California Legislature—2015–16 Regular Session

Assembly BillNo. 2613


Introduced by Assembly Member Achadjian

February 19, 2016


An act to amend Section 26909 of the Government Code, relating to local government.

LEGISLATIVE COUNSEL’S DIGEST

AB 2613, as introduced, Achadjian. County auditor: audits: special districts.

Existing law requires the county auditor to either contract with a certified public accountant or public accountant to perform an audit, or perform an audit, of the accounts and records of every special district within the county, as specified circumstances. Existing law authorizes a special district, by unanimous request of its governing board and unanimous approval by the board of supervisors, to replace the annual audit with an audit over a longer period of time or with a financial review, as specified.

This bill would additionally authorize a special district to, by unanimous request of its governing board and with unanimous approval of the board of supervisors, replace the annual audit with an annual financial compilation and an annual review of the internal control procedures of the special district to be performed by the county auditor in accordance with professional standards if certain conditions are met.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

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SECTION 1.  

Section 26909 of the Government Code is
2amended to read:

3

26909.  

(a) (1) The county auditor shall either make or contract
4with a certified public accountant or public accountant to make an
5annual audit of the accounts and records of every special district
6within the county for which an audit by a certified public
7accountant or public accountant is not otherwise provided. In each
8case, the minimum requirements of the audit shall be prescribed
9by the Controller and shall conform to generally accepted auditing
10standards.

11(2) Where an audit of a special district’s accounts and records
12is made by a certified public accountant or public accountant, the
13minimum requirements of the audit shall be prescribed by the
14Controller and shall conform to generally accepted auditing
15 standards, and a report thereof shall be filed with the Controller
16and with the county auditor of the county in which the special
17district is located. The report shall be filed within 12 months of
18the end of the fiscal year or years under examination.

19(3) Any costs incurred by the county auditor, including contracts
20with, or employment of, certified public accountants or public
21accountants, in making an audit of every special district pursuant
22to this section shall be borne by the special district and shall be a
23charge against any unencumbered funds of the district available
24for the purpose.

25(4) For a special district that is located in two or more counties,
26the provisions of this subdivision shall apply to the auditor of the
27county in which the treasury is located.

28(5) The county controller, or ex officio county controller, shall
29effect this section in those counties having a county controller, or
30ex officio county controller.

31(b) A special district may, by unanimous request of the
32governing board of the special district, with unanimous approval
33of the board of supervisors, replace the annual audit required by
34this section with one of the following, performed in accordance
35with professional standards, as determined by the county auditor:

36(1) A biennial audit covering a two-year period.

P3    1(2) An audit covering a five-year period, if the special district’s
2annual revenues do not exceed an amount specified by the board
3of supervisors.

4(3) An audit conducted at specific intervals, as recommended
5by the county auditor, that shall be completed at least once every
6five years.

7(c) (1) A special district may, by unanimous request of the
8governing board of the special district, with unanimous approval
9of the board of supervisors, replace the annual audit required by
10this section with a financial review, in accordance with the
11appropriate professional standards, as determined by the county
12auditor, if the following conditions are met:

13(A) All of the special district’s revenues and expenditures are
14transacted through the county’s financial system.

15(B) The special district’s annual revenues do not exceed one
16hundred fifty thousand dollars ($150,000).

17(2) If the board of supervisors is the governing board of the
18special district, it may, upon unanimous approval, replace the
19annual audit of the special district required by this section with a
20financial review in accordance with the appropriate professional
21standards, as determined by the county auditor, if the special district
22satisfies the requirements of subparagraphs (A) and (B) of
23paragraph (1).

begin insert

24(d) A special district may, by unanimous request of the
25governing board of the special district and with unanimous
26approval of the board of supervisors, replace the annual audit
27required by this section with an annual financial compilation and
28an annual review of the internal control procedures of the special
29district to be performed by the county auditor in accordance with
30professional standards if all of the following conditions are met:

end insert
begin insert

31(1) All of the special district’s revenues and expenditures are
32transacted through the county’s financial system.

end insert
begin insert

33(2) The special district’s annual revenues do not exceed one
34hundred fifty thousand dollars ($150,000).

end insert
begin insert

35(3) The special district shall pay for any costs incurred by the
36county auditor in performing a financial compilation and
37evaluation of the internal control procedures. Those costs shall
38be a charge against any unencumbered funds of the district
39available for that purpose.

end insert
begin delete

40(d)

end delete

P4    1begin insert(e)end insert Notwithstanding the provisions of this section, a special
2district shall be exempt from the requirement of an annual audit
3if the financial statements are audited by the Controller to satisfy
4federal audit requirements.



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