BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 899|
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THIRD READING
Bill No: SB 899
Author: La Malfa (R)
Amended: 5/31/11
Vote: 21
SENATE AGRICULTURE COMMITTEE : 6-0, 5/3/11
AYES: Cannella, Rubio, Berryhill, La Malfa, Vargas, Wolk
NO VOTE RECORDED: Evans
SENATE APPROPRIATIONS COMMITTEE : 8-0, 5/26/11
AYES: Kehoe, Walters, Alquist, Lieu, Pavley, Price,
Runner, Steinberg
NO VOTE RECORDED: Emmerson
SUBJECT : Fairs
SOURCE : Author
DIGEST : This bill deletes the duty of the Department of
Food and Agriculture to conduct fiscal and performance
audits of county fairs and permits discretionary audits as
determined by the county fair and the county board of
supervisors, as specified.
ANALYSIS : Under existing law, the Department of Food and
Agriculture (DFA) is responsible for, among other things,
ensuring the integrity of the Fair and Exposition Fund and
providing oversight of activities carried out by each
California fair. That oversight includes conducting fiscal
and performance audits of county fairs and citrus fairs
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that are requested by the fair that is the subject of the
audit, and that DFA deems to be necessary. Preliminary
information indicates DFA compliance audit costs for county
fairs average $10,013 (two fairs), audit costs for county
and citrus fairs average $13,853 and fiscal and compliance
audit costs average $14,813.
The May Revise noted the following: ?The Secretary of Food
and Agriculture will develop a plan to be included in the
Governor's 2012-13 Budget, addressing the future operation,
maintenance, and oversight of the Network of California
Fairs, including real and personal property and the
feasibility to restructure the governance of the fairs
within this network.
Existing law requires DFA to exercise oversight of
California fair activities, including conducting fiscal and
performance audits of county fairs and citrus fruit fairs
as requested by the fair that is the subject of the audit
and that DFA deems necessary.
This bill deletes the requirement of DFA to conduct fiscal
and performance audits of county fairs.
This bill provides that upon the agreement of the county
board of supervisors and the governing body of the county
fair, an audit of the county fair may be performed with a
copy of the audit being provided to DFA. Costs associated
with an audit are the responsibility of the fair.
This bill provides that with DFA's approval, (1) two or
more fairs may contract for a single audit by the same
certified public accountant in order to be more
cost-effective, and (2) DAAs and the California Exposition
and State Fair (Cal Expo) are relieved of any requirement
to abide by State Contracting Manual provisions which may
apply to competitively bidding an audit service contract as
developed by the Department of General Services.
Comments
According to the author, "In light of the elimination of
state financial support of the fair system, I believe that
giving fairs a more inexpensive option to conduct audits is
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not only wise, but necessary. Under existing law, many
fairs will need to pay the Department of Food & Agriculture
to conduct annual audits of fair operations. This bill
will give fairs more flexibility and allow them to contract
with local accountants to conduct audits if doing so will
create a cost savings, while also maintaining CDFA's review
of such audits and ensuring financial clarity."
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13
2013-14 Fund
Discretionary audits no new costs; significant
savings over General/
existing department audit
requirementsSpecial*
* Department of Food and Agriculture Fund
SUPPORT : (Verified 5/31/11)
Western Fairs Association
ARGUMENTS IN SUPPORT : The Western Fairs Association
states: "�this bill] address�es] the unnecessarily costly
oversight that exists for district agricultural
associations. In light of the budget actions that have
taken place this year, it makes sense to reduce costs where
possible, while maintaining important oversight.
Accordingly, we support allowing fairs to request audits be
conducted at a local level if it will result in a savings
to the fair. We believe this will be the case in most
instances and will result in a significant cost savings.
SB 899, as proposed to be amended, provides the authority
for CDFA to have continued oversight of fairs by reviewing
audits, without incurring unnecessary costs to the state
for the performance of those audits."
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MEL:mw 5/31/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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