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Article 2. Accounting, Budget Controls And Audits of California Education Code >> Division 7. >> Title 3. >> Part 50. >> Chapter 1. >> Article 2.
The accounting system including the uniform fund structure
used to record the financial affairs of any community college
district shall be in accordance with the definitions, instructions,
and procedures published in the California Community Colleges Budget
and Accounting Manual as approved by the board of governors and
furnished by the board of governors. No accounting manual so approved
shall expressly or by implication affect the content of any
educational program or objective, except as otherwise specifically
provided for by this code. The Legislature hereby finds that the
content shall be best determined by those involved in the
administration of educational programs, including community college
district governing boards, local administrators, instructors, and
students.
(a) It is the intent of the Legislature to encourage sound
fiscal management practices among community college districts for the
most efficient and effective use of public funds for the education
of community college students by strengthening fiscal accountability
at the district and state levels.
(b) The governing board of each community college district shall provide for an annual audit of all funds, books, and accounts of the district in accordance with regulations of the board of governors. The audit shall be made by certified public accountants licensed by the California Board of Accountancy. In the event the governing board of a community college district fails to provide for an audit, the board of governors shall provide for an audit, and if the board of governors fails or is unable to make satisfactory arrangements for such an audit, the Department of Finance shall make arrangements for the audit. The cost of any audit described above shall be paid from district funds.
(c) The board of governors shall adopt criteria and standards for periodic assessment of the fiscal condition of community college districts, and such regulations regarding the review and improvement of district fiscal conditions as necessary to encourage sound fiscal management practices. In so doing:
(1) The governing board of a community college district, as required by regulations of the board of governors, shall periodically report information to the board of governors regarding the fiscal condition of the district.
(2) The board of governors, by regulation, shall develop standards for district maintenance of sound fiscal conditions. The regulations shall authorize a board comprehensive management review of any community college district which, after assessing itself or being assessed in accordance with board criteria and standards, is shown to be experiencing fiscal difficulty. On the basis of the findings of the management review, the board of governors may recommend appropriate changes in a district's management practices.
(3) The board of governors, by regulation, shall develop appropriate procedures and actions for districts that fail to achieve fiscal stability or that fail to comply with the board of governors' recommendations. The procedures and remedies may include the appointment of a special trustee to manage the community college district. The regulations pursuant to which the board of governors may appoint a special trustee to manage the community college district shall include specific benchmarks to indicate the presence of local capacity to resume management of the community college district and clear standards that require meaningful consultation by a special trustee, or his or her designee, with the community college district prior to decisionmaking. The board of governors shall be authorized to reduce or withhold apportionment to districts to pay for the cost of the special trustee, management review, or other extraordinary costs resulting from the district's fiscal difficulties and to ensure the stabilization of the district's financial condition.
(4) The board of governors shall report to the chairs of the educational policy and fiscal committees of both houses of the Legislature, the Director of Finance, and the Governor any corrective action taken by the district and any action taken against the district pursuant to paragraph (3).
(b) The governing board of each community college district shall provide for an annual audit of all funds, books, and accounts of the district in accordance with regulations of the board of governors. The audit shall be made by certified public accountants licensed by the California Board of Accountancy. In the event the governing board of a community college district fails to provide for an audit, the board of governors shall provide for an audit, and if the board of governors fails or is unable to make satisfactory arrangements for such an audit, the Department of Finance shall make arrangements for the audit. The cost of any audit described above shall be paid from district funds.
(c) The board of governors shall adopt criteria and standards for periodic assessment of the fiscal condition of community college districts, and such regulations regarding the review and improvement of district fiscal conditions as necessary to encourage sound fiscal management practices. In so doing:
(1) The governing board of a community college district, as required by regulations of the board of governors, shall periodically report information to the board of governors regarding the fiscal condition of the district.
(2) The board of governors, by regulation, shall develop standards for district maintenance of sound fiscal conditions. The regulations shall authorize a board comprehensive management review of any community college district which, after assessing itself or being assessed in accordance with board criteria and standards, is shown to be experiencing fiscal difficulty. On the basis of the findings of the management review, the board of governors may recommend appropriate changes in a district's management practices.
(3) The board of governors, by regulation, shall develop appropriate procedures and actions for districts that fail to achieve fiscal stability or that fail to comply with the board of governors' recommendations. The procedures and remedies may include the appointment of a special trustee to manage the community college district. The regulations pursuant to which the board of governors may appoint a special trustee to manage the community college district shall include specific benchmarks to indicate the presence of local capacity to resume management of the community college district and clear standards that require meaningful consultation by a special trustee, or his or her designee, with the community college district prior to decisionmaking. The board of governors shall be authorized to reduce or withhold apportionment to districts to pay for the cost of the special trustee, management review, or other extraordinary costs resulting from the district's fiscal difficulties and to ensure the stabilization of the district's financial condition.
(4) The board of governors shall report to the chairs of the educational policy and fiscal committees of both houses of the Legislature, the Director of Finance, and the Governor any corrective action taken by the district and any action taken against the district pursuant to paragraph (3).
Each organization that is described in Section 501(c)(3)
of the Internal Revenue Code of 1954, 26 U.S.C. 501(c)(3), and that
is recognized by the governing board of a community college district
as having a formal relationship with, and that is working on behalf
of, the district or a community college within the district, shall
file a copy of its audited financial report for the previous fiscal
year or its annual financial report for the previous fiscal year with
the governing board on or before April 1 of each year.
(a) The board of governors, in cooperation with, and upon
approval by, the Department of Finance, shall prescribe the
statements and other information to be included in the audit reports
filed with the state and shall develop audit procedures for carrying
out the purposes of this section. The Department of Finance may make
audits, surveys, and reports which, in the judgment of the department
will serve the best interest of the state.
(b) A review of existing audit procedures, statements, and other information required to be included in the audit reports shall be conducted periodically by the board of governors, in cooperation with the Department of Finance. Standards shall be updated periodically.
(c) For the audit of community colleges electing to take formal action pursuant to Sections 22714, 22714.5, 87488, and 87488.1, the audit standards shall require any information as is prescribed by the chancellor, including, but not limited to, the following:
(1) The number and type of positions being vacated.
(2) The age and service credit of the retirees receiving the additional service credit provided by Sections 22714 and 87488.
(3) A comparison of the salary and benefits of each retiree receiving the additional service credit with the salary and benefits of the replacement employee, if any.
(4) The resulting retirement costs, including interest, if any, and postretirement healthcare benefits costs, incurred by the employer.
(d) The chancellor shall annually prepare a cost analysis, based upon the information included in the audit reports for the prior fiscal year, to determine the net savings or costs resulting from formal actions taken by community college districts pursuant to Sections 22714, 22714.5, 87488, and 87488.1, and shall report the results of the cost analysis to the Governor and the Legislature by April 1 of each year.
(e) All costs incurred by the board of governors to implement subdivision (c) shall be absorbed by the board of governors.
(f) At the request of the Department of Finance, each community college district that elects to take formal action pursuant to Sections 22714, 22714.5, 87488, and 87488.1 shall reimburse the Department of Finance for any related administrative costs incurred by the Department of Finance.
(b) A review of existing audit procedures, statements, and other information required to be included in the audit reports shall be conducted periodically by the board of governors, in cooperation with the Department of Finance. Standards shall be updated periodically.
(c) For the audit of community colleges electing to take formal action pursuant to Sections 22714, 22714.5, 87488, and 87488.1, the audit standards shall require any information as is prescribed by the chancellor, including, but not limited to, the following:
(1) The number and type of positions being vacated.
(2) The age and service credit of the retirees receiving the additional service credit provided by Sections 22714 and 87488.
(3) A comparison of the salary and benefits of each retiree receiving the additional service credit with the salary and benefits of the replacement employee, if any.
(4) The resulting retirement costs, including interest, if any, and postretirement healthcare benefits costs, incurred by the employer.
(d) The chancellor shall annually prepare a cost analysis, based upon the information included in the audit reports for the prior fiscal year, to determine the net savings or costs resulting from formal actions taken by community college districts pursuant to Sections 22714, 22714.5, 87488, and 87488.1, and shall report the results of the cost analysis to the Governor and the Legislature by April 1 of each year.
(e) All costs incurred by the board of governors to implement subdivision (c) shall be absorbed by the board of governors.
(f) At the request of the Department of Finance, each community college district that elects to take formal action pursuant to Sections 22714, 22714.5, 87488, and 87488.1 shall reimburse the Department of Finance for any related administrative costs incurred by the Department of Finance.
On June 30, 1991, and each year thereafter, the Board of
Governors of the California Community Colleges shall report to the
Joint Legislative Audit Committee on (1) the number and nature of
audit exceptions and estimated amount of funds involved in the
exceptions, (2) a list of districts which failed to file their audits
pursuant to Section 84040, and (3) the actions taken by the
department to eliminate audit exceptions and comply with management
improvement recommendations.
(a) The board of governors may request the County Office
Fiscal Crisis and Management Assistance Team (FCMAT) established
pursuant to Section 42127.8 to assist a community college district to
establish or maintain sound financial and budgetary conditions and
to comply with principles of sound fiscal management.
(b) The board of governors may recommend additional persons with expertise in community college fiscal accountability to serve as part of a FCMAT operation for the purposes of this section.
(c) The board of governors may request FCMAT to assist a community college district as follows:
(1) Whenever regulations adopted by the board of governors authorize contracting for a management review of the district and its educational programs or an audit of the financial conditions of the district.
(2) To provide management or fiscal crisis intervention, or both, for a community college district where a crisis presents an imminent threat to the fiscal integrity and security of that district. In these cases, the FCMAT shall have the authority, subject to regulations adopted by the board of governors, to stay or rescind any action of the district's governing board that is inconsistent with the district's fiscal integrity and security.
(d) The FCMAT shall submit a progress report to the affected district, to the board of governors, and to the chancellor at least every six months, or more frequently if that is required by the chancellor.
(e) Each community college district that receives assistance at the request of the board of governors under subdivision (a), (b), (c), or (d) shall be required to pay the full cost incurred by the unit for these purposes.
(f) If the board of governors requests the assistance of the FCMAT pursuant to paragraph (2) of subdivision (c), the chancellor shall provide the board of governors with a report that includes all of the following:
(1) An assessment of which events or activities led to the crisis.
(2) An action plan for addressing the deficiencies of the district.
(3) A process for assessing district progress in correcting deficiencies.
(4) Benchmarks that indicate the presence of local capacity to manage the fiscal responsibilities of the district.
(g) (1) Irrespective of whether the FCMAT has been requested by the board of governors to assist a district under this section, a district may request the FCMAT to do either or both of the following at district expense, in accordance with paragraph (2):
(A) Provide fiscal management assistance.
(B) Facilitate training for members of the district governing board and for any district employees whose responsibilities include addressing fiscal issues. Training services shall emphasize efforts to improve fiscal accountability and to expand the fiscal competency of the trainees.
(2) Each community college district that receives assistance at its request under this subdivision shall be required to pay the full cost incurred by the unit for that purpose.
(h) The board of governors shall develop and adopt any regulations that are necessary for the implementation of this section.
(b) The board of governors may recommend additional persons with expertise in community college fiscal accountability to serve as part of a FCMAT operation for the purposes of this section.
(c) The board of governors may request FCMAT to assist a community college district as follows:
(1) Whenever regulations adopted by the board of governors authorize contracting for a management review of the district and its educational programs or an audit of the financial conditions of the district.
(2) To provide management or fiscal crisis intervention, or both, for a community college district where a crisis presents an imminent threat to the fiscal integrity and security of that district. In these cases, the FCMAT shall have the authority, subject to regulations adopted by the board of governors, to stay or rescind any action of the district's governing board that is inconsistent with the district's fiscal integrity and security.
(d) The FCMAT shall submit a progress report to the affected district, to the board of governors, and to the chancellor at least every six months, or more frequently if that is required by the chancellor.
(e) Each community college district that receives assistance at the request of the board of governors under subdivision (a), (b), (c), or (d) shall be required to pay the full cost incurred by the unit for these purposes.
(f) If the board of governors requests the assistance of the FCMAT pursuant to paragraph (2) of subdivision (c), the chancellor shall provide the board of governors with a report that includes all of the following:
(1) An assessment of which events or activities led to the crisis.
(2) An action plan for addressing the deficiencies of the district.
(3) A process for assessing district progress in correcting deficiencies.
(4) Benchmarks that indicate the presence of local capacity to manage the fiscal responsibilities of the district.
(g) (1) Irrespective of whether the FCMAT has been requested by the board of governors to assist a district under this section, a district may request the FCMAT to do either or both of the following at district expense, in accordance with paragraph (2):
(A) Provide fiscal management assistance.
(B) Facilitate training for members of the district governing board and for any district employees whose responsibilities include addressing fiscal issues. Training services shall emphasize efforts to improve fiscal accountability and to expand the fiscal competency of the trainees.
(2) Each community college district that receives assistance at its request under this subdivision shall be required to pay the full cost incurred by the unit for that purpose.
(h) The board of governors shall develop and adopt any regulations that are necessary for the implementation of this section.
Except as provided in this section, any election held for
the purpose of permitting a community college district to exceed the
expenditure of district funds fixed by the Constitution or by the
statutes of the state shall be called, held, and conducted as nearly
as possible as are elections for the issuance of district bonds.
The notice of election shall contain only the following:
(a) The time and place or places of holding the election.
(b) The names of the officers appointed to conduct the election.
(c) The hours during the day in which the polls will be open.
(d) The amount by which it is proposed to increase the expenditures of the district during the school year.
(e) The total amount of proposed expenditures of the district, including the proposed increase, for the school year. The ballots used at the election shall contain the following language: "Shall the total authorized expenditures of the district be increased from ____ (naming the sum) to ____ (naming the sum) for the school year ____ (naming the school year)?" The hours during which the polls at the election are open shall be fixed in accordance with Section 14212 of the Elections Code.
(a) The time and place or places of holding the election.
(b) The names of the officers appointed to conduct the election.
(c) The hours during the day in which the polls will be open.
(d) The amount by which it is proposed to increase the expenditures of the district during the school year.
(e) The total amount of proposed expenditures of the district, including the proposed increase, for the school year. The ballots used at the election shall contain the following language: "Shall the total authorized expenditures of the district be increased from ____ (naming the sum) to ____ (naming the sum) for the school year ____ (naming the school year)?" The hours during which the polls at the election are open shall be fixed in accordance with Section 14212 of the Elections Code.
(a) (1) Notwithstanding any other law, and unless otherwise
prohibited under federal law, for the 2009-10 to 2014-15 fiscal
years, inclusive, community college districts may use funding
received, pursuant to subdivision (b), from any of the programs
listed in paragraph (2) that are contained in Item 6870-101-0001 of
Section 2.00 of the annual Budget Act, for the purposes of any of the
programs contained in Schedule (2) and Schedules (4) to (23),
inclusive, of Item 6870-101-0001 of Section 2.00 of the Budget Act of
2009.
(2) (A) Academic Senate for the Community Colleges.
(B) Equal Employment Opportunity.
(C) Part-time Faculty Health Insurance.
(D) Part-time Faculty Compensation.
(E) Part-time Faculty Office Hours.
(F) Economic Development.
(G) Transfer Education and Articulation.
(H) Physical Plant and Instructional Support.
(I) Campus Childcare Tax Bailout.
(b) For the 2009-10 to 2014-15 fiscal years, inclusive, the chancellor shall apportion from the amounts provided in the annual Budget Act for the programs enumerated in paragraph (2) of subdivision (a), an amount to a community college district, based on the same relative proportion that the community college district received in the 2008-09 fiscal year for the programs enumerated in paragraph (2) of subdivision (a). The amounts allocated shall be adjusted for any greater or lesser amount appropriated for the items enumerated in paragraph (2) of subdivision (a).
(c) (1) This section does not obligate the state to refund or repay reductions made pursuant to this section. A decision by a community college district to reduce funding pursuant to this section for a state-mandated local program shall constitute a waiver of the subvention of funds that the community college district is otherwise entitled to pursuant to Section 6 of Article XIII B of the California Constitution on the amount so reduced.
(2) If a community college district elects to use funding received pursuant to subdivision (b) in the manner authorized pursuant to subdivision (a), the governing board of the community college district shall, at a regularly scheduled open public hearing, take testimony from the public, discuss, and shall approve or disapprove the proposed use of funding.
(3) (A) If a community college district elects to use funding received pursuant to subdivision (b) in the manner authorized pursuant to subdivision (a), the community college district shall continue to report the expenditures pursuant to this section by using the appropriate codes to indicate the activities for which these funds were expended using the existing standard reporting process as determined by the chancellor.
(B) The chancellor shall collect the information in subparagraph (A) and shall provide that information to the Department of Finance and to the appropriate policy and budget committees of the Legislature on or before April 15, 2010, and annually thereafter by April 15 of each year, through 2016.
(d) For the 2009-10 to 2014-15 fiscal years, inclusive, community college districts that elect to use funding in the manner authorized pursuant to subdivision (a) shall be deemed to be in compliance with the program and funding requirements contained in statutory, regulatory, and provisional language, associated with the programs enumerated in subdivision (a).
(2) (A) Academic Senate for the Community Colleges.
(B) Equal Employment Opportunity.
(C) Part-time Faculty Health Insurance.
(D) Part-time Faculty Compensation.
(E) Part-time Faculty Office Hours.
(F) Economic Development.
(G) Transfer Education and Articulation.
(H) Physical Plant and Instructional Support.
(I) Campus Childcare Tax Bailout.
(b) For the 2009-10 to 2014-15 fiscal years, inclusive, the chancellor shall apportion from the amounts provided in the annual Budget Act for the programs enumerated in paragraph (2) of subdivision (a), an amount to a community college district, based on the same relative proportion that the community college district received in the 2008-09 fiscal year for the programs enumerated in paragraph (2) of subdivision (a). The amounts allocated shall be adjusted for any greater or lesser amount appropriated for the items enumerated in paragraph (2) of subdivision (a).
(c) (1) This section does not obligate the state to refund or repay reductions made pursuant to this section. A decision by a community college district to reduce funding pursuant to this section for a state-mandated local program shall constitute a waiver of the subvention of funds that the community college district is otherwise entitled to pursuant to Section 6 of Article XIII B of the California Constitution on the amount so reduced.
(2) If a community college district elects to use funding received pursuant to subdivision (b) in the manner authorized pursuant to subdivision (a), the governing board of the community college district shall, at a regularly scheduled open public hearing, take testimony from the public, discuss, and shall approve or disapprove the proposed use of funding.
(3) (A) If a community college district elects to use funding received pursuant to subdivision (b) in the manner authorized pursuant to subdivision (a), the community college district shall continue to report the expenditures pursuant to this section by using the appropriate codes to indicate the activities for which these funds were expended using the existing standard reporting process as determined by the chancellor.
(B) The chancellor shall collect the information in subparagraph (A) and shall provide that information to the Department of Finance and to the appropriate policy and budget committees of the Legislature on or before April 15, 2010, and annually thereafter by April 15 of each year, through 2016.
(d) For the 2009-10 to 2014-15 fiscal years, inclusive, community college districts that elect to use funding in the manner authorized pursuant to subdivision (a) shall be deemed to be in compliance with the program and funding requirements contained in statutory, regulatory, and provisional language, associated with the programs enumerated in subdivision (a).
(a) No later than December 31 of each fiscal year, the
Chancellor of the California Community Colleges shall submit reports
to the Department of Finance and the Legislature on the use of funds
appropriated in the Budget Act for the prior fiscal year for the
following purposes:
(1) The Student Success for Basic Skills Students program, including any outcomes associated with the use of funds.
(2) The Student Financial Aid Administration program, including the distribution of the funds, specific uses of the funds, strategies employed to reach low-income and disadvantaged students potentially eligible for financial aid, the extent to which community college districts were successful in increasing the number of students accessing financial aid, and the impact on student enrollment.
(3) The technical assistance provided to community college districts pursuant to the Student Success and Support Program.
(4) The Telecommunications and Technology Infrastructure program, including summaries of allocations and expenditures by program and by community college district.
(b) Reports to the Legislature pursuant to this section shall be submitted pursuant to Section 9795 of the Government Code.
(1) The Student Success for Basic Skills Students program, including any outcomes associated with the use of funds.
(2) The Student Financial Aid Administration program, including the distribution of the funds, specific uses of the funds, strategies employed to reach low-income and disadvantaged students potentially eligible for financial aid, the extent to which community college districts were successful in increasing the number of students accessing financial aid, and the impact on student enrollment.
(3) The technical assistance provided to community college districts pursuant to the Student Success and Support Program.
(4) The Telecommunications and Technology Infrastructure program, including summaries of allocations and expenditures by program and by community college district.
(b) Reports to the Legislature pursuant to this section shall be submitted pursuant to Section 9795 of the Government Code.
