BILL ANALYSIS
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THIRD READING
Bill No: AB 540
Author: Monning (D)
Amended: As introduced
Vote: 21
SENATE GOVERNMENTAL ORG. COMMITTEE : 12-0, 6/23/09
AYES: Wright, Harman, Benoit, Denham, Florez, Negrete
McLeod, Oropeza, Padilla, Price, Wiggins, Wyland, Yee
NO VOTE RECORDED: Calderon
ASSEMBLY FLOOR : 78-0, 5/11/09 (Consent) - See last page
for vote
SUBJECT : State Auditor: Bureau of State Audits: budget
SOURCE : Bureau of State Audits
DIGEST : This bill requires the Bureau of State Audits
(BSA) to provide the Department of Finance (DOF) with the
BSAs proposed budget for each fiscal year, and requires DOF
to include the BSA's proposed budget in the Governor's
Budget without modification.
ANALYSIS : Existing law establishes the BSA under the
direction of the Milton Marks "Little Hoover" Commission on
California State Government Organization and Economy and
requires the BSA to be independent of the executive branch
and legislative control in order to be free of
organizational impairments to independence.
CONTINUED
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Existing law states that the duties of the BSA are to
examine and report annually upon the financial statements
prepared by the executive branch of the state and to
perform performance audits, as mandated.
Background
In 1994, BSA and DOF entered into a memorandum of
understanding (MOU) to recognize the importance of audit
independence and to specify the roles and responsibilities
of the BSA and DOF in regards to the BSA's budget. That
MOU included a purpose and delineated the BSA and DOF's
roles. Specifically, the MOU states that the DOF will
"advise and assist the BSA on budget issues, preparation
and format, and include the BSA's budget as submitted to
the annual Governor's Budget."
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 6/29/09)
Bureau of State Audits (source)
American Federation of State, County and Municipal
Employees
OPPOSITION : (Verified 6/29/09)
Department of Finance
ARGUMENTS IN SUPPORT : According to the bill's sponsor,
the Bureau of State Audits, this bill is necessary to
streamline the BSA budget process by clarifying DOF's role.
This bill essentially codifies the MOU referenced above
between DOF and BSA. The BSA believes this legislation is
necessary to ensure that their independence is safeguarded.
In a letter to the author, the State Auditor writes, "The
exemptions from executive branch controls are essential in
fulfilling the independence requirements of Government
Auditing Standards that my office must abide by. ? Over the
years, my office has had to devote time and effort to
ensure that our independence is safeguarded during the
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budget process. We believe the language in this bill is
necessary to ensure that our budget process is efficient
and does not infringe upon the integrity of my office's
independence."
ARGUMENTS IN OPPOSITION : According to the Department of
Finance:
"While we are interested in clarifying the roles of BSA,
Finance, and the Legislature as it relates to BSA's
budget, Finance is opposed to this bill because the
current form of the bill does not include sufficient
provisions to ensure the clarity of its intent. It may
be appropriate to expand this bill to include specific
provisions and clarifying if the Administration has any
role with the BSA's budget, other than merely including
it annually in the Governor's Budget. We not
specifically that this bill, in its current form,
conflicts with the Administration's ability and
responsibility to build a balanced budget pursuant to
Government Code Sections 13320 and 13322 which requires
all state agencies and courts to submit their budgets to
Finance for approval and authorizes Finance to make
necessary revisions required in the interest of the
state.
"In 1994, the BSA and Finance entered into an MOU to
recognize the importance of audit independence and to
specify the roles and responsibilities of the BSA and
Finance in regards to the BSA's budget. That MOU
included a purpose and delineated the BSA and Finance's
roles. However, even with that historical MOU, from time
to time, it is unclear as to what role the Administration
has in regards to BSA's budget. Clear statutory
delineation of the roles and responsibilities should be
included in any statutory change in this area.
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Beall, Bill
Berryhill, Tom Berryhill, Blakeslee, Block, Blumenfield,
Brownley, Buchanan, Caballero, Charles Calderon, Carter,
Chesbro, Conway, Cook, Coto, Davis, De La Torre, De Leon,
DeVore, Emmerson, Eng, Evans, Feuer, Fletcher, Fong,
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Fuentes, Fuller, Furutani, Gaines, Galgiani, Garrick,
Gilmore, Hagman, Hall, Harkey, Hayashi, Hernandez, Hill,
Huber, Huffman, Jeffries, Jones, Knight, Krekorian, Lieu,
Logue, Bonnie Lowenthal, Ma, Mendoza, Miller, Monning,
Nava, Nestande, Niello, Nielsen, John A. Perez, V. Manuel
Perez, Portantino, Price, Ruskin, Salas, Saldana, Silva,
Skinner, Smyth, Solorio, Audra Strickland, Swanson,
Torlakson, Torres, Torrico, Tran, Villines, Bass
NO VOTE RECORDED: Duvall, Yamada
TSM:mw 6/29/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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