BILL ANALYSIS                                                                                                                                                                                                    Ó






                                                       Bill No:  SB  
          486
          
                 SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
                       Senator Roderick D. Wright, Chair
                           2013-2014 Regular Session
                                 Staff Analysis



          SB 486  Author:  DeSaulnier
          As Introduced:  February 21, 2013
          Hearing Date:  April 9, 2013
          Consultant:  Paul Donahue


                                     SUBJECT  

                Caltrans: Office of Legal Compliance and Ethics

                                   DESCRIPTION
           
          1)Creates the Office of Legal Compliance and Ethics within  
            the Transportation Agency, with responsibility for  
            preventing and detecting serious breaches of Department  
            of Transportation (Caltrans) policy, fraud, waste, abuse,  
            including any acts of criminal conduct within Caltrans.

          2)Requires the director of the office to report quarterly,  
            at a noticed public hearing of the California  
            Transportation Commission, regarding performance of and  
            activities related to investigations.

          3)Requires the director of the office to report annually to  
            the Governor and the Legislature with a summary of  
            investigations. The bill would require the summary to be  
            posted on the Agency's Internet website.

          4)The bill would require the director of the office to  
            provide information and evidence relating to criminal  
            acts to the State Auditor's office and appropriate law  
            enforcement officials, and to refer matters for civil,  
            criminal, and administrative action to appropriate  
            prosecutorial agencies, including the Attorney General.

                                   EXISTING LAW





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           Existing law establishes the Transportation Agency in state  
          government with various duties and responsibilities.

                                    BACKGROUND
           
           1)Purpose of the bill  : The author states that SB 486 seeks  
            to increase accountability within Caltrans by removing  
            the audits and investigations responsibilities from the  
            department and requiring them to report to the CTC and  
            Legislature on a regular basis.

            According to the author, "[i]n such a large organization,  
            it is nearly impossible to keep track of every employee  
            or ensure that each dollar is spent efficiently and  
            effectively. Recent media investigations and state audit  
            reports have created a picture of questionable practices  
            and mismanagement within Caltrans, such as failure to  
            comply with department inspection protocols, inability to  
            track staff time by project, and inappropriate use of  
            state resources.

            "While Caltrans has a Division of Audits and  
            Investigations, it reports only to department management  
            and has had little effect on improving Caltrans  
            performance. An entity outside of Caltrans conducting  
            audits and investigations and reporting its findings to  
            the administration, the Legislature, and the public  
            should instill some discipline and improve Caltrans'  
            management of the state transportation system and  
            funding."

            In November, 2011, the Senate Transportation and Housing  
            Committee held a Caltrans oversight hearing to  
            investigate allegations of improprieties within Caltrans'  
            program to inspect construction of new structures,  
            including the new Bay Bridge.

           2)Recent report on Caltrans by State Auditor  :  On March 28,  
            2013, the Bureau of State Audits released a report  
            concerning its investigation of Caltrans. Among other  
            things, the report found that several Caltrans workers  
            falsified test data on transportation projects, claimed  
            hundreds of hours of overtime they didn't work and  
            engaged in an "inexcusable neglect of duty," according to  
            the report. 





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            Specifically, the investigation discovered that from 2004  
            to 2009, a technician falsified 10 test results on  
            bridges and retaining walls, and an engineer was involved  
            in an additional incident.  The technicians' supervisor  
            failed to properly oversee his subordinates' time sheets  
            or detect the testing lapses. The same manager improperly  
            instructed workers in 2008 to take state-owned steel  
            beams and other material to his property in Susanville.  
            Some of the scrap steel was used for a large gate. The  
            falsified test data involved, in part, the new Benicia  
            Bridge, the Lake Hodges Bridge in San Diego, the La  
            Sierra Avenue Bridge in Riverside, an overhead sign on  
            Interstate 580 in Oakland and a retaining wall in Los  
            Angeles. 

            Caltrans in 2011 examined the subject projects and  
            declared them structurally sound, although the state  
            auditor questioned the state agency's delay. "Despite  
            identifying these additional data falsifications,  
            Caltrans did not at that time take any action to  
            determine whether the structures affected were indeed  
            sound," according to the report.<1> 













          -------------------------
          <1> The auditor's report also noted that 2 Caltrans  
          technicians were paid more than $13,000 for 267 hours of  
          overtime in 2008 they did not work. In addition, they  
          falsely listed time conducting tests for which they  
          received a higher pay rate.





















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                            PRIOR/RELATED LEGISLATION
           
          SB 878 (DeSaulnier) 2011-2012 Session. Would have created  
          the independent Office of the Transportation Inspector  
          General within state government to ensure that CalTrans,  
          the High-Speed Rail Authority, and all other state,  
          regional, and local agencies expending state transportation  
          funds are operating efficiently, effectively, and in  
          compliance with applicable federal and state laws. (Vetoed)

          AB 471 (Lowenthal) 2011-2012 Session. Would have created an  
          independent Office of Inspector General to oversee the  
          HSRA. (Held in Assembly Appropriations Committee.)

          SB 835 (Strickland) 2009-2010 Session. Would have  
          established the Bureaucracy Realignment and Closure  
          Commission of 2011 and provides for the creation of an  
          independent commission charged with examining state  
          bureaucracies in California with the goal to eliminate or  
          consolidate duplicative agencies and bureaucracies. (Held  
          in Senate Appropriations Committee)

          SB 887 (Hollingsworth) 2009-2010 Session. Would have  
          created the Government Reform, Accountability, and Sunset  
          Review Act, establishing the Office of Inspector General  
          with the mandate to deter, detect, and disclose waste,  
          fraud, and abuse in state government. (Failed passage in  
          Senate Governmental Organization Committee)

           SUPPORT:   

          None on file

           OPPOSE:   

          None on file

           DUAL REFERRAL:   Senate Transportation and Housing Committee
           
          FISCAL COMMITTEE:   Senate Appropriations Committee



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