BILL ANALYSIS                                                                                                                                                                                                    



                                                                     AB 255


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          Date of Hearing:  April 29, 2015


           ASSEMBLY COMMITTEE ON ACCOUNTABILITY AND ADMINISTRATIVE REVIEW


                                  Rudy Salas, Chair


          AB 255  
          Irwin - As Amended April 23, 2015


          SUBJECT:  Veterans:  Inspector General for Veterans Affairs


          SUMMARY:  Creates the office of Internal Audits for Veterans  
          Affairs within the California Department of Veterans Affairs  
          (CalVet).  Specifically, this bill:  


          1)Establishes the office, led by the chief auditor (auditor),  
            who would be subject to appointment by the Governor and  
            confirmation by the Senate.


          2)Requires the auditor to report to the CalVet secretary  
            (secretary) and conduct reviews and investigations at the  
            request of the secretary or other members of senior  
            management.


          3)Sets the intent and scope of the auditor's reviews and  
            investigations.


          4)Requires the auditor to report findings of employee misconduct  
            to the secretary.









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          5)Subjects the auditor to specified sections of Government Code  
            related to internal auditors' independence and  
            responsibilities.


          6)Requires the auditor to establish a toll-free public telephone  
            number for receiving complaints of possible wrongdoing.


          7)Allows the auditor to initiate a review or investigation of an  
            alleged wrongdoing.


          8)Protects the identity of a person providing information that  
            results in a review or investigation, with some exceptions.


          9)Requires the auditor to submit annual summary reports to the  
            California Veterans Board and relevant policy committees of  
            the Legislature.


          10)Includes a January 1, 2020 sunset.   


          EXISTING LAW establishes reporting and independence requirements  
          for internal auditors of state agencies. 


          FISCAL EFFECT:  Unknown


          COMMENTS:  This bill will establish an internal auditor's office  
          within CalVet.  The auditor will be appointed by the Governor  
          subject to Senate confirmation, report to the secretary, and  
          conduct reviews and investigations at the discretion of the  
          secretary and senior management.









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          While the department does not have an internal audit office, it  
          has had an inspector general (IG) in the past.  The IG was  
          established in 1999 and eliminated by a budget bill in 2004.   
          According to analyses of that budget bill, some of the oversight  
          function of the IG was expected to be performed by other state  
          entities, including the Bureau of State Audits and Department of  
          Finance.  While both entities have conducted several audits of  
          CalVet programs and issues, there is not an internal audit  
          function at CalVet that reviews the department's programs and  
          operations on an ongoing basis. 


          According to the author, the intent of this bill is for the  
          auditor to work with CalVet leadership to improve the  
          department's operations and efficiency while providing  
          additional accountability.


          This bill states that the auditor shall work with the "intent of  
          increasing efficiencies, improving operations, and reducing  
          fraud, waste, and abuse."  The auditor would be charged with  
          reviewing the operations and financial conditions of California  
          veterans homes, the veterans farm and home purchase program, as  
          well as other CalVet programs and operations.


          Additionally, the auditor would be allowed to receive  
          communications from any individual, including CalVet program  
          participants and veteran home residents.  The auditor would be  
          required to establish a toll-free public telephone number for  
          the purpose of receiving complaints about potential wrongdoing  
          and he or she would be authorized to investigate allegations.     
           


          This bill specifies that CalVet and the auditor will be subject  
          to Government Code sections related to internal audits at state  
          departments.  These sections set reporting structures for the  








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          auditor to enhance independence and specify methods to report  
          concerns to authorities outside of the department if necessary.


          Under this bill, the auditor would be required to submit an  
          annual summary report to the California Veterans Board and the  
          relevant committees of the Legislature. The report must include  
          information about the auditor's activities as well as  
          recommendations that led to efficiencies, and improvements.


          This bill sunsets the auditor's office on January 1, 2020.        
               


          REGISTERED SUPPORT / OPPOSITION:




          Support


          None on file




          Opposition


          None on file




          Analysis Prepared by:Scott Herbstman / A. & A.R. / (916)  
          319-3600









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