BILL ANALYSIS                                                                                                                                                                                                    �




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                          AB 187 (Lara)
          
          Hearing Date: 8/25/2011         Amended: 8/15/2011
          Consultant: Bob Franzoia        Policy Vote: G O 9-1
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          ____
          BILL SUMMARY: AB 187 would, subject to specified conditions, 
          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.
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          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2011-12      2012-13       2013-14     Fund
           
          State Auditor local    Unknown, potentially major costs 
          annuallyGeneral
          government audit program          depending on number and scope 
          of audits
                                 approved by the Joint Legislative Audit
                                 Committee                            
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          ____

          STAFF COMMENTS: SUSPENSE FILE. 

          Existing law requires the State Auditor to conduct an audit of a 
          state or local governmental entity that is requested by the 
          Joint Legislative Audit Committee (JLAC), to the extent that 
          funding is available and in accordance with priorities 
          established by JLAC.  Existing law also requires the State 
          Auditor to conduct specified financial and performance audits 
          directed in statute.  

          This bill states that the State Auditor shall notify JLAC 
          whenever he or she identifies a local government as at high 
          risk.  Audits conducted under the provisions of this bill shall 








          AB 187 (Lara)
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          be approved by JLAC.  

          Any auditing costs associated with this bill would be difficult 
          to predict and would depend upon how many local entities are 
          audited and the size and complexity of the audit.  State Auditor 
          costs are generally about $100 an hour with audits requiring 
          2,000 to 5,000 hours to complete.