BILL NUMBER: AB 2613	ENROLLED
	BILL TEXT

	PASSED THE SENATE  AUGUST 1, 2016
	PASSED THE ASSEMBLY  AUGUST 4, 2016
	AMENDED IN SENATE  JUNE 21, 2016
	AMENDED IN SENATE  JUNE 8, 2016
	AMENDED IN ASSEMBLY  MAY 2, 2016

INTRODUCED BY   Assembly Member Achadjian

                        FEBRUARY 19, 2016

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


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2613, Achadjian. County auditor: audits: special districts.
   Existing law requires the county auditor to either perform an
audit, or contract with a certified public accountant or public
accountant to perform an audit, 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, by unanimous request of its governing board and with
unanimous approval of the board of supervisors, to replace the
annual audit for not more than 5 consecutive years with an annual
financial compilation of the special district to be performed by the
county auditor, or with an agreed-upon procedures engagement, in
accordance with professional standards, if certain conditions are
met.



THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 26909 of the Government Code is amended to
read:
   26909.  (a) (1) The county auditor shall either make or contract
with a certified public accountant or public accountant to make an
annual audit of the accounts and records of every special district
within the county for which an audit by a certified public accountant
or public accountant is not otherwise provided. In each case, the
minimum requirements of the audit shall be prescribed by the
Controller and shall conform to generally accepted auditing
standards.
   (2) If an audit of a special district's accounts and records is
made by a certified public accountant or public accountant, the
minimum requirements of the audit shall be prescribed by the
Controller and shall conform to generally accepted auditing
standards, and a report thereof shall be filed with the Controller
and with the county auditor of the county in which the special
district is located. The report shall be filed within 12 months of
the end of the fiscal year or years under examination.
   (3) Any costs incurred by the county auditor, including contracts
with, or employment of, certified public accountants or public
accountants, in making an audit of every special district pursuant to
this section shall be borne by the special district and shall be a
charge against any unencumbered funds of the district available for
the purpose.
   (4) For a special district that is located in two or more
counties, this subdivision shall apply to the auditor of the county
in which the treasury is located.
   (5) The county controller, or ex officio county controller, shall
effect this section in those counties having a county controller or
ex officio county controller.
   (b) A special district may, by unanimous request of the governing
board of the special district and with unanimous approval of the
board of supervisors, replace the annual audit required by this
section with one of the following, performed in accordance with
professional standards, as determined by the county auditor:
   (1) A biennial audit covering a two-year period.
   (2) An audit covering a five-year period if the special district's
annual revenues do not exceed an amount specified by the board of
supervisors.
   (3) An audit conducted at specific intervals, as recommended by
the county auditor, that shall be completed at least once every five
years.
   (c) (1) A special district may, by unanimous request of the
governing board of the special district and with unanimous approval
of the board of supervisors, replace the annual audit required by
this section with a financial review, or an agreed-upon procedures
engagement, in accordance with the appropriate professional
standards, as determined by the county auditor, if the following
conditions are met:
   (A) All of the special district's revenues and expenditures are
transacted through the county's financial system.
   (B) The special district's annual revenues do not exceed one
hundred fifty thousand dollars ($150,000).
   (C) The special district shall pay for any costs incurred by the
county auditor in performing an agreed-upon procedures engagement.
Those costs shall be charged against any unencumbered funds of the
district available for that purpose.
   (2) If the board of supervisors is the governing board of the
special district, it may, upon unanimous approval, replace the annual
audit of the special district required by this section with a
financial review, or an agreed-upon procedures engagement, in
accordance with the appropriate professional standards, as determined
by the county auditor, if the special district satisfies the
requirements of subparagraphs (A) and (B) of paragraph (1).
   (d) (1) A special district may, by annual unanimous request of the
governing board of the special district and with annual unanimous
approval of the board of supervisors, replace the annual audit
required by this section with an annual financial compilation of the
special district to be performed by the county auditor in accordance
with professional standards, if all of the following conditions are
met:
   (A) All of the special district's revenues and expenditures are
transacted through the county's financial system.
   (B) The special district's annual revenues do not exceed one
hundred fifty thousand dollars ($150,000).
   (C) The special district shall pay for any costs incurred by the
county auditor in performing a financial compilation. Those costs
shall be a charge against any unencumbered funds of the district
available for that purpose.
   (2) A special district shall not replace an annual audit required
by this section with an annual financial compilation of the special
district pursuant to paragraph (1) for more than five consecutive
years, after which a special district shall comply with subdivision
(a).
   (e) Notwithstanding this section, a special district shall be
exempt from the requirement of an annual audit if the financial
statements are audited by the Controller to satisfy federal audit
requirements.
   (f) Upon receipt of the financial review, agreed-upon procedures
engagement, or financial compilation, the county auditor shall have
the right to appoint, pursuant to subdivision (a), a certified public
accountant or a public accountant to conduct an audit of the special
district, with proper notice to the governing board of the special
district and board of supervisors.
   (g) This section shall remain in effect only until January 1,
2027, and as of that date is repealed.
  SEC. 2.  Section 26909 is added to the Government Code, to read:
   26909.  (a) (1) The county auditor shall either make or contract
with a certified public accountant or public accountant to make an
annual audit of the accounts and records of every special district
within the county for which an audit by a certified public accountant
or public accountant is not otherwise provided. In each case, the
minimum requirements of the audit shall be prescribed by the
Controller and shall conform to generally accepted auditing
standards.
   (2) If an audit of a special district's accounts and records is
made by a certified public accountant or public accountant, the
minimum requirements of the audit shall be prescribed by the
Controller and shall conform to generally accepted auditing
standards, and a report thereof shall be filed with the Controller
and with the county auditor of the county in which the special
district is located. The report shall be filed within 12 months of
the end of the fiscal year or years under examination.
   (3) Any costs incurred by the county auditor, including contracts
with, or employment of, certified public accountants or public
accountants, in making an audit of every special district pursuant to
this section shall be borne by the special district and shall be a
charge against any unencumbered funds of the district available for
the purpose.
   (4) For a special district that is located in two or more
counties, this subdivision shall apply to the auditor of the county
in which the treasury is located.
   (5) The county controller, or ex officio county controller, shall
effect this section in those counties having a county controller or
ex officio county controller.
   (b) A special district may, by unanimous request of the governing
board of the special district and with unanimous approval of the
board of supervisors, replace the annual audit required by this
section with one of the following, performed in accordance with
professional standards, as determined by the county auditor:
   (1) A biennial audit covering a two-year period.
   (2) An audit covering a five-year period if the special district's
annual revenues do not exceed an amount specified by the board of
supervisors.
   (3) An audit conducted at specific intervals, as recommended by
the county auditor, that shall be completed at least once every five
years.
   (c) (1) A special district may, by unanimous request of the
governing board of the special district and with unanimous approval
of the board of supervisors, replace the annual audit required by
this section with a financial review, in accordance with the
appropriate professional standards, as determined by the county
auditor, if the following conditions are met:
   (A) All of the special district's revenues and expenditures are
transacted through the county's financial system.
   (B) The special district's annual revenues do not exceed one
hundred fifty thousand dollars ($150,000).
   (2) If the board of supervisors is the governing board of the
special district, it may, upon unanimous approval, replace the annual
audit of the special district required by this section with a
financial review in accordance with the appropriate professional
standards, as determined by the county auditor, if the special
district satisfies the requirements of subparagraphs (A) and (B) of
paragraph (1).
   (d) Notwithstanding this section, a special district shall be
exempt from the requirement of an annual audit if the financial
statements are audited by the Controller to satisfy federal audit
requirements.
   (e) The section shall become operative on January 1, 2027.