California Assembly Bill AB1891 Amended / Bill

 BILL NUMBER: AB 1891AMENDED BILL TEXT AMENDED IN SENATE JUNE 28, 2010 AMENDED IN SENATE JUNE 21, 2010 AMENDED IN SENATE MAY 27, 2010 INTRODUCED BY  Assembly Member   Portantino   Committee on Higher Education   (   Portantino (Chair), Block, Cook, Fong, Galgiani, Huber, Ma, and Ruskin   )  FEBRUARY 16, 2010  An act to amend Sections 8543, 8543.1, 8543.2, 8543.3, 8543.5, 8543.6, 8543.7, 8544, 8544.4, 8544.5, 8545, 8545.1, 8545.2, 8545.3, 8545.4, 8545.5, 8546, 8546.1, 8546.2, 8546.3, 8546.4, 8546.5, 8546.6, 8546.7, 8546.8, 8547.4, 8547.5, 8547.6, 8547.7, 8547.11, 8548.1, 8548.2, 8548.4, and 8548.9 of, and to amend the heading of Chapter 6.5 (commencing with Section 8543) of Division 1 of Title 2 of, the Government Code, relating to state government.   An act to add Article 8 (commencing with Section 550) to Chapter 3 of Part 1 of Division 1 of the Food and Agricultural Code, relating to agriculture.  LEGISLATIVE COUNSEL'S DIGEST AB 1891, as amended,  Portantino   Committee on Higher Education  .  State government: Bureau of State Audits and Inspector General .   Sustainable agriculture research agricultural chemicals.   Until January 1, 2010, existing law requested the Regents of the University of California to establish the Sustainable Agriculture Research and Education Program to support competitive grants to promote more research and education on sustainable agricultural practices, and to support the giving of instructions and practical demonstrations in agriculture.   This bill would reestablish this program, except it would not require the regents to biennially report to the Legislature on the program.   Existing law establishes the Bureau of State Audits under the direction of the Milton Marks "Little Hoover" Commission on California State Government Organization and Economy. Existing law provides that the duties of the bureau are to examine and report annually upon financial statements prepared by the executive branch and to perform other related assignments, including performance audits, mandated by statute.   This bill would rename the bureau the Bureau of State Audits and Inspector General and specify certain duties that the renamed bureau is to undertake as part of its existing responsibilities, relating to the investigation, review, and auditing of state entities under its jurisdiction. The bill would make conforming changes to existing law.  Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:  SECTION 1.   Article 8 (commencing with Section 550) is added to Chapter 3 of Part 1 of Division 1 of the   Food and Agricultural Code   , to read:   Article 8. Sustainable Agriculture 550. This article shall be known and may be cited as the Sustainable Agriculture Research and Education Act of 1986. 551. The Legislature finds and declares all of the following: (a) There is a growing movement in California and the nation to change farming techniques by adopting more resource-conserving, energy-efficient systems of agriculture. The objective of these changes is to produce agricultural products that may reduce the use of petrochemicals, improve means of biological pest management, improve soil productivity, improve erosion control, and improve irrigation, cultivation, and harvesting techniques. (b) Over the long term, adoption of more efficient resource-conserving systems of agricultural production can benefit both the producing and consuming public. (c) The resolution of many agricultural problems depends on immediate efforts to provide farmers with practices that are both resource conserving and economical for food producers, and to foster food production and distribution methods that reduce dependence on petroleum-based inputs. 552. The purpose of this article is to promote more research and education on sustainable agricultural practices, such as organic methods, biological control, and integrated pest managements, including the analysis of economic factors influencing the long-term sustainability of California agriculture. This article is intended to foster economically and ecologically beneficial means of soil improvement, pest management, irrigation, cultivation, harvesting, transportation, and marketing for California agriculture based on methods designed to accomplish all of the following: (a) The control of pests and diseases of agricultural importance through alternatives that reduce or eliminate the use of pesticides and petrochemicals. (b) The production, processing, and distribution of food and fiber in ways that consider the interactions among soil, plants, water, air, animals, tillage, machinery, labor, energy, and transportation to enhance agricultural efficiency, public health, and resource conservation. 553. (a) It is the intent of the Legislature that the Regents of the University of California establish the Sustainable Agriculture Research and Education Program to support all of the following: (1) Competitive grants for research on topics described in Section 552. (2) The giving of instructions and practical demonstrations in agriculture and imparting information through demonstrations, publications, and otherwise, and for printing and distribution of information in connection with the Sustainable Agriculture Research and Education Program. Where feasible, these demonstrations shall include field research conducted on cooperating farms. (3) Planning for and management of University of California farmlands committed to supporting long-term continuous research in sustainable agricultural practices and farming systems. (b) Those eligible to apply for competitive grants under subdivision (a) shall include individuals affiliated with public and private institutions of higher education and with nonprofit tax-exempt organizations. (c) All grant applications shall be subject to peer review for scientific merit. (d) In awarding grants, preference shall be given to projects that include field evaluation and offer the greatest potential for measurable progress toward attaining the long-term goals pursuant to Section 552. 554. (a) If the Sustainable Agriculture Research and Education Program is established by the regents, the President of the University of California shall establish and appoint a Program Advisory Committee and a Technical Advisory Committee. (b) The duties of the Program Advisory Committee shall include recommending goals and priorities for this program, including, but not limited to, reviewing the priority of grant applications. (c) The Program Advisory Committee shall be composed of a majority of individuals representing agriculture, as well as representatives from government, public organizations, and institutions of higher education, all of whom are knowledgeable regarding the issues and practices of sustainable agriculture. (d) The duties of the Technical Advisory Committee shall include making recommendations about the scientific merit of grant applications submitted pursuant to Section 553. (e) The Technical Advisory Committee shall be composed of faculty and staff of the University of California and other experts from outside the university. (f) Members of the Program Advisory Committee and Technical Advisory Committee who are not employed by the University of California shall be appointed for a period not exceeding three years and receive compensation for expenses incurred in the performance of their duties according to applicable university regulations and guidelines. 555. If the Sustainable Agriculture Research and Education Program is established by the regents, it shall be established from existing resources.   SECTION 1.   The heading of Chapter 6.5 (commencing with Section 8543) of Division 1 of Title 2 of the Government Code is amended to read: CHAPTER 6.5. STATE AUDITOR INSPECTOR GENERAL   SEC. 2.   Section 8543 of the Government Code is amended to read: 8543. (a) There is hereby created in state government the Bureau of State Audits and Inspector General under the direction of the Milton Marks "Little Hoover" Commission on California State Government Organization and Economy. In order to be free of organizational impairments to independence, the bureau shall be independent of the executive branch and legislative control. (b) Whenever a reference is made to the "Bureau of State Audits" by the provisions of any statute or regulation, it shall be construed as referring to the Bureau of State Audits and Inspector General.   SEC. 3.   Section 8543.1 of the Government Code is amended to read: 8543.1. The duties of the Bureau of State Audits and Inspector General are to examine and report annually upon the financial statements prepared by the executive branch of the state and to perform other related assignments, including performance audits, that are mandated by statute. For the purposes of this chapter "bureau" means the "Bureau of State Audits and Inspector General," unless the context clearly requires otherwise. The bureau shall, as part of its existing auditing, administrative, and investigative duties, detect, investigate, deter, and eliminate corruption, fraud, criminal activity, conflicts of interest, abuses of office, and waste in the state entities under its jurisdiction, including, but not limited to, state agencies, departments, divisions, offices, boards, and commissions. The bureau shall vigorously and fairly investigate allegations of misconduct and conduct audits and systematic reviews of state agency programs and procedures, and recommend improvements for positive and permanent reform of agency operations.   SEC. 4.   Section 8543.2 of the Government Code is amended to read: 8543.2. (a) The head of the bureau is the State Auditor Inspector General, who shall be appointed by the Governor from a list of three qualified individuals nominated by the Joint Legislative Audit Committee by a vote of at least a majority of the committee membership from each house of the Legislature. The term of any individual appointed as the State Auditor Inspector General shall be four years. Any vacancy in the office shall be filled in the same manner provided by this subdivision for a full term. (b) As the head of the bureau, the State Auditor Inspector General may establish constituent parts of the bureau to carry out the powers and duties of the bureau unless otherwise specified by law. (c) The bureau has a Chief Deputy State Auditor. (d) The bureau has a Chief Deputy State Inspector General.   SEC. 5.   Section 8543.3 of the Government Code is amended to read: 8543.3. The State Auditor Inspector General shall be chosen without reference to party affiliation and solely on the ground of fitness to perform the duties of the office. Prior to selection, the State Auditor Inspector General shall possess a combination of education and experience in auditing and management necessary to perform the duties of the office.   SEC. 6.   Section 8543.5 of the Government Code is amended to read: 8543.5. The Chief Deputy State Auditor shall be appointed by the State Auditor Inspector General. The Chief Deputy State Auditor shall carry out those duties prescribed by the State Auditor Inspector General and shall act for the State Auditor Inspector General when the State Auditor Inspector General is absent or unable to serve or when the office of the State Auditor Inspector General is vacant. The tenure of any incumbent Chief Deputy State Auditor shall expire on any date that an individual is appointed State Auditor Inspector General, but any incumbent Chief Deputy State Auditor may be reappointed pursuant to this section.   SEC. 7.   Section 8543.6 of the Government Code is amended to read: 8543.6. The State Auditor Inspector General may be removed for cause at any time by concurrent resolution of the Legislature. A State Auditor Inspector General removed pursuant to this section may not be reappointed to the office.   SEC. 8.   Section 8543.7 of the Government Code is amended to read: 8543.7. (a) The annual salary for the State Auditor Inspector General shall be equal to that of agency secretaries of the executive branch of government pursuant to Section 11550. (b) The State Auditor Inspector General shall be repaid all actual expenses incurred or paid by him or her in the discharge of his or her duties.   SEC. 9.   Section 8544 of the Government Code is amended to read: 8544. (a) Consistent with subdivision (i) of Section 8546, the State Auditor Inspector General may employ and fix the compensation, in accordance with Article VII of the California Constitution, of those professional assistants and technical, clerical, deputy state auditors, and other officers and employees as he or she deems necessary for the effective conduct of the work under his or her charge. (b) In establishing and adjusting classes of positions, and establishing and adjusting salary ranges for each class of position, to provide for the continued ability to attract and maintain qualified individuals within the bureau, consideration shall be given to the fact that the level of education, experience, knowledge, and ability required of the employees in the bureau is generally higher than that of state service generally, due to the unique duties and responsibilities imposed on the bureau and the relatively small number of employees. (c) When fixing compensation for employees, the State Auditor Inspector General shall consider prevailing rates for comparable service in other public employment and private business.   SEC. 10.   Section 8544.4 of the Government Code is amended to read: 8544.4. The permanent office of the State Auditor Inspector General shall be in Sacramento, where he or she shall be provided with suitable and sufficient offices. When in his or her judgment the conduct of the work requires, he or she may maintain offices at other places in the state.   SEC. 11.   Section 8544.5 of the Government Code is amended to read: 8544.5. (a) There is hereby established in the State Treasury the State Audit Fund. Notwithstanding Section 13340, the State Audit Fund is continuously appropriated for the expenses of the State Auditor Inspector General. There shall be appropriated annually in the Budget Act to the State Audit Fund, from the General Fund and the Central Service Cost Recovery Fund, the amount necessary to reimburse the State Audit Fund for the cost of audits to be performed that are not directly reimbursed under subdivision (c). "Cost of audits" means all direct and indirect costs of conducting the audits and any other expenses incurred by the State Auditor Inspector General in fulfilling his or her statutory responsibilities. (b) With regard to the funds appropriated pursuant to subdivision (a), upon certification by the State Auditor Inspector General of estimated costs on a monthly basis, the Controller shall transfer the amount thus certified from the General Fund or the Central Service Cost Recovery Fund, as applicable, to the State Audit Fund. The Controller shall thereafter issue warrants drawn against the State Audit Fund upon receipt of claims certified by the State Auditor Inspector General. (c) To ensure appropriate reimbursement from federal and special funds for the costs of the duties performed pursuant to Section 8546.3, the State Auditor Inspector General may directly bill state agencies for the costs incurred, subject to the approval of the Director of Finance. (d) To ensure adequate oversight of the operations of the bureau, the Milton Marks "Little Hoover" Commission on California State Government Organization and Economy shall annually obtain the services of an independent public accountant to audit the State Audit Fund and the operation of the bureau to assure compliance with state law, including Section 8546. The results of this audit shall be submitted to the commission and shall be a public record. (e) To ensure that audits of the Milton Marks "Little Hoover" Commission on California State Government Organization and Economy are conducted in conformity with government auditing standards, any audit of the commission that is required or permitted by law shall be conducted by the independent public accountant selected pursuant to subdivision (d).   SEC. 12.   Section 8545 of the Government Code is amended to read: 8545. The State Auditor Inspector General shall not destroy any papers or memoranda used to support a completed audit sooner than three years after the audit report is released to the public. All books, papers, records, and correspondence of the bureau pertaining to its work are public records subject to Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 and shall be filed at any of the regularly maintained offices of the State Auditor Inspector General, except that none of the following items or papers of which these items are a part shall be released to the public by the State Auditor Inspector General, his or her employees, or members of the commission: (a) Personal papers and correspondence of any person providing assistance to the State Auditor Inspector General when that person has requested in writing that his or her papers and correspondence be kept private and confidential. Those papers and correspondence shall become public records if the written request is withdrawn or upon the order of the State Auditor Inspector General. (b) Papers, correspondence, memoranda, or any substantive information pertaining to any audit not completed. (c) Papers, correspondence, or memoranda pertaining to any audit that has been completed, which papers, correspondence, or memoranda are not used in support of any report resulting from the audit.   SEC. 13.   Section 8545.1 of the Government Code is amended to read: 8545.1. (a) The State Auditor Inspector General, and any employee or former employee of the bureau, shall not divulge or make known to any person not employed by the bureau in any manner not expressly permitted by law any particulars of any record, document, or information the disclosure of which is restricted by law from release to the public. This prohibition includes, but is not limited to, the restrictions on the release of records, documents, or information set forth in Section 8545. (b) Subdivision (a) also applies to either of the following: (1) Any person or business entity that is contracting with or has contracted with the bureau and to the employees and former employees of that person or business entity. (2) The officers and employees of and any person or business entity that is contracting with or has contracted with any state or local governmental agency or publicly created entity that has assisted the bureau in the course of any audit or investigation or that has received a draft copy of any report or other draft document from the bureau for comment or review. (c) Any officer, employee, or person who discloses the particulars of any record, document, or other information in violation of this section is guilty of a misdemeanor.   SEC. 14.   Section 8545.2 of the Government Code is amended to read: 8545.2. (a) Notwithstanding any other provision of law, the State Auditor Inspector General during regular business hours shall have access to and authority to examine and reproduce, any and all books, accounts, reports, vouchers, correspondence files, and all other records, bank accounts, and money or other property, of any agency of the state, whether created by the California Constitution or otherwise, any local governmental entity, including any city, county, and school or special district, and any publicly created entity, for any audit or investigation. Any officer or employee of any agency or entity having these records or property in his or her possession, under his or her control, or otherwise having access to them, shall permit access to, and examination and reproduction thereof, upon the request of the State Auditor Inspector General or his or her authorized representative. (b) For the purposes of access to and examination and reproduction of the records and property described in subdivision (a), an authorized representative of the State Auditor Inspector General is an employee or officer of the state or local governmental agency or publicly created entity involved and is subject to any limitations on release of the information as may apply to an employee or officer of the state or local governmental agency or publicly created entity. For the purpose of conducting any audit or investigation, the State Auditor Inspector General or his or her authorized representative shall have access to the records and property of any public or private entity or person subject to review or regulation by the public agency or public entity being audited or investigated to the same extent that employees or officers of that agency or public entity have access. No provision of law providing for the confidentiality of any records or property shall prevent disclosure pursuant to subdivision (a), unless the provision specifically refers to and precludes access and examination and reproduction pursuant to subdivision (a). This subdivision does not apply to records compiled pursuant to Part 1 (commencing with Section 8900) or Part 2 (commencing with Section 10200) of Division 2. (c) Any officer or person who fails or refuses to permit access and examination and reproduction, as required by this section, is guilty of a misdemeanor.   SEC. 15.   Section 8545.3 of the Government Code is amended to read: 8545.3. It is a misdemeanor for the State Auditor Inspector General or any employee of the State Auditor Inspector General to release any information received pursuant to Section 10850 of the Welfare and Institutions Code or that is otherwise prohibited by law to be disclosed.   SEC. 16.   Section 8545.4 of the Government Code is amended to read: 8545.4. (a) In connection with any audit or investigation conducted by the State Auditor Inspector General, the State Auditor Inspector General or his or her designee, may do any of the following: (1) Administer oaths. (2) Certify to all official acts. (3) Issue subpoenas for the attendance of witnesses and the production of papers, books, accounts, or documents, or for the making of oral or written sworn statements, in any interview conducted as part of an audit or investigation. (b) Any subpoena issued under this section extends as process to all parts of the state and may be served by any person authorized to serve process of courts of record or by any person designated for that purpose by the State Auditor Inspector General or his or her designee. The person serving this process may receive compensation as allowed by the State Auditor Inspector General or his or her designee, not to exceed the fees prescribed by law for similar service. (c) Notwithstanding Section 7470, 7474, or 7491, subpoenas issued under this section for financial records of financial institutions concerning customers of financial institutions or for information contained in those records shall not be subject to the requirement or conditions of Section 7474.   SEC. 17.   Section 8545.5 of the Government Code is amended to read: 8545.5. (a) The superior court in the county in which any interview is held under the direction of the State Auditor Inspector General or his or her designee has jurisdiction to compel the attendance of witnesses, the making of oral or written sworn statements, and the production of papers, books, accounts, and documents, as required by any subpoena issued by the State Auditor Inspector General or his or her designee. (b) If any witness refuses to attend or testify or produce any papers required by the subpoena, the State Auditor Inspector General or his or her designee may petition the superior court in the county in which the hearing is pending for an order compelling the person to attend and answer questions under penalty of perjury or produce the papers required by the subpoena before the person named in the subpoena. The petition shall set forth all of the following: (1) That due notice of the time and place of attendance of the person or the production of the papers has been given. (2) That the person has been subpoenaed in the manner prescribed in Section 8545.4. (3) That the person has failed and refused to attend or produce the papers required by subpoena before the State Auditor Inspector General or his or her designee as named in the subpoena, or has refused to answer questions propounded to him or her in the course of the interview under penalty of perjury. (c) Upon the filing of the petition, the court shall enter an order directing the person to appear before the court at a specified time and place and then and there show cause why he or she has not attended, answered questions under penalty of perjury, or produced the papers as required. A copy of the order shall be served upon him or her. If it appears to the court that the subpoena was regularly issued by the State Auditor Inspector General or his or her designee, the court shall enter an order that the person appear before the person named in the subpoena at the time and place fixed in the order and answer questions under penalty of perjury or produce the required papers. Upon failure to obey the order, the person shall be dealt with as for contempt of court.   SEC. 18.   Section 8546 of the Government Code is amended to read: 8546. It is the intent of the Legislature that the bureau 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 Inspector General shall establish an equal employment opportunity program that shall meet the criteria and objectives established by the State Personnel Board. The State Auditor Inspector General shall report annually to the State Personnel Board and the commission regarding the program. (b) Notwithstanding Section 12470, the State Auditor Inspector General 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 Inspector General 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 Inspector General 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 Inspector General or officers and employees of the bureau may be absent from the state on business of the state upon approval of the State Auditor Inspector General or Chief Deputy State Auditor. (f) Sections 11040, 11042, and 11043 shall not apply to the Bureau of State Audits. The State Auditor Inspector General 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 Inspector General. (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 Inspector General 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 Inspector General 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 Inspector General 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 Inspector General 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 Inspector General, 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 Inspector General 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.   SEC. 19.   Section 8546.1 of the Government Code is amended to read: 8546.1. (a) The State Auditor Inspector General shall conduct financial and performance audits as directed by statute. The State Auditor Inspector General may conduct these audits of any state agency as defined by Section 11000, whether created by the California Constitution or otherwise, any local governmental agency, including any city, county, and school or special district, or any publicly created entity. However, the State Auditor Inspector General shall not audit the activities of the Milton Marks Commission on California State Government Organization and Economy or the Legislature to assure compliance with government auditing standards. (b) The State Auditor Inspector General shall conduct any audit of a state or local governmental agency or any other publicly created entity that is requested by the Joint Legislative Audit Committee to the extent that funding is available and in accordance with the priority established by the committee with respect to other audits requested by the committee. Members of the Legislature may submit requests for audits to the committee for its consideration and approval. Any audit request approved by the committee shall be forwarded to the State Auditor Inspector General as a committee request. (c) The State Auditor Inspector General shall complete any audit in a timely manner and in accordance with the "Government Auditing Standards" published by the Comptroller General of the United States. (d) Immediately upon completion of the audit, the State Auditor Inspector General shall transmit a copy of the audit report to the commission. Not later than 24 hours after delivery to the commission, the State Auditor Inspector General shall deliver the report to the Legislature, appropriate committees or subcommittees of the Legislature, and the Governor. Once transmitted to these parties, the report shall be made available to the public.   SEC. 20.   Section 8546.2 of the Government Code is amended to read: 8546.2. (a) The State Auditor Inspector General shall request that any state agency, as defined in Section 11000, whether created by the California Constitution or otherwise, any local governmental agency, including any city, county, city and county, school, or special district, or any publicly created entity, that is the subject of an audit or investigation conducted pursuant to this chapter provide updates on its progress in implementing the recommendations made by the State Auditor Inspector General, at intervals prescribed by the State Auditor Inspector General. (b) Any state agency described in subdivision (a) shall provide the State Auditor Inspector General, in the form prescribed by the State Auditor Inspector General, with updates on implementation of recommendations as described in subdivision (a).   SEC. 21.   Section 8546.3 of the Government Code is amended to read: 8546.3. The State Auditor Inspector General shall examine and report annually upon the financial statements otherwise prepared by the executive branch of the state so that the Legislature and the public will be informed of the adequacy of those financial statements in compliance with generally accepted accounting principles. In making that examination, the State Auditor Inspector General may make the audit examination of accounts and records, accounting procedures, and internal auditing performance that he or she determines to be necessary to disclose all material facts necessary to proper reporting in accordance with the federal Single Audit Act of 1984 (31 U.S.C. Section 7501 and following) and the purposes set forth in Section 8521.5.   SEC. 22.   Section 8546.4 of the Government Code is amended to read: 8546.4. (a) The State Auditor Inspector General shall annually issue an auditor's report based upon the general purpose financial statements included in the Controller's annual report that is submitted to the Governor pursuant to Section 12460. The report shall be in accordance with the "Government Auditing Standards" published by the Comptroller General of the United States and the standards published by the American Institute of Certified Public Accountants. (b) The State Auditor Inspector General, in the performance of this annual audit and any other audit or investigation undertaken by the bureau, may examine all the financial records, accounts, and documents of any state agency as defined by Section 11000. (c) The State Auditor Inspector General shall rely, to the maximum extent possible, upon the audits performed by the Controller, the Department of Finance, internal auditors of state agencies, and independent contractors. The Director of Finance shall be responsible for coordinating and providing technical assistance to the internal auditors of state agencies. Nothing in this article is intended to reduce or restrict the operations of internal auditors whose review of internal financial and administrative controls of state agencies is essential for coordinated audits. (d) State agencies receiving federal funds shall be primarily responsible for arranging for federally required financial and compliance audits. State agencies shall immediately notify the Director of Finance, the State Auditor Inspector General, and the Controller when they are required to obtain federally required financial and compliance audits. The Director of Finance, the State Auditor Inspector General, and the Controller shall coordinate the procurement by state agencies, including any negotiations with cognizant federal agencies, of federally required financial and compliance audits. (e) To prevent duplication of the annual audit conducted by the State Auditor Inspector General pursuant to subdivision (a), except for those state agencies that are required by state law to obtain an annual audit, no state agency shall enter into a contract for a financial or compliance audit without prior written approval of the Controller and the Director of Finance, which approval shall state the reason for the contract and shall be filed with the State Auditor Inspector General at least 30 days prior to the award of the contract. No funds appropriated by the Legislature shall be encumbered for the purpose of funding any contract for an audit that duplicates the annual financial audit conducted by the State Auditor Inspector General. (f) Notwithstanding any other provision of this article, nothing in this section shall be construed to limit, restrict, or otherwise infringe upon the constitutional or statutory authority of the Controller to superintend the fiscal concerns of the state. (g) Except as provided in subdivision (b), notwithstanding any other provision of this article, nothing in this section shall be construed to limit, restrict, or otherwise infringe upon the statutory authority of the Director of Finance to supervise the financial and business policies of the state.   SEC. 23.   Section 8546.5 of the Government Code is amended to read: 8546.5. (a) The State Auditor Inspector General may establish a high-risk government agency audit program for the purpose of identifying, auditing, and issuing reports on any agency of the state, whether created by the California Constitution or otherwise, that the State Auditor Inspector General 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. (b) In addition to identifying an agency as high risk on the basis of weaknesses identified in audit and investigative reports produced by the bureau, the State Auditor Inspector General may consult with the Legislative Analyst, the Milton Marks "Little Hoover" Commission on California State Government Organization and Economy, the Office of Inspector General within the Department of Corrections, the Department of Finance, and other state agencies that have oversight responsibilities over any other agency of the state, in identifying state agencies that are at high risk. (c) The State Auditor Inspector General shall notify the Joint Legislative Audit Committee whenever it identifies a state agency as at high risk. (d) The State Auditor Inspector General may issue audit reports with recommendations for improvement in state agencies identified as at high risk not less than once every two years. (e) The State Auditor Inspector General may require state agencies identified as high risk to periodically report to the auditor regarding the status of recommendations for improvement made by the State Auditor Inspector General or other state oversight agencies.   SEC. 24.   Section 8546.6 of the Government Code is amended to read: 8546.6. The State Auditor Inspector General, in connection with any audit or investigation conducted pursuant to this chapter, shall be deemed to be a department head for the purposes of Section 11189.   SEC. 25.   Section 8546.7 of the Government Code is amended to read: 8546.7. Notwithstanding any other provision of law, every contract involving the expenditure of public funds in excess of ten thousand dollars ($10,000) entered into by any state agency, board, commission, or department or by any other public entity, including a city, county, city and county, or district, shall be subject to the examination and audit of the State Auditor Inspector General, at the request of the public entity or as part of any audit of the public entity, for a period of three years after final payment under the contract. Every contract shall contain a provision stating that the contracting parties shall be subject to that examination and audit. The failure of a contract to contain this provision shall not preclude the State Auditor Inspector General from conducting an examination and audit of the contract at the request of the public entity entering into the contract or as part of any audit of the public entity. It is the intent of the Legislature that the Regents of the University of California include in contracts involving the expenditure of state funds in excess of ten thousand dollars ($10,000) a provision stating that the contracting parties shall be subject to the examination and audit of the State Auditor Inspector General, at the request of the regents or as part of any audit of the university, for a period of three years after final payment under the contract. The examinations and audits under this section shall be confined to those matters connected with the performance of the contract, including, but not limited to, the costs of administering the contract.   SEC. 26.   Section 8546.8 of the Government Code is amended to read: 8546.8. Unless the contrary is stated or clearly appears from the context, any reference to the Auditor General or the Office of the Auditor General in any statute or contract in effect on the effective date of this chapter, other than Chapter 4 (commencing with Section 10500), with respect to the performance of audits, shall be construed to refer to the State Auditor Inspector General and the Bureau of State Audits and Inspector General, respectively.   SEC. 27.   Section 8547.4 of the Government Code is amended to read: 8547.4. The State Auditor Inspector General shall administer this article and shall investigate and report on improper governmental activities. If, after investigating, the State Auditor Inspector General finds that an employee may have engaged or participated in improper governmental activities, the State Auditor Inspector General shall prepare an investigative report and send a copy of the investigative report to the employee's appointing power. Subject to the limitations of Section 8547.5, the State Auditor Inspector General may provide to the employee's appointing power any evidence gathered during the investigation that, in the judgment of the State Auditor Inspector General, is necessary to support an adverse action or an action recommended pursuant to subdivision (a) of Section 8547.7. Within 60 days after receiving a copy of the State Auditor Inspector General's investigative report, the appointing power shall either serve a notice of adverse action upon the employee who is the subject of the investigative report or set forth in writing its reasons for not taking adverse action. The appointing power shall file a copy of the notice of adverse action with the State Personnel Board in accordance with Section 19574, and shall submit a copy to the State Auditor Inspector General. If the appointing power does not take adverse action within 60 days of receiving a copy of the State Auditor Inspector General's investigative report, it shall submit its written reasons for not doing so to the State Auditor Inspector General and the State Personnel Board, and adverse action may be taken as provided in Section 19583.5. Any employee who is served with a notice of adverse action may appeal to the State Personnel Board in accordance with Section 19575.   SEC. 28.   Section 8547.5 of the Government Code is amended to read: 8547.5. (a) The State Auditor Inspector General shall create the means for the submission of allegations of improper governmental activity both by transmission via mail or other carrier to a specified mailing address and electronic submission through an Internet Web site portal. The State Auditor Inspector General may request that a person submitting an allegation provide his or her name and contact information and provide the names and contact information for any persons who could help to substantiate the claim. However, the State Auditor Inspector General shall not require any person submitting an allegation to provide his or her name or contact information and shall clearly state on the agency Web site that this information is not required in order to submit an allegation. (b) Upon receiving specific information that any employee or state agency has engaged in an improper governmental activity, the State Auditor Inspector General may conduct an investigation of the matter. The identity of the person providing the information that initiated the investigation, or of any person providing information in confidence to further an investigation, shall not be disclosed without the written permission of the person providing the information except that the State Auditor Inspector General may make the disclosure to a law enforcement agency that is conducting a criminal investigation.   SEC. 29.   Section 8547.6 of the Government Code is amended to read: 8547.6. The State Auditor Inspector General may request the assistance of any state department, agency, or employee in conducting any investigation required by this article. If an investigation conducted by the State Auditor Inspector General involves access to confidential academic peer review records of University of California academic personnel, these records shall be provided in a form consistent with university policy effective on August 1, 1992. No information obtained from the State Auditor Inspector General by any department, agency, or employee as a result of the State Auditor Inspector General's request for assistance, nor any information obtained thereafter as a result of further investigation, shall be divulged or made known to any person without the prior approval of the State Auditor Inspector General.   SEC. 30.   Section 8547.7 of the Government Code is amended to read: 8547.7. (a) If the State Auditor Inspector General determines that there is reasonable cause to believe that an employee or state agency has engaged in any improper governmental activity, he or she shall report the nature and details of the activity to the head of the employing agency, or the appropriate appointing authority, and may include recommended actions to prevent the continuation or recurrence of the activity. If appropriate, the State Auditor Inspector General shall report this information to the Attorney General, the policy committees of the Senate and Assembly having jurisdiction over the subject involved, and to any other authority that the State Auditor Inspector General determines appropriate. (b) The State Auditor Inspector General shall not have any enforcement power. In any case in which the State Auditor Inspector General submits a report of alleged improper activity to the head of the employing agency or appropriate appointing authority, that individual shall report to the State Auditor Inspector General with respect to any action taken by the individual regarding the activity, the first report being transmitted no later than 60 days after the date of the State Auditor Inspector General's report and monthly thereafter until final action has been taken. (c) The State Auditor Inspector General shall keep confidential every investigation, including, but not limited to, all investigative files and work product, except that the State Auditor Inspector General may issue any report of an investigation that has been substantiated, keeping confidential the identity of the individual or individuals involved, or, subject to the limitations of Section 8547.5, release any findings or evidence supporting any findings resulting from an investigation conducted pursuant to this article that is deemed necessary to serve the interests of the state. (d) This section does not limit any authority conferred upon the Attorney General or any other department or agency of government to investigate any matter.   SEC. 31.   Section 8547.11 of the Government Code is amended to read: 8547.11. (a) A University of California employee, including an officer or faculty member, may not directly or indirectly use or attempt to use the official authority or influence of the employee for the purpose of intimidating, threatening, coercing, commanding, or attempting to intimidate, threaten, coerce, or command any person for the purpose of interfering with the right of that person to disclose to a University of California official, designated for that purpose by the regents, or the State Auditor Inspector General matters within the scope of this article. (b) For the purpose of subdivision (a), "use of official authority or influence" includes promising to confer, or conferring, any benefit; effecting, or threatening to effect, any reprisal; or taking or directing others to take, or recommending, processing, or approving, any personnel action, including, but not limited to, appointment, promotion, transfer, assignment, performance evaluation, suspension, or other disciplinary action. (c) Any employee who violates subdivision (a) may be liable in an action for civil damages brought against the employee by the offended party. (d) Nothing in this section shall be construed to authorize an individual to disclose information otherwise prohibited by or under law.   SEC. 32.   Section 8548.1 of the Government Code is amended to read: 8548.1. No later than April 1, 2002, the State Auditor Inspector General shall prepare for state employees a written explanation of the California Whistleblower Protection Act contained in Article 3 (commencing with Section 8547). The explanation shall include, but not be limited to, the following information: (a) Instructions on how to contact the State Auditor Inspector General by mail or telephone. (b) A general overview of improper governmental activities and examples of three of the most common types of improper governmental activities that may be reported to the State Auditor Inspector General. (c) Examples of two of the most commonly reported governmental activities that the State Auditor Inspector General does not have authority to investigate. (d) An explanation of whistleblower protection available to state employees who report improper governmental activities to the State Auditor Inspector General. (e) The requirement that the State Auditor Inspector General protect the anonymity of a person who reports improper governmental activity to the State Auditor Inspector General. (f) The State Auditor Inspector General's authority in connection with violations of law discovered during an investigation of improper governmental activities.   SEC. 33.   Section 8548.2 of the Government Code is amended to read: 8548.2. The State Auditor Inspector General shall prepare for distribution to each state agency in an electronic format a notice containing the information in the written explanation prepared pursuant to Section 8548.1. No later than July 1, 2002, each state agency shall print and post this notice at its state office or offices in a location or locations where employee notices are maintained. A state agency shall not edit the written text of the notice but it may publish the notice in a manner it chooses, and it may include its own introductory language in the notice, provided that the language and the format selected do not alter the meaning of the notice.   SEC. 34.   Section 8548.4 of the Government Code is amended to read: 8548.4. The State Auditor Inspector General shall post the information described in Section 8548.1 on the Web site of the bureau.   SEC. 35.   Section 8548.9 of the Government Code is amended to read: 8548.9. (a) The State Auditor Inspector General shall, by January 15th of each year, report to the Joint Legislative Budget Committee, the Joint Legislative Audit Committee, and the Department of Finance with respect to each recommendation he or she has made based on an audit or investigation that was reported more than one year prior and that has not been fully implemented by the affected agency. (b) The report shall clearly identify the state agency audited or investigated, the audit or investigation that contained the recommendation, a brief description of the recommendation, the date it was issued, and the most recent explanation provided by the agency to the State Auditor Inspector General on the status of the recommendation. (c) Any state agency that is notified by the State Auditor Inspector General that it has not fully implemented a recommendation made pursuant to this chapter more than one year prior, shall do either of the following: (1) Provide a written report to the State Auditor Inspector General, the respective policy committees and budget subcommittees of the Assembly and Senate with oversight of the agency, and the Department of Finance, explaining why the audit recommendation or investigation has not been fully implemented. (2) Notify all entities described in subdivision (a) that it will begin implementing the audit recommendation or investigation recommendation within 90 days of the notification by the State Auditor Inspector General, and include the estimated date of full implementation.