Political ReformAuditing

Section § 90000

Explanation

In California, the Franchise Tax Board is responsible for conducting audits and field investigations. They review reports and statements that are filed with the Secretary of State. This includes documents associated with specific chapters related to elections and campaigns. Additionally, they audit local candidates and their committees that are chosen for review based on specific criteria.

Except as provided in Section 90006, the Franchise Tax Board shall make audits and field investigations with respect to the following:
(a)CA Government Code § 90000(a) Reports and statements filed with the Secretary of State under Chapter 4 (commencing with Section 84100), Chapter 5 (commencing with Section 85100), and Chapter 6 (commencing with Section 86100).
(b)CA Government Code § 90000(b) Local candidates and their controlled committees selected for audit pursuant to subdivision (i) of Section 90001.
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Section § 90001

Explanation

This law outlines the rules for auditing lobbying firms, lobbyist employers, and political candidates in California. Lobbying firms and their lobbyists have a 25% chance of being randomly audited. Candidates for various offices, like statewide positions or the Legislature, may be audited if they handle large contributions or expenses, with different thresholds and random selection rates. Committees associated with a candidate or focusing on state measures may also be audited under certain financial conditions.

Special rules apply for local candidates and candidates for the Public Employees’ Retirement System board, with specific regulations to be established. The Fair Political Practices Commission conducts these audits publicly after relevant election dates, ensuring transparency in campaign and lobbying finances.

Audits and investigations shall be made pursuant to Section 90000 with respect to the reports and statements of:
(a)CA Government Code § 90001(a) Each lobbying firm and each lobbyist employer who employs one or more lobbyists shall be subject to an audit on a random basis with these lobbying firms or lobbyist employers having a 25-percent chance of being audited. When a lobbying firm or lobbyist employer is audited, the individual lobbyists who are employed by the lobbying firm or the lobbyist employer shall also be audited.
(b)CA Government Code § 90001(b) Each statewide, Supreme Court, court of appeal, or Board of Equalization candidate in a direct primary or general election for whom it is determined that twenty-five thousand dollars ($25,000) or more in contributions have been raised or twenty-five thousand dollars ($25,000) or more in expenditures have been made, whether by the candidate or by a committee or committees controlled by the candidate or whose participation in the direct primary or general election is primarily in support of the candidate’s candidacy. Each statewide candidate whose contributions and expenditures are less than twenty-five thousand dollars ($25,000) shall be subject to an audit on a random basis of 10 percent of the number of such candidates.
(c)CA Government Code § 90001(c) Each candidate for the Legislature or superior court judge in a direct primary or general election shall be subject to audit by random selection if it is determined that fifteen thousand dollars ($15,000) or more in contributions have been received or fifteen thousand dollars ($15,000) or more in expenditures have been made, whether by the candidate or by a committee or committees controlled by the candidate or primarily supporting the candidate’s candidacy. Random selection shall be made of 25 percent of the Senate districts, 25 percent of the Assembly districts, and 25 percent of the judicial offices contested in an election year.
(d)CA Government Code § 90001(d) Each candidate for the Legislature in a special primary or special runoff election for whom it is determined that fifteen thousand dollars ($15,000) or more in contributions have been raised or fifteen thousand dollars ($15,000) or more in expenditures have been made, whether by the candidate or by a committee or committees controlled by the candidate or primarily supporting the candidate’s candidacy.
(e)CA Government Code § 90001(e) Each controlled committee of any candidate who is being audited pursuant to subdivision (b), (c), or (d).
(f)CA Government Code § 90001(f) Each committee, other than a committee specified in subdivision (c) of Section 82013, primarily supporting or opposing a candidate who is being audited pursuant to subdivision (b), (c), or (d) if it is determined that the committee has expended more than ten thousand dollars ($10,000).
(g)CA Government Code § 90001(g) Each committee, other than a committee specified in subdivision (c) of Section 82013, whose participation is primarily in support of or in opposition to a state measure or state measures if it is determined that the committee has expended more than ten thousand dollars ($10,000) on such measure or measures.
(h)CA Government Code § 90001(h) Each committee, other than a committee defined in subdivision (c) of Section 82013, a controlled committee or a committee primarily supporting or opposing a state candidate or measure, if it is determined that the committee has raised or expended more than ten thousand dollars ($10,000) supporting or opposing state candidates or state measures during any calendar year, except that if the commission determines from an audit report that a committee is in substantial compliance with the provisions of the act, the committee thereafter shall be subject to an audit on a random basis with each such committee having a 25-percent chance of being audited.
(i)Copy CA Government Code § 90001(i)
(1)Copy CA Government Code § 90001(i)(1) With respect to local candidates and their controlled committees, the commission shall promulgate regulations which provide a method of selection for these audits.
(2)CA Government Code § 90001(i)(2) With respect to candidates for the Board of Administration of the Public Employees’ Retirement System, the commission shall promulgate regulations that provide a method for selection of these audits. The Public Employees’ Retirement System shall reimburse the commission for all reasonable expenses incurred pursuant to this section.
(j)CA Government Code § 90001(j) In accordance with subdivisions (a), (b), (c), and (h), the Fair Political Practices Commission shall select by lot the persons or districts to be audited on a random basis. For campaign audits the selection shall be made in public after the last date for filing the first report or statement following the general or special election for which the candidate ran, or following the election at which the measure was adopted or defeated. For lobbying firm and lobbyist employer audits, the selection shall be made in public in February of odd-numbered years.
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Section § 90002

Explanation

This law outlines how audits and investigations of lobbying firms, lobbyist employers, and political committees should be conducted. Every two years, audits are needed for lobbying firms and lobbyist employers, focusing on their financial records related to lobbying. Campaign statements and reports from candidates and committees supporting or opposing candidates or measures are audited for all elections and the prior cycle. Other committees are checked for the past two years. These investigations can extend to linked transactions, but don't cover unrelated elections or restrict future discretionary audits by governing bodies.

(a)CA Government Code § 90002(a) The scope of audits and investigations under Section 90001 is as follows:
(1)CA Government Code § 90002(a)(1) Audits and investigations of lobbying firms and employers of lobbyists shall be conducted biennially covering reports filed during the previous two-year period. If a lobbying firm or lobbyist employer keeps a separate account for all receipts and payments for which reporting is required by this chapter, the requirement of an audit under subdivision (a) of Section 90001 shall be satisfied by an audit of that account and the supporting documentation required to be maintained by Section 86110.
(2)CA Government Code § 90002(a)(2) For campaign statements or reports of a candidate, controlled committee, or committee primarily supporting or opposing a candidate, the audit or investigation shall cover all campaign statements and reports filed for the primary and general election, or a special or runoff election, as well as any previous campaign statements or reports filed since the last election for that office. The audit or investigation shall not include statements or reports previously audited under Section 90001 or 90003.
(3)CA Government Code § 90002(a)(3) For campaign statements or reports of a committee primarily supporting or opposing a measure, the audit or investigation shall cover all campaign statements and reports filed by the committee in connection with the measure.
(4)CA Government Code § 90002(a)(4) For all other committees, the audit or investigation shall cover all campaign statements and reports filed during the previous two calendar years.
(b)CA Government Code § 90002(b) The audit or investigation periods may be extended to include any transaction that relates to or is connected with the election being audited or investigated or the two-year period.
(c)CA Government Code § 90002(c) An audit or investigation conducted under Section 90001 shall not include campaign statements or reports filed in conjunction with an election for any other office.
(d)CA Government Code § 90002(d) This section shall not be interpreted to act as a limit on the Franchise Tax Board or the Commission in undertaking a discretionary audit under Section 90003.
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Section § 90003

Explanation

This section allows the Franchise Tax Board and the Commission to conduct extra audits and investigations on any reports or statements required under this title, beyond those already required by a different section.

In addition to the audits and investigations required by Section 90001, the Franchise Tax Board and the Commission may make investigations and audits with respect to any reports or statements required by this title.
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Section § 90004

Explanation

This law requires the Franchise Tax Board to prepare detailed reports about certain political campaigns and candidates. These reports are shared with several officials, including the Commission, Secretary of State, Attorney General, and specific district attorneys, depending on the scope of the report. If the report involves the Attorney General candidates, it is sent to district attorneys in key counties. For local candidates, it goes to a local officer and the candidate's county district attorney. Reports from random audits must be completed within two years. All these reports are public documents that include findings on campaign report accuracy, and must be filed appropriately by the Secretary of State and other relevant local officials.

(a)CA Government Code § 90004(a) The Franchise Tax Board shall periodically prepare reports, which, except as otherwise provided in this section, shall be sent to the Commission, the Secretary of State, and the Attorney General. If the reports relate to candidates for or committees supporting or opposing candidates for the office of Attorney General, the reports shall be sent to the Commission, the Secretary of State, and the District Attorneys of the Counties of Los Angeles, Sacramento, and San Francisco. If the reports relate to local candidates and their controlled committees, the reports shall be sent to the Commission, the local filing officer with whom the candidate or committee is required to file the originals of campaign reports pursuant to Section 84215, and the district attorney for the candidate’s county of domicile.
(b)CA Government Code § 90004(b) The Franchise Tax Board shall complete its report of any audit conducted on a random basis pursuant to Section 90001 within two years after the person or entity subject to the audit is selected by the Commission to be audited.
(c)CA Government Code § 90004(c) The reports of the Franchise Tax Board shall be public documents and shall contain in detail the Franchise Tax Board’s findings with respect to the accuracy and completeness of each report and statement reviewed and its findings with respect to any report or statement that should have been but was not filed. The Secretary of State and the local filing officer shall place the audit reports in the appropriate campaign statement or lobbying files.
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Section § 90005

Explanation

This law section says that anyone working for the Franchise Tax Board or the Commission cannot share details of any records or information they receive, unless it's for their work duties, part of a court case, or a legal investigation by an agency.

A member, employee, or agent of the Franchise Tax Board or the Commission shall not divulge or make known in any manner the particulars of any record, documents, or information that the individual receives by virtue of this chapter, except in furtherance of the work of the Franchise Tax Board or the Commission or in connection with a court proceeding or the lawful investigation of any agency.
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Section § 90006

Explanation

The Commission is responsible for conducting audits and field investigations of candidates running for Controller and Board of Equalization, as well as the committees that support these candidates. This duty was previously handled by the Franchise Tax Board.

Audits and field investigations of candidates for Controller and member of the Board of Equalization and of committees supporting such candidates shall be made by the Commission instead of the Franchise Tax Board.
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Section § 90007

Explanation

This law requires a commission to set up rules for audits and investigations. These audits need to check for compliance and catch any violations while being efficient and cost-effective. They should also not be too disruptive. The commission must look at the standards of the American Institute of Certified Public Accountants when setting these rules, as long as they fit the goals of being efficient, unobtrusive, and focused on detecting issues.

(a)CA Government Code § 90007(a) The commission shall adopt auditing guidelines and standards which shall govern audits and field investigations conducted under Section 90001. The guidelines and standards shall be formulated to accomplish the following purposes:
(1)CA Government Code § 90007(a)(1) The audits should encourage compliance and detect violations of this title;
(2)CA Government Code § 90007(a)(2) The audits should be conducted with maximum efficiency in a cost-effective manner; and
(3)CA Government Code § 90007(a)(3) The audits should be as unobtrusive as possible consistent with the foregoing purposes.
(b)CA Government Code § 90007(b) In adopting its guidelines and standards the commission shall consider relevant guidelines and standards of the American Institute of Certified Public Accountants to the extent such guidelines and standards are applicable and consistent with the purposes set forth in this section.
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Section § 90008

Explanation

This law aims to guarantee that people in California can quickly access information about campaign donations and spending by various groups and individuals before elections, making it relevant and timely. To fulfill this goal, the government wants the Commission to oversee these disclosures and ensure they're happening as required. The law also allows the Commission and the Franchise Tax Board to examine records needed for transparency to confirm compliance, even before these documents are officially filed.

(a)CA Government Code § 90008(a) It is the intent of the Legislature that the people of California have timely access to information concerning the campaign contributions and expenditures of all committees, corporations, and individuals, and that this information be provided before the election, when it is relevant, in accordance with the requirements of this title. It is the further intent of the Legislature that the Commission ensure that these disclosures are being made, and that this title be liberally construed and any judicial process be expedited to achieve this purpose.
(b)CA Government Code § 90008(b) The Commission, and the Franchise Tax Board at the direction of the Commission, may audit any record required to be maintained under this title to ensure compliance with this title prior to an election, even if the record is a report or statement that has not yet been filed.
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Section § 90009

Explanation

The Commission has the power to go to a superior court to make sure information is shared as required by this title. The court is expected to quickly handle these cases and will have an expedited hearing where the opponent can give their side. The case will be moved along fast with quick deadlines for both parties to submit their briefs. Finally, the superior or appellate court can choose to put a hold on the court's order if needed.

(a)CA Government Code § 90009(a) To further the purposes of this title, the Commission may seek injunctive relief in a superior court to compel disclosure consistent with this title.
(b)CA Government Code § 90009(b) A court shall grant expedited review to an action filed pursuant to subdivision (a) as follows:
(1)CA Government Code § 90009(b)(1) The court shall conduct an expedited hearing with an opportunity for the defendant to respond.
(2)CA Government Code § 90009(b)(2) Briefs of the parties shall be required pursuant to an expedited schedule.
(c)CA Government Code § 90009(c) A superior or appellate court may, at its discretion, grant a stay of an order granting relief pursuant to subdivision (a).
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