The 2008–09 Governor’s budget includes four requests for workload adjustments and two budget reduction proposals for the Office of the Inspector General (OIG). Altogether, these requests result in a $4.5 million net increase in the budget for OIG. We recommend rejecting two of the workload adjustment increases since they are not justified on a workload basis. In addition, we recommend approving the two budget reduction proposals. Our recommendations would reduce the proposed budget for OIG by $4.5 million. (Reduce Item 0552–001–0001 by $4,451,000.)
Background. The OIG is responsible for independent oversight of the California Department of Corrections and Rehabilitation (CDCR). The OIG is required by statute and court orders to perform certain activities, such as auditing each correctional institution once every four years. In addition to these responsibilities, the OIG is authorized, but not mandated, to perform other activities, such as special reviews and fraud investigations. In recent years, as it has placed increased priority on oversight of state corrections, the Legislature has increased the number of staff at the OIG significantly, from approximately 40 positions in 2004–05 to nearly 110 positions in 2007–08. The OIG’s budget is supported exclusively through General Fund appropriations and is proposed to be about $26 million in 2008–09.
Governor’s Proposals. The Governor’s budget requests funding for four workload adjustments and also proposes two budget reductions. In total, these proposals would result in a net increase in the OIG’s budget of $4.5 million compared to the current year, as well as a net increase of 25 positions. We raise no concerns with two of these workload requests, that are for new staff and funds to support court–ordered activities related to medical investigations and attendance at committee meetings pertaining to prison incidents in which staff used force against inmates. The other two workload–related budget requests are for (1) 20 staff for the office’s Bureau of Audits and Investigations ($3.7 million), and (2) 6 administrative and information technology (IT) support staff ($690,000).
In addition to these workload requests, the Governor’s budget also includes two “budget–balancing reductions,” which would result in a total of $1.7 million in savings. Specifically, the administration proposes trailer bill language to reduce the frequency of certain OIG activities, such as audits and investigations, as well as the elimination of two administrative and eight staff positions consistent with this change in OIG duties.
Insufficient Justification for Two Workload Requests. Our analysis finds that insufficient justification was provided for two of the department’s workload requests. First, the OIG used a workload analysis as the justification for the additional auditing and investigations staff requested. However, in response to our questions, the OIG stated that it currently is fulfilling almost all of its mandated and nonmandated responsibilities at its current staffing level. The mandated work that has a small backlog, certain prison and warden audits, is scheduled to be in statutory compliance by 2009–10 without additional authorized positions. Of its nonmandated responsibilities, the OIG stated that it only experienced a backlog of a few special reviews in 2006–07. We find that, because the OIG will be in compliance with its mandated workload by 2009–10 as scheduled, the 20 additional auditing and investigations staff requested are not warranted at this time.
Second, the OIG provided insufficient justification for its request for new IT and administrative positions. The proposal did not include a workload analysis, but instead included only a narrative description to justify the requested support staff. Moreover, there is little evidence that the OIG has been unable to complete its work at its current administrative and IT staffing levels. In addition, our recommendation to deny the additional auditing and investigations staff will result in less of a need for the administrative and IT positions.
Budget Reduction Proposals Result in Additional Savings. Our analysis of the budget reduction proposals in OIG finds that they would result in additional savings for the state while having minimal impact on the office and its work. As a budget reduction strategy, the administration proposes trailer bill language to decrease the frequency with which the OIG performs certain responsibilities, such as reducing the frequency of prison and warden audits from once every four years to once every five years. This reduction in workload would result in the reduction of eight positions. The office reports that there are currently 10 vacancies out of 39 authorized positions for its investigator and auditor classification, a 26 percent vacancy rate. Our analysis suggests that the OIG could reduce its staff by the proposed eight positions without having to lay off current staff and, especially with the trailer bill language reducing certain workload, still continue to successfully complete all mandated and much of its nonmandated workload.
The administration also proposes eliminating two administrative staff positions in order to achieve budget savings. Given the state’s fiscal condition, we have no issue with this proposal and recommend adopting it to achieve additional state General Fund savings.
LAO Recommendations. Based on our analysis, we recommend that the Legislature (1) approve the requests related to court orders, (2) reject the proposed workload–related adjustments for audits and investigations, as well as administration, (3) approve the budget reduction proposal related to audits and investigations, (4) approve the proposed trailer bill language decreasing the frequency of certain OIG responsibilities, and (5) approve the budget reduction proposal that would eliminate two administrative staff positions. Taking these actions would result in General Fund savings of $4.5 million compared to the Governor’s budget.
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