Cannon, K.

English

University of San Diego

INTERNAL GOVERNMENT REVIEW OF AGENCIEScontributions collected were promptlyand completely deposited into theCommission's money market fund.OAG concluded that a lack of controlover these areas by the Athletic Com-mission could result in some boxers re-ceiving pensions for which they havenot paid. The Commission also missedopportunities to detect an embezzlementof over $14,000 in pension funds by anemployee of the Department of Con-sumer Affairs. Finally, OAG noted thatthe database used for the pension con-tained many errors that could result inincorrect refunds of pension distribu-tions or incorrect payments of pensionbenefits to boxers.To remedy these problems, OAG rec-ommends that the Athletic Commissionestablish a system to track the amountsof purses earned by boxers; ensure thatthe amounts of contributions collectedafter each show can be reconciled withthe amounts of contributions depositedinto the money market fund; monitorthe amount of time it takes to depositcontributions into the money marketfund to ensure that these contributionsare promptly invested, and take actionto correct unnecessary delays; ensurethat accounting records reflect all as-sets, including those in the money mar-ket fund; ensure that the interest rate,risk, and liquidity of its investments arereviewed periodically to determinewhether other investments would pro-vide a better rate of return; ensure thatinformation about boxers is accuratewhen entered into the database; andcomplete its identification and correc-tion of errors in the database.Other Reports. During the past fewmonths, OAG has also issued the fol-lowing reports: A Review of the Man-agement Practices and Financial Op-erations of the Riverside CommunityCollege District (Report No. F-019,June 1991); The Lake Elsinore Man-agement Project (Report No. P-042,August 1991); A Review of the Divi-sion of Labor Standards Enforcement'sHandling of the Crowe v. Simpson At-torney Fees Dispute (Report No. P-033,August 1991); A Review ConcerningAllegations of Conflict of Interest by aBoard Member of the Bay Area RapidTransit District (Report No. P-036, July1991); The Office of State PrintingNeeds to Strengthen Controls Over ItsElectronic Data Processing Resources(Report No. T-973, July 1991); A Re-view of the Board of Equalization'sTravel Claims (Report No. P-026, Au-gust 1991); and An Analysis of Sanc-tions in the General Relief/General As-sistance Programs of Six Counties (Re-port No. P-009, August 1991).LEGISLATION:SB 1132 (Maddy), as introducedMarch 8, would require the AuditorGeneral to complete audits in ac-cordance with the "Government Audit-ing Standards" issued by the Comp-troller of the United States. This billis still pending in the Senate RulesCommittee.LITIGATION:On June 14, the California SupremeCourt granted the legislature's motionfor a stay in Legislature v. Eu, No.S019660, temporarily blocking a provi-sion of Proposition 140 requiring thelegislature to reduce its operating bud-get 38% by July 1. (See CRLR Vol. 11,No. 3 (Summer 1991) pp. 49-50 forbackground information.) Lawmakersargued that if the stay were not granted,they would be forced to shut down OAGand the Legislative Analyst's Office-aclaim that was hotly disputed by theproponents of Proposition 140. Althoughthe court's decision blocks implemen-tation of the entire budget provision,legislative leaders generally agreed thatthe stay will be applied only to pro-posed cuts affecting OAG and LAO.On September 12, the Supreme Courtheard oral argument in the underlyingmatter, which concerns the constitution-ality of Proposition 140. During the 90-minute session, attorneys for the legis-lature argued that the measure consti-tutes a revision (rather than a mereamendment) of the state constitution,which cannot be accomplished by ini-tiative. In defense of Proposition 140,Deputy Attorney General ManuelMedeiros argued that because the mea-sure did not affect the legislature's tra-ditional powers, no constitutional rightsare violated. A ruling from the court isexpected by the end of the year.COMMISSION ON CALIFORNIASTATE GOVERNMENTORGANIZATION ANDECONOMY (LITTLE HOOVERCOMMISSION)Executive Director:Jeannine L. EnglishChairperson: Nathan Shapell(916) 445-2125The Little Hoover Commission wascreated by the legislature in 1961 andbecame operational in the spring of1962. (Government Code sections 8501et seq.) Although considered to be withinthe executive branch of state govern-ment for budgetary purposes, the lawstates that "the Commission shall not besubject to the control or direction of anyofficer or employee of the executivebranch except in connection with theappropriation of funds approved by theLegislature." (Government Code sec-tion 8502.)Statute provides that no more thanseven of the thirteen members of theCommission may be from the samepolitical party. The Governor appointsfive citizen members, and the legis-lature appoints four citizen members.The balance of the membership is com-prised of two Senators and twoAssemblymembers.This unique formulation enables theCommission to be California's only trulyindependent watchdog agency. How-ever, in spite of its statutory indepen-dence, the Commission remains a purelyadvisory entity only empowered to makerecommendations.The purpose and duties of the Com-mission are set forth in GovernmentCode section 8521. The Code states: "Itis the purpose of the Legislature in cre-ating the Commission, to secure assis-tance for the Governor and itself in pro-moting economy, efficiency and im-proved service in the transaction of thepublic business in the various depart-ments, agencies, and instrumentalitiesof the executive branch of the state gov-ernment, and in making the operation ofall state departments, agencies, and in-strumentalities and all expenditures ofpublic funds, more directly responsiveto the wishes of the people as expressedby their elected representatives ... "The Commission seeks to achievethese ends by conducting studies andmaking recommendations as to the adop-tion of methods and procedures to re-duce government expenditures, theelimination of functional and serviceduplication, the abolition of unneces-sary services, programs and functions,the definition or redefinition of publicofficials' duties and responsibilities, andthe reorganization and or restructuringof state entities and programs. The Com-mission holds hearings about once amonth on topics that come to its atten-tion from citizens, legislators, and othersources.MAJOR PROJECTS:Costs and Casualties of K-12 Edu-cation in California (June 1991), oneof the Commission's periodic reportson the state's education system, focuseson where education dollars are beingspent and how the state has failed tokeep dropouts in school.According to the report, a key culpritin the drain on educational resources isdistrict-by-district collective bargaining.The California Regulatory Law Reporter Vol. 11, No. 4 (Fall 1991) 4INTERNAL GOVERNMENT REVIEW OF AGENCIESThe Commission states that California"has been placed in a straitjacket thatlimits its decisions in other areas whileguaranteeing no better education for thestate's children," resulting in high drop-out levels and an illiterate and unpre-pared workforce.In its report, the Commission madefive major findings. First, it stated thatcurrent school funding methods preventschool districts from shifting prioritiesand allocating more money for instruc-tion. Much of California's educationmoney has been restricted by state orfederal law for specifically defined pur-poses, such as food services and childdevelopment centers. The report rec-ommends that, in order to allow moreflexibility in the decisionmaking of thedistricts and to further coordinate fund-ing for special programs, the Governorand the legislature should allow addi-tional block grant funding to local schooldistricts. The Commission warns thatsuch a program would need to includesufficient safeguards to ensure that hefunds ultimately accomplish the objec-tive of programs identified as being nec-essary in state statute.Second, the report found that the col-lective bargaining process improperlycontrols how school districts spend themajority of general fund monies; thesecollective bargaining processes not onlyregulate school employees' salaries andbenefits, but also affect a variety of costsin categories other than instruction. Thereport recommends that a study be con-ducted to examine the feasibility of theestablishment of a statewide council ofrecognized exclusive bargaining repre-sentatives to carry out the collectivebargaining process with a joint councilof school districts. In addition, the re-port recommends a review of the cur-rent parameters of what may be includedin the collective bargaining process soas to identify areas that might be betterremoved from the realm of negotiations,as well as a limit on the amount thatdistricts may be reimbursed for man-dated cost claims related to collectivebargaining costs.Third, the Commission found thatCalifornia's K-I 2 education system con-tinues to operate without adequate con-trols and with no accountability at thetop. According to the report, the currentassignment of local authority and re-sponsibility for fiscal decisionmaking,coupled with a primarily state-fundededucation system, does not ensure thefinancial stability of the districts. "Itappears that many local decisions defysound fiscal practices, without he stateable to exert control early enough toprevent fiscal adversity." Consequently,many districts are at risk of financialfailure which will result in the costlyprocess of the state bailing out the dis-tricts. The report recommends that thestate's Superintendent of Public Instruc-tion or the State Board of Education begiven additional fiscal authority and re-sponsibility when it appears that a dis-trict may fail to meet its financial obli-gations. In addition, the report recom-mends that penalties be assessed againstany school board member who know-ingly votes to approve a budget or ex-penditure which violates current statu-tory standards and criteria approved bythe Board of Education.Fourth, the report notes that the state'sdropout rate now exceeds 20% and thatDepartment of Education statistics areincomplete. Although state law allowsthe collection of dropout statistics onstudents leaving school as early as sev-enth grade, the Department counts drop-outs from only the tenth grade forward.The report recommends the implemen-tation of a statewide, student-level data-base that will incorporate the use ofstandard student identification numbersin order to track dropouts who laterreturn to school, as well as periodicreview of the dropout data sent to theDepartment by school districts.Fifth, the report states that if Califor-nia fails to reduce its dropout rate, thestate's economy will be severely af-fected. Although the figures are impre-cise, California's dropout rate indicatesthat large numbers of students annuallyleave school without graduating. As aresult, California's economy could even-tually suffer the consequences. The re-port recommends that the Governor andthe legislature support current success-ful efforts at dropout prevention andrecovery; the Department continue itsefforts to develop and implement initia-tives that will substantially contributeto the alleviation of the dropout prob-lem; and the Department place specialemphasis on the unique problem of His-panic dropouts.Conflict of Interest Code Amend-ments. In July, the Commission an-nounced that, pursuant to GovernmentCode section 87306, it intends to amendits conflict of interest code in Division8, Title 2 of the California Code ofRegulations. Pursuant to GovernmentCode section 87302, the code will des-ignate Commission employees whomust disclose certain investments, in-come, interests in real property, andbusiness positions, and who must dis-qualify themselves from making or par-ticipating in the making of governmen-tal decisions affecting those interests.The written comment period on theseproposed regulatory changes ended onSeptember 9.Recent Hearings. On August 22, theCommission held a public hearing re-garding California's transportation sys-tem and needs. The Commission hopesto release a report in January.DEPARTMENT OF CONSUMERAFFAIRSDirector: Jim Conran(916) 445-4465Consumer Infoline: (800) 344-9940Infoline for the Speech/HearingImpaired: (916) 322-1700In addition to its functions relatingto its 38 boards, bureaus, and commis-sions, the Department of Consumer Af-fairs (DCA) is charged with carryingout the Consumer Affairs Act of 1970.The Department educates consumers,assists them in complaint mediation,advocates their interests before the leg-islature, and represents them before thestate's administrative agencies andcourts.MAJOR PROJECTS:DCA Issues Final Report on De-mise of Bureau of Personnel Services.DCA recently issued its final report tothe legislature on the abolition of theBureau of Personnel Services (BPS).AB 2113 (Johnson) (Chapter 704, Stat-utes of 1989), the bill which abolishedBPS, required DCA to issue a reportsummarizing the legislation's impact onCalifornia consumers. (See CRLR Vol.9, No. 4 (Fall 1989) p. 74 for back-ground information.) DCA's report in-dicates that abuse of consumers by em-ployment agencies, while still problem-atic, has not increased substantially withthe abolition of the Bureau. Overall,DCA found minimal evidence of con-sumer abuse by employment agencies,but found that job listing services, whichhad accounted for substantial consumerabuse while BPS was operating, con-tinue to warrant special attention.To that end, the report recommendsthree statutory changes to protect con-sumers. First, DCA suggests that thecriminal penalty for abuses by job searchfirms increase from a misdemeanor to a"wobbler," which would be treated, inthe discretion of the district attorneyand judge, as either a misdemeanor or afelony. Second, the report recommendsthat all contracts between an employ-ment firm and a consumer be requiredto disclose the firm's agent for serviceof process; DCA anticipates that this0 The California Regulatory Law Reporter Vol. 11, No. 4 (Fall 1991)

Commission on California State Government Organization and Economy (Little Hoover Commission)

flj INTERNAL GOVERNMENT REVIEW OF AGENCIES COMMISSION ON CALIFORNIA STATE GOVERNMENT ORGANIZATION AND ECONOMY (LITTLE HOOVER COMMISSION) Executive Director: Jeannine L. English Chairperson: Nathan Shapell (916) 445-2125 The Little Hoover Commission was created by the legislature in 1961 and be-came operational in the spring of 1962. (Government Code sections 8501 et seq.) Although considered to be within the ex-ecutive branch of state government for budgetary purposes, the law states that "the Commission shall not be subject to the control or direction of any officer or employee of the executive branch except in connection with the appropriation of funds approved by the Legislature." (Government Code section 8502.) Statute provides that no more than seven of the thirteen members of the Com-mission may be from the same political party. The Governor appoints five citizen members, and the legislature appoints four citizen members. The balance of the mem-bership is comprised of two Senators and two Assemblymembers. This unique formulation enables the Commission to be California's only truly independent watchdog agency. However, in spite of its statutory independence, the Commission remains a purely advisory entity only empowered to make recom-mendations. The purpose and duties of the Commis-sion are set forth in Government Code section 8521. The Code states: "It is the purpose of the Legislature in creating the Commission, to secure assistance for the Governor and itself in promoting economy, efficiency and improved service in the transaction of the public business in the various departments, agencies, and in-strumentalities of the executive branch of the state government, and in making the operation of all state departments, agen-cies, and instrumentalities and all expen-ditures of public funds, more directly responsive to the wishes of the people as expressed by their elected repre-sentatives .... " The Commission seeks to achieve these ends by conducting studies and making recommendations as to the adop-tion of methods and procedures to reduce government expenditures, the elimination of functional and service duplication, the abolition of unnecessary services, programs and functions, the definition or redefinition of public officials' duties and responsibilities, and the reorganization 48 and or restructuring of state entities and programs. The Commission holds hear-ings about once a month on topics that come to its attention from citizens, legis-lators, and other sources. MAJOR PROJECTS: Transportation: Keeping California Moving (January 1992). In 1988, the Lit-tle Hoover Commission reported on California's transportation system, warn-ing that chronic funding shortfalls, slow project delivery, and a lack of policy direc-tion threatened to cripple the state's future mobility. {8:3 CRLR 38] In this sub-sequent report, the Commission examined the actions the state has taken to improve its transportation system and revealed that, despite significant improvements, the state's transportation policy is plagued by a lack of leadership, inadequate plan-ning, little cost/benefit analysis, ineffec-tive high-speed train development, poor project management, and a deficient growth management program. The report noted that voter approval of Propositions 108, 111, and 116 in June 1990 provided $18 .5 bi Ilion in new transportation revenue, formed a state consensus favoring multi-modal develop-ment, and established a growth manage-ment plan. However, the Commission found that a highway bias in the California Department of Transportation (Caltrans) and a lack of advocacy in the Governor's Cabinet hinder the state's efforts to develop a system encompassing a variety of transportation modes. According to the Commission, the Governor and the legis-lature should enact legislation to establish a new Transportation Agency to promote the efficient development of a multi-modal transportation system and require a management study to determine how Caltrans can be reorganized to promote the development of a multi-modal transportation system. Next, the Commission noted that the state has not adopted an adequate long-term plan for its transportation system. Propositions 108 and 111, also known as the Transportation Blueprint for the 21st Century, represented the first long-term transportation plan adopted since 1958. However, the Commission predicted that the Blueprint's failure to address economic factors causing highway con-gestion will prevent it from ensuring long-term mobility improvement in California. The Commission recommended that Caltrans develop a transportation im-provement plan that can promise im-proved mobility over the next twenty years. The plan should address the economic factors that perpetuate highway congestion; establish priorities for the development of a statewide, multi-modal transportation system; and address how transportation costs can be distributed equitably among users of the system. The Commission also found that the state does not adequately evaluate transportation alternatives based on cost-effectiveness, thus leading to unnecessary delay and expense for transportation projects. Further, the state has not been effective in developing a high-speed train system, thereby foregoing an alternative to auto and air travel. The Commission recommended that the Governor and the legislature enact legislation directing Caltrans to develop cost/benefit criteria that could be used by state, regional, and local transportation agencies in evaluating transportation options; requesting a franchise to build, operate, and finance a high-speed train system to include Sacramento, San Francisco, Fresno, Bakersfield, Los Angeles, and San Diego; and establishing a consortium that would guide development of the high-speed train system. The report noted that Caltrans has fre-quently been "criticized for the complica-tions and delays in their highway develop-ment process." These problems result, in part, from failure to assign project managers to major highway projects, thus leading to project delays and higher project costs. The Commission recom-mended that the Governor issue an execu-tive order requiring Caltrans to reorganize its district operations to ensure that a project manager is assigned to every major project; "major projects" should be defined as emergency projects or projects that are the most cost-effective in moving people. Finally, the Commission found that the Congestion Management Program (CMP), one of the most notable reforms established by Proposition 111, has several flaws that may prevent the linkage of transportation and land use planning. The CMP seeks to link local land use decisions to the capacity of transportation systems. While the program has helped bring together land use, air quality, and transportation decisionmakers, the Com-mission noted that it still needs improve-ments, which should include the follow-ing: --coordination of the goals and func-tions of existing planning agencies to streamline the planning process; --consistency between jurisdictions in the identification of principal arterials in CMPs and standardization of traffic forecast models; -the establishment of strategies that The California Regulatory Law Reporter Vol. 12, Nos. 2 & 3 (Spring/Summer 1992) INTERNAL GOVERNMENT REVIEW OF AGENCIES UJ encourage local governments to prevent traffic congestion, in addition to the CMP's current requirement to mitigate traffic congestion after it occurs; and -the establishment of mechanisms to minimize and resolve conflicts between jurisdictions within the CMP process. The Commission concluded that the state still has far to go to improve its transportation system, noting that Califor-nia cannot afford to be satisfied with the transportation achievements of the past few years. However, if all of its recom-mendations are implemented, the Com-mission predicted that the state can regain transportation leadership, provide for long-term mobility improvements, save money, speed up project delivery, and im-prove travel times. Mending Our Broken Children: Restructuring Foster Care in California (April 1992) lists five findings and makes sixteen recommendations for reforms that would substantially improve the quality of life for California's foster children. Opin-ing that it is generally best for children to remain with their natural families, the Commission found that California does not invest in "front-end" preventive ser-vices that seek to remove the problems, instead of the children, from families. Noting that an increasing number of children are being removed from their homes, the Commission also found that children are staying in the foster care sys-tem longer than was the case in previous years. In response to this condition, the Commission recommends that legislation be enacted to ensure that the state places a greater emphasis on placement prevention programs and associated family preserva-tion services for those families whose problems do not stem from sexual or physical abuse; such programs should focus on ensuring the safety and well-being of the child, however, and not simp-ly attempt to preserve families at any cost. The Commission also found that in-adequate training, support services, screening, and rates of reimbursement for the state's foster parents may result in foster children not receiving even the min-imal necessities and may expose them to potentially abusive situations. Further, the Commission found a high attrition rate among foster parents, leading to an insuf-ficient supply of qualified foster homes and an increased reliance on more costly types of placement facilities. The Com-mission made the following recommenda-tions for dealing with these conditions: -Legislation should be enacted to make training and a psychological evalua-tion prerequisites to the licensure of foster parents; such training should include basic information on the goals and activities of foster care services and the rules, regula-tions, policies, and expectations of the county agency supervising the foster children. -The state Department of Social Ser-vices (DSS) should provide the leadership necessary to encourage counties to maxi-mize the use of federal Title IV-E funds for the purposes of training foster parents. -The state should provide additional funding for the Foster Parent Training Program administered through California community colleges. -Legislation should be enacted which increases the statewide basic foster care rates of reimbursement to adequately cover the costs of raising foster children; the increase could be established only to the extent reliance on group homes and foster family agencies can be reduced. -The Governor and the legislature should aggressively lobby Congress and the President to enact federal legislation that would make all foster children eligible for AFDC-Foster Care. Next, the Commission found that more attention should be devoted to the needs of ethnic minority children in foster care. Despite a state law requirement that foster children be placed with relatives or families of the same racial or ethnic back-ground to preserve the children's cultural identities, the disproportionate share of ethnic minority children in foster care out-numbers the available "culturally com-petent" placement settings. In response to this imbalance, the Commission recom-mended that DSS reinstate funding for its Minority Home Recruitment Program and concentrate its recruitment efforts on eth-nic minority foster parents. DSS should, to the extent possible, work with counties to utilize methods that have proven to be effective in particular areas and can be replicated. In addition, DSS should monitor counties' administration of the foster care program to ensure the counties are making placements in accordance with the law. The Commission also found that the state's foster care system suffers from in-adequate monitoring and oversight. Such problems include the counties' conflict of interest in performing both licensing and placement functions, and the lack of an independent reporting mechanism for complaints regarding the system. As a result, the state's decisionmakers are unin-formed regarding the effectiveness of the present foster care program. The Commission recommended that the state establish a statewide foster care ombudsman program which would utilize a network of volunteers and work in con-The California Regulatory Law Reporter Vol. 12, Nos. 2 & 3 (Spring/Summer 1992) junction with existing Court Appointed Special Advocate programs. The state should also enact legislation eliminating the ability of DSS to contract with coun-ties to perform the licensing functions in the foster care system, thus making DSS solely responsible for those functions. DSS should also complete its develop-ment of foster care performance standards pursuant to SB 370 (Presley) (Chapter 1294, Statutes of 1989), and then monitor counties' adherence to the standards, while allowing counties discretion in how to meet them. Finally, the state should enact legislation requiring a bona fide lon-gitudinal study of California's foster care system and its clients to determine the long-range effectiveness of the system. Finally, the Commission found that counties lack sufficient interagency screening of children entering the foster care system. Despite the foster care system's goal to protect abused and neglected children, a "re-abuse" occurs when counties lack sufficient interagency coordination to protect the children from the trauma of being shuffled from agency to agency for multiple screenings. Accord-ing to the Commission, children end up being traumatized by their situations at home and again by the system that sup-posedly is designed to protect them. The Commission found that counties which promote interagency coordination have more success in mitigating further trauma to the children and reducing duplication of effort. The Commission recommended that the state enact legislation to establish the Child Development and Education Agen-cy, as well as legislation to provide start-up funds for counties to establish systems that institute interagency coordination; such legislation should also allow coun-ties flexibility in using those funds. Conflict of Interest Code Amend-ments. At this writing, the Commission's proposed amendments to its conflict of interest code in Division 8, Title 2 of the California Code of Regulations, await review and approval by the Office of Ad-ministrative Law. [ 12: l CRLR 33; 11:4 CRLR 50) Recent Hearings. On March 18, the Commission held a public hearing on the need for more school facilities and how that need can be met economically and efficiently. The Commission also scheduled a May 20 hearing on various school fiscal issues, such as deficit spend-ing by schools, the prospects for education funding in 1992-93, and steps taken by the state to increase fiscal oversight of local school districts. 49 

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Commission on California State Government Organization and Economy (Little Hoover Commission)

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