California Code, Government Code - GOV § 13405

(a) To ensure that the requirements of this chapter are fully complied with, each agency head that the Department of Finance determines is covered by this section shall, on a biennial basis but no later than December 31 of each odd-numbered year, conduct an internal review and prepare a report on the adequacy of the state agency's systems of internal control, and monitoring practices in accordance with the guide prepared by the Department of Finance pursuant to subdivision (d).

(b) The report, including the state agency's response to review recommendations, shall be signed by the agency head and addressed to the agency secretary, or the Director of Finance for a state agency without a secretary.  An agency head shall submit a copy of the report and related response, pursuant to a method determined by the Department of Finance, to the Legislature, the California State Auditor, the Controller, the Department of Finance, the Secretary of Government Operations, and to the State Library where the copy shall be available for public inspection.  A copy of the report shall be posted on the agency's Internet Web site within five business days after acceptance by the Department of Finance.

(c) The report shall identify all inadequacies or weaknesses in a state agency's systems of internal control that prevents the agency head from stating that the state agency's systems comply with this chapter.  By June 30, subsequent to the report prepared pursuant to subdivision (a), the state agency shall provide to the Department of Finance a plan and schedule for correcting the identified inadequacies or weaknesses.  The plan and schedule shall be updated every six months until all corrections are implemented.

(d) The Department of Finance, in consultation with the California State Auditor and the Controller, shall establish, and may modify from time to time as necessary, a system of reporting and a general framework to guide state agencies in conducting internal reviews of their systems of internal control.  The adoption, amendment, or repeal of this system of reporting and general framework, or other directives to guide state agencies consistent with this section, shall be exempt from the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340 ) of Part 1 of Division 3 of Title 2).

(e) The Department of Finance, in consultation with the California State Auditor and the Controller, shall establish, and may modify from time to time as necessary, a general framework of recommended practices to guide state agencies in conducting active, ongoing monitoring of processes for internal control.


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