SECTIONS 53130-53138 - California Statutes

GOVERNMENT CODE

SECTION 53130-53138

53130. In connection with federal block grant funds which require
mandated financial and compliance auditing, the Legislature finds
that there is limited coordination of audits among federal, state,
and local auditors and independent public accountants auditing local
agencies, which may result in overlaps and gaps in audit coverage.
The Legislature further finds that it is essential to establish
audit procedures that conform to the standards of independence and
quality contained within the federal Standards for Audit of
Governmental Organizations, Programs, Activities and Functions.
Therefore, it is the intent of the Legislature to promote audit
coordination by designating the agencies listed in Section 12430 as
responsible for assuring that local agencies provide for or otherwise
adhere to federally mandated financial and compliance audit
requirements for block grant funds allocated to them.

53131. As used in this article:
(a) "Qualified state and local government auditors" means those
auditors employed by state and local governments that meet the
independence requirements set forth in the federal Standards for
Audit of Governmental Organizations, Programs, Activities and
Functions.
(b) "Independent public accountants" means a certified public
accountant, or a public accountant who is licensed by the California
Board of Accountancy who holds a valid permit to practice
accountancy.
(c) "Local agency" means a city, county, city and county, special
district, joint-powers agency, public corporation, nonprofit
corporation, or any other agency that is eligible to receive federal
block grant funds.
(d) "State department" means that state organization designated by
law or agreement that allocates block grant funds to local agencies
or is otherwise responsible for administering block grant funds.
(e) "Financial and compliance audit" means an audit that complies
with the financial and compliance audit requirements of the Standards
for Audit of Governmental Organizations, Programs, Activities and
Functions published by the United States General Accounting Office.
Organization wide financial and compliance audits required by
Federal Office of Management and Budget Circulars A-102 and A-110 are
acceptable for this purpose.

53132. State departments shall identify and provide to the
Controller listings of all agreements allocating block grant funds to
local agencies.

53133. The Controller shall identify and make available to local
agencies federally mandated financial and compliance block grant
audit requirements.

53134. (a) Local agencies shall have the option, pursuant to the
provisions of Section 53135, to provide for federally mandated
financial and compliance audits of block grant funds received from
state departments. If, however, a local agency does not elect to, or
fails to provide for, federally mandated financial and compliance
audits, or if it is determined by the administering state department
that a local agency warrants assistance in this function, the state
department shall notify the Controller, and the Controller shall
identify appropriate methods for accomplishing federally required
audits.
The decision of the Controller shall be based upon use of any
existing state audit relationship, whenever appropriate in view of
federal requirements, so as to avoid duplication and excess costs.
(b) The state shall rely on the audit arranged by the local agency
if the audit is conducted in accordance with the standards
promulgated by the state consistent with federal policy. Additional
work shall not duplicate these audits and shall be conducted only
upon approval of the Controller in consultation with the Department
of Finance.
(c) Audits performed pursuant to this article shall be conducted
not less frequently than every two years, or as specified by federal
law, by qualified state or local government auditors or independent
public accountants in accordance with the financial and compliance
requirements of federal Standards for Audit of Governmental
Organizations, Programs, Activities and Functions. These audits shall
be completed no later than six months after the close of the audit
period. If the provisions of this subdivision have not been met, the
Controller shall immediately notify the Governor and the Legislature
as to what corrective actions it intends to take.

53135. State agencies administering federal block grant programs
shall prepare audit plans based on audit plan guidelines developed no
later than December 1, 1982, by the agencies listed in Section
12430.
The audit plan guidelines shall include, but not be limited to,
provisions for the contractor to obtain independent federally
mandated audits of block grant funds, preaudit conditions, and
compliance indicators. The departmental audit plans shall give
preference to utilization of existing audit relationships where
consistent with federal independence standards.
State agencies shall prepare their audit plans for review and
approval by the agencies listed in Section 12430 in a timely fashion
and contract provisions shall be incorporated into all existing
contracts no later than February 1, 1983. Plans shall be adopted
annually each fiscal year thereafter no later than October 1.

53136. The Controller shall assure that audits conducted in
accordance with this article meet the federal audit requirements
provided pursuant to block grant laws and regulations.

53137. The Controller shall review and monitor audit report
findings to determine that both state and local entities have taken
appropriate corrective action, or shall make recommendations to state
departments for corrective action, including recovery and referral
for legal action, as appropriate.

53138. The Controller, the Department of Finance, the State Auditor'
s office, or other state department auditors may perform audit
activities pursuant to this article insofar as the standards of
independence contained in the "Government Auditing Standards"
published by the Comptroller General of the United States are met.