The California Government Code section 8546.10 permits the California State Auditor to develop a high-risk local government agency audit program for the purpose of identifying, auditing, and issuing reports on any local government agency, including a city, county, special district, or other publicly created entity, that the State Auditor identifies as being at high risk for the potential of waste, fraud, abuse, and mismanagement or that has major challenges associated with its economy, efficiency, or effectiveness.
Regulations for the California State Auditor's High Risk Local Government Agency Audit Program became effective on July 1, 2015. This flowchart outlines the process the California State Auditor follows to determine whether a local government agency is at high risk. If a local agency is designated as high risk, it must provide written updates regarding its progress implementing its corrective action plan every six months after the report is issued. We will remove the high-risk designation when the agency has taken satisfactory corrective action.