School districts: state receivership: audits.

Existing law requires the Superintendent of Public Instruction to assume all the rights, duties, and powers of the governing board of specified school districts in order to ensure the return of the district to fiscal solvency. Existing law authorizes the payment of emergency apportionments to school districts experiencing financial difficulties and the appointment of a trustee by the Superintendent to monitor and review the operation of the district. Existing law also requires each county superintendent of schools to provide for an audit of all funds under his or her jurisdiction and control, not later than the first day of May of each fiscal year, and the governing board of each local educational agency to provide for an audit of the books and accounts of the local educational agency. This bill would provide that, if a trustee has been appointed by the Superintendent to monitor and review the operation of a school district receiving an emergency apportionment, and the Controller, or his or her designee, is required to cause an audit to be conducted of the books and accounts of the district instead of the annual audit described above, the Superintendent is required to allow the district 180 days before penalties are assessed against the district for discrepancies that are discovered by the audit. The bill also would require that, to the extent that the school district implements corrections to an apportionment significant audit exception or finding during the 180-day period specified above, and those corrections result in a reduction in the required repayment, penalty, or other fiscal impact recommended in or resulting from the audit report, the school district would only be liable for that part of an audit exception or finding remaining after the corrections are made. The bill would prohibit the repayment of an apportionment significant audit exception or payment of a penalty arising from an audit exception for a fiscal year other than the fiscal year for which that audit was conducted or the fiscal year prior to the fiscal year for which the audit is conducted.