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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)
AMENDED IN SENATE APRIL 9, 2012

INTRODUCED BY Senator Rubio

FEBRUARY 24, 2012

An act to amend Section 8546.10 8546
of the Government Code, relating to local government
the State Auditor .


LEGISLATIVE COUNSEL'S DIGEST


SB 1395, as amended, Rubio. State Auditor: local
government agency audit program.
reporting.
Existing law authorizes requires the
State 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 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
establish,
and annually report on, an equal employment opportunity program, as
specified
.
This bill would make technical, nonsubstantive changes to
this provision
instead require the State Auditor to
report in every even-numbered year
.
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no.


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

SECTION 1. Section 8546 of the
Government Code
is amended to read:
8546. It is the intent of the Legislature that the Bureau of
State Audits have the independence necessary to conduct all of its
audits in conformity with "Government Auditing Standards" published
by the Comptroller General of the United States and the standards
published by the American Institute of Certified Public Accountants,
free from influence of existing state control agencies that could be
the subject of audits conducted by the bureau. Therefore, all of the
following exclusions apply to the office:
(a) Notwithstanding Section 19790, the State Auditor shall
establish an equal employment opportunity program that shall meet the
criteria and objectives established by the State Personnel Board.
The State Auditor shall report annually every
even-numbered year
to the State Personnel Board and the
commission regarding the program.
(b) Notwithstanding Section 12470, the State Auditor shall be
responsible for maintaining its payroll system. In lieu of audits of
the uniform payroll system performed by the Controller or any other
department, the office shall contract pursuant to subdivision (e) of
Section 8544.5 for an annual audit of its payroll and financial
operations by an independent public accountant.
(c) Notwithstanding Section 13292, the State Auditor is delegated
the authority to establish and administer the fiscal and
administrative policies of the bureau in conformity with the State
Administrative Manual without oversight by the Department of Finance,
the Department of Information Technology, or any other state agency.

(d) Notwithstanding Section 11032, the State Auditor may approve
actual and necessary traveling expenses for travel outside the state
for officers and employees of the bureau.
(e) Notwithstanding Section 11033, the State Auditor or officers
and employees of the bureau may be absent from the state on business
of the state upon approval of the State Auditor or Chief Deputy State
Auditor.
(f) Sections 11040, 11042, and 11043 shall not apply to the Bureau
of State Audits. The State Auditor may employ legal counsel under
those terms that he or she deems necessary to conduct the legal
business of, or render legal counsel to, the State Auditor.
(g) The provisions and definitions of Article 2 (commencing with
Section 11342.510) of Chapter 3.5 of Division 3 shall not be
construed to include the Bureau of State Audits. The State Auditor
may adopt regulations necessary for the operation of the bureau
pursuant to the provisions of the Administrative Procedure Act
(Chapter 3.5 (commencing with Section 11340) of Division 3), but
these regulations shall not be subject to the review or approval of
the Office of Administrative Law.
(h) The State Auditor shall be exempt from all contract
requirements of the Public Contract Code that require oversight,
review, or approval by the Department of General Services or any
other state agency. The State Auditor may contract on behalf of the
State of California for goods and services that he or she deems
necessary for the furtherance of the purposes of the bureau.
(i) (1) Subject to Article VII of the California Constitution, the
State Auditor is delegated the authority to establish and administer
the personnel policies and practices of the Bureau of State Audits
in conformity with Part 2.6 (commencing with Section 19815) of
Division 5 of Title 2 without oversight or approval by the Department
of Personnel Administration.
(2) At the election of the State Auditor, officers and employees
of the bureau may participate in benefits programs administered by
the Department of Personnel Administration subject to the same
conditions for participation that apply to civil service employees in
other state agencies. For the purposes of benefits programs
administration only, the State Auditor is subject to the
determinations of the department. The Bureau of State Audits shall
reimburse the Department of Personnel Administration for the normal
administrative costs incurred by the Department of Personnel
Administration and for any extraordinary costs resulting from the
inclusion of the bureau employees in these state benefit programs.

SECTION 1.
Section 8546.10 of the Government
Code is amended 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 of that local agency.
(f) Audits conducted pursuant to this section shall be approved by
the Joint Legislative Audit Committee.