BILL ANALYSIS �
AB 1825
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CONCURRENCE IN SENATE AMENDMENTS
AB 1825 (Nazarian)
As Amended June 11, 2014
Majority vote
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|ASSEMBLY: |75-0 |(April 24, |SENATE: |35-0 |(July 3, 2014) |
| | |2014) | | | |
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Original Committee Reference: ED.
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 (OIG),
including the authority to issue subpoenas, and requires the
Inspector General to submit a final cumulative report to the
Legislature by December 1, 2024.
The Senate amendments are technical and nonsubstantive.
EXISTING LAW :
1)Authorizes the Inspector General of the LAUSD 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 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
AB 1825
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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;
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 : According to the Senate Appropriations
Committee, no direct fiscal impact on the state.
COMMENTS : The LAUSD 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.
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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
School District," and that it "substantially aids in the
performance of our work."
Analysis Prepared by : Rick Pratt / ED. / (916) 319-2087
FN: 0004084