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Warning! This is a not the current version of this legislative bill.
Italicized text includes proposed additions to law or the previous version of the bill.
Struck text includes proposed deletions to law or the previous version of the bill.

(pdf version)
CHAPTER 451
FILED WITH SECRETARY OF STATE OCTOBER 4, 2011
APPROVED BY GOVERNOR OCTOBER 4, 2011
PASSED THE SENATE AUGUST 31, 2011
PASSED THE ASSEMBLY SEPTEMBER 6, 2011
AMENDED IN SENATE AUGUST 15, 2011
AMENDED IN SENATE JUNE 22, 2011
AMENDED IN ASSEMBLY MAY 27, 2011

INTRODUCED BY Assembly Members Lara and Smyth
(Principal coauthor: Assembly Member Alejo)

JANUARY 25, 2011

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


LEGISLATIVE COUNSEL'S DIGEST


AB 187, Lara. State Auditor: audits: high-risk local government
agency audit program.
Existing law authorizes the State Auditor to establish a high-risk
government agency audit program for the purpose of identifying,
auditing, and issuing reports on any agency of the state that the
State Auditor identifies as being at high risk for the potential of
waste, fraud, abuse, and mismanagement or that has major challenges
associated with its economy, efficiency, or effectiveness.
This bill would, subject to specified conditions, authorize the
State Auditor to establish a high-risk local government agency audit
program to identify, audit, and issue reports on any local government
agency, including any city, county, or special district, or any
publicly created entity that the 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. The bill would also authorize the State
Auditor to consult with the Controller, Attorney General, and other
state agencies in identifying local government agencies that are at
high risk.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1. Section 8546.10 is added to the Government Code, to
read:
8546.10. (a) The 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 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 bureau, the State Auditor may 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 Bureau of State Audits 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) The State Auditor shall notify the Joint Legislative Audit
Committee whenever he or she identifies a local government as at
high risk.
(2) The 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 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
State Auditor establishes the program provided for in this section
and the State Auditor determines that a local agency is at high risk,
the 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.