BILL NUMBER: SB 186	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 6, 2011
	AMENDED IN SENATE  MARCH 22, 2011
	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
the Controller  possesses documentation that results in
reason to believe   has reason to believe, supported by
documentation,  that the local agency is not complying with the
financial requirements in state law, grant agreements, local
charters, or local ordinances. 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.
   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, 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, 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, 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 local agency investigated is situated,
or, if the agency is situated in more than one county, in the county
in which any portion of the 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 the Controller possesses
documentation that results in a reason to believe that the local
agency is not complying with the financial requirements in state law,
grant agreements, local charters, or local ordinances. 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 shall be communicated to appropriate
authorities, including the county grand jury.  
   (b) (1) If the Controller has reason to believe that any county,
city, special district, joint powers authority, or redevelopment
agency is not complying with the financial requirements in state law,
local charters, or local ordinances, he or she may perform an audit
or investigation of the issue. The basis for the decision to conduct
an audit or investigation shall be supported by credible
documentation, including input from the local agency. The Controller
shall prepare a report of the results of the audit or investigation
that shall include documentation used as the basis for the decision
to perform the audit or investigation. A copy of the report shall be
filed with the legislative body of the county, city, special
district, joint powers authority, or redevelopment agency, subject to
the audit or investigation. Any finding of illegal acts or fraud
shall be communicated to the appropriate authorities, including the
county grand jury.  
   (2) For purposes of this subdivision, documentation means any
handwriting, typewriting, printing, photostating, photographing,
photocopying, transmitting by electronic mail or facsimile, and every
other means of recording upon any tangible thing any form of
communication or representation, including letters, words, pictures,
sounds, or symbols, or combinations thereof, and any record thereby
created, regardless of the manner in which the record has been
stored. 
   (c) Any costs incurred by the Controller pursuant to subdivision
(a), including contracts with, or employment of, certified public
accountants or public accountants, in compiling a financial report
pursuant to Section 12463 or 12463.3  of this code, or as
required by Section  33684 of the Health and Safety Code,
 shall be borne by the county, city, special district, joint
powers authority, or redevelopment agency, and shall be a charge
against any unencumbered funds of the county, city, 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,
special district, joint powers authority, or redevelopment agency.