California Assembly Bill AB450 Amended / Bill

 BILL NUMBER: AB 450AMENDED BILL TEXT AMENDED IN ASSEMBLY MAY 2, 2011 INTRODUCED BY Assembly Member Wieckowski FEBRUARY 15, 2011 An act to amend  Section 89036 of the Education Code, and to amend  Section 12440.1 of the Government Code, relating to the California State University. LEGISLATIVE COUNSEL'S DIGEST AB 450, as amended, Wieckowski. California State University: audits. (1) Existing law requires the Trustees of the California State University to maintain records of certain vendor payments for 3 years and make those records available to the Controller for postaudit review, as needed  , and to contract with one or more public accounting firms to conduct specified financial statement and compliance audits without obtaining the approval of any other state officer or entity  .  This bill would provide that the trustees, in conjunction with the Controller, have the right, at reasonable times and upon reasonable notice, to examine the books, records, and other compilations of data of a services contractor, as defined, that relate to the provisions and requirements of all service contracts.   (2) Existing law authorizes the trustees to enter into agreements for the performance of acts or for the furnishing of services, facilities, materials, goods, supplies, or equipment, under certain conditions. The trustees are required to prescribe policies and procedures for the acquisition of services, facilities, materials, goods, supplies, or equipment, subject to specified criteria.   This bill would require the policies and procedures for the acquisition of services to specify that any direct or indirect rebates from a 3rd party be fully disclosed and credited to the campus or other unit of the university and be available for review as part of any audit conducted under specified provisions.   This bill instead would require the trustees to maintain those records for 5 years.   (2) Existing law requires the trustees to contract with one or more public accounting firms to conduct specified financial statement and compliance audits without obtaining the approval of any other state officer or entity. Internal and independent financial statement audits of the trustees are required to test compliance with procurement procedures and the integrity of the payments made.   This bill would require the trustees to contract with the public accounting firms pursuant to an open bidding process, and would specify that the Department of Finance shall have final approval over the selection of the accounting firm. It would require the internal and independent financial statement audits of the trustees to be conducted using generally accepted accounting principles. It would also delete the requirement of a test of compliance with procurement procedures and the integrity of the payments made, and instead would require that the audits include a determination of these factors.   (3) Existing law requires at least 10 individual campus audits to be conducted on a rotating basis, and requires each campus to be audited at least once every 2 years.   This bill would delete these provisions and instead would require that in addition to an annual statewide system audit, each campus be audited at least once every year.  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.   Section 89036 of the   Education Code   is amended to read:  89036. (a) (1) The trustees may enter into agreements with any public or private agency, officer, person, or institution, corporation, association, or foundation for the performance of acts or for the furnishing of services, facilities, materials, goods, supplies, or equipment by or for the trustees or for the joint performance of an act or function or the joint furnishing of services and facilities by the trustees and the other party to the agreement. (2)  (A)    Notwithstanding any other provision of law, the trustees shall prescribe policies and procedures for the acquisition of services, facilities, materials, goods, supplies, or equipment. The policies and procedures of the trustees for the acquisition of materials, goods, supplies, or equipment shall include competitive means for obtaining best value while complying with legislative intent regarding competitive bids or proposals as it is expressed in Article 3 (commencing with Section 10300) of Chapter 2 of Part 2 of Division 2 of the Public Contract Code, and may include the use of financing arrangements.  (B) The policies and procedures for the acquisition of services shall specify that any direct or indirect rebates from a third party shall be fully disclosed and credited to the campus or other unit of the university, and be available for review as part of any audit conducted pursuant to Section 89045 or Section 12440.1 of the Government Code.  (3) The trustees may enter into agreements with the federal government or any agency thereof in accordance with the procedures prescribed by the federal government or agency in order to receive the benefits of any federal statute extending benefits to the California State University or to California State University students, including, but not necessarily limited to, both of the following: (A) Agreements with any agency of the federal government for the education of persons in the service of the federal government. (B) Agreements with any agency of the federal government for the education of veterans. These agreements shall provide for payment of the maximum amount permitted under the act, or acts, of Congress under which the agreement is entered into. (4) Notwithstanding any other provision of law, the trustees have all power necessary to perform any acts, and comply with conditions, required or imposed by the federal government in order to receive the benefits. The trustees are vested with all necessary power and authority to cooperate with any agency of the federal government in the administration of any applicable act of Congress and rules and regulations adopted thereunder. (b) Notwithstanding any other provision of law, the trustees have all power necessary to award contracts to one or more contractors, at any one or more campuses, for the collection of delinquent education loans required to be repaid under federal law.  SECTION 1.   SEC. 2.  Section 12440.1 of the Government Code is amended to read: 12440.1. (a) The trustees, in conjunction with the Controller, shall implement a process that allows any campus or other unit of the university to make payments of obligations of the university from its revolving fund directly to all of its vendors. Notwithstanding Article 5 (commencing with Section 16400) of Chapter 2 of Part 2 of Division 4, or any other provision of law, the trustees may draw from funds appropriated to the university, for use as a revolving fund, amounts necessary to make payments of obligations of the university directly to vendors. In any fiscal year, the trustees shall obtain the approval of the Director of Finance to draw amounts in excess of 10 percent of the total appropriation to the university for that fiscal year for use as a revolving fund.  (b) The trustees, in conjunction with the Controller, shall have the right at reasonable times and upon reasonable notice to examine the books, records, and other compilations of data of the services contractor that relate to the provisions and requirements of all service contracts, including records related to any rebates received by a contractor from a third party as a consequence of, or incidental to, a contract.   (b)   (c)  Notwithstanding Sections 925.6, 12410, and 16403, or any other provision of law, the trustees shall maintain payment records for  five   three  years and make those records available to the Controller for postaudit review, as needed.  (c)   (d)  Notwithstanding Section 8546.4 or any other provision of law, the trustees shall, pursuant to an open bidding process, contract with one or more public accounting firms to conduct systemwide and individual campus annual financial statement and  compliance audits, with the Department of Finance to have final approval over the selection of the accounting firm. In addition to an annual systemwide audit, each campus shall be audited at least once every year.   (d)     The internal and independent financial statement audits of the trustees, conducted using generally accepted accounting principles, shall include a determination of compliance with   compliance audits without obtaining the approval of any other state officer or entity. At least 10 individual campus audits shall be conducted on a rotating basis, and each campus shall be audited at least once every two years.   (e)     The internal and independent financial statement audits of the trustees shall test compliance with  procurement procedures and the integrity of the payments made. The results of these audits shall be included in the biennial report required by Section 13405.  (e) As used in this section:   (f) As used in this section, the following terms have the following meanings:   (1) "Rebate" includes any return of monetary value, including, but not limited to, any volume discounts, allowances, or discount purchase incentives.   (2) "Services contractor" includes a contractor providing food, janitorial, laundry, maintenance, window cleaning, or landscape services.   (1)   (3)  "Trustees" means the Trustees of the California State University.  (2)   (4)  "University" means the California State University.