BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 1825
                                                                  Page  1

          Date of Hearing:   April 9, 2014

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

               AB 1825 (Nazarian) - As Introduced:  February 18, 2014 

          Policy Committee:                              EducationVote:6-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              No

           SUMMARY  

          This bill extends the sunset on provisions governing the Los  
          Angeles Unified School District's (LAUSD) Office of the  
          Inspector General from January 1, 2015 to January 1, 2025 and  
          requires the Inspector General to submit a final cumulative  
          report to the Legislature by December 1, 2024.  

           FISCAL EFFECT  

          No direct state fiscal impact

           COMMENTS  

           1)Purpose.  Prior to the establishment of the OIG in statute, the  
            district's Internal Audits and Special Investigation Unit  
            reported that it was difficult to conduct investigations,  
            especially those that involve an outside party, such as a  
            contractor, because the unit had no authority to compel the  
            parties to provide documents or other types of information.   
            According to a recent report, the power of subpoena "serves as  
            a deterrent to those who may consider committing fraudulent  
            acts against the School District."

           2)Background  . 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.  Existing  
            law authorizes the OIG 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  








                                                                  AB 1825
                                                                  Page  2

            has been or is being violated.  

            According to the author, 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.


           Analysis Prepared by  :    Misty Feusahrens / APPR. / (916)  
          319-2081