMA),   State Leadership
Accountability Act,  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
heads  covered by the FISMA  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,  the Treasurer, the Attorney General, the
Governor, the director,   the Department of Finance, the
Secretary of Government Operations,  and to the State Library
where the  copies are   copy is  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 1.    Section 13405 of the Government Code
is amended to read:
   13405.  (a) To ensure that the requirements of this chapter are
fully complied with, the head of each state agency that the director
determines is covered by this section shall, on a biennial basis but
no later than December 31 of each odd-numbered year, conduct an
internal review and prepare a report on the adequacy of the agency's
systems of internal accounting, administrative control, and
monitoring practices in accordance with the guide prepared by the
director pursuant to subdivision (d).
   (b) The report, including the state agency's response to review
recommendations, shall be signed by the head of the agency and
addressed to the agency secretary, or the director for agencies
without a secretary. Copies of the reports shall be posted on the
agency's Internet Web site within five days of finalization, and
submitted to the Legislature, the California State Auditor, the
Controller, the Treasurer, the Attorney General, the Governor, the
director, and to the State Library where they shall be available for
public inspection.
   (c) The report shall identify any material inadequacy or material
weakness in an agency's systems of internal accounting and
administrative control that prevents the head of the agency from
stating that the agency's systems comply with this chapter. No later
than 30 days after the report is submitted, the agency shall provide
to the director a plan and schedule for correcting the identified
inadequacies and weaknesses, which shall be updated every six months
until all corrections are completed.
   (d) The director, in consultation with the State Auditor and the
Controller, shall establish, and may modify from time to time as
necessary, a system of reporting and a general framework to guide
state agencies in conducting internal reviews of their systems of
internal accounting and administrative control.
   (e) The director, in consultation with the State Auditor and the
Controller, shall establish, and may modify from time to time as
necessary, a general framework of recommended practices to guide
state agencies in conducting active, ongoing monitoring of processes
for internal accounting and administrative control. 
   SECTION 1.    Section 13405 of the  
Government Code   , as amended by Section 18 of Chapter 25
of the Statutes of 2015, is amended to   read: 
   13405.  (a) To ensure that the requirements of this chapter are
fully complied with, each agency head that the Department of Finance
determines is covered by this section shall, on a biennial basis but
no later than December 31 of each odd-numbered year, conduct an
internal review and prepare a report on the adequacy of the state
agency's systems of internal control, and monitoring practices in
accordance with the guide prepared by the Department of Finance
pursuant to subdivision (d).
   (b) The report, including the state agency's response to review
recommendations, shall be signed by the agency head and addressed to
the agency secretary, or the Director of Finance for a state agency
without a secretary. An agency head shall submit a copy of the report
and related response, pursuant to a method determined by the
Department of Finance, to the Legislature, the California State
Auditor, the Controller, the Department of Finance, the Secretary of
Government Operations, and to the State Library where the copy shall
be available for public inspection.  A copy of the report shall
be posted on the agency's Internet Web site within five days of
finalization. 
   (c) The report shall identify any material inadequacy or material
weakness in a state agency's systems of internal control that
prevents the agency head from stating that the state agency's systems
comply with this chapter. Concurrently with the submission of the
report pursuant to subdivision (b), the state agency shall provide to
the Department of Finance a plan and schedule for correcting the
identified inadequacies and weaknesses, that shall be updated every
six months until all corrections are implemented.
   (d) The Department of Finance in consultation with the California
State Auditor and the Controller, shall establish, and may modify
from time to time as necessary, a system of reporting and a general
framework to guide state agencies in conducting internal reviews of
their systems of internal control.
   (e) The Department of Finance in consultation with the California
State Auditor and the Controller, shall establish, and may modify
from time to time as necessary, a general framework of recommended
practices to guide state agencies in conducting active, ongoing
monitoring of processes for internal control.