CA AB1538

Authorizes the Controller to contract with consultants to conduct semiannual recovery audits of state agencies with expenditures exceeding $50,000,000 annually, with exemptions available by regulation.

Permits consultants to receive reasonable compensation, including fees calculated as a percentage of amounts recovered from vendor overpayments, and allows consultants to pursue judicial recovery actions.

Prohibits recovery audits during the 180-day period following payment and requires consultants to be bound by the same confidentiality restrictions applicable to the Controller and state employees.

Requires the Controller to provide copies of audit reports to the Director of Finance and State Auditor within 7 days, and mandates annual legislative reports summarizing audit results until January 1, 2017.

Defines "overpayment" to include duplicated payments, unapplied discounts, improper late fees, incorrect shipping costs, unprovided goods or services, and state sales tax.