BILL ANALYSIS Ó
-----------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 728|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
-----------------------------------------------------------------
THIRD READING
Bill No: AB 728
Author: Hadley (R)
Amended: 8/24/15 in Senate
Vote: 21
SENATE GOVERNMENTAL ORG. COMMITTEE: 13-0, 6/9/15
AYES: Hall, Berryhill, Block, Gaines, Galgiani, Glazer,
Hernandez, Hill, Hueso, Lara, McGuire, Runner, Vidak
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 77-0, 5/7/15 (Consent) - See last page for
vote
SUBJECT: State government: financial reporting
SOURCE: Author
DIGEST: This bill requires that any internal audit report
performed by a state agency to be posted on the agency's
Internet Web site within five business days after acceptance by
the Department of Finance (DOF).
Senate Floor Amendments of 8/24/15 specify that the agency's
internal report shall be posted on the agency's Internet Web
site within five business days after acceptance by the DOF. The
bill previously required that the internal report be posted on
the agency's Internet Web site within five days of finalization.
ANALYSIS:
Existing law:
1)Provides, under the Financial Integrity and State Manager's
AB 728
Page 2
Accountability Act of 1983 (FISMA), 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.
2)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 of Finance,
and to the State Library where the copies are required to be
available for public inspection.
This bill requires that any internal audit report performed by a
state agency to be posted on the agency's Internet Web site
within five business days after acceptance by the DOF.
Comments
Purpose of the bill. According to the author, every state
agency with annual spending greater than $50 million is
recommended to establish ongoing audit activities. Currently,
42 state agencies employ dedicated audit staff which provides
independent and objective assessments to improve accountability,
identify misuse of public funds, and detect waste, fraud, or
abuse.
The author argues "that agencies are already performing such
audits and maintaining their existing websites. Current law
requires that these audits are submitted to various state
agencies. While these audit reports are technically public
record, there is no requirement to notify the public if and when
an audit has been conducted. Without access to such
information, the public is effectively prevented from demanding
accountability and ensuring that audit recommendations are
implemented in order to correct a waste or abuse of taxpayer
funds."
The author concludes that by requiring all internal audits
performed by state agencies to be published on the agency's
AB 728
Page 3
Internet Web site within five business days after acceptance by
DOF, this bill is a simple solution to this transparency
problem.
Prior/Related Legislation
AB 661 (Beth Gaines, 2013) would have required state agencies to
post FISMA reports on their Web sites within five days of
finalization. Additionally, it would have required the head of
an agency to sign off on the reports under penalty of perjury
and would have suspended without pay agency heads who did not
submit FISMA reports within 30 days of their due dates. (Held
in Assembly Appropriations Committee)
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
SUPPORT: (Verified8/25/15)
Howard Jarvis Taxpayers Association
OPPOSITION: (Verified8/25/15)
None received
ARGUMENTS IN SUPPORT: According to the Howard Jarvis
Taxpayers Association, existing law requires numerous state
agencies to receive internal audits performed by a state agency.
Essentially, everybody receives these audits but the public,
and requiring that financial audits be posted on the agency's
Web site in a timely manner is an effective way to ensure that
taxpayers have more immediate access to information about how
their dollars are spent.
ASSEMBLY FLOOR: 77-0, 5/7/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
AB 728
Page 4
Bonilla, Bonta, Brough, Brown, Burke, Calderon, Chang, Chau,
Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly,
Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina
Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,
Gordon, Gray, Grove, Hadley, Harper, Holden, Irwin, Jones,
Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low,
Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin,
Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea,
Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Mark
Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams,
Wood, Atkins
NO VOTE RECORDED: Campos, Roger Hernández, Steinorth
Prepared by:Felipe Lopez / G.O. / (916) 651-1530
8/25/15 16:03:30
**** END ****