BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
2266 (Bradford)
Hearing Date: 08/12/2010 Amended: 08/04/2010
Consultant: Dan Troy Policy Vote: ED 7-0
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BILL SUMMARY: AB 2266 would modify requirements for the
maintenance and destruction of original school district
documents.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Audit findings Potential loss of savings, potentially
General*
in the millions
* Counts toward meeting the Proposition 98 minimum funding
guarantee
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STAFF COMMENTS: SUSPENSE FILE.
Current law allows the governing board of a school district to
make photographic, microfilm, or electronic copies of records,
as specified. Current law allows for the destruction of
original records if they have been copied and are permanently
maintained, except that no original document that is basic to a
required audit may be destroyed prior to the beginning of the
second fiscal year succeeding the completion of the audit.
As of January 1, 2013, this bill would eliminate the requirement
to retain original documents required for an audit for any time
period, as long as they can be reproduced in a photographic,
microfilm, or electronic form through a "trusted system," as
defined in the Government Code. Essentially, reproductions of
the original documents could replace original documents for
purposes of audit reviews if the copies are nonalterable.
While it may be possible to utilize trusted systems that ensure
copies of original documents are not altered, allowing the
destruction of original documentation prior to the completion of
required audits may compromise the audit integrity. Auditors
require access to original documentation in order to assure the
accuracy and integrity of contemporaneous record keeping.
Statewide summary information available from the SCO for the
2008-09 fiscal year indicate that there were 136 audit findings
regarding attendance accounting requirements that year, 46
findings regarding independent study, and 19 findings concerning
instructional time requirements, among many other findings.
While determining the ultimate cost of all of these findings is
difficult due to the appeals process and negotiated payment
plans, loosening the laws requiring the maintenance of original
documentation may make it difficult for auditors to determine
when districts have inappropriately claimed state funding.
Given that one unit of average daily attendance is worth over
$5,000 in funding, the potential loss to the state could be in
the millions on an annual basis.
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AB 2266 (Bradford)
Further, according to the State Controller's Office, current
government auditing standards require review of original
documentation. To the extent auditors are not able to issue
unqualified audit opinions as to the accuracy of the
information, districts may not be able to receive funding for
federal or state programs. If verification requires more
investigation on the part of the auditor, the costs borne by the
districts for the audit could increase. This may offset savings
on storage costs that districts might hope to achieve.