BILL ANALYSIS Ó
SENATE COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
DEVELOPMENT
Senator Jim Beall, Chair
2015 - 2016 First Extraordinary
Bill No: SBX1 13 Hearing Date: 08/19/2015
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|Author: |Vidak |
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|Version: |7/16/2015 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Christine Hochmuth |
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SUBJECT: Office of the Transportation Inspector General
DIGEST: This bill creates the Office of the Transportation
Inspector General (OTIG) in state government as an independent
office, to ensure that all state agencies expending state
transportation funds are operating efficiently, effectively, and
in compliance with federal and state laws.
ANALYSIS:
Existing law:
1)Creates, under the Federal Inspector General Act of 1978,
independent and objective units which conduct and supervise
audits and investigations relating to the programs and
operations of various federal departments, agencies, boards,
and commissions, including the Department of Transportation.
2)Establishes, under the Federal Inspector General Reform Act of
2008, the Council of the Inspectors General on Integrity and
Efficiency (CIGIE), an independent entity within the executive
branch designed to address integrity, economy, and
effectiveness issues that transcend individual Government
agencies and increase the professionalism and effectiveness of
personnel by developing policies, standards, and approaches to
aid in the establishment of a well-trained and highly skilled
workforce in the offices of the inspectors general.
SBX1 13 (Vidak) Page 2 of ?
3)Requires the Los Angeles County Metropolitan Transportation
Authority (LACMTA) to appoint an inspector general to report
quarterly on the expenditures which are specified by the
authority.
This bill:
1)Creates the independent OTIG which is responsible for ensuring
that the Department of Transportation (Caltrans), the
High-Speed Rail Authority (HSRA), and all other state agencies
expending state transportation funds are operating
efficiently, effectively, and in compliance with applicable
federal and state laws.
2)Requires the Governor to appoint the Transportation Inspector
General (TIG) to a six-year term, subject to Senate
confirmation; prohibits the removal of the TIG during that
term except for good cause.
3)Requires the TIG to review policies, practices, and
procedures, and conduct audits and investigations of
activities involving state transportation funds in
consultation with all affected state agencies.
4)Provides that the TIG's duties and responsibilities shall
include, at a minimum, all of the following:
a) To examine the operating practices of Caltrans, HSRA,
and all other state agencies expending state transportation
funds to identify fraud and waste, opportunities for
efficiencies, and opportunities to improve the data used to
determine appropriate project resource allocations.
b) To identify best practices in the delivery of
transportation projects and develop policies or recommend
proposed legislation enabling state agencies to adopt these
practices when practicable.
c) To provide objective analysis of, and when possible,
offer solutions to, concerns raised by the public or
generated within agencies involving the state's
transportation infrastructure and project delivery methods.
d) To conduct, supervise, and coordinate audits and
investigations relating to the programs and operations of
all state transportation agencies with state-funded
SBX1 13 (Vidak) Page 3 of ?
transportation projects.
e) To recommend policies promoting economy and efficiency
in the administration of programs and operations of all
state agencies with state-funded transportation projects.
1)Prohibits the TIG's office from conducting any audits or
investigations that are redundant to or concurrent with those
being conducted contemporaneously by another state entity, or
planned to be initiated pursuant to state or federal law or
adopted agency board policy, within 18 months of the
notification of the intent to undertake the audit or
investigation by the TIG.
2)Requires the TIG to report annually to the Governor and
Legislature with a summary of their findings, investigations,
and audits, including significant problems discovered by the
TIG and whether recommendations of the TIG have been
implemented. The summary must be posted on the TIG's web site
and must otherwise be made available to the public.
3)Requires the TIG, in consultation with the Department of
Finance, to develop a methodology for producing a workload
budget to be used for annually adjusting the budget of the
OTIG, beginning with the budget for the 2016-17 FY. The
office must be funded with federal transportation funds to the
extent possible. If federal funding is unavailable, funding
must be made available, in proportion to the activities of the
office, from the State Highway Account and an account from
which HSR activities may be funded.
COMMENTS:
1)Purpose. According to the author, "Over the past few years
there have been constant examples within Caltrans of waste,
fraud, inefficiencies, as exemplified by exposure of the
deficiencies in the construction of the replacement span of
the San Francisco-Oakland Bay Bridge and the efforts to
internally conceal those deficiencies. Additionally, there
have been reports of falsified data in the testing of bridge
safety, Caltrans employees consuming alcohol while on the job,
misusing state assets, and moonlighting on state time."
The author contends that OTIG will root out waste, improve
opportunities for efficiency, highlight best practices, and
find opportunities to improve project resource allocations.
SBX1 13 (Vidak) Page 4 of ?
Caltrans, HSRA, and other transportation state agencies are
tasked with spending billions of dollars every year ($11.4
billion according to the Governor's Budget of 2015-16), and
the author states that it is important to ensure that these
resources are being used efficiently.
2)California Bureau of State Audits (BSA). In April of 2011,
the California State Auditor presented an audit report
concerning the performance, management, efficiency, and budget
of Caltrans's Capital Outlay Support program. The report
concluded that, despite a stated goal to reduce overruns in
its support project budgets, Caltrans had performed little
analysis to determine the frequency or magnitude of support
cost budget overruns. Their review of projects that
completed construction in fiscal years (FY) 2007-08 through
2009-10 indicated that 62% of the projects had support costs
that exceeded their respective budgets. These overruns
totaled more than $305 million of the $1.4 billion in total
support cost expenditures.
3)Are current accountability measures enough? SB 878
(DeSaulnier, 2011) would have established an independent OTIG
to oversee Caltrans, HSRA, and all other state, regional, and
local agencies expending state transportation funds. Governor
Brown vetoed SB 878, stating that Caltrans and local
transportation agencies are already subject to performance
reviews and fiscal audits by state and federal auditors, the
Legislative Analyst's Office, the Department of Finance, and
the Transportation Committees of the Legislature. Further, he
questioned the action of creating a new, costly state office,
instead requesting that the Legislature use the resources they
already have.
While similar, there are distinct differences between the
existing oversight options and the proposed OTIG. OTIG will
do investigations and audits of the state's
transportation-related activities, and it will be
self-directed, not requiring statutory or legislative
direction. This may give OTIG the ability to investigate and
recommend solutions to problems of which the Legislature may
not be aware or which may be sensitive or controversial.
Further, being focused solely on expenditures of state
transportation resources, OTIG should be able to delve deeper
into problems and propose more comprehensive solutions
involving the complicated transportation project delivery
SBX1 13 (Vidak) Page 5 of ?
paradigm.
This bill does not preclude partnering with or utilizing
academic and/or other institutions that may be especially
qualified to assist OTIG with investigations. This bill calls
upon OTIG to conduct, supervise, and coordinate audits and
investigations, and there may be many ways to accomplish these
goals.
4)Federal Inspectors General can be a sound investment. Based
on federal semi-annual reports, OTIG has reported a
significant return on investment based on completed work over
the last five years. Per year, on average OTIG issued 73
audit reports with a total of 228 recommendations, including
financial recommendations totaling almost $359 million.
Additionally, their investigative work during the same time
period resulted, on average, in 45 indictments, 37 convictions
and a total of almost $173 million per year in fines,
restitutions, and recoveries. (For reference, the 2016 FY
budget request for OTIG is $87.472 million in support of 410
base-level full-time equivalents.)
5)More authority for the OTIG? The federal OTIG has the
authority to require by subpoena the production of all
information, documents, reports, answers, records, accounts,
papers, and other data in any medium (including electronically
stored information, as well as any tangible thing) and
documentary evidence necessary in the performance of their
duties. Likewise, the OIG for the California Department of
Corrections and Rehabilitation may administer oaths, certify
to all official acts, and issue subpoenas. The committee may
wish to discuss the merits of providing similar authority to
the proposed OTIG.
Related Legislation:
SB 878 (DeSaulnier, 2011) - would have established the
independent Office of Transportation Inspector General to ensure
that state and local agencies expend state transportation funds
efficiently, effectively, and in compliance with applicable
federal and state laws. SB 878 was vetoed by Governor Brown.
AB 471 (Lowenthal, 2009) - would have created an independent
Inspector General to oversee the High-Speed Rail Authority. AB
471 was held in the Assembly Appropriations committee.
SBX1 13 (Vidak) Page 6 of ?
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes
Local: No
POSITIONS: (Communicated to the committee before noon on
Thursday,
August 13, 2015.)
SUPPORT:
Transportation California
OPPOSITION:
Sierra Club California
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