SACRAMENTO – State Controller John Chiang today
applauded Governor Jerry Brown for signing AB 1248, a bill authored by
Assemblyman Ken Cooley (D-Rancho Cordova), which requires the
establishment of internal control standards aimed at preventing local
government malfeasance and insolvency. Controller Chiang sponsored this
legislation, which was informed by lessons learned during his recent
audits of the cities of Bell, Stockton, Hercules, and Montebello.
“For many local governments currently battling insolvency, the seeds
of their financial distress were sown long before the Great Recession,”
said Chiang. "Poor checks-and-balances can sap communities of their
fiscal health to the point where a downturn in the economy can be
catastrophic."
"Recent audits produced by my office demonstrate how
weak internal controls can set-up local governments for failure, in such
forms as bankruptcy, default, and corruption.” Chiang said. “This bill
calls for the State and local governments to work together to develop
stronger fiscal management practices aimed at protecting communities
against self-dealing, misuse of taxpayer monies and other abuses of
public trust."
Under AB 1248, internal control standards include separation of
powers between budgeting and check-writing, avoiding potential conflicts
of interest in hiring or contracting, and other measures designed to
protect the integrity of a local government's finances.
“AB 1248 is a bill that is designed to strengthen public confidence
in that layer of government that most frequently touches their lives –
local government. These guidelines will create a highly visible yard
stick by which administrative practices may be measured, giving much
needed guidance to citizens and public officials,” said Assemblyman Ken
Cooley.
This bill was backed by the California Taxpayers Association and
received bipartisan support in both houses of the Legislature.
Check the Controller’s website for more information on his audit programs.
