BILL NUMBER: AB 1538 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 19, 2012
AMENDED IN ASSEMBLY MARCH 28, 2012
AMENDED IN ASSEMBLY MARCH 19, 2012
AMENDED IN ASSEMBLY MARCH 13, 2012
INTRODUCED BY Assembly Member Cook
(Coauthors: Assembly Members Garrick, Nestande, Portantino, and
Silva)
(Coauthors: Senators Dutton and Harman)
JANUARY 24, 2012
An act to add Section 12433 to the Government Code, relating to
audits.
LEGISLATIVE COUNSEL'S DIGEST
AB 1538, as amended, Cook. Recovery audits.
Existing law prescribes the duties of the Controller, including
auditing all claims against the state and the disbursement of state
money, for correctness, legality, and for sufficient provisions of
law for payment.
This bill would require authorize
the Controller to contract with consultants to provide semiannual
recovery audits of state agencies with expenditures exceeding
$50,000,000 in a fiscal year, unless excepted by regulation. The bill
would authorize reasonable payment to the consultants
from recovered overpayments, upon appropriation, including
as a percentage of recovery , as specified
. The bill would require contracts made under its provisions to
apply the same confidentiality provisions to consultants as are
applicable to the Controller, the state agency that is subject to the
audit, or employees of the Controller or the state agency. The bill
would further require the Controller to provide copies of the
consultants' audit reports to the Department of Finance and the State
Auditor, and would, until January 1, 2017, require annual reports by
the Controller to the Legislature summarizing these audits.
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 12433 is added to the Government Code, to read:
12433. (a) Notwithstanding any other law, the
The Controller shall may
contract with one or more consultants to conduct semiannual recovery
audits of payments made by state agencies to vendors. The audits
shall be designed to detect and recover overpayments to the vendors
and to recommend improved state agency accounting operations.
(b) A contract under this section may provide reasonable
compensation for services provided under the contract, including
compensation determined by the application of a specified percentage
of the total amount recovered because of the consultant's audit
activities or recommendations as a fee for services. A contract may
permit or require the consultant to pursue a judicial action in court
inside or outside this state to recover an overpaid amount. To allow
time for the performance of any existing state payment auditing
procedures, a contract under this section may
shall not allow a recovery audit of a payment during the
180-day period after the date the payment was made.
(c) The Controller or a state agency that is being audited
pursuant to this section may provide a consultant under this section
with any confidential information in the custody of the Controller or
state agency that is necessary for the performance of the audit or
the recovery of an overpayment, to the extent that the Controller or
state agency is not prohibited from sharing the information under an
agreement with another state or the federal government. A person
acting under a contract authorized by this section, and each employee
or agent of that person, is subject to all prohibitions against the
disclosure of confidential information obtained from the state in
connection with the contract that apply to the Controller or
applicable state agency or an employee of the Controller or
applicable state agency. A person acting under a contract authorized
by this section or an employee or agent of that person who discloses
confidential information in violation of this subdivision is subject
to the same sanctions and penalties that would apply to the
Controller or applicable state agency or an employee of the
Controller or applicable state agency for that disclosure.
(d) The Controller shall may require
that these semiannual recovery audits be performed on the payments
to vendors made by each state agency that has total expenditures
during a fiscal year in an amount that exceeds fifty million dollars
($50,000,000). Each state agency described by this subdivision shall
provide the recovery audit consultant with all information necessary
for the audit. The Controller may exempt from the mandatory recovery
audit process a state agency that has a low proportion of its
expenditures made to vendors, according to the criteria that the
Controller adopts by regulation after consideration of the likely
costs and benefits of performing recovery audits for agencies that
make relatively few or small payments to vendors.
(e) A state agency shall pay , from recovered moneys
appropriated for the purpose, the recovery audit consultant
responsible for obtaining for the agency a reimbursement from a
vendor. A state agency shall expend or return to the federal
government any federal money that is recovered through a recovery
audit conducted under this section. The state agency shall expend or
return the federal money in accordance with
pursuant to the rules of the federal program through which the
agency received the federal money.
(f) The Controller shall provide copies, including electronic form
copies, of any report received from a consultant contracting under
this section to the Director of Finance and the State Auditor not
later than the seventh day after the date the Controller receives the
consultant's report. Before January 2 of each year, the Controller
shall issue a report to the Legislature summarizing the contents of
all reports received under this section during the immediately
preceding fiscal year.
(g) For purposes of this section, "overpayment" includes a
duplicated payment made to a vendor for a single invoice, the amount
of a discount available from a vendor that was not applied, and the
amount of any of the following:
(1) A late payment penalty that was improperly applied by the
vendor.
(2) Excess shipping costs that were incorrectly computed or
incorrectly included in an invoice.
(3) Payment for a good or service that the vendor did not provide.
(4) State sales tax.
(h) (1) The requirement for submitting a report to the Legislature
pursuant to subdivision (f) is inoperative on January 1, 2017,
pursuant to Section 10231.5.
(2) A report to be submitted under subdivision (f) shall be
submitted pursuant to with Section 9795.