BILL NUMBER: SB 736	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Cannella

                        FEBRUARY 18, 2011

   An act to amend Section 12440.1 of the Government Code, relating
to the California State University.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 736, as introduced, Cannella. California State University:
trustees.
   Existing law authorizes the Trustees of the California State
University to draw from funds appropriated to the university, for use
as a revolving fund, amounts necessary to make payments of
obligations of the university directly to vendors. Existing law
requires the Trustees of the California State University to contract
with one or more public accounting firms to conduct a systemwide and
individual campus annual financial statement audit.
   This bill would instead require the Trustees of the California
State University to contract with one or more public accounting firms
to conduct a systemwide annual financial statement audit in
accordance with generally accepted accounting principles, as well as
other required compliance audits. This bill would delete the
requirement that at least 10 individual campus audits be conducted on
a rotating basis, and each campus be audited at least once every 2
years.
   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 12440.1 of the Government Code is amended to
read:
   12440.1.  (a) The trustees, in conjunction with the Controller,
shall implement a process that allows any campus or other unit of the
university to make payments of obligations of the university from
its revolving fund directly to all of its vendors. Notwithstanding
Article 5 (commencing with Section 16400) of Chapter 2 of Part 2 of
Division 4 of Title 2, or any other  provision of 
law, the trustees may draw from funds appropriated to the university,
for use as a revolving fund, amounts necessary to make payments of
obligations of the university directly to vendors. In any fiscal
year, the trustees shall obtain the approval of the Director of
Finance to draw amounts in excess of 10 percent of the total
appropriation to the university for that fiscal year for use as a
revolving fund.
   (b) Notwithstanding Sections 925.6, 12410, and 16403, or any other
 provision of  law, the trustees shall maintain
payment records for three years and make those records available to
the Controller for postaudit review, as needed.
   (c) Notwithstanding Section 8546.4 or any other  provision
of  law, the trustees shall contract with one or more
public accounting firms to conduct  a  systemwide 
and individual campus  annual financial statement 
and   audit in accordance with generally accepted
accounting principles (GAAP), as well as other required 
compliance audits without obtaining the approval of any other state
officer or entity.  At least 10 individual campus audits
shall be conducted on a rotating basis, and each campus shall be
audited at least once every two years. 
   (d) The internal and independent financial statement audits of the
trustees shall test compliance with procurement procedures and the
integrity of the payments made. The results of these audits shall be
included in the biennial report required by Section 13405.
   (e) As used in this section:
   (1) "Trustees" means the Trustees of the California State
University.
   (2) "University" means the California State University.