41010. The accounting system used to record the financial affairs
of any school district shall be in accordance with the definitions,
instructions, and procedures published in the California School
Accounting Manual as approved by the State Board of Education and
furnished by the Superintendent of Public Instruction. 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 such content shall be best determined by those involved in the
administration of educational programs, including school district
governing boards, local administrators, teachers, students, and
parents.
41011. The accounting system used to record the financial affairs
of any school district shall be designed to provide separate
recording and clear distinction between expenditures for salaries of
classroom teachers employed by the district and expenditures for
other purposes of the district.
As used in this section "salaries of classroom teachers" means:
(a) The salary paid to each teacher employed by the district whose
duties require that the full time for which the teacher is employed
be devoted to the teaching of pupils of the district.
(b) The portion of the salary of each teacher whose duties require
that a part, but not all, of the full time for which the teacher is
employed be devoted to the teaching of pupils of the district, which
is equal to the portion of such full time actually devoted by the
teacher to teaching pupils of the district.
(c) The salary paid to each instructional aide employed by the
district, any portion of whose duties are required to be performed
under the supervision of a classroom teacher.
As used in this section a "teacher" means an employee of the
district employed in a position requiring certification
qualifications and whose duties require him to teach pupils of the
district for at least one full instructional period each schoolday
for which the employee is employed. In the case of a teacher employed
to teach in an elementary school, an instructional period is a
period of not less than 20 minutes. In the case of a teacher employed
to teach in a secondary school, an instructional period is the
number of minutes equal to the number of minutes of the regular
academic period in the junior high school, or high school, in which
the teacher is employed to teach.
41012. For purposes of determining allowances pursuant to Chapter 8
(commencing with Section 52200) of Part 28, and Chapter 3
(commencing with Section 56500) and Chapter 4 (commencing with
Section 56600) of Part 30, the Superintendent of Public Instruction
shall require the use of a uniform cost accounting procedure, as set
forth in the California School Accounting Manual.
41013. For the purpose of achieving clarity and uniformity in the
budgeting and reporting of school district expenditures by funds,
whenever certain expenditures for the children's center program, the
development center for handicapped minors program, or any similar
program, except the food service program, for which a special fund is
required by law, are: (1) authorized by law and by action of the
governing board to be paid from the general fund of the school
district, or (2) required by law to be paid from the general fund of
the school district, the amount estimated or actually required to
meet these expenditures shall be transferred or paid from the general
fund to the children's center fund, the development center for
handicapped minors fund, or other special fund as appropriate.
Any amount transferred or paid in excess of the amount actually
required shall be refunded to the general fund.
The Superintendent of Public Instruction is hereby authorized to
adopt rules and regulations governing the method of accounting for
said payments and transfers.
41014. Excepting only as provided in Article 1 (commencing with
Section 41000) and this article, all constitutional and statutory
limitations on the purposes for which moneys derived from particular
specified sources may be expended, and all statutory provisions
relative to the establishment of specified school district funds,
shall be administered by county superintendents of schools, or in the
discretion of county auditors, by county superintendents of schools
and county auditors by means of budgetary accounting and not by the
establishment and maintenance in the county or city and county
treasury of special school district funds.
41015. The governing board of any school district or any county
office of education which has funds in a special reserve fund of the
district or county office of education or any surplus moneys not
required for the immediate necessities of the district or county
office of education, is hereby authorized to invest all or any part
of the funds in any of the investments specified in Section 16430 or
53601 of the Government Code.
41016. The governing board of a school district which has made an
investment pursuant to the authority of Section 41015 may deposit
such security for safekeeping with a state or national bank or trust
company located within this state or with the Federal Reserve Bank of
San Francisco or any branch thereof within the state, or with any
Federal Reserve bank or with any state or national bank located in
any city designated as a reserve city by the Board of Governors of
the Federal Reserve System. The governing board shall take from such
bank a receipt for the security so deposited. The county treasurer
with whom such funds if uninvested would be deposited shall not be
responsible for securities delivered to and receipted for by a bank
under the authority of this section until they are withdrawn from the
bank by said treasurer.
41017. The governing board of any school district or any county
office of education may authorize any school district governed by it,
or any school under its jurisdiction to deposit in one or more bank
accounts as clearing accounts any miscellaneous receipts, including
receipts from the sale of property or materials pursuant to Section
39526 or 39527, received or collected by the school district or
county office of education, and may provide for the withdrawals from
those accounts. All moneys in those bank accounts shall be paid into
the county treasury within the time periods specified pursuant to
Section 41001. Cashiers' checks, certified checks, and money placed
in the custody of the school district or county office of education
as security that a bidder will execute or faithfully perform a
contract, if awarded to him or her, may be deposited in those bank
accounts but shall not be paid into the county treasury to the credit
of the school district or county office of education unless
forfeited or unless unclaimed by the bidder for a period of 12
months.
Such bank accounts shall not be subject to the deposit of funds
provisions of Article 2 (commencing with Section 53630) of Chapter 4
of Part 1 of Division 2 of Title 5 of the Government Code, except to
the extent provided by Section 53679 of the Government Code.
41018. The governing board of any school district or any county
office of education having an average daily attendance of 100,000 or
more may deposit in one or more bank accounts moneys received from
the temporary rental of property acquired by a school district or
county office of education pending construction of school facilities
on the property. The moneys may be held in the accounts for a period
of not to exceed three years and may be used to pay any proper costs
incurred as a result of the temporary rental, provided that when the
moneys are not being used to pay the costs they may be invested,
along with all other moneys deposited in clearing accounts, pursuant
to Section 41015 as determined by the governing board of the school
district or the county office of education. The moneys invested
pursuant to this section shall be invested with the care, skill,
prudence, and diligence under the circumstances then prevailing that
a prudent person acting in a like capacity and familiar with these
matters would use in the conduct of an enterprise of like character
and with like aims.
41019. The governing board of any school district which maintains
clearing accounts, cafeteria accounts, and other accounts in a bank
or banks, pursuant to Section 41017 or 39892, or pursuant to any
other provisions of law, may contract and pay for the expenses of
transporting money to and from such bank or banks.
41020. (a) It is the intent of the Legislature to encourage sound
fiscal management practices among local educational agencies for the
most efficient and effective use of public funds for the education of
children in California by strengthening fiscal accountability at the
district, county, and state levels.
(b) (1) Not later than the first day of May of each fiscal year,
each county superintendent of schools shall provide for an audit of
all funds under his or her jurisdiction and control and the governing
board of each local educational agency shall either provide for an
audit of the books and accounts of the local educational agency,
including an audit of income and expenditures by source of funds, or
make arrangements with the county superintendent of schools having
jurisdiction over the local educational agency to provide for that
auditing.
(2) A contract to perform the audit of a local educational agency
that has a disapproved budget or has received a negative
certification on any budget or interim financial report during the
current fiscal year or either of the two preceding fiscal years, or
for which the county superintendent of schools has otherwise
determined that a lack of going concern exists, is not valid unless
approved by the responsible county superintendent of schools and the
governing board.
(3) If the governing board of a local educational agency has not
provided for an audit of the books and accounts of the local
educational agency by April 1, the county superintendent of schools
having jurisdiction over the local educational agency shall provide
for the audit of each local educational agency.
(4) An audit conducted pursuant to this section shall comply fully
with the Government Auditing Standards issued by the Comptroller
General of the United States.
(5) For purposes of this section, "local educational agency" does
not include community colleges.
(c) Each audit conducted in accordance with this section shall
include all funds of the local educational agency, including the
student body and cafeteria funds and accounts and any other funds
under the control or jurisdiction of the local educational agency.
Each audit shall also include an audit of pupil attendance
procedures.
(d) All audit reports for each fiscal year shall be developed and
reported using a format established by the Controller after
consultation with the Superintendent and the Director of Finance.
(e) (1) The cost of the audits provided for by the county
superintendent of schools shall be paid from the county school
service fund and the county superintendent of schools shall transfer
the pro rata share of the cost chargeable to each district from
district funds.
(2) The cost of the audit provided for by a governing board shall
be paid from local educational agency funds. The audit of the funds
under the jurisdiction and control of the county superintendent of
schools shall be paid from the county school service fund.
(f) (1) The audits shall be made by a certified public accountant
or a public accountant, licensed by the California Board of
Accountancy, and selected by the local educational agency, as
applicable, from a directory of certified public accountants and
public accountants deemed by the Controller as qualified to conduct
audits of local educational agencies, which shall be published by the
Controller not later than December 31 of each year.
(2) Commencing with the 2003-04 fiscal year and except as provided
in subdivision (d) of Section 41320.1, it is unlawful for a public
accounting firm to provide audit services to a local educational
agency if the lead audit partner, or coordinating audit partner,
having primary responsibility for the audit, or the audit partner
responsible for reviewing the audit, has performed audit services for
that local educational agency in each of the six previous fiscal
years. The Education Audits Appeal Panel may waive this requirement
if the panel finds that no otherwise eligible auditor is available to
perform the audit.
(3) It is the intent of the Legislature that, notwithstanding
paragraph (2), the rotation within public accounting firms conform to
provisions of the federal Sarbanes-Oxley Act of 2002 (P.L. 107-204;
15 U.S.C. Sec. 7201 et seq.), and upon release of the report required
by the act of the Comptroller General of the United States
addressing the mandatory rotation of registered public accounting
firms, the Legislature intends to reconsider the provisions of
paragraph (2). In determining which certified public accountants and
public accountants shall be included in the directory, the Controller
shall use the following criteria:
(A) The certified public accountants or public accountants shall
be in good standing as certified by the Board of Accountancy.
(B) The certified public accountants or public accountants, as a
result of a quality control review conducted by the Controller
pursuant to Section 14504.2, shall not have been found to have
conducted an audit in a manner constituting noncompliance with
subdivision (a) of Section 14503.
(g) (1) The auditor's report shall include each of the following:
(A) A statement that the audit was conducted pursuant to standards
and procedures developed in accordance with Chapter 3 (commencing
with Section 14500) of Part 9 of Division 1 of Title 1.
(B) A summary of audit exceptions and management improvement
recommendations.
(C) Each audit of a local educational agency shall include an
evaluation by the auditor on whether there is substantial doubt about
the ability of the local educational agency to continue as a going
concern for a reasonable period of time. This evaluation shall be
based on the Statement of Auditing Standards (SAS) No. 59, as issued
by the AICPA regarding disclosure requirements relating to the
ability of the entity to continue as a going concern.
(2) To the extent possible, a description of correction or plan of
correction shall be incorporated in the audit report, describing the
specific actions that are planned to be taken, or that have been
taken, to correct the problem identified by the auditor. The
descriptions of specific actions to be taken or that have been taken
shall not solely consist of general comments such as "will implement,"
"accepted the recommendation," or "will discuss at a later date."
(h) Not later than December 15, a report of each local educational
agency audit for the preceding fiscal year shall be filed with the
county superintendent of schools of the county in which the local
educational agency is located, the department, and the Controller.
The Superintendent shall make any adjustments necessary in future
apportionments of all state funds, to correct any audit exceptions
revealed by those audit reports.
(i) (1) Commencing with the 2002-03 audit of local educational
agencies pursuant to this section and subdivision (d) of Section
41320.1, each county superintendent of schools shall be responsible
for reviewing the audit exceptions contained in an audit of a local
educational agency under his or her jurisdiction related to
attendance, inventory of equipment, internal control, and any
miscellaneous items, and determining whether the exceptions have been
either corrected or an acceptable plan of correction has been
developed.
(2) Commencing with the 2004-05 audit of local educational
agencies pursuant to this section and subdivision (d) of Section
41320.1, each county superintendent of schools shall include in the
review of audit exceptions performed pursuant to this subdivision
those audit exceptions related to use of instructional materials
program funds, teacher misassignments pursuant to Section 44258.9,
information reported on the school accountability report card
required pursuant to Section 33126 and shall determine whether the
exceptions are either corrected or an acceptable plan of correction
has been developed.
(j) Upon submission of the final audit report to the governing
board of each local educational agency and subsequent receipt of the
audit by the county superintendent of schools having jurisdiction
over the local educational agency, the county office of education
shall do all of the following:
(1) Review audit exceptions related to attendance, inventory of
equipment, internal control, and other miscellaneous exceptions.
Attendance exceptions or issues shall include, but not be limited to,
those related to revenue limits, adult education, and independent
study.
(2) If a description of the correction or plan of correction has
not been provided as part of the audit required by this section, then
the county superintendent of schools shall notify the local
educational agency and request the governing board of the local
educational agency to provide to the county superintendent of schools
a description of the corrections or plan of correction by March 15.
(3) Review the description of correction or plan of correction and
determine its adequacy. If the description of the correction or plan
of correction is not adequate, the county superintendent of schools
shall require the local educational agency to resubmit that portion
of its response that is inadequate.
(k) Each county superintendent of schools shall certify to the
Superintendent and the Controller, not later than May 15, that his or
her staff has reviewed all audits of local educational agencies
under his or her jurisdiction for the prior fiscal year, that all
exceptions that the county superintendent was required to review were
reviewed, and that all of those exceptions, except as otherwise
noted in the certification, have been corrected by the local
educational agency or that an acceptable plan of correction has been
submitted to the county superintendent of schools. In addition, the
county superintendent shall identify, by local educational agency,
any attendance-related audit exception or exceptions involving state
funds, and require the local educational agency to which the audit
exceptions were directed to submit appropriate reporting forms for
processing by the Superintendent.
(l) In the audit of a local educational agency for a subsequent
year, the auditor shall review the correction or plan or plans of
correction submitted by the local educational agency to determine if
the exceptions have been resolved. If not, the auditor shall
immediately notify the appropriate county office of education and the
department and restate the exception in the audit report. After
receiving that notification, the department shall either consult with
the local educational agency to resolve the exception or require the
county superintendent of schools to follow up with the local
educational agency.
(m) (1) The Superintendent shall be responsible for ensuring that
local educational agencies have either corrected or developed plans
of correction for any one or more of the following:
(A) All federal and state compliance audit exceptions identified
in the audit.
(B) Any exceptions that the county superintendent certifies as of
May 15 have not been corrected.
(C) Any repeat audit exceptions that are not assigned to a county
superintendent to correct.
(2) In addition, the Superintendent shall be responsible for
ensuring that county superintendents of schools and each county board
of education that serves as the governing board of a local
educational agency either correct all audit exceptions identified in
the audits of county superintendents of schools and of the local
educational agencies for which the county boards of education serve
as the governing boards or develop acceptable plans of correction for
those exceptions.
(3) The Superintendent shall report annually to the Controller on
his or her actions to ensure that school districts, county
superintendents of schools, and each county board of education that
serves as the governing board of a school district have either
corrected or developed plans of correction for any of the exceptions
noted pursuant to paragraph (1).
(n) To facilitate correction of the exceptions identified by the
audits issued pursuant to this section, commencing with 2002-03
audits pursuant to this section, the Controller shall require
auditors to categorize audit exceptions in each audit report in a
manner that will make it clear to both the county superintendent of
schools and the Superintendent which exceptions they are responsible
for ensuring the correction of by a local educational agency. In
addition, the Controller annually shall select a sampling of county
superintendents of schools and perform a followup of the audit
resolution process of those county superintendents of schools and
report the results of that followup to the Superintendent and the
county superintendents of schools that were reviewed.
(o) County superintendents of schools shall adjust subsequent
local property tax requirements to correct audit exceptions relating
to local educational agency tax rates and tax revenues.
(p) If a governing board or county superintendent of schools fails
or is unable to make satisfactory arrangements for the audit
pursuant to this section, the Controller shall make arrangements for
the audit and the cost of the audit shall be paid from local
educational agency funds or the county school service fund, as the
case may be.
(q) Audits of regional occupational centers and programs are
subject to the provisions of this section.
(r) This section does not authorize examination of, or reports on,
the curriculum used or provided for in any local educational agency.
(s) Notwithstanding any other provision of law, a nonauditing,
management, or other consulting service to be provided to a local
educational agency by a certified public accounting firm while the
certified public accounting firm is performing an audit of the agency
pursuant to this section must be in accord with Government
Accounting Standards, Amendment No. 3, as published by the United
States General Accounting Office.
41020.1. Reports of audits previously filed with the county clerk
pursuant to Section 41020 shall be disposed of by the county clerk or
returned to the respective superintendent of schools.
41020.2. (a) If a school district governing board has entered into
a contract for an independent audit of its financial statements in
accordance with Section 41020 and the audited financial statements
have not been filed with the county superintendent of schools on or
before the due date established under Section 41020, the county
superintendent of schools may investigate the causes for the delay
and initiate one of the following actions that will provide the
required audited financial statements in the most effective manner:
(1) The county superintendent of schools may, after consultation
with the school district governing board and the auditors under
contract to the district, and with the consent of the Controller's
office and the Superintendent of Public Instruction, grant an
appropriate extension for the completion of the audit and the filing
of the audited financial statements. An extension does not waive the
legal deadline, but permits the filing of the report after the
deadline.
(2) The county superintendent of schools may, after consultation
with the school district governing board, the auditors under contract
to the district, and the Controller's office, contract with another
qualified certified public accountant or public accountant to obtain
the required audited financial statements and charge the cost of the
audit to the funds of the district. The county superintendent of
schools shall, to the extent feasible, assist the district in
initiating action to avoid payment to the auditors under contract who
did not complete the original audit.
(3) The county superintendent of schools may request the
Controller's office to investigate the situation and initiate action
as provided in subdivision (b).
(b) If the audited financial statements required by Section 41020
have not been filed by a school district or county superintendent of
schools with the Controller's office on or before the due date
established under Section 41020, the Controller's office shall
determine the most advantageous method of obtaining the required
audited financial statements. The Controller's office may do any of
the following:
(1) Accept the action of the county superintendent of schools
permitted by subdivision (a).
(2) Conduct the audit and prepare the auditor's report, utilizing
the staff available within that office and charge the cost of the
audit to the next regular apportionment from the State School Fund to
the district or county superintendent of schools.
(3) Contract with any qualified certified public accountant or
public accountant, utilizing the appropriate contracting procedures,
for the conduct of the audit and preparation of the audited financial
statements and charge the cost of the audit to the next regular
apportionment from the State School Fund to the district or county
superintendent of schools.
(4) Grant a reasonable extension of the time for filing the report
if, in the judgment of the Controller's office, this will provide
the required audited financial statements within the shortest time
period. The extension of the time for filing does not waive the legal
deadline, but permits the filing of the report after the deadline.
The Controller's office shall consult with the district governing
board, the county superintendent of schools, and the auditors under
contract to the district or county superintendent of schools before
making the determination of the method to be used in obtaining the
audited financial statements. The Controller's office shall, to the
extent feasible, assist the district or county superintendent in
initiating action to avoid payment to the auditors under contract who
did not complete the original audit.
(c) Notwithstanding any extension granted under paragraph (1) of
subdivision (a) or paragraph (4) of subdivision (b), the Controller's
office may determine at any time after the due date for filing of
audit reports established by Section 41020 that the audited financial
statements not yet filed with that office are delinquent and that
the audit will be performed under paragraph (2) or (3) of subdivision
(b).
41020.3. By January 31 of each year, the governing body of each
local education agency shall review, at a public meeting, the annual
audit of the local education agency for the prior year, any audit
exceptions identified in that audit, the recommendations or findings
of any management letter issued by the auditor, and any description
of correction or plans to correct any exceptions or management letter
issue. This review shall be placed on the agenda of the meeting
pursuant to Section 35145.
41020.5. (a) If the Controller determines by two consecutive
quality control reviews pursuant to Section 14504.2, or if a county
superintendent of schools determines, that audits performed by a
certified public accountant or public accountant under Section 41020
were not performed in substantial conformity with provisions of the
audit guide, or that the audit reports, including amended reports,
submitted by February 15 following the close of the fiscal year
audited, for two consecutive years do not conform to provisions of
the audit guide as required by Section 14504, the Controller or the
county superintendent of schools, as appropriate, shall notify in
writing the certified public accountant or public accountant and the
California Board of Accountancy.
If the certified public accountant or public accountant does not
file an appeal in writing with the California Board of Accountancy
within 30 calendar days after receipt of the notification from the
Controller or county superintendent of schools, the determination of
the Controller or county superintendent of schools pursuant to this
section shall be final.
(b) If an appeal is filed with the California Board of
Accountancy, the board shall complete an investigation of the appeal
within 90 days of the filing date. On the basis of the investigation,
the board may do either of the following:
(1) Find that the determination of the Controller or county
superintendent of schools should not be upheld and has no effect.
(2) Schedule the appeal for a hearing, in which case, the final
action on the appeal shall be completed by the board within one year
from the date of filing the appeal.
(c) If the determination of the Controller or county
superintendent of schools under subdivision (a) becomes final, the
certified public accountant or public accountant shall be ineligible
to conduct audits under Section 41020 for a period of three years,
or, in the event of an appeal, for any period, and subject to the
conditions, that may be ordered by the California Board of
Accountancy. Not later than the first day of March of each year, the
Controller shall notify each school district and county office of
education of those certified public accountants or public accountants
determined to be ineligible under this section. School districts and
county offices of education shall not use the audit services of a
certified public accountant or public accountant ineligible under
this section.
(d) For the purposes of this section, "certified public accountant
or public accountant" includes any person or firm entering into a
contract to conduct an audit under Section 41020.
(e) This section shall not preclude the California Board of
Accountancy from taking any disciplinary action it deems appropriate
under other provisions of law.
41020.6. On October 1, 2001, and each year thereafter, the State
Department of Education shall report to the Joint Legislative Audit
Committee on the actions taken by the department to eliminate audit
exceptions and comply with management improvement recommendations.
41020.8. Notwithstanding any other provision of law, the auditor
conducting the annual audit pursuant to Section 41020 shall, upon
request, provide the county superintendent or the Superintendent of
Public Instruction with fiscal information on a school district
within his or her jurisdiction if the county superintendent of
schools determines, pursuant to Section 42127.6, that a school
district may not be able to meet its obligations of the current or
subsequent fiscal year. Information provided by an auditor to a
county superintendent or the Superintendent of Public Instruction
pursuant to this section shall be submitted simultaneously to the
named district and shall not constitute a violation of auditor-client
confidentiality.
41021. The governing board of every school district shall require
each employee of the district, whose duty it is to handle funds of
the district, and may, in its discretion, require employees of the
district, whose duty it is to handle property of the district, to be
bonded under a suitable bond indemnifying the district against loss.
Such bond may be a name schedule bond, schedule position bond or
blanket bond, and shall be in such amount and type as the board shall
consider necessary and desirable. The boards shall pay from the
funds of the district the cost of the premium necessary to provide
the bond.
41022. Except as provided in this section, any election held for
the purpose permitting a school district to exceed the expenditure of
school 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 school 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.
41023. (a) Any agency organized pursuant to Article 1 (commencing
with Section 6500) of Chapter 5 of Division 7 of Title 1 of the
Government Code, the parties of which consist solely of school
districts and county offices of education, shall be subject to the
same restrictions as are applicable to school districts and county
offices of education, under that chapter, including the preparation
of budget and financial statements required by Article 1 (commencing
with Section 42100) and this article; the certifications required by
Article 3 (commencing with Section 42130) of Chapter 6 of Part 24;
the accounting and auditing requirements prescribed by Article 1
(commencing with Section 42100) and this article; and the expenditure
and appropriation controls prescribed by Chapter 9 (commencing with
Section 42600) of Part 24. This section does not apply to joint
powers agreements that are for the performance of the powers
described in Section 17567.
(b) Each agency described in subdivision (a) shall annually report
to their participating school districts and county superintendents
of schools on forms prescribed by the Superintendent of Public
Instruction.
41010. The accounting system used to record the financial affairs
of any school district shall be in accordance with the definitions,
instructions, and procedures published in the California School
Accounting Manual as approved by the State Board of Education and
furnished by the Superintendent of Public Instruction. 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 such content shall be best determined by those involved in the
administration of educational programs, including school district
governing boards, local administrators, teachers, students, and
parents.
41011. The accounting system used to record the financial affairs
of any school district shall be designed to provide separate
recording and clear distinction between expenditures for salaries of
classroom teachers employed by the district and expenditures for
other purposes of the district.
As used in this section "salaries of classroom teachers" means:
(a) The salary paid to each teacher employed by the district whose
duties require that the full time for which the teacher is employed
be devoted to the teaching of pupils of the district.
(b) The portion of the salary of each teacher whose duties require
that a part, but not all, of the full time for which the teacher is
employed be devoted to the teaching of pupils of the district, which
is equal to the portion of such full time actually devoted by the
teacher to teaching pupils of the district.
(c) The salary paid to each instructional aide employed by the
district, any portion of whose duties are required to be performed
under the supervision of a classroom teacher.
As used in this section a "teacher" means an employee of the
district employed in a position requiring certification
qualifications and whose duties require him to teach pupils of the
district for at least one full instructional period each schoolday
for which the employee is employed. In the case of a teacher employed
to teach in an elementary school, an instructional period is a
period of not less than 20 minutes. In the case of a teacher employed
to teach in a secondary school, an instructional period is the
number of minutes equal to the number of minutes of the regular
academic period in the junior high school, or high school, in which
the teacher is employed to teach.
41012. For purposes of determining allowances pursuant to Chapter 8
(commencing with Section 52200) of Part 28, and Chapter 3
(commencing with Section 56500) and Chapter 4 (commencing with
Section 56600) of Part 30, the Superintendent of Public Instruction
shall require the use of a uniform cost accounting procedure, as set
forth in the California School Accounting Manual.
41013. For the purpose of achieving clarity and uniformity in the
budgeting and reporting of school district expenditures by funds,
whenever certain expenditures for the children's center program, the
development center for handicapped minors program, or any similar
program, except the food service program, for which a special fund is
required by law, are: (1) authorized by law and by action of the
governing board to be paid from the general fund of the school
district, or (2) required by law to be paid from the general fund of
the school district, the amount estimated or actually required to
meet these expenditures shall be transferred or paid from the general
fund to the children's center fund, the development center for
handicapped minors fund, or other special fund as appropriate.
Any amount transferred or paid in excess of the amount actually
required shall be refunded to the general fund.
The Superintendent of Public Instruction is hereby authorized to
adopt rules and regulations governing the method of accounting for
said payments and transfers.
41014. Excepting only as provided in Article 1 (commencing with
Section 41000) and this article, all constitutional and statutory
limitations on the purposes for which moneys derived from particular
specified sources may be expended, and all statutory provisions
relative to the establishment of specified school district funds,
shall be administered by county superintendents of schools, or in the
discretion of county auditors, by county superintendents of schools
and county auditors by means of budgetary accounting and not by the
establishment and maintenance in the county or city and county
treasury of special school district funds.
41015. The governing board of any school district or any county
office of education which has funds in a special reserve fund of the
district or county office of education or any surplus moneys not
required for the immediate necessities of the district or county
office of education, is hereby authorized to invest all or any part
of the funds in any of the investments specified in Section 16430 or
53601 of the Government Code.
41016. The governing board of a school district which has made an
investment pursuant to the authority of Section 41015 may deposit
such security for safekeeping with a state or national bank or trust
company located within this state or with the Federal Reserve Bank of
San Francisco or any branch thereof within the state, or with any
Federal Reserve bank or with any state or national bank located in
any city designated as a reserve city by the Board of Governors of
the Federal Reserve System. The governing board shall take from such
bank a receipt for the security so deposited. The county treasurer
with whom such funds if uninvested would be deposited shall not be
responsible for securities delivered to and receipted for by a bank
under the authority of this section until they are withdrawn from the
bank by said treasurer.
41017. The governing board of any school district or any county
office of education may authorize any school district governed by it,
or any school under its jurisdiction to deposit in one or more bank
accounts as clearing accounts any miscellaneous receipts, including
receipts from the sale of property or materials pursuant to Section
39526 or 39527, received or collected by the school district or
county office of education, and may provide for the withdrawals from
those accounts. All moneys in those bank accounts shall be paid into
the county treasury within the time periods specified pursuant to
Section 41001. Cashiers' checks, certified checks, and money placed
in the custody of the school district or county office of education
as security that a bidder will execute or faithfully perform a
contract, if awarded to him or her, may be deposited in those bank
accounts but shall not be paid into the county treasury to the credit
of the school district or county office of education unless
forfeited or unless unclaimed by the bidder for a period of 12
months.
Such bank accounts shall not be subject to the deposit of funds
provisions of Article 2 (commencing with Section 53630) of Chapter 4
of Part 1 of Division 2 of Title 5 of the Government Code, except to
the extent provided by Section 53679 of the Government Code.
41018. The governing board of any school district or any county
office of education having an average daily attendance of 100,000 or
more may deposit in one or more bank accounts moneys received from
the temporary rental of property acquired by a school district or
county office of education pending construction of school facilities
on the property. The moneys may be held in the accounts for a period
of not to exceed three years and may be used to pay any proper costs
incurred as a result of the temporary rental, provided that when the
moneys are not being used to pay the costs they may be invested,
along with all other moneys deposited in clearing accounts, pursuant
to Section 41015 as determined by the governing board of the school
district or the county office of education. The moneys invested
pursuant to this section shall be invested with the care, skill,
prudence, and diligence under the circumstances then prevailing that
a prudent person acting in a like capacity and familiar with these
matters would use in the conduct of an enterprise of like character
and with like aims.
41019. The governing board of any school district which maintains
clearing accounts, cafeteria accounts, and other accounts in a bank
or banks, pursuant to Section 41017 or 39892, or pursuant to any
other provisions of law, may contract and pay for the expenses of
transporting money to and from such bank or banks.
41020. (a) It is the intent of the Legislature to encourage sound
fiscal management practices among local educational agencies for the
most efficient and effective use of public funds for the education of
children in California by strengthening fiscal accountability at the
district, county, and state levels.
(b) (1) Not later than the first day of May of each fiscal year,
each county superintendent of schools shall provide for an audit of
all funds under his or her jurisdiction and control and the governing
board of each local educational agency shall either provide for an
audit of the books and accounts of the local educational agency,
including an audit of income and expenditures by source of funds, or
make arrangements with the county superintendent of schools having
jurisdiction over the local educational agency to provide for that
auditing.
(2) A contract to perform the audit of a local educational agency
that has a disapproved budget or has received a negative
certification on any budget or interim financial report during the
current fiscal year or either of the two preceding fiscal years, or
for which the county superintendent of schools has otherwise
determined that a lack of going concern exists, is not valid unless
approved by the responsible county superintendent of schools and the
governing board.
(3) If the governing board of a local educational agency has not
provided for an audit of the books and accounts of the local
educational agency by April 1, the county superintendent of schools
having jurisdiction over the local educational agency shall provide
for the audit of each local educational agency.
(4) An audit conducted pursuant to this section shall comply fully
with the Government Auditing Standards issued by the Comptroller
General of the United States.
(5) For purposes of this section, "local educational agency" does
not include community colleges.
(c) Each audit conducted in accordance with this section shall
include all funds of the local educational agency, including the
student body and cafeteria funds and accounts and any other funds
under the control or jurisdiction of the local educational agency.
Each audit shall also include an audit of pupil attendance
procedures.
(d) All audit reports for each fiscal year shall be developed and
reported using a format established by the Controller after
consultation with the Superintendent and the Director of Finance.
(e) (1) The cost of the audits provided for by the county
superintendent of schools shall be paid from the county school
service fund and the county superintendent of schools shall transfer
the pro rata share of the cost chargeable to each district from
district funds.
(2) The cost of the audit provided for by a governing board shall
be paid from local educational agency funds. The audit of the funds
under the jurisdiction and control of the county superintendent of
schools shall be paid from the county school service fund.
(f) (1) The audits shall be made by a certified public accountant
or a public accountant, licensed by the California Board of
Accountancy, and selected by the local educational agency, as
applicable, from a directory of certified public accountants and
public accountants deemed by the Controller as qualified to conduct
audits of local educational agencies, which shall be published by the
Controller not later than December 31 of each year.
(2) Commencing with the 2003-04 fiscal year and except as provided
in subdivision (d) of Section 41320.1, it is unlawful for a public
accounting firm to provide audit services to a local educational
agency if the lead audit partner, or coordinating audit partner,
having primary responsibility for the audit, or the audit partner
responsible for reviewing the audit, has performed audit services for
that local educational agency in each of the six previous fiscal
years. The Education Audits Appeal Panel may waive this requirement
if the panel finds that no otherwise eligible auditor is available to
perform the audit.
(3) It is the intent of the Legislature that, notwithstanding
paragraph (2), the rotation within public accounting firms conform to
provisions of the federal Sarbanes-Oxley Act of 2002 (P.L. 107-204;
15 U.S.C. Sec. 7201 et seq.), and upon release of the report required
by the act of the Comptroller General of the United States
addressing the mandatory rotation of registered public accounting
firms, the Legislature intends to reconsider the provisions of
paragraph (2). In determining which certified public accountants and
public accountants shall be included in the directory, the Controller
shall use the following criteria:
(A) The certified public accountants or public accountants shall
be in good standing as certified by the Board of Accountancy.
(B) The certified public accountants or public accountants, as a
result of a quality control review conducted by the Controller
pursuant to Section 14504.2, shall not have been found to have
conducted an audit in a manner constituting noncompliance with
subdivision (a) of Section 14503.
(g) (1) The auditor's report shall include each of the following:
(A) A statement that the audit was conducted pursuant to standards
and procedures developed in accordance with Chapter 3 (commencing
with Section 14500) of Part 9 of Division 1 of Title 1.
(B) A summary of audit exceptions and management improvement
recommendations.
(C) Each audit of a local educational agency shall include an
evaluation by the auditor on whether there is substantial doubt about
the ability of the local educational agency to continue as a going
concern for a reasonable period of time. This evaluation shall be
based on the Statement of Auditing Standards (SAS) No. 59, as issued
by the AICPA regarding disclosure requirements relating to the
ability of the entity to continue as a going concern.
(2) To the extent possible, a description of correction or plan of
correction shall be incorporated in the audit report, describing the
specific actions that are planned to be taken, or that have been
taken, to correct the problem identified by the auditor. The
descriptions of specific actions to be taken or that have been taken
shall not solely consist of general comments such as "will implement,"
"accepted the recommendation," or "will discuss at a later date."
(h) Not later than December 15, a report of each local educational
agency audit for the preceding fiscal year shall be filed with the
county superintendent of schools of the county in which the local
educational agency is located, the department, and the Controller.
The Superintendent shall make any adjustments necessary in future
apportionments of all state funds, to correct any audit exceptions
revealed by those audit reports.
(i) (1) Commencing with the 2002-03 audit of local educational
agencies pursuant to this section and subdivision (d) of Section
41320.1, each county superintendent of schools shall be responsible
for reviewing the audit exceptions contained in an audit of a local
educational agency under his or her jurisdiction related to
attendance, inventory of equipment, internal control, and any
miscellaneous items, and determining whether the exceptions have been
either corrected or an acceptable plan of correction has been
developed.
(2) Commencing with the 2004-05 audit of local educational
agencies pursuant to this section and subdivision (d) of Section
41320.1, each county superintendent of schools shall include in the
review of audit exceptions performed pursuant to this subdivision
those audit exceptions related to use of instructional materials
program funds, teacher misassignments pursuant to Section 44258.9,
information reported on the school accountability report card
required pursuant to Section 33126 and shall determine whether the
exceptions are either corrected or an acceptable plan of correction
has been developed.
(j) Upon submission of the final audit report to the governing
board of each local educational agency and subsequent receipt of the
audit by the county superintendent of schools having jurisdiction
over the local educational agency, the county office of education
shall do all of the following:
(1) Review audit exceptions related to attendance, inventory of
equipment, internal control, and other miscellaneous exceptions.
Attendance exceptions or issues shall include, but not be limited to,
those related to revenue limits, adult education, and independent
study.
(2) If a description of the correction or plan of correction has
not been provided as part of the audit required by this section, then
the county superintendent of schools shall notify the local
educational agency and request the governing board of the local
educational agency to provide to the county superintendent of schools
a description of the corrections or plan of correction by March 15.
(3) Review the description of correction or plan of correction and
determine its adequacy. If the description of the correction or plan
of correction is not adequate, the county superintendent of schools
shall require the local educational agency to resubmit that portion
of its response that is inadequate.
(k) Each county superintendent of schools shall certify to the
Superintendent and the Controller, not later than May 15, that his or
her staff has reviewed all audits of local educational agencies
under his or her jurisdiction for the prior fiscal year, that all
exceptions that the county superintendent was required to review were
reviewed, and that all of those exceptions, except as otherwise
noted in the certification, have been corrected by the local
educational agency or that an acceptable plan of correction has been
submitted to the county superintendent of schools. In addition, the
county superintendent shall identify, by local educational agency,
any attendance-related audit exception or exceptions involving state
funds, and require the local educational agency to which the audit
exceptions were directed to submit appropriate reporting forms for
processing by the Superintendent.
(l) In the audit of a local educational agency for a subsequent
year, the auditor shall review the correction or plan or plans of
correction submitted by the local educational agency to determine if
the exceptions have been resolved. If not, the auditor shall
immediately notify the appropriate county office of education and the
department and restate the exception in the audit report. After
receiving that notification, the department shall either consult with
the local educational agency to resolve the exception or require the
county superintendent of schools to follow up with the local
educational agency.
(m) (1) The Superintendent shall be responsible for ensuring that
local educational agencies have either corrected or developed plans
of correction for any one or more of the following:
(A) All federal and state compliance audit exceptions identified
in the audit.
(B) Any exceptions that the county superintendent certifies as of
May 15 have not been corrected.
(C) Any repeat audit exceptions that are not assigned to a county
superintendent to correct.
(2) In addition, the Superintendent shall be responsible for
ensuring that county superintendents of schools and each county board
of education that serves as the governing board of a local
educational agency either correct all audit exceptions identified in
the audits of county superintendents of schools and of the local
educational agencies for which the county boards of education serve
as the governing boards or develop acceptable plans of correction for
those exceptions.
(3) The Superintendent shall report annually to the Controller on
his or her actions to ensure that school districts, county
superintendents of schools, and each county board of education that
serves as the governing board of a school district have either
corrected or developed plans of correction for any of the exceptions
noted pursuant to paragraph (1).
(n) To facilitate correction of the exceptions identified by the
audits issued pursuant to this section, commencing with 2002-03
audits pursuant to this section, the Controller shall require
auditors to categorize audit exceptions in each audit report in a
manner that will make it clear to both the county superintendent of
schools and the Superintendent which exceptions they are responsible
for ensuring the correction of by a local educational agency. In
addition, the Controller annually shall select a sampling of county
superintendents of schools and perform a followup of the audit
resolution process of those county superintendents of schools and
report the results of that followup to the Superintendent and the
county superintendents of schools that were reviewed.
(o) County superintendents of schools shall adjust subsequent
local property tax requirements to correct audit exceptions relating
to local educational agency tax rates and tax revenues.
(p) If a governing board or county superintendent of schools fails
or is unable to make satisfactory arrangements for the audit
pursuant to this section, the Controller shall make arrangements for
the audit and the cost of the audit shall be paid from local
educational agency funds or the county school service fund, as the
case may be.
(q) Audits of regional occupational centers and programs are
subject to the provisions of this section.
(r) This section does not authorize examination of, or reports on,
the curriculum used or provided for in any local educational agency.
(s) Notwithstanding any other provision of law, a nonauditing,
management, or other consulting service to be provided to a local
educational agency by a certified public accounting firm while the
certified public accounting firm is performing an audit of the agency
pursuant to this section must be in accord with Government
Accounting Standards, Amendment No. 3, as published by the United
States General Accounting Office.
41020.1. Reports of audits previously filed with the county clerk
pursuant to Section 41020 shall be disposed of by the county clerk or
returned to the respective superintendent of schools.
41020.2. (a) If a school district governing board has entered into
a contract for an independent audit of its financial statements in
accordance with Section 41020 and the audited financial statements
have not been filed with the county superintendent of schools on or
before the due date established under Section 41020, the county
superintendent of schools may investigate the causes for the delay
and initiate one of the following actions that will provide the
required audited financial statements in the most effective manner:
(1) The county superintendent of schools may, after consultation
with the school district governing board and the auditors under
contract to the district, and with the consent of the Controller's
office and the Superintendent of Public Instruction, grant an
appropriate extension for the completion of the audit and the filing
of the audited financial statements. An extension does not waive the
legal deadline, but permits the filing of the report after the
deadline.
(2) The county superintendent of schools may, after consultation
with the school district governing board, the auditors under contract
to the district, and the Controller's office, contract with another
qualified certified public accountant or public accountant to obtain
the required audited financial statements and charge the cost of the
audit to the funds of the district. The county superintendent of
schools shall, to the extent feasible, assist the district in
initiating action to avoid payment to the auditors under contract who
did not complete the original audit.
(3) The county superintendent of schools may request the
Controller's office to investigate the situation and initiate action
as provided in subdivision (b).
(b) If the audited financial statements required by Section 41020
have not been filed by a school district or county superintendent of
schools with the Controller's office on or before the due date
established under Section 41020, the Controller's office shall
determine the most advantageous method of obtaining the required
audited financial statements. The Controller's office may do any of
the following:
(1) Accept the action of the county superintendent of schools
permitted by subdivision (a).
(2) Conduct the audit and prepare the auditor's report, utilizing
the staff available within that office and charge the cost of the
audit to the next regular apportionment from the State School Fund to
the district or county superintendent of schools.
(3) Contract with any qualified certified public accountant or
public accountant, utilizing the appropriate contracting procedures,
for the conduct of the audit and preparation of the audited financial
statements and charge the cost of the audit to the next regular
apportionment from the State School Fund to the district or county
superintendent of schools.
(4) Grant a reasonable extension of the time for filing the report
if, in the judgment of the Controller's office, this will provide
the required audited financial statements within the shortest time
period. The extension of the time for filing does not waive the legal
deadline, but permits the filing of the report after the deadline.
The Controller's office shall consult with the district governing
board, the county superintendent of schools, and the auditors under
contract to the district or county superintendent of schools before
making the determination of the method to be used in obtaining the
audited financial statements. The Controller's office shall, to the
extent feasible, assist the district or county superintendent in
initiating action to avoid payment to the auditors under contract who
did not complete the original audit.
(c) Notwithstanding any extension granted under paragraph (1) of
subdivision (a) or paragraph (4) of subdivision (b), the Controller's
office may determine at any time after the due date for filing of
audit reports established by Section 41020 that the audited financial
statements not yet filed with that office are delinquent and that
the audit will be performed under paragraph (2) or (3) of subdivision
(b).
41020.3. By January 31 of each year, the governing body of each
local education agency shall review, at a public meeting, the annual
audit of the local education agency for the prior year, any audit
exceptions identified in that audit, the recommendations or findings
of any management letter issued by the auditor, and any description
of correction or plans to correct any exceptions or management letter
issue. This review shall be placed on the agenda of the meeting
pursuant to Section 35145.
41020.5. (a) If the Controller determines by two consecutive
quality control reviews pursuant to Section 14504.2, or if a county
superintendent of schools determines, that audits performed by a
certified public accountant or public accountant under Section 41020
were not performed in substantial conformity with provisions of the
audit guide, or that the audit reports, including amended reports,
submitted by February 15 following the close of the fiscal year
audited, for two consecutive years do not conform to provisions of
the audit guide as required by Section 14504, the Controller or the
county superintendent of schools, as appropriate, shall notify in
writing the certified public accountant or public accountant and the
California Board of Accountancy.
If the certified public accountant or public accountant does not
file an appeal in writing with the California Board of Accountancy
within 30 calendar days after receipt of the notification from the
Controller or county superintendent of schools, the determination of
the Controller or county superintendent of schools pursuant to this
section shall be final.
(b) If an appeal is filed with the California Board of
Accountancy, the board shall complete an investigation of the appeal
within 90 days of the filing date. On the basis of the investigation,
the board may do either of the following:
(1) Find that the determination of the Controller or county
superintendent of schools should not be upheld and has no effect.
(2) Schedule the appeal for a hearing, in which case, the final
action on the appeal shall be completed by the board within one year
from the date of filing the appeal.
(c) If the determination of the Controller or county
superintendent of schools under subdivision (a) becomes final, the
certified public accountant or public accountant shall be ineligible
to conduct audits under Section 41020 for a period of three years,
or, in the event of an appeal, for any period, and subject to the
conditions, that may be ordered by the California Board of
Accountancy. Not later than the first day of March of each year, the
Controller shall notify each school district and county office of
education of those certified public accountants or public accountants
determined to be ineligible under this section. School districts and
county offices of education shall not use the audit services of a
certified public accountant or public accountant ineligible under
this section.
(d) For the purposes of this section, "certified public accountant
or public accountant" includes any person or firm entering into a
contract to conduct an audit under Section 41020.
(e) This section shall not preclude the California Board of
Accountancy from taking any disciplinary action it deems appropriate
under other provisions of law.
41020.6. On October 1, 2001, and each year thereafter, the State
Department of Education shall report to the Joint Legislative Audit
Committee on the actions taken by the department to eliminate audit
exceptions and comply with management improvement recommendations.
41020.8. Notwithstanding any other provision of law, the auditor
conducting the annual audit pursuant to Section 41020 shall, upon
request, provide the county superintendent or the Superintendent of
Public Instruction with fiscal information on a school district
within his or her jurisdiction if the county superintendent of
schools determines, pursuant to Section 42127.6, that a school
district may not be able to meet its obligations of the current or
subsequent fiscal year. Information provided by an auditor to a
county superintendent or the Superintendent of Public Instruction
pursuant to this section shall be submitted simultaneously to the
named district and shall not constitute a violation of auditor-client
confidentiality.
41021. The governing board of every school district shall require
each employee of the district, whose duty it is to handle funds of
the district, and may, in its discretion, require employees of the
district, whose duty it is to handle property of the district, to be
bonded under a suitable bond indemnifying the district against loss.
Such bond may be a name schedule bond, schedule position bond or
blanket bond, and shall be in such amount and type as the board shall
consider necessary and desirable. The boards shall pay from the
funds of the district the cost of the premium necessary to provide
the bond.
41022. Except as provided in this section, any election held for
the purpose permitting a school district to exceed the expenditure of
school 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 school 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.
41023. (a) Any agency organized pursuant to Article 1 (commencing
with Section 6500) of Chapter 5 of Division 7 of Title 1 of the
Government Code, the parties of which consist solely of school
districts and county offices of education, shall be subject to the
same restrictions as are applicable to school districts and county
offices of education, under that chapter, including the preparation
of budget and financial statements required by Article 1 (commencing
with Section 42100) and this article; the certifications required by
Article 3 (commencing with Section 42130) of Chapter 6 of Part 24;
the accounting and auditing requirements prescribed by Article 1
(commencing with Section 42100) and this article; and the expenditure
and appropriation controls prescribed by Chapter 9 (commencing with
Section 42600) of Part 24. This section does not apply to joint
powers agreements that are for the performance of the powers
described in Section 17567.
(b) Each agency described in subdivision (a) shall annually report
to their participating school districts and county superintendents
of schools on forms prescribed by the Superintendent of Public
Instruction.
41010. The accounting system used to record the financial affairs
of any school district shall be in accordance with the definitions,
instructions, and procedures published in the California School
Accounting Manual as approved by the State Board of Education and
furnished by the Superintendent of Public Instruction. 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 such content shall be best determined by those involved in the
administration of educational programs, including school district
governing boards, local administrators, teachers, students, and
parents.
41011. The accounting system used to record the financial affairs
of any school district shall be designed to provide separate
recording and clear distinction between expenditures for salaries of
classroom teachers employed by the district and expenditures for
other purposes of the district.
As used in this section "salaries of classroom teachers" means:
(a) The salary paid to each teacher employed by the district whose
duties require that the full time for which the teacher is employed
be devoted to the teaching of pupils of the district.
(b) The portion of the salary of each teacher whose duties require
that a part, but not all, of the full time for which the teacher is
employed be devoted to the teaching of pupils of the district, which
is equal to the portion of such full time actually devoted by the
teacher to teaching pupils of the district.
(c) The salary paid to each instructional aide employed by the
district, any portion of whose duties are required to be performed
under the supervision of a classroom teacher.
As used in this section a "teacher" means an employee of the
district employed in a position requiring certification
qualifications and whose duties require him to teach pupils of the
district for at least one full instructional period each schoolday
for which the employee is employed. In the case of a teacher employed
to teach in an elementary school, an instructional period is a
period of not less than 20 minutes. In the case of a teacher employed
to teach in a secondary school, an instructional period is the
number of minutes equal to the number of minutes of the regular
academic period in the junior high school, or high school, in which
the teacher is employed to teach.
41012. For purposes of determining allowances pursuant to Chapter 8
(commencing with Section 52200) of Part 28, and Chapter 3
(commencing with Section 56500) and Chapter 4 (commencing with
Section 56600) of Part 30, the Superintendent of Public Instruction
shall require the use of a uniform cost accounting procedure, as set
forth in the California School Accounting Manual.
41013. For the purpose of achieving clarity and uniformity in the
budgeting and reporting of school district expenditures by funds,
whenever certain expenditures for the children's center program, the
development center for handicapped minors program, or any similar
program, except the food service program, for which a special fund is
required by law, are: (1) authorized by law and by action of the
governing board to be paid from the general fund of the school
district, or (2) required by law to be paid from the general fund of
the school district, the amount estimated or actually required to
meet these expenditures shall be transferred or paid from the general
fund to the children's center fund, the development center for
handicapped minors fund, or other special fund as appropriate.
Any amount transferred or paid in excess of the amount actually
required shall be refunded to the general fund.
The Superintendent of Public Instruction is hereby authorized to
adopt rules and regulations governing the method of accounting for
said payments and transfers.
41014. Excepting only as provided in Article 1 (commencing with
Section 41000) and this article, all constitutional and statutory
limitations on the purposes for which moneys derived from particular
specified sources may be expended, and all statutory provisions
relative to the establishment of specified school district funds,
shall be administered by county superintendents of schools, or in the
discretion of county auditors, by county superintendents of schools
and county auditors by means of budgetary accounting and not by the
establishment and maintenance in the county or city and county
treasury of special school district funds.
41015. The governing board of any school district or any county
office of education which has funds in a special reserve fund of the
district or county office of education or any surplus moneys not
required for the immediate necessities of the district or county
office of education, is hereby authorized to invest all or any part
of the funds in any of the investments specified in Section 16430 or
53601 of the Government Code.
41016. The governing board of a school district which has made an
investment pursuant to the authority of Section 41015 may deposit
such security for safekeeping with a state or national bank or trust
company located within this state or with the Federal Reserve Bank of
San Francisco or any branch thereof within the state, or with any
Federal Reserve bank or with any state or national bank located in
any city designated as a reserve city by the Board of Governors of
the Federal Reserve System. The governing board shall take from such
bank a receipt for the security so deposited. The county treasurer
with whom such funds if uninvested would be deposited shall not be
responsible for securities delivered to and receipted for by a bank
under the authority of this section until they are withdrawn from the
bank by said treasurer.
41017. The governing board of any school district or any county
office of education may authorize any school district governed by it,
or any school under its jurisdiction to deposit in one or more bank
accounts as clearing accounts any miscellaneous receipts, including
receipts from the sale of property or materials pursuant to Section
39526 or 39527, received or collected by the school district or
county office of education, and may provide for the withdrawals from
those accounts. All moneys in those bank accounts shall be paid into
the county treasury within the time periods specified pursuant to
Section 41001. Cashiers' checks, certified checks, and money placed
in the custody of the school district or county office of education
as security that a bidder will execute or faithfully perform a
contract, if awarded to him or her, may be deposited in those bank
accounts but shall not be paid into the county treasury to the credit
of the school district or county office of education unless
forfeited or unless unclaimed by the bidder for a period of 12
months.
Such bank accounts shall not be subject to the deposit of funds
provisions of Article 2 (commencing with Section 53630) of Chapter 4
of Part 1 of Division 2 of Title 5 of the Government Code, except to
the extent provided by Section 53679 of the Government Code.
41018. The governing board of any school district or any county
office of education having an average daily attendance of 100,000 or
more may deposit in one or more bank accounts moneys received from
the temporary rental of property acquired by a school district or
county office of education pending construction of school facilities
on the property. The moneys may be held in the accounts for a period
of not to exceed three years and may be used to pay any proper costs
incurred as a result of the temporary rental, provided that when the
moneys are not being used to pay the costs they may be invested,
along with all other moneys deposited in clearing accounts, pursuant
to Section 41015 as determined by the governing board of the school
district or the county office of education. The moneys invested
pursuant to this section shall be invested with the care, skill,
prudence, and diligence under the circumstances then prevailing that
a prudent person acting in a like capacity and familiar with these
matters would use in the conduct of an enterprise of like character
and with like aims.
41019. The governing board of any school district which maintains
clearing accounts, cafeteria accounts, and other accounts in a bank
or banks, pursuant to Section 41017 or 39892, or pursuant to any
other provisions of law, may contract and pay for the expenses of
transporting money to and from such bank or banks.
41020. (a) It is the intent of the Legislature to encourage sound
fiscal management practices among local educational agencies for the
most efficient and effective use of public funds for the education of
children in California by strengthening fiscal accountability at the
district, county, and state levels.
(b) (1) Not later than the first day of May of each fiscal year,
each county superintendent of schools shall provide for an audit of
all funds under his or her jurisdiction and control and the governing
board of each local educational agency shall either provide for an
audit of the books and accounts of the local educational agency,
including an audit of income and expenditures by source of funds, or
make arrangements with the county superintendent of schools having
jurisdiction over the local educational agency to provide for that
auditing.
(2) A contract to perform the audit of a local educational agency
that has a disapproved budget or has received a negative
certification on any budget or interim financial report during the
current fiscal year or either of the two preceding fiscal years, or
for which the county superintendent of schools has otherwise
determined that a lack of going concern exists, is not valid unless
approved by the responsible county superintendent of schools and the
governing board.
(3) If the governing board of a local educational agency has not
provided for an audit of the books and accounts of the local
educational agency by April 1, the county superintendent of schools
having jurisdiction over the local educational agency shall provide
for the audit of each local educational agency.
(4) An audit conducted pursuant to this section shall comply fully
with the Government Auditing Standards issued by the Comptroller
General of the United States.
(5) For purposes of this section, "local educational agency" does
not include community colleges.
(c) Each audit conducted in accordance with this section shall
include all funds of the local educational agency, including the
student body and cafeteria funds and accounts and any other funds
under the control or jurisdiction of the local educational agency.
Each audit shall also include an audit of pupil attendance
procedures.
(d) All audit reports for each fiscal year shall be developed and
reported using a format established by the Controller after
consultation with the Superintendent and the Director of Finance.
(e) (1) The cost of the audits provided for by the county
superintendent of schools shall be paid from the county school
service fund and the county superintendent of schools shall transfer
the pro rata share of the cost chargeable to each district from
district funds.
(2) The cost of the audit provided for by a governing board shall
be paid from local educational agency funds. The audit of the funds
under the jurisdiction and control of the county superintendent of
schools shall be paid from the county school service fund.
(f) (1) The audits shall be made by a certified public accountant
or a public accountant, licensed by the California Board of
Accountancy, and selected by the local educational agency, as
applicable, from a directory of certified public accountants and
public accountants deemed by the Controller as qualified to conduct
audits of local educational agencies, which shall be published by the
Controller not later than December 31 of each year.
(2) Commencing with the 2003-04 fiscal year and except as provided
in subdivision (d) of Section 41320.1, it is unlawful for a public
accounting firm to provide audit services to a local educational
agency if the lead audit partner, or coordinating audit partner,
having primary responsibility for the audit, or the audit partner
responsible for reviewing the audit, has performed audit services for
that local educational agency in each of the six previous fiscal
years. The Education Audits Appeal Panel may waive this requirement
if the panel finds that no otherwise eligible auditor is available to
perform the audit.
(3) It is the intent of the Legislature that, notwithstanding
paragraph (2), the rotation within public accounting firms conform to
provisions of the federal Sarbanes-Oxley Act of 2002 (P.L. 107-204;
15 U.S.C. Sec. 7201 et seq.), and upon release of the report required
by the act of the Comptroller General of the United States
addressing the mandatory rotation of registered public accounting
firms, the Legislature intends to reconsider the provisions of
paragraph (2). In determining which certified public accountants and
public accountants shall be included in the directory, the Controller
shall use the following criteria:
(A) The certified public accountants or public accountants shall
be in good standing as certified by the Board of Accountancy.
(B) The certified public accountants or public accountants, as a
result of a quality control review conducted by the Controller
pursuant to Section 14504.2, shall not have been found to have
conducted an audit in a manner constituting noncompliance with
subdivision (a) of Section 14503.
(g) (1) The auditor's report shall include each of the following:
(A) A statement that the audit was conducted pursuant to standards
and procedures developed in accordance with Chapter 3 (commencing
with Section 14500) of Part 9 of Division 1 of Title 1.
(B) A summary of audit exceptions and management improvement
recommendations.
(C) Each audit of a local educational agency shall include an
evaluation by the auditor on whether there is substantial doubt about
the ability of the local educational agency to continue as a going
concern for a reasonable period of time. This evaluation shall be
based on the Statement of Auditing Standards (SAS) No. 59, as issued
by the AICPA regarding disclosure requirements relating to the
ability of the entity to continue as a going concern.
(2) To the extent possible, a description of correction or plan of
correction shall be incorporated in the audit report, describing the
specific actions that are planned to be taken, or that have been
taken, to correct the problem identified by the auditor. The
descriptions of specific actions to be taken or that have been taken
shall not solely consist of general comments such as "will implement,"
"accepted the recommendation," or "will discuss at a later date."
(h) Not later than December 15, a report of each local educational
agency audit for the preceding fiscal year shall be filed with the
county superintendent of schools of the county in which the local
educational agency is located, the department, and the Controller.
The Superintendent shall make any adjustments necessary in future
apportionments of all state funds, to correct any audit exceptions
revealed by those audit reports.
(i) (1) Commencing with the 2002-03 audit of local educational
agencies pursuant to this section and subdivision (d) of Section
41320.1, each county superintendent of schools shall be responsible
for reviewing the audit exceptions contained in an audit of a local
educational agency under his or her jurisdiction related to
attendance, inventory of equipment, internal control, and any
miscellaneous items, and determining whether the exceptions have been
either corrected or an acceptable plan of correction has been
developed.
(2) Commencing with the 2004-05 audit of local educational
agencies pursuant to this section and subdivision (d) of Section
41320.1, each county superintendent of schools shall include in the
review of audit exceptions performed pursuant to this subdivision
those audit exceptions related to use of instructional materials
program funds, teacher misassignments pursuant to Section 44258.9,
information reported on the school accountability report card
required pursuant to Section 33126 and shall determine whether the
exceptions are either corrected or an acceptable plan of correction
has been developed.
(j) Upon submission of the final audit report to the governing
board of each local educational agency and subsequent receipt of the
audit by the county superintendent of schools having jurisdiction
over the local educational agency, the county office of education
shall do all of the following:
(1) Review audit exceptions related to attendance, inventory of
equipment, internal control, and other miscellaneous exceptions.
Attendance exceptions or issues shall include, but not be limited to,
those related to revenue limits, adult education, and independent
study.
(2) If a description of the correction or plan of correction has
not been provided as part of the audit required by this section, then
the county superintendent of schools shall notify the local
educational agency and request the governing board of the local
educational agency to provide to the county superintendent of schools
a description of the corrections or plan of correction by March 15.
(3) Review the description of correction or plan of correction and
determine its adequacy. If the description of the correction or plan
of correction is not adequate, the county superintendent of schools
shall require the local educational agency to resubmit that portion
of its response that is inadequate.
(k) Each county superintendent of schools shall certify to the
Superintendent and the Controller, not later than May 15, that his or
her staff has reviewed all audits of local educational agencies
under his or her jurisdiction for the prior fiscal year, that all
exceptions that the county superintendent was required to review were
reviewed, and that all of those exceptions, except as otherwise
noted in the certification, have been corrected by the local
educational agency or that an acceptable plan of correction has been
submitted to the county superintendent of schools. In addition, the
county superintendent shall identify, by local educational agency,
any attendance-related audit exception or exceptions involving state
funds, and require the local educational agency to which the audit
exceptions were directed to submit appropriate reporting forms for
processing by the Superintendent.
(l) In the audit of a local educational agency for a subsequent
year, the auditor shall review the correction or plan or plans of
correction submitted by the local educational agency to determine if
the exceptions have been resolved. If not, the auditor shall
immediately notify the appropriate county office of education and the
department and restate the exception in the audit report. After
receiving that notification, the department shall either consult with
the local educational agency to resolve the exception or require the
county superintendent of schools to follow up with the local
educational agency.
(m) (1) The Superintendent shall be responsible for ensuring that
local educational agencies have either corrected or developed plans
of correction for any one or more of the following:
(A) All federal and state compliance audit exceptions identified
in the audit.
(B) Any exceptions that the county superintendent certifies as of
May 15 have not been corrected.
(C) Any repeat audit exceptions that are not assigned to a county
superintendent to correct.
(2) In addition, the Superintendent shall be responsible for
ensuring that county superintendents of schools and each county board
of education that serves as the governing board of a local
educational agency either correct all audit exceptions identified in
the audits of county superintendents of schools and of the local
educational agencies for which the county boards of education serve
as the governing boards or develop acceptable plans of correction for
those exceptions.
(3) The Superintendent shall report annually to the Controller on
his or her actions to ensure that school districts, county
superintendents of schools, and each county board of education that
serves as the governing board of a school district have either
corrected or developed plans of correction for any of the exceptions
noted pursuant to paragraph (1).
(n) To facilitate correction of the exceptions identified by the
audits issued pursuant to this section, commencing with 2002-03
audits pursuant to this section, the Controller shall require
auditors to categorize audit exceptions in each audit report in a
manner that will make it clear to both the county superintendent of
schools and the Superintendent which exceptions they are responsible
for ensuring the correction of by a local educational agency. In
addition, the Controller annually shall select a sampling of county
superintendents of schools and perform a followup of the audit
resolution process of those county superintendents of schools and
report the results of that followup to the Superintendent and the
county superintendents of schools that were reviewed.
(o) County superintendents of schools shall adjust subsequent
local property tax requirements to correct audit exceptions relating
to local educational agency tax rates and tax revenues.
(p) If a governing board or county superintendent of schools fails
or is unable to make satisfactory arrangements for the audit
pursuant to this section, the Controller shall make arrangements for
the audit and the cost of the audit shall be paid from local
educational agency funds or the county school service fund, as the
case may be.
(q) Audits of regional occupational centers and programs are
subject to the provisions of this section.
(r) This section does not authorize examination of, or reports on,
the curriculum used or provided for in any local educational agency.
(s) Notwithstanding any other provision of law, a nonauditing,
management, or other consulting service to be provided to a local
educational agency by a certified public accounting firm while the
certified public accounting firm is performing an audit of the agency
pursuant to this section must be in accord with Government
Accounting Standards, Amendment No. 3, as published by the United
States General Accounting Office.
41020.1. Reports of audits previously filed with the county clerk
pursuant to Section 41020 shall be disposed of by the county clerk or
returned to the respective superintendent of schools.
41020.2. (a) If a school district governing board has entered into
a contract for an independent audit of its financial statements in
accordance with Section 41020 and the audited financial statements
have not been filed with the county superintendent of schools on or
before the due date established under Section 41020, the county
superintendent of schools may investigate the causes for the delay
and initiate one of the following actions that will provide the
required audited financial statements in the most effective manner:
(1) The county superintendent of schools may, after consultation
with the school district governing board and the auditors under
contract to the district, and with the consent of the Controller's
office and the Superintendent of Public Instruction, grant an
appropriate extension for the completion of the audit and the filing
of the audited financial statements. An extension does not waive the
legal deadline, but permits the filing of the report after the
deadline.
(2) The county superintendent of schools may, after consultation
with the school district governing board, the auditors under contract
to the district, and the Controller's office, contract with another
qualified certified public accountant or public accountant to obtain
the required audited financial statements and charge the cost of the
audit to the funds of the district. The county superintendent of
schools shall, to the extent feasible, assist the district in
initiating action to avoid payment to the auditors under contract who
did not complete the original audit.
(3) The county superintendent of schools may request the
Controller's office to investigate the situation and initiate action
as provided in subdivision (b).
(b) If the audited financial statements required by Section 41020
have not been filed by a school district or county superintendent of
schools with the Controller's office on or before the due date
established under Section 41020, the Controller's office shall
determine the most advantageous method of obtaining the required
audited financial statements. The Controller's office may do any of
the following:
(1) Accept the action of the county superintendent of schools
permitted by subdivision (a).
(2) Conduct the audit and prepare the auditor's report, utilizing
the staff available within that office and charge the cost of the
audit to the next regular apportionment from the State School Fund to
the district or county superintendent of schools.
(3) Contract with any qualified certified public accountant or
public accountant, utilizing the appropriate contracting procedures,
for the conduct of the audit and preparation of the audited financial
statements and charge the cost of the audit to the next regular
apportionment from the State School Fund to the district or county
superintendent of schools.
(4) Grant a reasonable extension of the time for filing the report
if, in the judgment of the Controller's office, this will provide
the required audited financial statements within the shortest time
period. The extension of the time for filing does not waive the legal
deadline, but permits the filing of the report after the deadline.
The Controller's office shall consult with the district governing
board, the county superintendent of schools, and the auditors under
contract to the district or county superintendent of schools before
making the determination of the method to be used in obtaining the
audited financial statements. The Controller's office shall, to the
extent feasible, assist the district or county superintendent in
initiating action to avoid payment to the auditors under contract who
did not complete the original audit.
(c) Notwithstanding any extension granted under paragraph (1) of
subdivision (a) or paragraph (4) of subdivision (b), the Controller's
office may determine at any time after the due date for filing of
audit reports established by Section 41020 that the audited financial
statements not yet filed with that office are delinquent and that
the audit will be performed under paragraph (2) or (3) of subdivision
(b).
41020.3. By January 31 of each year, the governing body of each
local education agency shall review, at a public meeting, the annual
audit of the local education agency for the prior year, any audit
exceptions identified in that audit, the recommendations or findings
of any management letter issued by the auditor, and any description
of correction or plans to correct any exceptions or management letter
issue. This review shall be placed on the agenda of the meeting
pursuant to Section 35145.
41020.5. (a) If the Controller determines by two consecutive
quality control reviews pursuant to Section 14504.2, or if a county
superintendent of schools determines, that audits performed by a
certified public accountant or public accountant under Section 41020
were not performed in substantial conformity with provisions of the
audit guide, or that the audit reports, including amended reports,
submitted by February 15 following the close of the fiscal year
audited, for two consecutive years do not conform to provisions of
the audit guide as required by Section 14504, the Controller or the
county superintendent of schools, as appropriate, shall notify in
writing the certified public accountant or public accountant and the
California Board of Accountancy.
If the certified public accountant or public accountant does not
file an appeal in writing with the California Board of Accountancy
within 30 calendar days after receipt of the notification from the
Controller or county superintendent of schools, the determination of
the Controller or county superintendent of schools pursuant to this
section shall be final.
(b) If an appeal is filed with the California Board of
Accountancy, the board shall complete an investigation of the appeal
within 90 days of the filing date. On the basis of the investigation,
the board may do either of the following:
(1) Find that the determination of the Controller or county
superintendent of schools should not be upheld and has no effect.
(2) Schedule the appeal for a hearing, in which case, the final
action on the appeal shall be completed by the board within one year
from the date of filing the appeal.
(c) If the determination of the Controller or county
superintendent of schools under subdivision (a) becomes final, the
certified public accountant or public accountant shall be ineligible
to conduct audits under Section 41020 for a period of three years,
or, in the event of an appeal, for any period, and subject to the
conditions, that may be ordered by the California Board of
Accountancy. Not later than the first day of March of each year, the
Controller shall notify each school district and county office of
education of those certified public accountants or public accountants
determined to be ineligible under this section. School districts and
county offices of education shall not use the audit services of a
certified public accountant or public accountant ineligible under
this section.
(d) For the purposes of this section, "certified public accountant
or public accountant" includes any person or firm entering into a
contract to conduct an audit under Section 41020.
(e) This section shall not preclude the California Board of
Accountancy from taking any disciplinary action it deems appropriate
under other provisions of law.
41020.6. On October 1, 2001, and each year thereafter, the State
Department of Education shall report to the Joint Legislative Audit
Committee on the actions taken by the department to eliminate audit
exceptions and comply with management improvement recommendations.
41020.8. Notwithstanding any other provision of law, the auditor
conducting the annual audit pursuant to Section 41020 shall, upon
request, provide the county superintendent or the Superintendent of
Public Instruction with fiscal information on a school district
within his or her jurisdiction if the county superintendent of
schools determines, pursuant to Section 42127.6, that a school
district may not be able to meet its obligations of the current or
subsequent fiscal year. Information provided by an auditor to a
county superintendent or the Superintendent of Public Instruction
pursuant to this section shall be submitted simultaneously to the
named district and shall not constitute a violation of auditor-client
confidentiality.
41021. The governing board of every school district shall require
each employee of the district, whose duty it is to handle funds of
the district, and may, in its discretion, require employees of the
district, whose duty it is to handle property of the district, to be
bonded under a suitable bond indemnifying the district against loss.
Such bond may be a name schedule bond, schedule position bond or
blanket bond, and shall be in such amount and type as the board shall
consider necessary and desirable. The boards shall pay from the
funds of the district the cost of the premium necessary to provide
the bond.
41022. Except as provided in this section, any election held for
the purpose permitting a school district to exceed the expenditure of
school 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 school 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.
41023. (a) Any agency organized pursuant to Article 1 (commencing
with Section 6500) of Chapter 5 of Division 7 of Title 1 of the
Government Code, the parties of which consist solely of school
districts and county offices of education, shall be subject to the
same restrictions as are applicable to school districts and county
offices of education, under that chapter, including the preparation
of budget and financial statements required by Article 1 (commencing
with Section 42100) and this article; the certifications required by
Article 3 (commencing with Section 42130) of Chapter 6 of Part 24;
the accounting and auditing requirements prescribed by Article 1
(commencing with Section 42100) and this article; and the expenditure
and appropriation controls prescribed by Chapter 9 (commencing with
Section 42600) of Part 24. This section does not apply to joint
powers agreements that are for the performance of the powers
described in Section 17567.
(b) Each agency described in subdivision (a) shall annually report
to their participating school districts and county superintendents
of schools on forms prescribed by the Superintendent of Public
Instruction.
