BILL ANALYSIS �
SENATE COMMITTEE ON EDUCATION
Alan Lowenthal, Chair
2011-2012 Regular Session
BILL NO: SB 423
AUTHOR: Wyland
AMENDED: March 23, 2011
FISCAL COMM: No HEARING DATE: May 11, 2011
URGENCY: No CONSULTANT:Kathleen Chavira
SUBJECT : School Facility Local Bond Measures.
SUMMARY
This bill requires that the constitutionally required
annual independent financial and performance audits of the
use of school facility construction bonds, as required by
initiative measure (Proposition 39, November 2000), be
submitted to the citizens' oversight committee, also
established by Proposition 39, by March 31 of each year.
BACKGROUND
Article XI, section 18 of the California Constitution, as
amended by voter initiative measure (Proposition 39,
November 2000) authorizes a school district, community
college district, or county office of education to incur
bond indebtedness for the construction, reconstruction,
rehabilitation, or replacement of school facilities, with
the approval of 55 percent of the voters of the district or
county. Article XIII A provides that this vote threshold
only applies if, among other things, the local bond measure
includes a specific list of school projects to be funded
and requires the authorizing board to conduct annual,
independent financial and performance audits until all bond
funds have been spent to ensure they are used exclusively
for the projects listed in the measure. Current law
provides that a Citizen's Oversight Committee be
established to, among other things, receive and review
copies of the constitutionally required annual independent
financial and performance audits. (Education Code � 15278)
Current law, established by SB 423 (Wyland, Chapter 294,
Statutes of 2010), requires that the independent financial
and performance audits required by Proposition 39 be
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conducted in accordance with the Government Auditing
Standards issued by the Comptroller General of the United
States. (EC �15286)
ANALYSIS
This bill requires that the annual independent financial
and performance audits required as the result of the
passage of Proposition 39 be submitted to the citizen's
oversight committee by March 31 of each year.
STAFF COMMENTS
1) Need for the bill . While Proposition 39 and the
Education Code currently require annual financial and
performance audits for funds connected to bonds issued
under the provisions of Proposition 39, the statute
currently only requires that these audits be done at
some point during the calendar year.
According to the author, the establishment of an
annual due date of March 31 would allow districts to
take corrective action regarding any necessary changes
to bond spending prior to the summer construction
season. In addition, the author contends that the
timing of this audit would logically follow completion
of other audits required of the community colleges and
school districts (generally due December 15) and would
be flexible enough to meet both the districts and the
citizens oversight committee needs.
2) Related legislation . SB 911 (DeLeon) was recently
amended to provide, among other thing, that if a
citizen's oversight committee appointed in accordance
with Proposition 39 fails to issue a report on
expenditures to taxpayers at least once a year (as
required by law), no bond proceeds may be expended
until a report is issued. SB 911 is scheduled to be
heard by the Senate Governance and Finance Committee
on May 4, 2011.
3) Prior legislation . SB 1473 (Wyland, Chapter 294,
Statutes of 2010) required that the constitutionally
required performance audit established by initiative
measure (Proposition 39, November 2000) be conducted
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in accordance with Government Auditing Standards
issued by the Comptroller General of the United
States.
SUPPORT
California League of Bond Oversight Committees
Howard Jarvis Taxpayers Association
OPPOSITION
None received.