BILL ANALYSIS
Bill No: AB
567
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2009-2010 Regular Session
Staff Analysis
AB 567 Author: Villines
As Amended: April 23, 2009
Hearing Date: June 9, 2009
Consultant: Art Terzakis
SUBJECT
Government Practices
DESCRIPTION
AB 567 creates a "Clearinghouse for Government Innovation
and Improvement Program" (clearinghouse) within the Bureau
of State Audits (BSA) to solicit recommendations from the
public for improving state operations and makes specified
modifications to the California Whistleblower Protection
Act including certain other changes to the operations of
the BSA. Specifically, this measure:
1. Establishes the clearinghouse, as resources become
available, within the BSA and requires the State Auditor
to establish a means for members of the public to submit
recommendations for improving state operations and review
such submissions in good faith.
2. Permits the State Auditor to forward selected
recommendations from the public to the Governor, the
Director of Finance, and the majority and minority party
leaders in both houses of the Legislature for review.
3. Requires the State Auditor to take reasonable measures
to create and maintain public awareness of the
clearinghouse.
4. Deletes reference to "investigative audits" and instead
grants the BSA the authority to perform "investigations."
AB 567 (Villines) continued
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5. Modifies the definition of "employee," within
provisions of the California Whistleblower Protection
Act, to include an individual appointed by the
Legislature who is not an employee of the Legislature.
In addition, changes the definition of "improper
activity" within the Act to include any activity by an
employee that is undertaken inside a state office or that
is undertaken in any place other than a state office that
directly relates to any responsibility of state
government.
6. Also, clarifies that the term "protected disclosure"
includes any good faith communication to the BSA alleging
an improper governmental activity and the delivery of any
evidence to the BSA in support of an allegation.
7. Permits the State Auditor to include recommendations to
prevent the continuation or recurrence of improper
governmental activity in a report to the head of the
employee's agency.
8. Lengthens the reporting time from 30 to 60 days for the
head of the employing agency to report any action taken
regarding improper governmental activity.
9. Requires the State Auditor to keep every investigation
confidential, including all investigative files and work
product. Also, specifies that the State Auditor must
report any recommendations that have not been fully
implemented.
10. Makes it explicit that these provisions shall be
implemented using existing resources.
EXISTING LAW
Existing law sets forth the duties and powers of the Bureau
of State Audits and makes reference to audits and
investigative audits. Existing law also prohibits the
State Auditor or his or her employees from releasing to the
public, among other things, any papers, correspondence, or
any substantive information pertaining to any audit not
completed.
Existing law, the California Whistleblower Protection Act
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sets forth the circumstances and procedures under which a
state employee, as defined, may report improper
governmental activities, as defined, or make a protected
disclosure, as defined, to the State Auditor, and prohibits
retaliation or reprisal against a state employee for these
acts.
BACKGROUND
Senate Bill 37 (Maddy) Chapter 12, Statutes of 1993,
(Government Code 8543), created the BSA as part of the
Executive Branch. To assure its independence, the BSA is
free from the control of the Executive and Legislative
branches; the Milton Marks "Little Hoover" Commission
oversees its administrative operations. The BSA, under the
direction of the State Auditor, performs an annual
examination (single audit) of the State's general-purpose
financial statements as prepared by the State Controller's
Office. The federal government, as a condition of
receiving federal funds, requires this audit. The single
audit also includes a review of major federal programs for
compliance with federal laws and regulations, and
recommendations to improve the State's financial systems
and internal control.
The BSA also conducts financial and performance audits as
directed by statute, and other government audits requested
by the Joint Legislative Audit Committee (JLAC). The BSA
has the explicit authority to audit any entity that
receives state funds. Consequently, it sometimes audits at
the local government level.
In addition, the BSA administers the "California
Whistleblower Protection Act," which includes a hotline for
anonymous reporting. Under the Act, the State Auditor is
authorized to conduct an investigative audit upon receiving
confirmation that an employee or state agency has engaged
in an improper governmental activity. The Act prohibits an
employee from using his or her official authority or
influence to intimidate, threaten, coerce, or command any
person in order to interfere with that person's right to
make a disclosure under the Act.
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The Act protects employees who, among other things, make
disclosures to anyone of information that may evidence an
improper governmental activity, refusal to obey an illegal
order, or any condition that may significantly threaten the
health or safety of employees or the public if the
disclosure is made for the purpose of remedying the
condition.
Furthermore, the Act provides that a state employee who
files a written complaint with his or her supervisor,
manager, or the appointing power alleging actual or
attempted acts of reprisal, retaliation, threats, coercion,
or similar impropriety because he or she has made a
protected disclosure, may also file a copy of the written
complaint with the State Personnel Board. Any person who
engages in the above-specified acts of reprisal is guilty
of a misdemeanor and subject to a $10,000 fine, and is also
subject to civil liability, as specified, except for any
action or inaction that is justified on the basis of
evidence separate and apart from the fact that the person
has made a protected disclosure.
Purpose of AB 567: The author's office notes that
California's citizens need to know that their government is
acting responsibly and running efficiently, especially
during our current budget climate. The author's office
points out that the California Whistleblower Protection Act
currently provides the means for state employees and
members of the public to anonymously speak out if they
witness any government waste, fraud or abuse. The author's
office emphasizes that although the Act is effective, there
are several improvements that could be made to encourage
state employees to come forward without fear of retaliation
and to ensure that auditor recommendations to correct
issues are taken seriously. The author believes it is
important that no person feels threatened when providing
information on how our government can run more effectively
and efficiently and corrective actions are taken when
necessary.
PRIOR/RELATED LEGISLATION
AB 2852 (Villines) 2007-08 Session. Would have made
various changes to the California Whistleblower Protection
Act and established a clearinghouse to receive,
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analyze and forward submissions from the general public
recommending improvements in California government
operations. (Died in Assembly Appropriations suspense
file)
SB 521 (Wyland) 2007-08 Session. Among other things, would
have transferred audit and evaluation duties within the
Department of Finance to the Bureau of State Audits (BSA)
and renamed the BSA as the Bureau of State Audits and
Evaluations (BSAE). (Held in this committee at author's
request)
AB 1419 (Anderson) 2007-08 Session. Would have transferred
the Bureau of State Audits from under the direction of the
Milton Marks "Little Hoover" Commission to the State
Controller. (Died in Assembly policy committee)
SB 1452 (Speier) Chapter 452, Statutes of 2006. Updated
the auditing standards for state and local agencies and set
up a process whereby the Legislature would be informed when
auditor recommendations are being ignored or not
implemented by state agencies. Also, it protected auditors
from intimidation while providing them with a process to
have audit expectations reported to agency counsel if audit
findings are suppressed by management.
SB 413 (Speier) Chapter 883, Statutes of 2001. Made
numerous changes to the California Whistleblower Protection
Act, as specified.
SB 37 (Maddy) Chapter 12, Statutes of 1993. Created the
Bureau of State Audits under the direction of the Little
Hoover Commission and transferred many of the duties and
power of the Office of Auditor General to the Bureau of
State Audits. This was done in response to the passage of
Proposition 140 which had the effect of greatly reducing
the size and scope of the Auditor General's office. In
addition, it created the Improper Governmental Activities
Act to provide state employees protection when disclosing
improper governmental activities.
SUPPORT: None on file as of June 5, 2009.
OPPOSE: None on file as of June 5, 2009.
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DUAL REFERRAL: Senate Judiciary Committee
FISCAL COMMITTEE: Senate Appropriations Committee
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