California Code, Government Code - GOV § 12422.5

(a) On or before January 1, 2015, the Controller shall develop internal control guidelines applicable to each local agency to prevent and detect financial errors and fraud.

(b) The Controller shall develop the internal control guidelines based on standards adopted by the American Institute of Certified Public Accountants and with input from any local agency and organizations representing the interests of local agencies, including, but not limited to, the League of California Cities, the California State Association of Counties, the California Special Districts Association, and the California State Association of County Auditors.

(c) On or before January 1, 2015, the Controller shall post the completed internal control guidelines on the Controller's internet website to assist a local agency, as defined in subdivision (f), in establishing a system of internal controls to safeguard assets and prevent and detect financial errors and fraud.

(d) The Controller shall, with input from the agencies listed in subdivision (b), update the internal control guidelines, as the Controller deems necessary, and maintain a current version on its internet website.

(e) The Controller may audit any local agency for purposes of determining whether the agency's internal controls are adequate to detect and prevent financial errors and fraud.

(f) For purposes of this section, “local agency” means a city, county, city and county, special district, or any other local governmental entity, except a school district.