BILL ANALYSIS
Bill No: AB
539
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2009-2010 Regular Session
Staff Analysis
AB 539 Author: Monning
As Introduced: February 25, 2009
Hearing Date: June 23, 2009
Consultant: Art Terzakis
SUBJECT
State Auditor
DESCRIPTION
AB 539 makes the following clarifying and technical changes
to provisions of law pertaining to the State Auditor and
the Bureau of State Audits (BSA):
1. Deletes reference to establishment of an "affirmative
action" program by the State Auditor and instead requires
the State Auditor to establish an "equal employment
opportunity" program.
2. Clarifies that the State Auditor shall be responsible
for delivering completed reports to the Legislature,
appropriate committees or subcommittees of the
Legislature and the Governor, not later than 24 hours
after delivering the reports to the Milton Marks "Little
Hoover" Commission.
3. Authorizes the State Auditor to examine all financial
records, accounts and documents of any state agency in
the performance of an audit or investigation.
4. Extends the timeframe in which the head of an employing
agency must transmit the initial report of alleged
improper activity to the State Auditor from 30 days to 60
days.
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EXISTING LAW
Existing law sets forth the duties and powers of the Bureau
of State Audits and makes reference to audits and
investigative audits.
Existing law, the California Whistleblower Protection Act,
sets forth the circumstances and procedures under which a
state employee, as defined, may report improper
governmental activities, as defined, or make a protected
disclosure, as defined, to the State Auditor, and prohibits
retaliation or reprisal against a state employee for these
acts.
Existing law requires the State Auditor to establish an
affirmative action program that meets the criteria and
objectives established by the State Personnel Board.
Existing law requires the State Auditor to complete any
audit in a timely manner and in accordance with the
"Government Auditing Standards" published by the U.S.
Comptroller General.
Existing law requires the State Auditor to transmit a copy
of the audit report to the Milton Marks Commission
immediately upon completion of the audit.
Existing law requires the Milton Marks Commission to
deliver a completed report to the Legislature, appropriate
committees or subcommittees of the Legislature, and the
Governor, not later than 24 hours after delivery of the
report to the Commission.
Existing law requires the State Auditor to annually issue
an auditor's report based upon the general purpose
financial statements included in the Controller's annual
report to the Governor.
Existing law authorizes the State Auditor to examine all
the financial records, accounts, and documents of any state
agency, as defined, in the performance of an annual audit.
Existing law provides that if the State Auditor submits a
report of alleged improper activity to the head of an
employing agency or appropriate appointing authority, that
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individual is required to: (a) report to the State Auditor
with respect to any action taken regarding the activity,
(b) transmit the first report no later than 30 days after
the date of the State Auditor's report, and (c) transmit
monthly reports thereafter until final action has been
taken.
BACKGROUND
Purpose of AB 539: This measure would amend certain
sections of the Government Code (Sections 8545.2, 8546,
8546.1, 8546.4, and 8547.7) related to the Bureau of State
Audits (BSA). According to the author's office, the
proposed changes are essentially technical in nature and
are made as part of code maintenance. The State Auditor
emphasizes that the following four proposed changes are
needed to clarify existing law, codify current practices
and correct inconsistencies in current law.
First, after the passage of Proposition 209, the state's
affirmative action program was deemed unlawful and the
Government Code was amended to instead reference an "equal
employment opportunity" program. The author's office
maintains that striking the reference to "affirmative
action" will ensure that the particular statute conforms to
existing law and the language used to cross-reference the
code section.
Second, existing law requires the State Auditor to transmit
a copy of a completed audit report to the Milton Marks
Commission, which must deliver the report within 24 hours,
upon receipt, to the Legislature, appropriate committees or
subcommittees of the Legislature, and the Governor. For
the past several years, the State Auditor has
simultaneously delivered audit reports to the Commission,
the Legislature, and the Governor. This measure would
codify current practice.
Third, existing law requires the State Auditor to annually
issue an auditor's report based upon the general purpose
financial statements included in the Controller's annual
report to the Governor. The State Auditor is authorized to
examine all the financial records, accounts, and documents
of any state agency in the performance of the annual audit.
This measure would instead authorize the State Auditor to
examine all the financial records, accounts, and documents
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of any state agency in the performance of this annual audit
and any other audit or investigation undertaken by the BSA .
Fourth, under existing law, if the State Auditor submits a
report of alleged improper activity to the head of an
employing agency or appropriate appointing authority, that
individual is required to report to the State Auditor with
respect to any action taken by the individual regarding the
activity. The individual is required to transmit that
first report no later than 30 days after the date of the
state Auditor's report. This measure would instead require
the head of the employing agency or appropriate appointing
authority to transmit the first report to the State Auditor
no later than 60 days after the date of the State Auditor's
report. According to the author's office, this change is
necessary to correct an inconsistency in current law.
Under current whistleblower law, if, after investigation,
the State Auditor finds that an employee may have engaged
or participated in improper governmental activities, the
State Auditor must send a copy of the investigation to the
employee's appointing power. The appointing power has 60
days from receipt of the report to either serve a notice of
adverse action on the employee or provide to the State
Auditor and the State Personnel Board a written explanation
for why it was not done. However, as is also provided in
current law, upon a finding of improper governmental
activity, the State Auditor shall report the finding to the
head of the appropriate employing agency or appointing
power and that individual must report to the State Auditor
any responsive action taken by that individual within 30
days. The proposed amendment would make both reports due
within 60 days after the Auditor reports the findings of
improper governmental activities.
PRIOR/RELATED LEGISLATION
AB 540 (Monning) 2009-10 Session. Would require the Bureau
of State Audits (BSA) to provide the Department of Finance
with the BSA's budget for each fiscal year. Also, would
require the Department of Finance to include the budget,
without modification, in the Governor's annual budget.
(Pending in this committee)
AB 567 (Villines) 2009-10 Session. Would create a
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"Clearinghouse for Government Innovation and Improvement
Program" within the Bureau of State Audits (BSA) to solicit
recommendations from the public for improving state
operations and make specified modifications to the
California Whistleblower Protection Act including certain
other changes to the operations of the BSA. (Pending in
Senate Judiciary Committee)
SB 521 (Wyland) 2007-08 Session. Among other things, would
have transferred audit and evaluation duties within the
Department of Finance to the Bureau of State Audits (BSA)
and renamed the BSA as the Bureau of State Audits and
Evaluations (BSAE). (Held in this committee at author's
request)
AB 1419 (Anderson) 2007-08 Session. Would have transferred
the Bureau of State Audits from under the direction of the
Milton Marks "Little Hoover" Commission to the State
Controller. (Died in Assembly policy committee)
SB 1452 (Speier) Chapter 452, Statutes of 2006. Updated
the auditing standards for state and local agencies and set
up a process whereby the Legislature would be informed when
auditor recommendations are being ignored or not
implemented by state agencies. Also, it protected auditors
from intimidation while providing them with a process to
have audit expectations reported to agency counsel if audit
findings are suppressed by management.
SB 413 (Speier) Chapter 883, Statutes of 2001. Made
numerous changes to the California Whistleblower Protection
Act, as specified.
SB 37 (Maddy) Chapter 12, Statutes of 1993. Created the
Bureau of State Audits under the direction of the Little
Hoover Commission and transferred many of the duties and
power of the Office of Auditor General to the Bureau of
State Audits. This was done in response to the passage of
Proposition 140 which had the effect of greatly reducing
the size and scope of the Auditor General's office. In
addition, it created the Improper Governmental Activities
Act to provide state employees protection when disclosing
improper governmental activities.
SUPPORT: As of June 19, 2009:
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Bureau of State Audits (sponsor)
American Federation of State, County and Municipal
Employees (AFSCME)
OPPOSE: None on file As of June 19, 2009.
FISCAL COMMITTEE: Senate Appropriations Committee
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