The Office of the Inspector General, within the Youth and Adult Correctional Agency, is responsible for audits and investigations of the boards and departments within the state's correctional system. The office performs management review audits of adult prison wardens and Youth Authority facility superintendents. It audits the performance of internal affairs units operated within the state correctional system and reviews the adequacy of those investigations. The office also directly investigates certain allegations of staff misconduct in the correctional system and operates a toll-free telephone hotline for reporting of such misconduct and violations of state policy. State law establishes the office as an independent entity reporting directly to the Governor.
The budget proposes expenditures of $10.2 million in 2000-01 from the General Fund. This is about $4.2 million, or 69 percent, more than the current-year expenditures estimated in the Governor's spending plan. (As we will discuss later, we believe the current-year expenditures are overestimated.) The increase in year-to-year expenditures is due primarily to the implementation of state legislation significantly expanding the responsibilities of the office.
The Office of Inspector General is significantly overbudgeted for 1999-00, with the result that $2.3 million--about one-third of its initial budget allocation--will likely go unspent. About 70 percent of the new positions added for 1999-00 were still vacant as of January 2000 because the office could not keep pace with the budgeted quadrupling of its workforce. We recommend that the proposed 2000-01 spending request be reduced by $1.5 million because (1) the rapid pace of personnel growth that is assumed is unrealistic and (2) its auditing and investigative workload is moderately less than projected. (Reduce Item 0550-001-0001 by $1.5 million.)
Office Hiring Not Keeping Pace With Projections. The Office of the Inspector General, which was initially created in 1994, has been assigned significantly expanded duties by several 1998 and 1999 legislative measures. While the Legislature has fully funded the office's requests for additional funding to carry out these legislative mandates, the office has not expended all the funds or hired all the staff that was budgeted for these purposes.
In 1998-99, the office was overbudgeted by about $129,000, or 7 percent, and used only about nine personnel-years (PYs) in staffing despite being budgeted for 16 PYs. We estimate that in 1999-00 the office will be overbudgeted by about $2.3 million, or almost one-third of the budget allocation provided in the 1999-00 Budget Act, and thus will expend about $5.1 million in the current fiscal year. About 70 percent of the new positions added for 1999-00 were still vacant as of January 2000 because the office cannot keep pace with the budgeted quadrupling of its workforce. As a result, the office estimates that it will use only about 26 PYs in the current year out of the 59 PYs of staffing added to the office's operations.
In May 1999, we advised the Legislature that the office appeared unlikely to be able to add staff and expand its auditing and investigative programs as quickly as had been proposed. At the time, the office assured the Legislature that all of the resources were needed and could be used. Subsequently, the full funding it requested was provided in the 1999-00 Budget Act. However, the office now acknowledges that, what it has termed as "unavoidable delays" in expanding its operations will result in a significant portion of its current-year budget being left unspent. This will occur even though the office intends to redirect about $490,000 of its funds to temporarily hire retired annuitants and outside consultants in place of permanent investigative staff which it is unable to hire as planned.
Current-Year Audit and Investigative Workload Overstated. Our review of revised caseload estimates indicates that the workload projections upon which the 1999-00 office budget was based were also moderately overstated. For example, the office now expects to conduct only seven investigations initiated by legislative requests instead of the 30 for which it sought and received funding. The toll-free telephone hotline is now anticipated to generate only 15 investigations instead of the 90 the office predicted.
Some categories of investigations and audits, such as management review audits, are exceeding projections, and the time expended on certain types of investigations is exceeding the office's budgetary standards. However, taking all of these changes into account, we estimate that the office is overbudgeted for its workload by about $570,000 and six PYs in staffing in 1999-00.
New Budget Request Also Excessive. Although the office has yet to catch up with the significant increases in staffing and spending it was provided in the 1999-00 Budget Act, its 2000-01 budget plan assumes that all of the staffing authorized for the current year will be in place by June 2000. It also provides resources to implement two new investigative programs required by 1999 state legislation:
We believe it is reasonable and appropriate for the office's budget request for 2000-01 to include additional resources to comply with the 1999 legislative requirements. We are concerned, however, that the budget request assumes that all of the new staff would be hired and in place from the very start of the 2000-01 fiscal year. This seems unlikely given the office's track record for bringing on additional personnel over the past two years. Our review of updated caseload data also indicates that the budget request moderately overstates the new and existing workload the office would have to handle for correctional audits and investigations.
(We would note that Chapter 806, the bill to protect so-called "whistleblowers," assigns these types of cases to the Office of the Inspector General from the California Department of Corrections' [CDC] internal affairs unit. However, no offsetting reduction has been made in the CDC budget to account for a reduction in the caseload of that unit.)
Analyst's Recommendation. We recommend that the Legislature approve a 2000-01 budget for the Office of the Inspector General amounting to $8.7 millionan increase of $3.6 million, or 70 percent, above our $5.1 million estimate of what the office will actually spend in the current year. The General Fund spending level we recommend amounts to a $1.5 million reduction from the level proposed in the Governor's budget. We believe this budget level provides the additional resources the office needs to comply with legislative mandates while being realistic about the pace of staff expansion and workload the office can handle.
If our recommendation were adopted, the number of authorized positions would grow to about 105, or five fewer than proposed in the Governor's spending plan, reflecting our updated workload estimates for the office. (Because of a gradual phase-in of new staffing over the course of 2000-01, our recommendation would result in a total of 88 PYs for the officeabout 16 fewer PYs than proposed in the Governor's spending plan.)
Figure 1 summarizes our specific recommendations relating to the 2000-01 budget and their effect on funding, position authority, and personnel-year staffing levels of the Office of the Inspector General.
| Figure 1 | |||
| LAO-Recommended Reductions to Office of the Inspector General | |||
| (Dollars in Thousands) | |||
| Funding | Positions | Personnel-Years | |
| "Whistle-blower" investigations | $1,061 | 2.0 | 11.1 |
| Management review audits | 185 | No change | 2.7 |
| Existing workload | 299 | 3.2 | 3.2 |
| Total recommended reductions | $1,545 | 5.2 | 16.3 |
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