Section 84040 Of Article 2. Accounting, Budget Controls And Audits From California Education Code >> Division 7. >> Title 3. >> Part 50. >> Chapter 1. >> Article 2.
84040
. (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).