BILL ANALYSIS �
AB 1825
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Date of Hearing: March 26, 2014
ASSEMBLY COMMITTEE ON EDUCATION
Joan Buchanan, Chair
AB 1825 (Nazarian) - As Introduced: February 18, 2014
SUBJECT : School districts: Los Angeles Unified School
District: inspector general
SUMMARY : Changes from January 1, 2015 to January 1, 2025 the
sunset date for provisions governing the Los Angeles Unified
School District's (LAUSD) Office of the Inspector General,
including the authority to issue subpoenas, and requires the
Inspector General to submit a final cumulative report to the
Legislature by December 1, 2024.
EXISTING LAW
1)Authorizes the Inspector General of the LAUSD Office of the
Inspector General to conduct audits and investigations,
subpoena witnesses, administer oaths or affirmations, take
testimony, and compel the production of information deemed
material and relevant and that reasonably relate to an inquiry
or investigation undertaken when the Inspector General has a
reasonable suspicion that a law, regulation, rule or policy
has been or is being violated.
2)Defines "reasonable suspicion" to mean specific and
articulable facts causing the Inspector General and would
cause a reasonable officer in a like position to suspect that
a material violation of law, regulation or policy has occurred
or is occurring.
3)Provides that the first instance of false sworn testimony to
the Inspector General is a misdemeanor publishable by up to
six months in jail or a fine of up to $5,000 or both; and that
each subsequent violation shall be punishable by up to 12
months in jail or a fine of up to $10,000 or both.
4)Requires the Inspector General to submit annual reports to the
Legislature and a final cumulative report by December 1, 2014
on all of the following:
a) The use and effectiveness of the subpoena power in the
successful completion of the Inspector General's duties;
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b) Any instance in which the subpoena was quashed; and
c) Any instance in which the local district attorney or
Attorney General declined to investigate further or to
prosecute a referred case.
5)Provides for a sunset date of January 1, 2015.
FISCAL EFFECT : Unknown
COMMENTS : The LAUSD Office of the Inspector General (OIG) was
initially established by SB 1260 (Hayden), Chapter 295, Statutes
of 1999, at the request of the district. At that time, the
district's Internal Audits and Special Investigation Unit had
been in existence for one year, but its director reported that
it was difficult or impossible to conduct investigations,
especially those that involve an outside party, such as a
contractor, that the unit had no authority to compel to provide
documents or other types of information. SB 1260 had a sunset
date of January 1, 2001. The sunset date was subsequently
extended by SB 1360 (Hayden), Chapter 750, Statutes of 2000, and
AB 2425 (Richman), Chapter 462, Statutes of 2002, which extended
the sunset date to January 1, 2015.
The OIG's "Annual Report to the Board of Education" for the 2013
fiscal year reports that the office issued 41 reports on
completed contract audits that resulted in a cost savings to the
district of approximately $4.6 million. No subpoenas were
issued in that year. The OIG's work plan for the 2014 fiscal
year anticipates audits and reviews of more than $600 million of
contracts and expenditures.
Since its inception, the author's office reports that the OIG
has resulted in a total savings of $585,483,803. Of that,
$440,217,621 is from greater efficiencies, $129,138,709 is from
the identification of disallowed or unsupported costs related to
contracts and grants, and $16,127,473 is from restitution
recovered via the courts.
The OIG's most recent annual report to the Legislature, dated
June 30, 2013, reports that, during 2012-13, no subpoenas for
business or financial records were issued. The report also
states that the power of subpoena "serves as a deterrent to
those who may consider committing fraudulent acts against the
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School District," and that it "substantially aids in the
performance of our work."
REGISTERED SUPPORT / OPPOSITION :
Support
Los Angeles Unified School District (sponsor)
Opposition
None received.
Analysis Prepared by : Rick Pratt / ED. / (916) 319-2087