BILL ANALYSIS Ó
-----------------------------------------------------------------
| |
| SENATE COMMITTEE ON NATURAL RESOURCES AND WATER |
| Senator Fran Pavley, Chair |
| 2013-2014 Regular Session |
| |
-----------------------------------------------------------------
BILL NO: AB 757 HEARING DATE: June 25, 2013
AUTHOR: Hernández URGENCY: No
VERSION: May 2, 2013 CONSULTANT: Dennis O'Connor
DUAL REFERRAL: No FISCAL: Yes
SUBJECT: Department of Parks and Recreation: regulations.
BACKGROUND AND EXISTING LAW
Last July, the Sacramento Bee reported that a high-ranking
official at the Department of Parks and Recreation (DPR) had
carried out an unauthorized vacation buy-back program during
2011 for himself and other headquarters staff involving the
payout of some $271,000. Shortly after that, the State Natural
Resources Agency announced that DPR had failed to report $20.5
million in the State Parks and Recreation Fund and $34 million
in the Off-Highway Vehicle Trust Fund to the Department of
Finance (DOF). These revelations led to the resignation of the
DPR director and the termination of several upper-management
level employees. The discoveries also led the DOF, the State
Controller's Office, the Attorney General, and the Bureau of
State Audits to launch four separate audits or investigations
into activities at DPR.
The Controller's review was released in December 2012 and
identified internal control weaknesses and/or violations of DPR
and State policies that created a risk of abuse, fraud and
overpayments to employees for out-of-class (OOC) assignment pay.
Specifically, the Controller found:
DPR management circumvented internal controls for authorizing OOC
assignments pay.
DPR lacked proper supporting documentation for OOC assignments.
OOC assignment periods exceeded limits set by bargaining unit
agreements and State regulations, resulting in overpayments to
employees.
The DPR did not wait 91 days before paying managers OOC
compensation.
OOC pay was not adjusted for employees receiving Non-industrial
Disability Insurance (NDI).
1
OOC payment calculations were not properly calculated or
documented.
The Controller's review concluded "we strongly recommend that
the DPR conduct a review of all current OOC assignments to
ensure that the assignments are in accordance with State law,
bargaining unit agreements, and DPR policies. Additionally, the
DPR should implement the following policies and procedures:"
"Before the OOC assignment transaction is given to the
Transactions Unit, the Classification and Pay Unit should
ensure that the transaction is properly documented. The
documentation should include a written explanation justifying
the necessity and appropriateness of the assignment and
explaining why alternative administrative solutions would not
be sufficient. The documentation also should include a current
and proposed duty statement and an organization chart
indicating the employee's current position and the position of
the proposed assignment."
"All of the OOC assignments should be forwarded to the
Classification and Pay Unit for approval. The Transactions
Unit should ensure that all of the proper approvals are
obtained before entering assignments into the payroll system.
Approvals should occur before the assignment start date."
"The Classification and Pay Unit should review bargaining unit
contracts before approval of the OOC assignment to ensure that
compensation is not paid beyond the end of an assignment
period and/or so that compensation does not exceed 120 days
within 12 consecutive months, or 365 days depending on the
employee's classification."
"The justification documentation and/or approval sheet should
include language stating that approval for managers to receive
OOC occurs only after the manager already has worked OOC for
90 days."
"The Transactions Unit should provide training to staff to
ensure that they are aware that OOC pay should be adjusted for
employees on NDI."
"The Transactions Unit managers or supervisors should provide
tools and training to staff to ensure that payment
calculations are calculated correctly. Additionally, the
calculation should be adequately documented using a STD. 671
form and a legible calculation sheet."
"The DPR's Internal Audit Unit should conduct regular reviews
of OOC assignments to determine whether the assignments are in
accordance with State law, bargaining unit agreements, and DPR
policies."
"The DPR should seek reimbursement from employees who received
OOC payments to which they were not lawfully entitled."
2
DPR in its response to the Controller's review agreed with the
recommendations made and noted that many of the improvements and
safeguards suggested have already been implemented. They also
noted that DPR has in place an entirely new executive management
team. With regard to the specific recommendations, DPR stated
that a majority were implemented prior to completion of the
audit.
PROPOSED LAW
This bill would do two main things:
Require DPR, by July 1, 2014, to implement, to the extent
practicable, policy recommendations contained in the
Controller's review. The bill enumerates many, but not all of
those recommended policies and procedures regarding
compensation for employees working in out-of-class assignments
in the review.
Require DPR, by July 31, 2014, to report to the Legislature on
its implementation of the Controller's recommendations.
ARGUMENTS IN SUPPORT
According to the author, "The purpose of this bill is to ensure
that DPR adheres to existing law and regulations governing
employees, particularly in instances where employees are working
outside their job classification. Though DPR is on record
claiming control measures are being implemented, AB 757 ensures
this by requiring a report to the legislature on the progress of
the Department."
ARGUMENTS IN OPPOSITION: None received
3
COMMENTS
Is this bill necessary? On February 20, 2013, this committee
held a joint oversight hearing with the Assembly Water, Parks,
and Wildlife Committee regarding the various audits of DPR and
DPR's compliance with recent legislation. At that hearing, the
then recently appointed Director of DPR, Major General Anthony
L. Jackson, USMC (Ret), stated in no uncertain terms that DPR
concurred with all of the findings and recommendation in all of
the audits and attorney general investigations and DPR was
incorporating all recommendations for improvement.
Trust but verify. While most people are likely willing to take
Major General Jackson at his word, given the seriousness of the
revelations regarding DPR over the last year or so, it may be
prudent to receive a formal accounting of what DPR did to comply
with the Controller's recommendations.
Micromanaging DPR? Some of the specific actions required in
this bill are significantly beyond the level of detail typically
enumerated in statute. For example, "the calculation should be
adequately documented using a STD. 671 form and a legible
calculation sheet." If the main purpose of the bill is to get a
report on the progress DPR is making in implementing the
Controller's recommendations, why not just require that? (See
suggested amendments)
SUGGESTED AMENDMENTS
Delete subdivision (a) beginning on page 1, line 3 through
page 3, line 19
Clarify in subdivision (b) that the Controller's
recommendations are contained in the "State Controller's
Payroll Review Report of the Department of Parks and
Recreation dated December 18, 2012"
Renumber the subdivisions as appropriate
SUPPORT
American Federation of State, County, and Municipal Employees
(AFSCME)
State Controller John Chiang
OPPOSITION
None Received
4
5