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AB-2822 California State Auditor: high-risk local government agency audit program.(2017-2018)

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Date Published: 04/04/2018 09:00 PM
AB2822:v98#DOCUMENT

Amended  IN  Assembly  April 04, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 2822


Introduced by Assembly Member Obernolte

February 16, 2018


An act to amend Section 8546.10 of the Government Code, relating to state government.


LEGISLATIVE COUNSEL'S DIGEST


AB 2822, as amended, Obernolte. California State Auditor: high-risk local government agency audit program.
Existing law establishes the California State Auditor’s Office, headed by the appointed California State Auditor and under the direction of the Milton Marks “Little Hoover” Commission on California State Government Organization and Economy, with specified duties that include, among others, conducting financial and performance audits as directed by statute. Existing law authorizes the auditor to establish a high-risk local government agency audit program for the purpose of identifying, auditing, and issuing reports on any local government agency that he or she identifies as at high risk for fraud or waste, among other things. Existing law requires the auditor to notify the Joint Legislative Audit Committee (JLAC) when he or she identifies a local government as at high risk and requires an audit conducted pursuant to the program to be approved by JLAC. authorizes the auditor to consult with the Controller, Attorney General, and other state agencies that have oversight responsibilities over any local government agency to identify local governments that are at high risk.
This bill would remove the requirement for an audit conducted pursuant to the high-risk local government agency audit program to be approved by JLAC, and would instead authorize the auditor to conduct an audit under the program, unless before the expiration of a specified 30-day notice period, JLAC adopts a motion directing the auditor to delay or cease commencing audit work. The bill would also require the auditor to notify any local government agency that he or she identifies as at high risk. additionally authorize the California State Auditor to review publicly available information to identify local governments that are at high risk.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 8546.10 of the Government Code is amended to read:

8546.10.
 (a) The California State Auditor may establish a high-risk local government agency audit program for the purpose of identifying, auditing, and issuing reports on any local government agency, including, but not limited to, any city, county, special district, or any publicly created entity, whether created by the California Constitution or otherwise, that the California State Auditor identifies as being at high risk for the potential of waste, fraud, abuse, or mismanagement or that has major challenges associated with its economy, efficiency, or effectiveness.
(b) In addition to identifying a local government agency as high risk on the basis of weaknesses identified in audit and investigative reports produced by the office, the California State Auditor may review publicly available information and consult with the Controller, Attorney General, and other state agencies that have oversight responsibilities over any local government agency, in identifying local governments that are at high risk.
(c) The California State Auditor’s Office shall be responsible for the state costs associated with the high-risk local government agency audit program, shall conduct the program as funds permit, and shall only conduct the program to the extent that it does not interfere with duties related to mandated audits and requests from the Joint Legislative Audit Committee.
(d) (1) (A)The California State Auditor shall notify the local government agency and the Joint Legislative Audit Committee whenever he or she identifies a local government as at high risk.

(B)The California State Auditor is authorized to conduct an audit of a local government agency pursuant to this section on and after the first day after 30 calendar days of continuous session of the Legislature after the date on which the notification is transmitted to the Joint Legislative Audit Committee, unless, before the expiration of the 30-day period, the Joint Legislative Audit Committee adopts a motion directing the auditor to delay or cease commencing audit work.

(2) The California State Auditor shall provide the Joint Legislative Audit Committee, at a public hearing of the committee, an annual update of all audits in progress.
(3) If a local government agency has taken significant corrective measures for deficiencies identified by the California State Auditor, that agency shall be removed from the high-risk local government agency audit program.
(e) Notwithstanding the requirements of Section 10231.5, if the California State Auditor establishes the program provided for in this section and the California State Auditor determines that a local agency is at high risk, the California State Auditor shall issue audit reports at least once every two years with recommendations for improvement in such a local government so identified.
(f) Audits conducted pursuant to this section shall be approved by the Joint Legislative Audit Committee.