BILL ANALYSIS Ó AB 255 Page 1 Date of Hearing: May 13, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair AB 255 (Irwin) - As Amended April 23, 2015 ----------------------------------------------------------------- |Policy |Veterans Affairs |Vote:|8 - 1 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | |Accountability and | |9 - 0 | | |Administrative Review | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill creates the office of Internal Audits for Veterans Affairs within the California Department of Veterans Affairs (CalVet). Specifically, this bill: AB 255 Page 2 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)Requires the auditor to report findings of employee misconduct to the secretary. 4)Subjects the auditor to specified sections of Government Code related to internal auditors' independence and responsibilities. 5)Allows the auditor to initiate a review or investigation of an alleged wrongdoing. 6)Requires the auditor, beginning January 1, 2017, and each year thereafter, to submit an annual summary report to the California Veterans Board and relevant policy committees of the Legislature. 7)Includes a January 1, 2020 sunset. FISCAL EFFECT: Moderate ongoing costs, in the range of $500,000 to $750,000 AB 255 Page 3 (GF), to CalVets to staff an audit unit. and submit the required reports. COMMENTS: 1)Purpose. 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. 2)Background. 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, but it was eliminated in 2004 Budget Act. According to analyses of that Budget Act, some of the oversight functions of the IG were 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. 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. Analysis Prepared by:Pedro R. Reyes / APPR. / (916) 319-2081 AB 255 Page 4