BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 757| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 757 Author: Roger Hernández (D) Amended: 6/26/13 in Senate Vote: 21 SENATE GOVERNMENTAL ORGANIZATION COMMITTEE : 11-0, 6/11/13 AYES: Wright, Nielsen, Berryhill, Calderon, Cannella, Correa, De León, Galgiani, Hernandez, Lieu, Padilla SENATE NATURAL RESOURCES AND WATER COMMITTEE : 8-0, 6/25/13 AYES: Pavley, Cannella, Evans, Fuller, Jackson, Lara, Monning, Wolk NO VOTE RECORDED: Hueso SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8 ASSEMBLY FLOOR : 72-0, 5/23/13 - See last page for vote SUBJECT : Department of Parks and Recreation: payroll review report SOURCE : Author DIGEST : This bill requires the Department of Parks and Recreation (DPR) to report to the Legislature on DPRs implementation of the recommendations contained in the "State Controller's Payroll Review Report of the Department of Parks and Recreation." Sunsets the provisions of this bill on December 31, 2014. CONTINUED AB 757 Page 2 ANALYSIS : Existing law: 1. Grants DPR control of the state park system, and charges it with responsibility for administering, protecting, developing and interpreting state parks for the use and enjoyment of the public. 2. Requires the Controller to supervise the fiscal concerns of the state, audit all claims against the state, and authorizes the Controller to audit the disbursement of any state money for correctness, legality and lawful payment. 3. Delegates to state departments the authority to approve employee "out-of-class" assignments, subject to limitations, rules and procedures set out in administrative regulations and various Department of Human Resources and state civil service manuals. This bill requires DPR to report on its implementation of the recommendations of the Controller contained in the "State Controller's Payroll Review Report of the Department of Parks and Recreation," dated December 18, 2012. Specifically, this bill: 1. Requires the DPR to report to the Legislature on or before July 31, 2014, on the extent to which it has implemented the Controller's recommendations. 2. Sunsets the provisions of this bill on December 31, 2014. Background The author's office notes that, between July 1, 2009 and June 30, 2012, DPR had 203 employees assigned to work in positions outside their job classification, usually with a pay increase. In many of these cases, state parks officials circumvented normal payroll rules by assigning employees to out-of-class positions without adequate documentation. As a result, at least 17 employees violated policy by working in out-of-class positions longer than the maximum 120 days, and 20 did so for more than a year. In other cases, parks officials AB 757 Page 3 failed to properly adjust out-of-class pay for employees who were furloughed or not working because of disability. State Controller's recommendations . In the recent audit, contained in the "State Controller's Payroll Review Report of the Department of Parks and Recreation," the Controller listed the following policy suggestions regarding compensation for employees working in out-of-class assignments: 1. All of the out-of-class assignments should be forwarded to DPR's Classification and Pay Unit for approval. The DPR's 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. 2. The DPR's Classification and Pay Unit should review bargaining unit contracts before approval of the out-of-class assignment to ensure that compensation is not paid beyond the end of an assignment period or that compensation does not exceed 120 days within 12 consecutive months or 365 days, or both, depending on the employee's classification. 3. The justification documentation or approval sheet, or both, should include language stating that approval for managers to receive out-of-class assignments occurs only after the manager already has worked out of class for 90 days. 4. The DPR's Transactions Unit should provide training to staff to ensure that they are aware that out-of-class pay should be adjusted for employees on nonindustrial disability insurance. 5.The DPR's Transactions Unit managers or supervisors should provide tools and training to staff to ensure that payment calculations are calculated correctly. The calculation should be adequately documented using a state form STD 671 and a legible calculation sheet. 6.DPR's Internal Audit Unit should conduct regular reviews of out-of-class assignments to determine whether the assignments are in accordance with state law, bargaining unit agreements, and department policies. 7. DPR should seek reimbursement from employees who received AB 757 Page 4 out-of-class payments to which they were not lawfully entitled. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No SUPPORT : (Verified 7/18/13) State Controller John Chiang AFSCME ARGUMENTS IN SUPPORT : According to the author's office, 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. The author's office states that out-of-class work assignments may have cost taxpayers tens of thousands of dollars beyond the misuse of funds that has been previously reported at the department. For most rank-and-file employees, out of class work is defined as performing the full range of duties and responsibilities allocated to an existing classification more than 50% of the time. AFSCME states that this bill "will fence off potential abuse through reform. This means requiring proper documentation before OOC [out-of-class] assignments begin." State Controller John Chiang states, "The review my office conducted looked at DPR's payroll processes for the period of July 1, 2009, through June 30, 2012, and identified numerous internal control weaknesses and/or violations of DPR and State policies that create a risk of abuse, fraud, and overpayments to employees for OOC assignment pay. Further, we also identified additional violations of DPR and State policies and procedures that resulted in inappropriate amounts paid to DPR employees. As the State's chief fiscal officer, I strongly believe this legislation will help ensure that the recommendations outlined in the review are implemented by DPR in a meaningful and prompt manner." ASSEMBLY FLOOR : 72-0, 5/23/13 AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom, Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian Calderon, Campos, Chau, Chávez, Chesbro, Conway, AB 757 Page 5 Cooley, Dahle, Dickinson, Donnelly, Eggman, Fong, Fox, Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gordon, Gorell, Gray, Hagman, Hall, Harkey, Roger Hernández, Jones-Sawyer, Levine, Linder, Logue, Lowenthal, Maienschein, Mansoor, Medina, Melendez, Mitchell, Morrell, Mullin, Muratsuchi, Nazarian, Nestande, Olsen, Pan, Patterson, Perea, V. Manuel Pérez, Quirk, Quirk-Silva, Rendon, Salas, Skinner, Stone, Ting, Wagner, Wieckowski, Wilk, Williams, Yamada, John A. Pérez NO VOTE RECORDED: Daly, Grove, Holden, Jones, Waldron, Weber, Vacancy, Vacancy MW:d 8/8/13 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****