BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1820
                                                                  Page  1

          Date of Hearing:   April 14, 2010

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

              AB 1820 (Portantino) - As Introduced:  February 11, 2010 

          Policy Committee:                              Business and  
          Professions  Vote:                            9 - 0 

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill establishes the Office of the California Inspector  
          General (OCIG).  Specifically, this bill:

          1)Establishes the OCIG, headed by the California Inspector  
            General who is appointed by the governor with the consent of  
            the Senate.

          2)Specifies that the Inspector General shall serve for a term of  
            four years and shall be removed from office by a majority vote  
            of the Senate and the Assembly.

          3)Authorizes the Inspector General to appoint a Chief Deputy  
            Inspector General and employ officers and employees he or she  
            deems necessary.

          4)Specifies that the annual salary of the Inspector General  
            shall be equal to that of agency secretaries of the executive  
            branch of government.

          5)Authorizes the OCIG to investigate all state entities that are  
            headed up by governor's appointees.

           FISCAL EFFECT  

          Based on the duties outlined in the bill and the current budget  
          for the Bureau of State Audits - with 147 PYs and a budget of  
          $18 million - which has similar duties, annual costs for the new  
          inspector general's office would likely exceed $10 million (GF).  










                                                                  AB 1820
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           COMMENTS  

           1)Rationale  . The author is concerned that there are no state  
            agencies currently tasked with identifying and investigating  
            fraud and waste. He asserts that "there is no single agency  
            that can act completely and independently to do these  
            functions."  According to the author, creating the OCIG in  
            California will create a watch dog that can look everywhere  
            and will ensure that government money, assets and effort are  
            used in a manner that supports the publics' trust in  
            government.

           2)Bureau of State Audits (BSA)  . The BSA is a non-partisan office  
            headed by the State Auditor (SA), which is tasked with  
            independently examining records, administering oaths, issuing  
            subpoenas, and conducting and reporting on financial and  
            performance audits of every state agency, constitutional  
            office, and local governmental agency. In addition, the BSA  
            administers the California Whistleblower Protection Act; has  
            the authority to identify, audit, and report on state issues  
            that the SA recognizes as being at high risk for waste, fraud,  
            abuse, and mismanagement, or that have major challenges  
            related to efficiency or effectiveness; and issues a high risk  
            list every two years that identifies, audits, and issues  
            reports with recommendations for improvement in areas  
            detected.

            The State Auditor has raised concerns about this legislation.   
            Primarily, she notes that the duties outlined in this  
            legislation substantially overlap and directly duplicate the  
            activities of the BSA. The auditor cautions, "When the State  
            Auditor's Office was created, the Legislature was clear in its  
            intent to establish an independent office free from executive  
            and legislative control." Under this legislation, the  
            Inspector General would not be an independent office, it would  
            be a position appointed by the governor and approved by the  
            Senate, similar to other executive positions within the  
            administration.

           3)Existing Office of the California Inspector General  . The state  
            currently has an inspector general's office - with 147 PYs and  
            a $26 million budget.  The mission of that office is to help  
            maintain the integrity of the state's correctional system - in  
            effect, to act as the eyes and ears of the public in  
            overseeing the state's prisons and correctional programs. The  








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            Office of the Inspector General carries out that mission by  
            investigating and auditing the California Department of  
            Corrections and Rehabilitation to uncover criminal conduct,  
            administrative wrongdoing, poor management practices, waste,  
            fraud, and other abuses by staff, supervisors, and management.  
            The inspector general posts the findings of every audit and  
            special report on its website, along with quarterly summary  
            reports describing the number of audits and special reviews  
            completed, the types of misconduct uncovered, and the  
            disciplinary actions taken.
           
          4)The Whistleblower Protection Act  . This legislation directly  
            duplicates the language in the existing Whistleblower  
            Protection Act. That Act authorizes BSA to conduct  
            investigations in response to complaints received from state  
            employees, state agencies, and members of the public, or  
            initiated by the SA, into any potential improper governmental  
            activity by a state agency or employee, including  
            gubernatorial appointees, the California State University, the  
            University of California, and the State Compensation Fund.

           5)Related Legislation  . SB 887 (Hollingsworth) would create the  
            Office of the Chief Inspector General and would require him or  
            her to submit a proposed sunset date for all state programs,  
            departments and agencies to the Legislature. The Chief  
            Inspector General would be appointed by the governor and would  
            need to be confirmed by a two-thirds vote of both houses.  The  
            term for the Chief Inspector General would be 12 years. That  
            bill is currently pending in the Senate Governmental  
            Organization committee.


           Analysis Prepared by  :    Julie Salley-Gray / APPR. / (916)  
          319-2081