BILL ANALYSIS
Bill No: SCA
28
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2009-2010 Regular Session
Staff Analysis
SCA 28 Author: Wyland
As Amended: May 24, 2010
Hearing Date: June 9, 2010
Consultant: Art Terzakis
SUBJECT
State Auditor: duties
DESCRIPTION
SCA 28 empowers the State Auditor to conduct a performance
evaluation of every state program to identify strengths and
weaknesses so that programs can be improved or eliminated.
Specifically, this measure:
1. Requires the State Auditor to biennially conduct a
performance evaluation of each state government program,
including the administration or oversight of that program
by each department or agency that is responsible for the
program, and submit a report of the results of that
performance evaluation to the Legislature.
2. Requires the committee that considers the budget in
each house of the Legislature to meet and consider
recommendations made in each performance evaluation
within 90 days of submission by the State Auditor.
3. Provides that each performance evaluation shall
include, but is not limited to, all of the following:
(a) a statement of the program's purpose, including
Legislative intent to establish or modify it; (b) a
discussion of the program's history; (c) a description of
the program's funding and evaluation of its
cost-effectiveness; (d) an evaluation of the program's
success; and, (e) recommendations as to how the program
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may be made more efficient and effective, or whether it
should be eliminated.
4. Requires the State Auditor to make each performance
evaluation available in hardcopy format and on the
Internet.
5. Stipulates that the Legislature shall appropriate to
the Bureau of State Audits (BSA) necessary funds to
implement the provisions of this measure.
SCA 28 (Wyland) continued
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EXISTING LAW
Senate Bill 37 (Maddy) Chapter 12, Statutes of 1993,
(Government Code 8543), created the Bureau of State Audits
(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 "Reporting of Improper Governmental
Activities Act," which includes a hotline for anonymous
reporting.
BACKGROUND
As noted above, the State Auditor conducts performance
audits that are either mandated by statute or requested by
the Legislature. Performance auditing is the systematic
and objective examination of evidence to provide an
independent assessment of the performance and management of
an organization or activity against objective criteria as
well as assessments that provide a prospective focus or
create best practices. Performance audits provide
information to improve operations and facilitate decision
making by parties with responsibility to oversee or
initiate corrective action and improve public
accountability. Examples of these audits include:
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The extent to which legislative, regulatory, or
organizational goals and objectives are being
achieved.
The extent to which programs duplicate, overlap or
conflict with other related programs.
The relative cost and benefits or cost
effectiveness of program performance.
The reliability, validity, and relevance of
financial information related to the performance of a
program.
Purpose of SCA 28: The author of this measure contends
that far too many government programs have been created in
California and these programs have never thoroughly been
examined to assess their effectiveness and efficiency. As
a result, the state's budget has grown tremendously over
the years. The author believes that during this period of
lower revenues it is essential that the Legislature have an
independent assessment of the performance and management of
government programs in order to make the best use of the
taxpayer's dollars. The author argues that without such an
evaluation the Legislature and the public is simply unable
to determine if a particular government program is working
or not. The author emphasizes that the performance
evaluations proposed by this measure will help identify
strengths and weaknesses in existing programs so that they
can be improved or eliminated as needed.
Historic Budget Reform Efforts: There have been numerous
proposals to reform the budget over the past decades.
Historical reform efforts include, but are not limited to,
the following:
Pilot projects on performance budgeting in four
State departments starting in 1993 by then Governor
Pete Wilson.
Recommendations by the California Constitution
Revision Commission that convened from 1994 to 1996 at
the direction of statute and made various
recommendations regarding the State budget process
and alignment of programs between State and local
governments.
Recommendations by the California Citizens Budget
Commission in 1998 that proposed statutory and
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constitutional changes to the budget process,
including reducing the vote requirement for the State
budget to a majority vote.
Recommendations in the Governor's 2004 California
Performance Review regarding the State budget process,
including a recommendation to adopt a biennial budget
and a performance-based budgeting system.
California Forward has sponsored the most recent
efforts regarding government reform.
Performance-based budgeting and program performance
review are just two of the reforms proposed by
California Forward.
PRIOR/RELATED LEGISLATION
SB 1020 (Wolk) 2009-10 Session. Would provide a statutory
framework for the implementation of performance
based budgeting and for a systematic program performance
review by the Legislature. The provisions of this bill are
the same performance based budgeting and program
performance review provisions contained in the
larger package of reforms sponsored by California Forward.
(Pending Referral in the Assembly)
SB 777 (Wolk) 2009-10 Session. Would require that the
budget submitted by the Governor to the Legislature for the
2014-15 fiscal year and each fiscal year thereafter be
developed pursuant to performance-based budgeting methods,
as defined, for each state agency and court. (Held in
Senate Budget and Fiscal Review Committee)
ACA 4 (Feuer) 2009-10 Session. This proposed
Constitutional Amendment is the California Forward
organization's proposed changes to the state budget and
legislative processes. Among other things, it would (a)
implement a pay as you go system for the majority of
legislation, the Governor's Budget, and initiatives; (b)
require the Legislature to review state programs once every
ten years; (c) lower the vote threshold for the budget to a
majority; (d) increase the vote threshold for fees when
they are being used to fund a program, service, or activity
that was previously funded by revenue from a tax to
two-thirds; and, (e) provide the Governor with mid-year cut
authority, as specified. (Pending in Assembly Budget
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Committee)
AB 2591 (Feuer) 2009-10 Session. Would amend statute to
fully implement the budget reform provisions of ACA 4
(Feuer). (Pending in Assembly Budget Committee)
SCA 2 (Wyland) 2009-10 Session. Among other things, would
require the Legislature to convene in regular biennial
session, but would require, commencing on December 6, 2010,
that the sessions held in odd-numbered years be budget
sessions, and sessions held in even-numbered years be
general sessions. (Pending in Senate Rules Committee)
SB 1314 (Wyland) 2007-08 Session. 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)
with responsibility for auditing the performance of state
programs and managers and for recommending actions to
correct any inefficiencies or ineffectiveness that may
exist. (Held in this Committee at Author's Request)
SB 521 (Wyland) 2007-08 Session. Similar to SB 1314
(Wyland) of 2008. (Held in this Committee at Author's
Request)
SCA 7 (Wyland) 2007-08 Session. Would have required the
Legislature to pass a 2-year Budget Bill by May 1 of each
even-numbered year, following specified procedures. Also,
would have provided that if no Budget Bill is passed by
July 1 of an even-numbered year, the amount in each item of
appropriation in the Budget Act for the preceding 2-year
period would, with specified exceptions, be deemed to be
appropriated for the current 2-year period. Additionally,
contained provisions requiring members of the Legislature
to forfeit salary and per diem for failure to enact a
timely Budget Bill. (Held in Senate Budget and Fiscal
Review Committee at Author's Request)
SB 1452 (Speier) Chapter 452 of 2006. Updated the auditing
standards for state and local agencies and enacted the
Omnibus Audit Accountability Act of 2006 which established
a process whereby the Legislature would be informed when
auditor recommendations are being ignored or not
implemented by state agencies.
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SB 1437 (Speier) Chapter 251 of 2004. Authorized the
State Auditor to establish a high-risk government agency
audit program for the purpose of identifying, auditing and
issuing reports on any state agency that the auditor
identifies as high risk for the potential of waste, fraud,
abuse and mismanagement.
SUPPORT: As of June 8, 2010:
Howard Jarvis Taxpayers Association
OPPOSE: None on file as of June 4, 2010.
DUAL REFERRAL: Senate Elections, Reapportionment &
Constitutional Amendments
FISCAL COMMITTEE: Senate Appropriations Committee
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