BILL ANALYSIS �
SENATE COMMITTEE ON EDUCATION
Carol Liu, Chair
2013-2014 Regular Session
BILL NO: AB 1825
AUTHOR: Nazarian
INTRODUCED: February 18, 2014
FISCAL COMM: Yes HEARING DATE: June 4, 2014
URGENCY: No CONSULTANT:Lenin Del Castillo
SUBJECT : Office of the Inspector General.
SUMMARY
This bill proposes to extend the sunset date of the Los
Angeles Unified School District's Office of the Inspector
General by ten years from January 1, 2015, to January 1,
2025.
BACKGROUND
Current law authorizes the Los Angeles Unified School
District's Office of Inspector General until January 1,
2015, to conduct audits and investigations, as specified,
including the ability to subpoena witnesses, administer
oaths or affirmations, take testimony, and compel the
production of all information and documentary evidence
deemed material and relevant and that reasonably relate to
the inquiry or investigation undertaken by the Inspector
General when there is reasonable suspicion that a law,
regulation, rule, or district policy has been violated or
is being violated.
Current law provides that "reasonable suspicion" means that
the circumstances known or apparent to the Inspector
General include specific and articulable facts causing him
or her to suspect that a material violation of law,
regulation, or school district policy has occurred or is
occurring, and that the facts would cause a reasonable
officer in a similar position to suspect that a material
violation of a law, regulation, rule, or school district
policy has occurred or is occurring.
Current law provides that any person who, after the
administration of an oath or affirmation, states or affirms
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as true any material matter that he or she knows to be
false, is a misdemeanor publishable by imprisonment in a
county jail not to exceed six months or by a fine of up to
$5,000 or both for the first offense, and that each
subsequent violation shall be punishable by imprisonment
not to exceed one year or by a fine of up to $10,000 or
both.
Additionally, the Inspector General is required to submit
annual reports to the Legislature and a final cumulative
report by December 1, 2014, on all of the following:
1) The use and effectiveness of the subpoena power in
the successful completion of the Inspector General's
duties;
2) Any use of the subpoena power in which it was
quashed, including the basis for the court's order;
and
3) Any referral to the local district attorney or
Attorney General where the district attorney or
Attorney General declined to investigate the matter
further or declined to prosecute.
ANALYSIS
This bill extends the sunset date of January 1, 2015, for
the Office of the Inspector General by ten years to January
1, 2025. Additionally, this bill changes the deadline for
the Inspector General to submit a final cumulative report,
as specified, from December 1, 2014, to December 1, 2024
STAFF COMMENTS
1) Office of the Inspector General . The Los Angeles
Unified School District's Office of the Inspector
General was originally established by Chapter 295,
Statutes of 1999, SB 1260 (Hayden), at the request of
the school district with the primary mission of
detecting and preventing waste, fraud, and abuse. It
was also established in response to criticism over the
district's attempt to build a new downtown school on
expensive property that later turned out to be
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contaminated. At that time, the district's Internal
Audits and Special Investigation Unit had been in
existence for one year, but it was difficult or
impossible to conduct investigations, especially those
that involve an outside party such as a contractor,
and that the unit had no authority to compel to
provide documents or other types of information. The
Office of Inspector General originally had a sunset
date of January 1, 2001, but subsequent legislation
extended the sunset date-Chapter, 750, Statutes of
2000, SB 1360 (Hayden), and Chapter 462, Statutes of
2002, AB 2425 (Richman).
The Office of the Inspector General consists of 52
employees and operates within a $7.2 million budget
that is fully funded at the local level. The Los
Angeles Unified School District has indicated that
since its inception, the Inspector General has saved
the district a total of approximately $585 million as
a result of greater efficiencies, from the
identification of disallowed or unsupported costs
related to contracts and grants, and from restitution
recovered via the courts.
2) Need for the bill . According to the Los Angeles
Unified School District, the Inspector General's
subpoena power may compel the production of
information deemed material and relevant in situations
that the Inspector General has reasonable suspicion
that a law, regulation, rule, or policy has been
violated. The bill would ensure the Inspector General
maintains its subpoena power to compel private
individuals and entities to collaborate and ensure
that audits and investigations are conducted in a
timely manner. The Los Angeles Unified School
District has indicated that absent the subpoena
authority, the Inspector General could not effectively
perform its mission and would be limited in its
efforts to provide law enforcement with sufficient
information to determine if a prosecution should be
pursued.
3) Senate Office of Oversight and Outcomes report .
The Senate Office of Oversight and Outcomes report,
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"Food Fight: Small team of state examiners no match
for schools that divert student meal funds" discussed
weaknesses and gaps in the oversight system for
student meal funds. According to the report, school
districts have been illegally dipping into student
meal funds and misappropriating them when they are
intended to feed low income students. The
misappropriations are in most cases attempts by school
districts to use cafeteria funds to pay for a greater
share of personnel, utility, and other costs. The
Inspector General documented the district's
misappropriation of cafeteria funds. As part of the
report, the Senate Office of Oversight and Outcomes
recommended that the Legislature should consider
eliminating or extending the sunset date for the Los
Angeles Unified School District's Office of Inspector
General.
4) Committee amendments . Staff recommends that the
bill be amended to retain the deadline for the Office
of the Inspector General to submit a cumulative report
on December 1, 2014, and require that a final
cumulative report be submitted on December 1, 2024.
SUPPORT
Los Angeles Unified School District (sponsor)
OPPOSITION
None on file.