|Budget Issue:||Transfer of IT function to Department of General Services (DGS) and staff to handle new workload|
|Program:||Department of Fair Employment and Housing|
|Finding or Recommendation:||Adopt Governor’s 2011-12 January budget proposal to transfer DFEH’s IT workload to DGS. Reject transfer of five positions to DGS and $507,000 in General Funds to pay for these staff. Instead, eliminate the five positions at DFEH and require DGS to justify the need for additional staff on a workload basis. In addition, withhold redirecting two positions from DFEH’s IT unit to its enforcement division until volume of the new workload is better known (anticipated in mid-February).|
Background. The Department of Fair Employment and Housing (DFEH) is responsible for protecting the people of California from unlawful discrimination in employment, housing, and public accommodations. The department consists of 207 authorized positions, including seven positions (five positions in headquarters including the Chief Information Officer, one position in southern California, and one position in the Bay Area) which used to provide information technology (IT) services for the department and 150 positions in the department’s enforcement division.
The DFEH entered into an agreement with the state’s Department of General Services (DGS) effective July 2010 which transferred DFEH’s entire IT function and five positions to DGS's IT unit and provided $465,000 to DGS for the cost of providing these services in 2010-11. One objective of this agreement was to achieve efficiency and cost savings.
In addition, DFEH reached its first multi-million dollar discrimination settlement in September 2010 totaling more than $6.9 million. According to the department, this settlement will result in a significant increase in workload for the department.
Governor’s 2011-12 Budget Proposal. The Governor’s budget proposes to permanently move five DFEH positions to DGS and add provisional budget bill language that sets aside $507,000 in DFEH funding to pay for the transferred positions. In addition, the administration proposes to redirect the two remaining positions in DFEH‘s IT unit to its enforcement division to process settlement claims resulting from the large class-action settlement.
LAO Analysis. Centralizing the department’s IT function within DGS is reasonable. However, transferring the five positions from DFEH to DGS without having DGS justify the need for these additional staff reduces transparency and may not accurately reflect the new workload. If DGS is unable to absorb the increased workload, then it can request the appropriate level of additional staff and provide workload justification.
The DFEH is also requesting to redirect two positions from its former IT unit to its enforcement division to handle the workload related to the settlement of the class-action lawsuit. At the time the request was prepared, the volume of claims that would need to be processed was unknown. The department indicates that it will know the total number of settlement claims filed by mid-February and be able to better describe its workload needs then. In addition, given that pursuing large class action settlements, rather than individual claims, is a relatively new effort for the department, we are continuing to examine this request. We also have raised questions to DFEH about which party should be responsible for paying the related administrative costs when administering a large settlement.
LAO Recommendation. We recommend the Legislature adopt the Governor’s 2011-12 January budget proposal to transfer the Department of Fair Employment and Housing’s (DFEH) IT workload to the Department of General Services (DGS). However, the Legislature should reject the transfer of five positions to DGS and $507,000 in General Funds to pay for these staff. Instead, we recommend elimination of the five positions at DFEH and that the Legislature require DGS to justify the need for additional staff on a workload basis. Should DGS incur additional costs, DFEH should provide the appropriate level of reimbursements to fund this workload. In addition, we recommend the Legislature withhold approval of redirecting two positions from DFEH’s IT unit to its enforcement division until the volume of the new workload is better known. We are continuing to examine what would be the most appropriate source of funding for this workload.