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<ns0:Id>20250SB__112698AMD</ns0:Id>
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<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2026-02-17</ns0:ActionDate>
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<ns0:ActionText>AMENDED_SENATE</ns0:ActionText>
<ns0:ActionDate>2026-04-08</ns0:ActionDate>
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<ns0:SessionYear>2025</ns0:SessionYear>
<ns0:SessionNum>0</ns0:SessionNum>
<ns0:MeasureType>SB</ns0:MeasureType>
<ns0:MeasureNum>1126</ns0:MeasureNum>
<ns0:MeasureState>AMD</ns0:MeasureState>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Senator Choi</ns0:AuthorText>
<ns0:AuthorText authorType="COAUTHOR_ORIGINATING">(Coauthors: Senators Alvarado-Gil and Strickland)</ns0:AuthorText>
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<ns0:Legislator>
<ns0:Contribution>LEAD_AUTHOR</ns0:Contribution>
<ns0:House>SENATE</ns0:House>
<ns0:Name>Choi</ns0:Name>
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<ns0:Legislator>
<ns0:Contribution>COAUTHOR</ns0:Contribution>
<ns0:House>SENATE</ns0:House>
<ns0:Name>Alvarado-Gil</ns0:Name>
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<ns0:Contribution>COAUTHOR</ns0:Contribution>
<ns0:House>SENATE</ns0:House>
<ns0:Name>Strickland</ns0:Name>
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<ns0:Title> An act to add Section 41020.4 to the Education Code, and to add Article 10.2 (commencing with Section 53905) to Chapter 4 of Part 1 of Division 2 of Title 5 of the Government Code, relating to local government. </ns0:Title>
<ns0:RelatingClause>local government</ns0:RelatingClause>
<ns0:GeneralSubject>
<ns0:Subject>School districts, county offices of education, and local agencies: financial postings.</ns0:Subject>
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(1)
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Existing law requires, not later than May 1 of each fiscal year, each county superintendent of schools to provide for an audit of all funds under their jurisdiction and control, and requires the governing board of each local educational agency to either provide for an audit of the books and accounts of the local educational agency or make arrangements with the county superintendent of schools having jurisdiction over the local educational agency to provide for that auditing. Existing law requires, by January 31 of each year, the governing body of each local educational agency to review, at a public meeting, the annual audit of the local educational 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.
</html:p>
<html:p>This bill would require governing boards of school districts and county superintendents of schools to post their annual audit report on their internet websites within 30 days of the report being filed with the county superintendent of schools or formally received by the governing board, as specified.</html:p>
<html:p>
(2)
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Existing law requires, within 7 months after the close of each
fiscal year or within the time prescribed by the Controller, whichever is later, the officer of each local agency, as defined, who has charge of the financial records to furnish to the Controller a report of all the financial transactions of the local agency during the preceding fiscal year, as specified. Existing law requires the report to contain underlying data from audited financial statements prepared in accordance with generally accepted accounting principles, as specified, and to state certain information, including the aggregate income during the preceding fiscal year. Existing law requires the legislative body, upon completion of the report, to either post the report in a conspicuous location on its internet website or to cause copies of the report to be prepared and the clerk of the legislative body to furnish a copy to any person requesting it, as specified.
</html:p>
<html:p>This bill would require a local agency, as defined, that maintains an internet website to post its
audited financial statements, or its annual comprehensive financial report, on its internet website within 30 days of the date that the statements or report are completed by the local agency, as specified.
The bill would make its provisions applicable to local agencies operative on January 1, 2028. By imposing additional duties on school districts, county superintendents of schools, and local agencies, the bill would impose a state-mandated local program.</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
The bill would include findings and declarations related to these provisions.
</html:p>
<html:p>
(4)
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The bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that
reimbursement.
</html:p>
<html:p>This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.</html:p>
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<ns0:VoteRequired>MAJORITY</ns0:VoteRequired>
<ns0:Appropriation>NO</ns0:Appropriation>
<ns0:FiscalCommittee>YES</ns0:FiscalCommittee>
<ns0:LocalProgram>YES</ns0:LocalProgram>
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<ns0:ImmediateEffect>NO</ns0:ImmediateEffect>
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<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
<ns0:BillSection id="id_49CAB5D9-91B7-42B9-9FF7-D164B6BCB15A">
<ns0:Num>SECTION 1.</ns0:Num>
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<html:p>The Legislature finds and declares all of the following:</html:p>
<html:p>
(a)
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Under the California Constitution, the people have the right of access to information concerning the conduct of the people’s business. Access to the audited financial statements of local agencies and school districts is a fundamental and necessary right of every resident to ensure the proper stewardship of public funds.
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<html:p>
(b)
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Recent instances of fiscal distress and mismanagement in various local jurisdictions have highlighted the need for timely, accessible, and transparent financial reporting. Publicly available audits serve
as an “early warning system” for taxpayers, creditors, and state oversight agencies.
</html:p>
<html:p>
(c)
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While existing law requires the performance of annual audits, there is currently no uniform requirement for these documents to be posted prominently online. This lack of standardization creates “transparency deserts,” where residents must navigate complex requests under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code) to view basic financial health data.
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<html:p>
(d)
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In a modern democracy, “publicly available” must mean “available online.” Requiring local agencies and educational entities to host their audited financial statements on their internet websites ensures that information is accessible to all Californians regardless of
their ability to visit a physical government office during business hours.
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<html:p>
(e)
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It is the intent of the Legislature in enacting this act to provide a simple, no-cost mechanism for the public to monitor the fiscal health of their local governments and to ensure that financial accountability is a proactive duty of the state’s political subdivisions rather than a reactive response to inquiry.
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<ns0:Num>SEC. 2.</ns0:Num>
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Section 41020.4 is added to the
<ns0:DocName>Education Code</ns0:DocName>
, to read:
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<ns0:Num>41020.4.</ns0:Num>
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<html:p>The governing board of each school district and each county superintendent of schools shall post the annual audit report required by Section 41020 on its internet website. All of the following shall apply to the posting:</html:p>
<html:p>
(a)
<html:span class="EnSpace"/>
The annual audit report shall be posted in a prominent location on the internet website and be
accessible to the public without a password or fee.
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<html:p>
(b)
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The annual audit report shall be posted within 30 days of the date it is filed with the county superintendent of schools or formally received by the governing board, whichever occurs first.
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<html:p>
(c)
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The school district or county superintendent of schools shall maintain the posted audit report on its internet website for a period of
not less than three years.
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<ns0:Num>SEC. 3.</ns0:Num>
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Article 10.2 (commencing with Section 53905) is added to Chapter 4 of Part 1 of Division 2 of Title 5 of the
<ns0:DocName>Government Code</ns0:DocName>
, to read:
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<ns0:Num>10.2.</ns0:Num>
<ns0:LawHeadingVersion id="id_3A071994-83DC-4B76-AD1C-C422831A87BE">
<ns0:LawHeadingText>Financial Postings</ns0:LawHeadingText>
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<ns0:LawSection id="id_2C3199B9-D316-4A53-A177-26A81348C22F">
<ns0:Num>53905.</ns0:Num>
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<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
Notwithstanding any other law, for purposes of this section, “local agency” means a city, including a charter city, county, city and county, or an independent special district, as defined in Section 56044.
</html:p>
<html:p>
(b)
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If a local agency maintains an internet website, the local agency shall post its audited financial statements, or its annual comprehensive financial report, on that internet website. All the following apply to the posting:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
The audited financial statement or annual comprehensive financial report shall be posted in a prominent location on the internet website and be accessible to the public without a
password or fee.
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<html:p>
(2)
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The audited financial statement or annual comprehensive financial report shall be posted within 30 days of the date that the statements or report are completed by the local agency.
</html:p>
<html:p>
(3)
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The local agency shall maintain the posted audited financial statement or annual comprehensive financial report on its internet website for a period of not less than three years.
</html:p>
<html:p>
(c)
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This section shall become operative on January 1, 2028.
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<ns0:BillSection id="id_F008334C-2342-4379-9227-960DFDE0492A">
<ns0:Num>SEC. 4.</ns0:Num>
<ns0:Content>
<html:p>The Legislature finds and declares that the fiscal integrity of local agencies and school districts is a matter of statewide concern and is not a municipal affair as that term is used in Section 5 of Article XI of the California Constitution, and that the financial failure of a single local entity can have cascading effects on the state’s credit rating, the stability of the public employee retirement systems, and the delivery of essential services like education and public safety. Therefore, Section 3 of this act adding Article 10.2 (commencing with Section 53905) to Chapter 4 of Part 1 of Division 2 of Title 5 of the Government Code applies to all cities, including charter cities.</html:p>
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<ns0:Num>SEC. 5.</ns0:Num>
<ns0:Content>
<html:p>If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.</html:p>
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