BILL NUMBER: AB 187	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MAY 27, 2011

INTRODUCED BY   Assembly Members Lara and Smyth
   (Principal coauthor: Assembly Member Alejo)

                        JANUARY 25, 2011

   An act to add Section 8546.10 to the Government Code, relating to
state government.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 187, as amended, Lara. State Auditor: audits: high-risk local
government agency audit program.
   Existing law authorizes the State Auditor to establish a high-risk
government agency audit program for the purpose of identifying,
auditing, and issuing reports on any agency of the state that the
State Auditor identifies as being at high risk for the potential of
waste, fraud, abuse, and mismanagement or that has major challenges
associated with its economy, efficiency, or effectiveness.
   This bill would authorize the State Auditor to establish a
high-risk local government agency audit program to identify, audit,
and issue reports on any local government agency, including any city,
county, or special district, or any publicly created entity that the
State Auditor identifies as being at high risk for the potential of
waste, fraud, abuse, or mismanagement or that has major challenges
associated with its economy, efficiency, or effectiveness. The bill
would also authorize the State Auditor to consult with the State
Controller, Attorney General, and other state agencies in identifying
local government agencies that are at high risk.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

  SECTION 1.  Section 8546.10 is added to the Government Code, to
read:
   8546.10.  (a) The State Auditor may establish a high risk local
government agency audit program for the purpose of identifying,
auditing, and issuing reports on any local government agency,
including, but not limited to, any city, county, special district, or
any publicly created entity, whether created by the California
Constitution or otherwise, that the State Auditor identifies as being
at high risk for the potential of waste, fraud, abuse, or
mismanagement or that has major challenges associated with its
economy, efficiency, or effectiveness.
   (b) In addition to identifying a local government agency as high
risk on the basis of weaknesses identified in audit and investigative
reports produced by the bureau, the State Auditor may consult with
the Controller, Attorney General, and other state agencies that have
oversight responsibilities over any local government agency, in
identifying local governments that are at high risk. 
   (c) The Bureau of State Audits shall be responsible for the costs
associated with the high-risk local government agency audit program,
shall conduct the program as funds permit, and shall only conduct the
program to the extent that it does not interfere with duties related
to mandated audits and requests from the Joint Legislative Audit
Committee.  
   (c) 
    (d)   (1)    The State Auditor shall
notify the Joint Legislative Audit Committee whenever it identifies a
local government as at high risk. 
   (2) The State Auditor shall notify the Joint Legislative Audit
Committee at the start of any audit conducted pursuant to the
high-risk local government agency audit program.  
   (3) The State Auditor shall provide the Joint Legislative Audit
Committee, at a public hearing of the committee, an annual update of
all audits in progress.  
   (4) If a local government agency has taken significant corrective
measures for deficiencies identified by the State Auditor, that
agency shall be removed from the high-risk local government agency
audit program.  
   (d) 
    (e)  Notwithstanding the requirements of Section
10231.5, if the State Auditor establishes the program provided for in
this section and the State Auditor determines that a local agency is
at high risk, the State Auditor shall issue audit reports at least
once every two years with recommendations for improvement in such a
local government so identified.