AB 2613, as amended, Achadjian. County auditor: audits: special districts.
Existing law requires the county auditor to eitherbegin insert perform an audit, orend insert contract with a certified public accountant or public accountant to perform an audit,begin delete or perform an audit,end delete of the accounts and records of every special district within the county, as specified. 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, until January 1, 2027,begin delete and for a period of not more than 5 consecutive years,end delete
by unanimous request of its governing board and with unanimous approval of the board of supervisors, to replace the annual audit with an annual financial compilation of the special district to be performed by the county auditor, or an agreed-upon procedures engagement, 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:
Section 26909 of the Government Code is
2amended to read:
(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) If an audit of a special district’s accounts and records is
12made 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,
26this subdivision shall apply to the auditor of the county in which
27the treasury is located.
28(5) The county controller, or ex officio county controller, shall
29
effect 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 and with unanimous
33approval of the board of supervisors, replace the annual audit
34required by this section with one of the following, performed in
P3 1accordance with professional standards, as determined by the
2county auditor:
3(1) A biennial audit covering a two-year period.
4(2) An audit covering a five-year period if the special district’s
5annual revenues do not exceed an amount specified by the board
6of supervisors.
7(3) An audit conducted at specific intervals, as recommended
8by the county auditor, that shall be completed at least once every
9five years.
10(c) (1) A special district may, by unanimous request of the
11governing board of the special district and with unanimous
12approval of the board of supervisors, replace the annual audit
13required by this section with a financial review, or an agreed-upon
14procedures engagement, in accordance with the appropriate
15professional standards, as determined by the county auditor, if the
16following conditions are met:
17(A) All of the special district’s revenues and expenditures are
18transacted through the county’s financial system.
19(B) The special district’s annual revenues do not exceed one
20hundred fifty thousand dollars ($150,000).
21
(C) The special district shall pay
for any costs incurred by the
22county auditor in performing an agreed-upon procedures
23engagement. Those costs shall be charged against any
24unencumbered funds of the district available for that purpose.
25(2) If the board of supervisors is the governing board of the
26special district, it may, upon unanimous approval, replace the
27annual audit of the special district required by this section with a
28financial review, or an agreed-upon procedures engagement, in
29accordance with the appropriate professional standards, as
30determined by the county auditor, if the special district satisfies
31the requirements of subparagraphs (A) and (B) of paragraph (1).
32(d) (1) A special district may, by annual unanimous request of
33the governing board of the special district and with annual
34unanimous approval of the board of supervisors, replace the annual
35audit
required by this section with an annual financial compilation
36of the special district to be performed by the county auditor in
37accordance with professional standards, if all of the following
38conditions are met:
39(A) All of the special district’s revenues and expenditures are
40transacted through the county’s financial system.
P4 1(B) The special district’s annual revenues do not exceed one
2hundred fifty thousand dollars ($150,000).
3(C) The special district shall pay for any costs incurred by the
4county auditor in performing a financialbegin delete compilation and evaluation begin insert compilation.end insert
Those costs shall
5of the internal control procedures.end delete
6be a charge against any unencumbered funds of the district
7available for that purpose.
8(2) A special district shall not replace an annual audit required
9by this section with an annual financial compilation of the special
10district pursuant to paragraph (1) for more than five consecutive
11years, after which a special district shall comply with subdivision
12(a).
13(e) Notwithstanding this section, a special district shall be
14exempt from the requirement of an annual audit if the financial
15statements are audited by the Controller to satisfy federal audit
16requirements.
17
(f) Upon receipt of the financial review, agreed-upon procedures
18engagement, or financial compilation, the county auditor shall
19have the right to
appoint, pursuant to subdivision (a), a certified
20public accountant or a public accountant to conduct an audit of
21the special district, with proper notice to the governing board of
22the special district and board of supervisors.
23(f)
end delete
24begin insert(g)end insert This section shall remain in effect only until January 1, 2027,
25and as of that date is repealed.
Section 26909 is added to the Government Code, to
27read:
(a) (1) The county auditor shall either make or contract
29with a certified public accountant or public accountant to make an
30annual audit of the accounts and records of every special district
31within the county for which an audit by a certified public
32accountant or public accountant is not otherwise provided. In each
33case, the minimum requirements of the audit shall be prescribed
34by the Controller and shall conform to generally accepted auditing
35standards.
36(2) If an audit of a special district’s accounts and records is
37made by a certified public accountant or public accountant, the
38minimum requirements of the audit shall be prescribed by the
39Controller and shall
conform to generally accepted auditing
40standards, and a report thereof shall be filed with the Controller
P5 1and with the county auditor of the county in which the special
2district is located. The report shall be filed within 12 months of
3the end of the fiscal year or years under examination.
4(3) Any costs incurred by the county auditor, including contracts
5with, or employment of, certified public accountants or public
6accountants, in making an audit of every special district pursuant
7to this section shall be borne by the special district and shall be a
8charge against any unencumbered funds of the district available
9for the purpose.
10(4) For a special district that is located in two or more counties,
11this subdivision shall apply to the auditor of the county
in which
12the treasury is located.
13(5) The county controller, or ex officio county controller, shall
14effect this section in those counties having a county controller or
15ex officio county controller.
16(b) A special district may, by unanimous request of the
17governing board of the special district and with unanimous
18approval of the board of supervisors, replace the annual audit
19required by this section with one of the following, performed in
20accordance with professional standards, as determined by the
21county auditor:
22(1) A biennial audit covering a two-year period.
23(2) An audit covering a five-year period if the special district’s
24annual revenues do not exceed an amount specified by the board
25of supervisors.
26(3) An audit conducted at specific intervals, as recommended
27by the county auditor, that shall be completed at least once every
28five years.
29(c) (1) A special district may, by unanimous request of the
30governing board of the special district and with unanimous
31approval of the board of supervisors, replace the annual audit
32required by this section with a financial review, in accordance with
33the appropriate professional standards, as determined by the county
34auditor, if the following conditions are met:
35(A) All of the special district’s revenues and expenditures are
36transacted through the county’s financial system.
37(B) The special district’s annual revenues do not exceed one
38hundred fifty thousand dollars ($150,000).
39(2) If the board of supervisors is the governing board of the
40special district, it may, upon unanimous approval, replace the
P6 1annual audit of the special district required by this section with a
2financial review in accordance with the appropriate professional
3standards, as determined by the county auditor, if the special district
4satisfies the requirements of subparagraphs (A) and (B) of
5paragraph (1).
6(d) Notwithstanding this section, a special district shall be
7exempt from the requirement of an annual audit if the financial
8statements are audited by the Controller to satisfy federal audit
9requirements.
10(e) The section shall become operative on January 1, 2027.
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