BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 187|
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THIRD READING
Bill No: AB 187
Author: Lara (D), et al.
Amended: 8/15/11 in Senate
Vote: 21
SENATE GOVERNMENTAL ORGANIZATION COMM. : 9-1, 6/28/11
AYES: Wright, Calderon, Corbett, De Le�n, Evans,
Hernandez, Strickland, Wyland, Yee
NOES: Anderson
NO VOTE RECORDED: Berryhill, Cannella, Padilla
SENATE APPROPRIATIONS COMMITTEE : 6-3, 8/25/11
AYES: Kehoe, Alquist, Lieu, Pavley, Price, Steinberg
NOES: Walters, Emmerson, Runner
ASSEMBLY FLOOR : 74-1, 6/1/11 - See last page for vote
SUBJECT : State Auditor: high-risk local government
audit program
SOURCE : Author
DIGEST : This bill, subject to specified conditions,
authorizes 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
CONTINUED
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its economy, efficiency, or effectiveness.
ANALYSIS : 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, subject to specified conditions, authorizes 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.
Prior/Related Legislation
SB 1314 (Wyland), 2007-08 Session, would have transferred
audit and evaluation duties within the Department of
Finance to the BSA and renamed the BSA as the Bureau of
State Audits and Evaluations with responsibility for
auditing the performance of state programs and managers and
for recommending actions to correct any inefficiencies or
ineffectiveness that may exist. (Held in Senate
Governmental Organization Committee at Author's Request)
SB 1452 (Speier), Chapter 452, Statutes of 2006, updated
the auditing standards for state and local agencies and
enacted the Omnibus Audit Accountability Act of 2006 which
established a process whereby the Legislature would be
informed when auditor recommendations are being ignored or
not implemented by state agencies.
SB 1437 (Speier), Chapter 251, Statutes of 2004, authorizes
the State Auditor to establish a high-risk government
agency audit program for the purpose of identifying,
auditing, and issuing reports on any state agency that the
auditor identifies as high risk for the potential of waste,
fraud, abuse, and mismanagement, or that has major
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challenges associated with its economy, efficiency, or
effectiveness.
SB 37 (Maddy), Chapter 12, Statutes of 1993, creates the
Bureau of State Audits under the direction of the Little
Hoover Commission. Many of the duties and power of the
Office of Auditor General were passed to the Bureau of
State Audits. This was done in response to the passage of
Proposition 140 which had the effect of greatly reducing
the size and scope of the Auditor General's office.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13
2013-14 Fund
State Auditor local Unknown,
potentially major costs General
government audit annually depending on number and
program scope of audits approved by the
JLAC
SUPPORT : (Verified 8/25/11)
California State Auditor
California Taxpayers Association
Central Basin Municipal Water District
Water Replenishment District of Southern California
OPPOSITION : (Verified 8/25/11)
Friant Water Authority
State Association of County Auditors
ARGUMENTS IN SUPPORT : The author's office points out
that currently, the State Auditor's high-risk audit program
only applies to state government and does not give the
Auditor the authority to include local government high-risk
assessments. Yet the State Auditor's general jurisdiction
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for audit work includes all levels of state and local
government. Omitting local governments from the high-risk
program could hamper the ability of the State Auditor to
provide state-wide oversight and government transparency.
The author's office emphasizes that this bill is simply
intended to increase oversight within all levels of
government and allow the State Auditor to identify and
examine local governments during the course of the
high-risk audit program to determine if there are any areas
that are at risk of fraud, waste or mismanagement.
ARGUMENTS IN OPPOSITION : Writing in opposition, the
State Association of County Auditors argues that this bill
does not contain detail or guidelines regarding the
criteria for being identified as a "high risk" agency, or
how, specifically, to remove this designation. The
Association is also concerned that this bill does not
provide local agencies with an ability to appeal or respond
to an impending audit in a public forum prior to the
commencement of the audit, or prior to the audit findings
being made public.
Also writing in opposition, the Friant Water Authority,
which operates and maintains the Friant-Kern Canal, states
that this bill appears to be an overreaction to the City of
Bell and similar local government scandals. The Friant
Water Authority believes that "AB 187 is unnecessary and is
actually duplicative of the grand jury function that is
already available - and used widely - within local
communities throughout the State."
ASSEMBLY FLOOR :
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, Bill
Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Butler, Charles Calderon, Campos, Carter,
Cedillo, Chesbro, Conway, Cook, Davis, Dickinson,
Donnelly, Eng, Feuer, Fletcher, Fong, Fuentes, Furutani,
Beth Gaines, Galgiani, Gatto, Gordon, Hagman, Halderman,
Hall, Harkey, Hayashi, Roger Hern�ndez, Hill, Huber,
Hueso, Huffman, Jones, Knight, Lara, Logue, Bonnie
Lowenthal, Ma, Mansoor, Mendoza, Miller, Mitchell,
Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan,
Perea, Portantino, Silva, Skinner, Smyth, Solorio,
Swanson, Torres, Valadao, Wagner, Wieckowski, Williams,
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Yamada, John A. P�rez
NOES: Grove
NO VOTE RECORDED: Buchanan, Garrick, Gorell, Jeffries, V.
Manuel P�rez
PQ:do 8/29/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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