BILL ANALYSIS �
AB 187
Page 1
Date of Hearing: April 27, 2011
ASSEMBLY COMMITTEE ON ACCOUNTABILITY AND ADMINISTRATIVE REVIEW
Roger Dickinson, Chair
AB 187 (Lara) - As Introduced: January 25, 2011
SUBJECT : State Auditor: High-Risk Local Government Agency
Audit Program
SUMMARY : This bill authorizes the State Auditor to establish a
high-risk local government agency audit program. Specifically,
this bill : authorizes the State Auditor to establish a program
"for the purpose of identifying, auditing, and issuing reports
on any local government agency" which the auditor determines is
"at risk for the potential of waste, fraud, abuse, or
mismanagement."
EXISTING LAW :
1) Authorizes the State Auditor to establish a high-risk
audit program for the purpose of "identifying, auditing,
and issuing reports" on any state agency the auditor
determines is "at high risk for the potential of waste,
fraud, abuse, and mismanagement or that has major
challenges associated with its economy, efficiency, or
effectiveness."
2) Requires the State Controller to conduct audits to
ensure the accuracy of local government reports pertaining
to their use of specified tax funds, and claims made to the
state.
3) Authorizes the State Controller to conduct an audit of a
local governmental agency, at the request of that agency.
FISCAL EFFECT : Unknown
COMMENTS : Under current law, the State Auditor is authorized
to initiate an audit of a state agency that it determines is at
high risk of "waste, fraud, abuse, and mismanagement or that has
major challenges associated with its economy, efficiency, or
effectiveness."
Under current law, the State Auditor can conduct audits of local
governmental agencies that meet these criteria only if the
AB 187
Page 2
Legislature makes a specific request for an audit. The author
states that "the omission of local governments in the high-risk
audit program could hamper the ability of the auditor to provide
state-wide oversight and government transparency."
This bill would not require the State Auditor to conduct local
government audits. Instead, this bill would authorize the State
Auditor to do so if it determines a local governmental agency is
"at risk for the potential of waste, fraud, abuse, or
mismanagement."
According to the author, the State Auditor is in support of this
bill. The Friant Water Authority opposes this bill because they
argue it would duplicate the function of grand juries.
Related legislation
AB 162 (Smyth) of 2011, requires that, if an audit of a local
agency reveals certain financial irregularities, the findings be
sent separately to the Controller immediately after the audit
has been concluded. This bill requires the Controller to
prepare and transmit a report on those findings, and the
Controller's recommendations, to the Assembly Committee on Local
Government and the Senate Committee on Local Government. This
bill is pending in Assembly Local Government Committee.
AB 229 (Lara) of 2011, expands the Controller's oversight of
local governmental agencies to those that expend less than
$500,000 in federal funds, and stipulates standards for the
performance of local government audits. This bill is pending in
Assembly Local Government Committee.
SB 186 (Kehoe) of 2011, expands the Controller's authority to
perform discretionary audits of local agencies to ensure
compliance with local ordinances and state law. This bill is
pending in Senate Appropriations Committee.
SB 449 (Pavley) of 2011, authorizes the Controller to conduct a
preliminary review to determine the existence of a local agency
financial problem, and perform an audit upon completion of that
review, subject to specified criteria. This bill is pending in
Senate Appropriations Committee.
AB 187
Page 3
REGISTERED SUPPORT / OPPOSITION :
Support
None received
Opposition
Friant Water Authority
Analysis Prepared by : Nancy Chaires / A. & A.R. / (916)
319-3600