BILL NUMBER: AB 1102 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 20, 2011
AMENDED IN SENATE JUNE 14, 2011
AMENDED IN ASSEMBLY APRIL 27, 2011
AMENDED IN ASSEMBLY APRIL 4, 2011
INTRODUCED BY Assembly Member Lara
FEBRUARY 18, 2011
An act to amend Sections 8544.5, 8545, 8546.5, 8547.2, 8547.5,
8547.6, 8547.7, 8548, 8548.2, and 8548.9 of, and to repeal Section
12430 of, and to repeal Article 2 (commencing with Section 10520) of
Chapter 4 of Part 2 of Division 2 of Title 2 of, the Government Code,
relating to the State Auditor.
LEGISLATIVE COUNSEL'S DIGEST
AB 1102, as amended, Lara. State Auditor.
(1) Existing law sets out the authority and duties of the State
Auditor in conducting audits and surveys of specified entities, and
of contracting for goods and services on behalf of the Bureau of
State Audits. Existing law provides for reimbursement of the State
Auditor by annual appropriation in the Budget Act, for specified
costs incurred by the State Auditor in the performance of certain
duties.
This bill would revise the provisions governing the scope and
conduct of audits and surveys by the State Auditor and costs for
which the State Audit Fund may be reimbursed.
(2) The California Whistleblower Protection Act requires the State
Auditor to administer the act and to investigate and report on
improper governmental activities, as defined. The act requires the
State Auditor to establish a means of submitting allegations of
improper governmental activity, and prohibits the State Auditor from
disclosing the identity of a person who provides information that
results in an investigation unless the person provides written
permission to make that disclosure.
This bill would revise the definition of improper governmental
activities to include more activities, including actions that are a
violation of a state rule, directive, policy, or procedure of general
application.
This bill would instead prohibit the State Auditor from disclosing
the identity of the person who provides information that results in
an investigation without obtaining the person's express permission.
(3) The act authorizes the State Auditor to request the assistance
of any state department, agency, or employee in conducting any
investigation required by the act.
This bill would expand that authorization to also authorize the
State Auditor to request assistance evaluating an allegation or
conducting any investigation of an improper governmental activity as
authorized by the act.
The
(4) The act requires the State
Auditor, if he or she determines that an employee or agency has
engaged in improper governmental activity, to issue an investigative
report regarding that employee's specific activities, for purposes of
pursuing adverse action against that employee. The act also requires
the State Auditor to report the nature and details of the activity
to the head of the agency or the appropriate appointing power, and
authorizes the report to include recommended actions to prevent the
reoccurrence of the activity.
This bill would recast the provisions that require the State
Auditor to report the general nature and details of the employee's
activities to the agency in a manner that conforms to the reporting
requirement that is more specific and for the purpose of taking
adverse action against that employee as specified.
This bill would revise those provisions to also authorize the
State Auditor to report the findings of an investigation,
and certain evidence to support that finding, to additional entities
or individuals, including the head of any other agency that has
direct oversight over the agency involved, a criminal law enforcement
agency, an administrative law enforcement agency, or a licensing
agency that has authority to investigate the matter.
This bill would also provide that, as an alternative to
conducting its own investigation, the State Auditor is authorized to,
if the State Auditor makes a certain finding on an allegation of
improper governmental activities, refer an allegation to the involved
state agency, or to another state agency having direct oversight of
the involved state agency, to conduct an investigation of the
allegation under the State Auditor's supervision. This bill would
similarly authorize the State Auditor to refer an
allegation to a criminal or administrative law enforcement agency.
(3)
(5) Existing law requires the State Auditor to prepare
for state employees a written explanation of the California
Whistleblower Protection Act that includes prescribed information.
Existing law requires the State Auditor to provide a notice to state
agencies, as defined, that includes the information contained in the
written explanation. Existing law prohibits state agencies from
modifying the text of the notice.
This bill would conform the definition of state agency to the
definition used in the California Whistleblower Protection Act, to
include the Supreme Court, Court of Appeal, superior courts, and the
Administrative Office of the Courts.
The bill would require any agency that posts or advertises the
opportunity to submit whistleblower complaints through a program
administered by the agency, to also disclose the opportunity to
submit complaints to the State Auditor under the California
Whistleblower Protection Act.
(4)
(6) This bill would also delete various obsolete
provisions of law.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 8544.5 of the Government Code is amended to
read:
8544.5. (a) There is hereby established in the State Treasury the
State Audit Fund. Notwithstanding Section 13340, the State Audit
Fund is continuously appropriated for the expenses of the State
Auditor. There shall be appropriated annually in the Budget Act to
the State Audit Fund, from the General Fund and the Central Service
Cost Recovery Fund, the amount necessary to reimburse the State Audit
Fund for the cost of audits and any other duties to be performed
that are not directly reimbursed under subdivision (c), including for
the cost of any other duties imposed on the bureau by statute. "Cost
of audits or any other duties" means all direct and indirect costs
of conducting the audits or other duties, and any other expenses
incurred by the State Auditor in fulfilling his or her statutory
responsibilities.
(b) With regard to the funds appropriated pursuant to subdivision
(a), upon certification by the State Auditor of estimated costs on a
monthly basis, the Controller shall transfer the amount thus
certified from the General Fund or the Central Service Cost Recovery
Fund, as applicable, to the State Audit Fund. The Controller shall
thereafter issue warrants drawn against the State Audit Fund upon
receipt of claims certified by the State Auditor.
(c) To ensure appropriate reimbursement from federal and special
funds for the costs of the duties performed pursuant to Section
8546.3, the State Auditor may directly bill state agencies for the
costs incurred, subject to the approval of the Director of Finance.
(d) To ensure adequate oversight of the operations of the bureau,
the Milton Marks "Little Hoover" Commission on California State
Government Organization and Economy shall annually obtain the
services of an independent public accountant to audit the State Audit
Fund and the operation of the bureau to assure compliance with state
law, including Section 8546. The results of this audit shall be
submitted to the commission and shall be a public record.
(e) To ensure that audits of the Milton Marks "Little Hoover"
Commission on California State Government Organization and Economy
are conducted in conformity with government auditing standards, any
audit of the commission that is required or permitted by law shall be
conducted by the independent public accountant selected pursuant to
subdivision (d).
SEC. 2. Section 8545 of the Government Code is amended to read:
8545. The State Auditor shall not destroy any papers or memoranda
used to support a completed audit sooner than three years after the
audit report is released to the public. All books, papers, records,
and correspondence of the bureau pertaining to its work are public
records subject to Chapter 3.5 (commencing with Section 6250) of
Division 7 of Title 1 and shall be filed at any of the regularly
maintained offices of the State Auditor, except that none of the
following items or papers of which these items are a part shall be
released to the public by the State Auditor, his or her employees, or
members of the commission:
(a) Personal papers and correspondence of any person providing
assistance to the State Auditor when that person has requested in
writing that his or her papers and correspondence be kept private and
confidential. Those papers and correspondence shall become public
records if the written request is withdrawn or upon the order of the
State Auditor.
(b) Papers, correspondence, memoranda, or any substantive
information pertaining to any audit not completed.
(c) Papers, correspondence, or memoranda pertaining to any audit
that has been completed, which papers, correspondence, or memoranda
are not used in support of any report resulting from the audit.
(d) Any survey of public employees that the State Auditor
determines should be kept confidential because the employees have
expressed fear of retaliation by their employer if they respond to
the survey.
SEC. 3. Section 8546.5 of the Government Code is amended to read:
8546.5. (a) The State Auditor may establish a high-risk
government agency audit program for the purpose of identifying,
auditing, and issuing reports on any agency of the state, whether
created by the California Constitution or otherwise, as well as
statewide issues, that the State Auditor identifies as being at high
risk for the potential of waste, fraud, abuse, and mismanagement or
that has major challenges associated with its economy, efficiency, or
effectiveness.
(b) In addition to identifying an agency as high risk on the basis
of weaknesses identified in audit and investigative reports produced
by the bureau, the State Auditor may consult with the Legislative
Analyst, the Milton Marks "Little Hoover" Commission on California
State Government Organization and Economy, the Office of Inspector
General within the Department of Corrections, the Department of
Finance, and other state agencies that have oversight
responsibilities over any other agency of the state, in identifying
state agencies that are at high risk.
(c) The State Auditor shall notify the Joint Legislative Audit
Committee whenever it identifies a state agency as at high risk.
(d) The State Auditor may issue audit reports with recommendations
for improvement in state agencies, and for statewide issues,
identified as at high risk not less than once every two years.
(e) The State Auditor may require state agencies identified as
high risk, or as responsible for all or a portion of a statewide
issue identified as high risk, to periodically report to the auditor
regarding the status of recommendations for improvement made by the
State Auditor or other state oversight agencies.
SEC. 4. Section 8547.2 of the Government Code is amended to read:
8547.2. For the purposes of this article, the following terms
have the following meanings:
(a) "Employee" means an individual appointed by the Governor, or
employed or holding office in a state agency as defined by Section
11000, including, for purposes of Sections 8547.3 to 8547.7,
inclusive, an employee of the California State University, or an
individual appointed by the Legislature to a state board or
commission and who is not a Member or employee of the Legislature. In
addition, "employee" means a person employed by the Supreme Court, a
court of appeal, a superior court, or the Administrative Office of
the Courts for the purposes of Sections 8547.3 to 8547.7, inclusive,
and Section 8547.13, except for those provisions of Section 8547.4
concerning notice of adverse action and the State Personnel Board.
"Employee" includes a former employee who met the criteria of this
subdivision during his or her employment.
(b) "Illegal order" means a directive to violate or assist in
violating a federal, state, or local law, rule, or regulation, or an
order to work or cause others to work in conditions outside of their
line of duty that would unreasonably threaten the health or safety of
employees or the public.
(c) "Improper governmental activity" means an activity by a state
agency or by an employee that is undertaken in the performance of the
employee's duties, undertaken inside a state office, or, if
undertaken outside a state office by the employee, directly relates
to state government, whether or not that activity is within the scope
of his or her employment, and that (1) is in violation of any state
or federal law or regulation, including, but not limited to,
corruption, malfeasance, bribery, theft of government property,
fraudulent claims, fraud, coercion, conversion, malicious
prosecution, misuse of government property, or willful omission to
perform duty, (2) is in violation of a state rule, directive, policy,
or procedure of general application, including an executive order of
the Governor, a California Rule of Court, or a policy or procedure
mandated by the State Administrative Manual or State Contracting
Manual, or (3) is economically wasteful, involves significant
misconduct, including causes for discipline specified in Section
19572, involves incompetency that reflects an absence of
qualification, ability, or fitness to perform a prescribed duty or
function, or involves inefficiency that may adversely affect the
state or members of the public. For purposes of Sections 8547.4,
8547.5, 8547.10, and 8547.11, "improper governmental activity"
includes any activity by the University of California or by an
employee, including an officer or faculty member, who otherwise meets
the criteria of this subdivision. For purposes of Sections 8547.4,
8547.5, and 8547.13, "improper governmental activity" includes any
activity by the Supreme Court, a court of appeal, a superior court,
or the Administrative Office of the Courts, or by an employee
thereof, who otherwise meets the criteria of this subdivision.
(d) "Person" means an individual, corporation, trust, association,
a state or local government, or an agency or instrumentality of any
of the foregoing.
(e) "Protected disclosure" means a good faith communication,
including a communication based on, or when carrying out, job duties,
that discloses or demonstrates an intention to disclose information
that may evidence (1) an improper governmental activity, or (2) a
condition that may significantly threaten the health or safety of
employees or the public if the disclosure or intention to disclose
was made for the purpose of remedying that condition. Protected
disclosure specifically includes a good faith communication to the
Bureau of State Audits alleging an improper governmental activity and
any evidence delivered to the Bureau of State Audits in support of
the allegation. "Protected disclosure" also includes, but is not
limited to, a complaint made to the Commission on Judicial
Performance.
(f) "State agency" is defined by Section 11000. "State agency"
includes the University of California for purposes of Sections 8547.5
to 8547.7, inclusive, and the California State University for
purposes of Sections 8547.3 to 8547.7, inclusive. Sections 8547.3 to
8547.7, inclusive, shall apply to the Supreme Court, the courts of
appeal, the superior courts, and the Administrative Office of the
Courts in the same manner as they apply to a state agency.
SEC. 5. Section 8547.5 of the Government Code is amended to read:
8547.5. (a) The State Auditor shall create the means for the
submission of allegations of improper governmental activity both by
transmission via mail or other carrier to a specified mailing address
and electronic submission through an Internet Web site portal. The
State Auditor may request that a person submitting an allegation
provide his or her name and contact information and provide the names
and contact information for any persons who could help to
substantiate the claim. However, the State Auditor shall not require
any person submitting an allegation to provide his or her name or
contact information and shall clearly state on the agency
Internet Web site that this information is not required in
order to submit an allegation.
(b) Upon receiving specific information that any employee or state
agency has engaged in an improper governmental activity, the State
Auditor may conduct an investigation of the matter. The identity of
the person providing the information that initiated the
investigation, or of any person providing information in confidence
to further an investigation, shall not be disclosed without the
express permission of the person providing the information except
that the State Auditor may make the disclosure to a law enforcement
agency that is conducting a criminal investigation.
SEC. 6. Section 8547.6 of the Government Code is amended to read:
8547.6. (a) The State Auditor may request the assistance of any
state department, agency, or employee in evaluating an allegation or
conducting any investigation of an improper governmental activity as
authorized by this article. In response to a request for assistance
from the State Auditor, a state agency that
state department, agency, or employee shall provide the
assistance, including, but not limited to, providing access to
documents or other information in a timely manner, as required by
Section 8545.2. If an investigation conducted by the State Auditor
involves access to confidential academic peer review records of
University of California academic personnel, these records shall be
provided in a form consistent with university policy effective on
August 1, 1992. No information obtained from the State Auditor by any
department, agency, or employee as a result of the State Auditor's
request for assistance, nor any information obtained thereafter as a
result of further investigation, shall be divulged or made known to
any person without the prior approval of the State Auditor.
(b) Notwithstanding any other law, instead of seeking assistance
from an agency pursuant to subdivision (a) and as an alternative to
initiating or completing an investigation, if the State Auditor
determines that there is reasonable cause to believe that a state
agency or employee may have engaged in an improper governmental
activity, the State Auditor, subject to the limitations of Section
8547.5, may refer the allegation to the state agency involved, or to
a criminal or administrative law enforcement agency that has
jurisdiction over the agency. If the State Auditor refers an
allegation pursuant to this subdivision, that agency shall
investigate the allegation and report the results of the
investigation to the State Auditor within 60 days of the referral,
and monthly thereafter until final action has been taken.
(b) As an alternative to conducting its own investigation, if the
State Auditor determines that there is reasonable cause to believe
that a state agency or employee may have engaged in an improper
governmental activity, the State Auditor, subject to the limitations
of Section 8547.5, may refer the allegation to the involved state
agency, or to another state agency having direct oversight of the
involved state agency, to conduct an investigation of the allegation
under the State Auditor's supervision. If the State Auditor refers an
allegation to the involved state agency or to another state agency
having direct oversight of the involved state agency, that state
agency shall investigate the allegation and report the results of the
investigation to the State Auditor within 60 days of the referral
and monthly thereafter until final action has been taken. In
addition, whenever the State Auditor determines that there is
reasonable cause to believe that a state agency or employee may have
engaged in an improper governmental activity, the State Auditor,
subject to the limitations of Section 8547.5, may refer the
allegation to a criminal or administrative law enforcement agency in
lieu of conducting or supervising an investigation of the matter.
SEC. 7. Section 8547.7 of the Government Code is amended to read:
8547.7. (a) If, after investigating an allegation, the State
Auditor finds that a state agency or employee may have engaged or
participated in an improper governmental activity, he or she shall
prepare an investigative report and send a copy of that report to the
head of the agency involved and to the head of any other agency that
has direct oversight over that involved agency. The investigative
report may include the State Auditor's recommended actions to prevent
the continuation or recurrence of the activity. If appropriate, the
State Auditor shall report this information to the Attorney General,
the policy committees of the Senate and Assembly having jurisdiction
over the subject involved, and to any other authority that the State
Auditor determines appropriate. Subject to the limitations of Section
8547.5, the State Auditor may provide to the involved agency any
evidence gathered during the investigation that, in the judgment of
the State Auditor, is necessary to support any of the
recommendations. Within 60 days of receiving the State Auditor's
investigative report, the involved agency shall report to the State
Auditor any actions that it has taken or that it intends to take to
implement the recommendations. The agency shall file subsequent
reports on a monthly basis until final action has been taken.
(b) The State Auditor shall not have any enforcement power. In any
case in which the State Auditor finds that a state agency or
employee may have engaged in an improper governmental activity, the
State Auditor may provide the finding, and any evidence supporting
the finding, subject to the limitations of Section 8547.5, to a
criminal law enforcement agency, an administrative law enforcement
agency, or a licensing agency that has authority to investigate the
matter.
(c) The State Auditor shall keep confidential every investigation,
including, but not limited to, all investigative files and work
product, except that the State Auditor, whenever he or she determines
it necessary to serve the interests of the state, and subject to the
limitations of Section 8547.5, may issue a public report of an
investigation that has substantiated an improper governmental
activity, keeping confidential the identity of the employee or
employees involved. In addition, subject to the limitations of
Section 8547.5, the State Auditor may release any findings or
evidence supporting any findings resulting from an investigation
conducted pursuant to this article whenever the State Auditor
determines it necessary to serve the interests of the state.
(d) This section does not limit any authority conferred upon the
Attorney General or any other department or agency of government to
investigate any matter.
SEC. 8. Section 8548 of the Government Code is amended to read:
8548. For purposes of this article, "state agency" means every
state office, officer, department, division, bureau, board, and
commission, including the California State University, the University
of California the Supreme Court, the Court of Appeal, the superior
courts, and the Administrative Office of the Courts.
SEC. 9. Section 8548.2 of the Government Code is amended to read:
8548.2. The State Auditor shall prepare for distribution to each
state agency in an electronic format a notice containing the
information in the written explanation prepared pursuant to Section
8548.1. No later than July 1, 2002, each state agency shall print and
post this notice at its state office or offices in a location or
locations where employee notices are maintained. A state agency shall
not edit the written text of the notice but it may publish the
notice in a manner it chooses, and it may include its own
introductory language in the notice, provided that the language and
the format selected do not alter the meaning of the notice. In
addition, whenever a state agency posts or advertises the opportunity
to submit whistleblower complaints through a program administered by
the agency, it shall also disclose the opportunity to submit
complaints to the State Auditor under the California Whistleblower
Protection Act (Article 3 (commencing with Section 8547)).
SEC. 10. Section 8548.9 of the Government Code is amended to read:
8548.9. (a) The State Auditor shall, by January 15th of each
year, report to the Joint Legislative Budget Committee, the Joint
Legislative Audit Committee, and the Department of Finance with
respect to each recommendation he or she has made based on an audit
or investigation that was reported more than one year prior and that
has not been fully implemented by the affected agency.
(b) The report shall clearly identify the state agency audited or
investigated, the audit or investigation that contained the
recommendation, a brief description of the recommendation, the date
it was issued, and the most recent explanation provided by the agency
to the State Auditor on the status of the recommendation.
(c) Any state agency that is notified by the State Auditor that it
has not fully implemented a recommendation made pursuant to this
chapter more than one year prior, shall do either of the following:
(1) Provide a written report to the State Auditor, the respective
policy committees and budget subcommittees of the Assembly and Senate
with oversight of the agency, and the Department of Finance,
explaining why the audit recommendation or investigation has not been
fully implemented.
(2) Notify all entities described in subdivision (a) that it will
begin implementing the audit recommendation or investigation
recommendation within 90 days of the notification by the State
Auditor, and include the estimated date of full implementation.
(d) For the purposes of this section, "state agency" means a state
agency as defined by Section 11000, the California State University,
the Supreme Court, a Court of Appeal, a superior court, and the
Administrative Office of the Courts.
SEC. 11. Article 2 (commencing with Section 10520) of Chapter 4 of
Part 2 of Division 2 of Title 2 of the Government Code is repealed.
SEC. 12. Section 12430 of the Government Code is repealed.