ARTICLE 7. Federally Mandated Audits of Block Grant Funds Allocated to Local Agencies [53130. - 53138.]

Cal. Government Code - GOV 7.

in effect

Cal. Government Code - GOV § 53130. Section 53130.

In connection with federal block grant funds which require mandated financial and compliance auditing, the Legislature finds that there is limited coordination of audits among federal, state, and local auditors and independent public accountants auditing local agencies, which may result in overlaps and gaps in audit coverage. The Legislature further finds that it is essential to establish audit procedures that conform to the standards of independence and quality contained within the federal Standards for Audit of Governmental Organizations, Programs, Activities and Functions. Therefore, it is the intent of the Legislature to promote audit coordination by designating the agencies listed in Section 12430 as responsible for assuring that local agencies provide for or otherwise adhere to federally mandated financial and compliance audit requirements for block grant funds allocated to them.

Cal. Government Code - GOV § 53131. Section 53131.

As used in this article: (a) “Qualified state and local government auditors” means those auditors employed by state and local governments that meet the independence requirements set forth in the federal Standards for Audit of Governmental Organizations, Programs, Activities and Functions. (b) “Independent public accountants” means a certified public accountant, or a public accountant who is licensed by the California Board of Accountancy who holds a valid permit to practice accountancy. (c) “Local agency” means a city, county, city and county, special district, joint-powers agency, public corporation, nonprofit corporation, or any other agency that is eligible to receive federal block grant funds. (d) “State department” means that state organization designated by law or agreement that allocates block grant funds to local agencies or is otherwise responsible for administering block grant funds. (e) “Financial and compliance audit” means an audit that complies with the financial and compliance audit requirements of the Standards for Audit of Governmental Organizations, Programs, Activities and Functions published by the United States General Accounting Office. Organization wide financial and compliance audits required by Federal Office of Management and Budget Circulars A-102 and A-110 are acceptable for this purpose.

Cal. Government Code - GOV § 53132. Section 53132.

State departments shall identify and provide to the Controller listings of all agreements allocating block grant funds to local agencies.

Cal. Government Code - GOV § 53133. Section 53133.

The Controller shall identify and make available to local agencies federally mandated financial and compliance block grant audit requirements.

Cal. Government Code - GOV § 53134. Section 53134.

(a) Local agencies shall have the option, pursuant to the provisions of Section 53135, to provide for federally mandated financial and compliance audits of block grant funds received from state departments. If, however, a local agency does not elect to, or fails to provide for, federally mandated financial and compliance audits, or if it is determined by the administering state department that a local agency warrants assistance in this function, the state department shall notify the Controller, and the Controller shall identify appropriate methods for accomplishing federally required audits. The decision of the Controller shall be based upon use of any existing state audit relationship, whenever appropriate in view of federal requirements, so as to avoid duplication and excess costs. (b) The state shall rely on the audit arranged by the local agency if the audit is conducted in accordance with the standards promulgated by the state consistent with federal policy. Additional work shall not duplicate these audits and shall be conducted only upon approval of the Controller in consultation with the Department of Finance. (c) Audits performed pursuant to this article shall be conducted not less frequently than every two years, or as specified by federal law, by qualified state or local government auditors or independent public accountants in accordance with the financial and compliance requirements of federal Standards for Audit of Governmental Organizations, Programs, Activities and Functions. These audits shall be completed no later than six months after the close of the audit period. If the provisions of this subdivision have not been met, the Controller shall immediately notify the Governor and the Legislature as to what corrective actions it intends to take.

Cal. Government Code - GOV § 53135. Section 53135.

State agencies administering federal block grant programs shall prepare audit plans based on audit plan guidelines developed no later than December 1, 1982, by the agencies listed in Section 12430. The audit plan guidelines shall include, but not be limited to, provisions for the contractor to obtain independent federally mandated audits of block grant funds, preaudit conditions, and compliance indicators. The departmental audit plans shall give preference to utilization of existing audit relationships where consistent with federal independence standards. State agencies shall prepare their audit plans for review and approval by the agencies listed in Section 12430 in a timely fashion and contract provisions shall be incorporated into all existing contracts no later than February 1, 1983. Plans shall be adopted annually each fiscal year thereafter no later than October 1.

Cal. Government Code - GOV § 53136. Section 53136.

The Controller shall assure that audits conducted in accordance with this article meet the federal audit requirements provided pursuant to block grant laws and regulations.

Cal. Government Code - GOV § 53137. Section 53137.

The Controller shall review and monitor audit report findings to determine that both state and local entities have taken appropriate corrective action, or shall make recommendations to state departments for corrective action, including recovery and referral for legal action, as appropriate.

Cal. Government Code - GOV § 53138. Section 53138.

The Controller, the Department of Finance, the State Auditor’s office, or other state department auditors may perform audit activities pursuant to this article insofar as the standards of independence contained in the “Government Auditing Standards” published by the Comptroller General of the United States are met.

Source: CA Legislative Counsel Bulk DataURL: https://downloads.leginfo.legislature.ca.gov/pubinfo_2025.zipFetched: 6/27/2026