BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
SB 486 (DeSaulnier) - Transportation: Office of Legal Compliance
and Ethics.
Amended: April 15, 2013 Policy Vote: GO 9-2; T&H 11-0
Urgency: No Mandate: No
Hearing Date: May 20, 2013 Consultant: Mark McKenzie
This bill meets the criteria for referral to the Suspense File.
Bill Summary: SB 486 would establish an Office of Legal
Compliance and Ethics (OLCE) in the Transportation Agency to
oversee the Department of Transportation (Caltrans) and submit
periodic reports on its investigations.
Fiscal Impact:
Shift of approximately $2.2 million and 22 PY of staff from
Caltrans' Division of Audits and Investigations to the new
OLCE (State Highway Account).
Additional staff costs of $658,000 to backfill 6PY of staff
to retain necessary functions and responsibilities at
Caltrans (State Highway Account).
Background: Existing law creates the Transportation Agency
within state government. Among other departments, the agency
oversees Caltrans and the California Transportation Commission
(CTC). The Secretary of the agency is generally responsible for
the sound fiscal management of each department, office, or other
unit within the agency.
The Division of Audits and Investigations (A&I) within Caltrans
is responsible for internal audits of Caltrans' programs and
policies, external audits of third party contracts, and
investigations of administrative complaints, such as incidents
of ethics policy violations, conflicts of interest, incompatible
or criminal activities, fraudulent or corrupt practices, and
other employee misconduct. The Director of A&I is a member of
Caltrans' executive management team and reports directly to the
Chief Deputy Director and Director of Caltrans.
Existing law establishes an independent Office of the Inspector
SB 486 (DeSaulnier)
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General that is responsible for oversight of internal affairs
investigations and the disciplinary process of the Department of
Corrections and Rehabilitation.
Proposed Law: SB 486 would establish the OLCE in the
Transportation Agency and require the office to be responsible
for the following:
Prevention and detection of breaches of Caltrans policy,
fraud, waste, and abuse, including criminal conduct.
Independent and objective review and investigation of
specified conduct.
Conducting internal audits of the department to identify
improvements in efficiency and performance.
Ensuring CTC members and Caltrans employees receive
appropriate ethics training.
The bill would require the Director of the OLCE to organize the
office and develop a proposed budget, and would specify that
funding for the office would be provided by savings achieved
from shifting staff from Caltrans' Division of A&I. The bill
would also require the Director of the OLCE to report quarterly
on performance and investigative activities at quarterly CTC
meetings, and report annually to the Governor and Legislature
with a summary of investigations, as specified, which would also
be posted on the Transportation Agency's website.
Related Legislation: SB 878 (DeSaulnier) would have established
an Office of Transportation Inspector General to oversee the
expenditure of transportation funds by state and local agencies.
SB 878 was vetoed by Governor Brown last year. The veto
message included the following:
The Department of Transportation and local transportation
agencies already are subject to performance reviews and
fiscal audits by state and federal auditors, by the
Legislative Analyst's Office, the Department of Finance,
and of course the Transportation Committees of the
Legislature. Rather than creating a new, costly state
office, let's use the resources we already have.
AB 471 (Lowenthal) of 2011 would have created an independent
Office of Inspector General to oversee the High-Speed Rail
Authority. That bill was held on the Assembly Appropriations
Committee's Suspense File.
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Staff Comments: This bill is intended to provide a level of
accountability and independent oversight of Caltrans, in light
of Bureau of State Audits reports on improper and illegal
activities of the department's employees, as well as allegations
of improprieties within the bridge inspection program.
Caltrans currently has 70 positions in the Division of A&I.
This bill is expected to result in the transfer of 22 existing
audit staff, supported by $2.2 million to the new OLCE, which
would leave 48 staff and $4.6 million in funding at the Division
of A&I. Caltrans indicates they would need to add 6 additional
staff to backfill transferred positions in order to retain
mandated functions and responsibilities, at a cost of $658,000.
The bill does not specify whether Caltrans' current A&I staff
that are transferred to the new OLCE would remain housed in
Caltrans or physically move to the offices of the Transportation
Agency. This analysis assumes that moving would not be
necessary, but there would be additional unknown costs if a
physical move is required.