BILL NUMBER: SB 186	AMENDED
	BILL TEXT

	AMENDED IN SENATE  MARCH 10, 2011

INTRODUCED BY   Senators Kehoe and DeSaulnier
   (Principal coauthor: Assembly Member Alejo)
   (Coauthor: Assembly Member Lara)

                        FEBRUARY 7, 2011

   An act to amend Section 12464 of the Government Code, relating to
the Controller.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 186, as amended, Kehoe. The Controller.
   Existing law authorizes the Controller to appoint a qualified
accountant to make an investigation and to obtain the information
required for the annual report of financial transactions.
   This bill would authorize the Controller to exercise discretionary
authority to perform an audit or investigation of any county, city,
special district,  joint powers authority,  or redevelopment
agency, if necessary, to ensure compliance with  the financial
requirements in  state law, grant agreements,  or 
local ordinances  , and to determine fiscal viability
 . This bill would require the Controller to prepare a
report of the results of the audit or investigation and to file a
copy with the local legislative body. This bill would also provide
that specified costs incurred by the Controller shall be borne by the
county, city,  special district, joint powers authority, 
or redevelopment agency and state that reimbursements collected, upon
appropriation to the Controller, be available to offset costs of
enforcing this provision.
   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 12464 of the Government Code is amended to
read:
   12464.  (a) If the county, city,  or district 
 special district, joint powers authority, or redevelopment
agency  reports are not made in the time, form, and manner
required or there is reason to believe that a report is false,
incomplete, or incorrect, the Controller shall appoint a qualified
accountant to make an investigation and to obtain the information
required. The accountant appointed shall report to the Controller the
results of  the  investigation, and a copy shall be filed
with the legislative body of the county, city,  or district
  special district, joint powers authority, or
redevelopment agency  , the accounts of which were investigated.
If a similar investigation has to be made of the accounts of any
county, city,  or district   special district,
joint powers authority, or redevelopment agency  , for two
successive years, a certified copy of the results of the
investigation last made shall be transmitted to the grand jury of the
county that was investigated or in which the  city or
district   local agency  investigated is situated,
or, if the  district  agency  is situated
in more than one county, in the county in which any portion of the
 district   agency  is situated.
   (b) The Controller may, at his or her discretion, perform an audit
or investigation of any county, city, special district,  joint
powers authority,  or redevelopment agency, if  deemed
necessary, to ensure compliance   there is reason to
believe that the local agency is not complying  with  the
financial requirements in  state law, grant agreements,  or
 local ordinances  , and to determine fiscal viability
 . The Controller shall prepare a report of the results of
the audit or investigation, and a copy shall be filed with the
legislative body of the county, city, special district,  joint
powers authority,  or redevelopment agency, the accounts of
which were audited or investigated. The audit or investigation will
be designed to provide reasonable assurance on compliance with laws
and regulations that are significant to the audit or investigation
objectives. Any indication  ,   of  illegal
acts  ,  or fraud  will  
shall  be communicated to appropriate authorities, including the
county grand jury.
   (c) Any costs incurred by the Controller pursuant to subdivisions
(a) and (b), including contracts with, or employment of, certified
public accountants or public accountants, in compiling a financial
report pursuant to Section 12463 or 12463.3 shall be borne by the
county, city,  district   special district,
joint powers authority , or redevelopment agency, and shall be a
charge against any unencumbered funds of the county, city, 
district   special district, joint powers authority
, or redevelopment agency. Any forfeiture imposed by Section 53895
or 53895.5 may be offset up to the total costs incurred by the
Controller. Any remaining balance shall be forfeited in accordance
with Sections 53895 and 53895.5. Any costs incurred by the Controller
in excess of the forfeiture imposed shall be a charge against any
unencumbered funds of the county, city,  district 
 special district, joint powers authority  , or
redevelopment agency. All reimbursements collected in regard to this
section shall  ,  upon appropriation to the Controller, be
available to offset costs of enforcing this section.