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Other Budget Issues

Last Updated: 3/14/2014
Budget Issue: Office of Administrative Hearings staffing augmentation
Program: Department of General Services
Finding or Recommendation: Approve Governor's January proposal to provide a net increase of $1.8 million annually from the Service Revolving Fund for 19 additional positions--including 14 permanent administrative law judges (ALJs)--partially offset by a reduction in funding for temporary ALJs. Require reporting on annual caseload and hearing time frames.
Further Detail


Office of Administrative Hearings (OAH). The OAH within the Department of General Services provides administrative law judges (ALJs) to hear administrative disputes for over 1,500 state and local agencies. The OAH conducts adjudicatory hearings, prehearing and settlement conferences, and mediations. It handles a variety of types of cases, such as teacher layoffs, local ordinance violations, and professional licensing complaints for the Department of Consumer Affairs (DCA). The OAH is a self-supporting entity that relies on fees charged for the services it provides.

Hearing Delays. In recent years, OAH’s hearing workload has increased. For instance, OAH reports that its case filings increased 18 percent between 2007-08 and 2012-13, while the number of permanent ALJ positions to accommodate such filings declined from 91 positions to 82 positions over that same period. Consequently, OAH has relied more heavily on temporary (“pro tem”) ALJs to conduct hearings (about 14 full-time equivalent pro tem ALJs in each of the last two years) and has experienced delays in holding its hearings within targeted timeframes. Currently, OAH reports that it takes an average of 244 days from the time it receives a hearing request to when the hearing occurs. This is double its target of 120 days. Lengthy timeframes for setting hearings end up delaying the conclusion of the case for the parties involved, including increasing the amount of time to complete the discipline process for DCA licensees found to have violated laws and regulations. Such delays in the process can compromise consumer protection.

Governor’s Proposal

The Governor’s budget proposes a net increase of $1.8 million annually from the Service Revolving Fund for 19 additional positions, including 14 permanent ALJs and 5 senior legal typists. The proposal includes a reduction in funding for pro tem ALJ hours that is roughly equivalent to the number of hours associated with the 14 proposed permanent ALJ positions. According to the administration, it is difficult to find, train, and retain a pool of qualified pro tem ALJs. The administration notes that OAH’s budget would continue to include funding to use some pro tem ALJs on an ongoing basis—the equivalent of 3.7 full-time ALJs—once fully implemented. The administration indicates that approval of the proposal would permit OAH to return to its prior standard of setting cases for hearings within 120 days.

LAO Comments

Proposal Not Likely to Fully Address Delays. The Governor’s proposal replaces pro tem ALJ hours with a roughly equal number of permanent ALJ hours. While the proposal retains funding for some pro tem ALJs, it represents only a modest increase overall in total ALJ hours—the equivalent of fewer than four additional full-time ALJ positions (or 4 percent of current permanent and pro tem ALJ positions). Given the magnitude of the current delays at OAH and the existing caseload growth trends, we believe that it is unlikely that this proposal would be sufficient to fully address the issue on an ongoing basis, as indicated by the department.

Delays Vary by Location and Case Type. The OAH operates five regional offices throughout the state (Sacramento, Oakland, Los Angeles, Van Nuys, and San Diego). Our review of the department’s data found that the time frames for scheduling cases varies significantly by location. For instance, the average case-setting time frame is close to three times longer in San Diego than in Oakland (311 days versus 108 days, respectively). It is not clear why these differences exist—whether primarily due to caseloads, staffing, management, complexity of cases, or other factors. In addition, delays appear to vary by type of case. This may in part be due to statutory, regulatory, or contractual priority given to certain types of cases. For instance, under current law, teacher dismissal cases must commence within 60 days, and developmental disabilities cases must be heard within 50 days of the request for a hearing.

LAO Recommendations

Approve Staffing Proposal. We recommend approving the proposed staff changes, since the ongoing workload at OAH supports the additional positions, which should help address the lengthy case-setting time frames.

Include Reporting Requirement. We recommend that the Legislature adopt budget trailer legislation requiring OAH to report its annual caseload and hearing time frames. We recommend this information be delineated by hearing location, agency, and case type. This data would enable the Legislature to track the effectiveness of the proposal at reducing the time frames for setting hearings and monitor the differences in time frames across regions. If, after full implementation, time frames still exceed the 120-day target, the Legislature may wish to consider requiring OAH to submit a plan to reach the standard.

LAO analysis prepared by Helen Kerstein and reviewed by Brian Brown.