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SB-481 Local government: auditors: independence.(2015-2016)

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Enrolled  August 24, 2015
Passed  IN  Senate  August 20, 2015
Passed  IN  Assembly  July 16, 2015
Amended  IN  Assembly  June 18, 2015
Amended  IN  Senate  April 08, 2015
Amended  IN  Senate  April 06, 2015

CALIFORNIA LEGISLATURE— 2015–2016 REGULAR SESSION

Senate Bill
No. 481


Introduced by Senator Hueso

February 26, 2015


An act to amend Section 1236 of the Government Code, relating to local government.


LEGISLATIVE COUNSEL'S DIGEST


SB 481, Hueso. Local government: auditors: independence.
Existing law requires, with certain exceptions, that all city, county, city and county, and district employees who conduct audits or that conduct audit activities of those respective agencies, conduct their work under the general and specified standards prescribed by the Institute of Internal Auditors or the Government Auditing Standards issued by the Comptroller General of the United States, as appropriate. Those standards generally provide, among other things, that auditors should be independent of the activities they audit. Existing law makes every willful omission to perform any duty enjoined by law upon any public officer, or person holding any public trust or employment, where no special provision is made for the punishment of that delinquency, a crime.
This bill would prohibit the general counsel of the city, county, city and county, or district, or the employees of the general counsel from having direct oversight over the city, county, city and county, and district employees that conduct audits or that conduct audit activities of those respective agencies.
By expanding the definition of an existing crime, this bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

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


SECTION 1.

 Section 1236 of the Government Code is amended to read:

1236.
 (a) All city, county, city and county, and district employees that conduct audits or that conduct audit activities of those respective agencies shall conduct their work under the general and specified standards prescribed by the Institute of Internal Auditors or the Government Auditing Standards issued by the Comptroller General of the United States, as appropriate. The standards generally provide as follows:
(1) That auditors should be independent of the activities they audit.
(2) That audits should be performed with proficiency and due professional care.
(3) That the scope of the audit should encompass the examination and evaluation of the adequacy and effectiveness of the organization’s system of internal control and the quality of performance in carrying out assigned responsibilities.
(4) That audit work should include planning the audit, examining and evaluating information, communicating results, and following up.
(5) That the chief auditor should properly manage the auditing department.
(b) Nothing in this section is intended to limit the rights or obligations of auditors to conduct audits and audit activities in accordance with other laws and regulations that may apply to a particular entity, as appropriate.
(c) The general counsel of the city, county, city and county, or district, or the employees of the general counsel shall not have direct oversight over the city, county, city and county, or district employees that conduct audits or that conduct audit activities of the respective agency.

SEC. 2.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.