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Analysis of the 2004-05 Budget BillLegislative Analyst's Office
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We recommend that the Legislature reject the Governor's proposal to eliminate the Office of the Inspector General (OIG), and transfer some of its function to the Youth and Adult Correctional Agency because it would result in a reduced level of oversight, and could jeopardize the quality of future investigations. Moreover, the administration has not provided adequate justification for the proposal. We discuss our concerns in detail below, and provide options for strengthening the OIG's oversight role.
In the early 1990s, the California Department of Corrections (CDC) faced a succession of highly publicized internal affairs cases alleging serious misconduct on the part of its personnel, particularly at the Corcoran and Pelican Bay state prisons. At the same time, CDC's internal affairs system was believed to be ineffective and inefficient in its ability to deter personnel misconduct, to investigate misconduct when it did occur, or to discipline those who violate department personnel policies or the law.
In response to these ongoing problems, Chapter 766, Statutes of 1994 (SB 1462, Maddy), was enacted to establish the Office of the Inspector General (OIG) within the Youth and Adult Correctional Agency (YACA). The OIG's role was to (1) review departmental policies and procedures for conducting investigations, as well as compliance with the same; (2) investigate allegations of personnel misconduct, including complaints of retaliation and other wrongdoing; and (3) recommend related correc tive action. In 1998, following continued complaints of personnel misconduct within CDC, the Legislature moved OIG out of YACA and established it as the only independent state agency responsible for oversight and investigation of correctional programs, reporting directly to the Governor.
In fiscal years 2002-03 and 2003-04, the Legislature and the Governor made significant reductions to the OIG's budget, reducing it from a high of $11 million in 2001-02 to $2.8 million in the current year. These reductions were made as part of the effort to address the state's budgetary shortfall.
Governor's Budget Proposal. The Governor's budget proposes to eliminate the OIG for a General Fund savings of $2.8 million and to transfer selected oversight functions, and six positions to the YACA Secretary. The Governor also proposes to augment the YACA budget by $630,000 to fund these positions. Under the proposal, the Inspector General staff will report directly to the YACA Secretary.
Ongoing Problems Suggest Need for More, Not Less Oversight. Since the establishment of the office, the Inspector General has (1) conducted 48 management review audits and special reviews of state correctional agencies and programs; (2) responded to more than 16,000 complaints via mail and through its toll-free call center; (3) investigated more than 1,400 allegations of misconduct by correctional staff and management; and (4) performed quality control reviews of more than 4,000 internal affairs investigations conducted by the investigative units of the Department of Corrections (CDC) and the Youth Authority.
As a result of these audits and investigations, the OIG has produced a number of findings of inefficient management practices and wrong-doings by correctional departments and staff. For example, in recent years OIG has identified shortcomings in CDC's fiscal audits unit, inefficient staffing in the Board of Prison Terms, and cases of abuse by Youth Authority staff. In addition, a recent federal court report regarding Pelican Bay State Prison concurred with OIG's findings in 2001 of deficiencies in CDC's efforts to investigate and discipline officer misconduct. Findings such as these suggest a continued need for oversight of correctional departments.
Proposal Would Reduce Independent Oversight. We have three concerns with the Governor's proposal to eliminate OIG. First, it would severely reduce the level of oversight of the state's correctional departments by reducing OIG resources from 24 to six positions. Administration officials have not proposed a detailed plan of how YACA would utilize these six positions, but the decrease in investigative staff would reduce both the number and the depth of investigations and audits conducted of correctional departments and institutions. As a result, this proposal would likely result in some cases of misconduct, abuse, and inefficiency to go unidentified.
Second, we are concerned that placing investigative positions in YACA could jeopardize the quality of oversight by housing the investigative staff in the very agency they are supposed to oversee. Because YACA and its departments work so closely together and share similar missions, there is a potential that departments might have undue influence on investigations initiated within the agency. Should such influence occur, it could affect the selection, quality, and outcomes of investigations. As we indicated earlier, the OIG was originally placed in YACA, but was later removed because the Legislature wanted to ensure OIG's independence when conducting its investigations and oversight.
Third, the Governor's proposal could result in state costs in the long run. One benefit of the OIG is the potential cost savings to the state resulting from the identification of inefficient and ineffective prison policies. Since the Governor's proposal would result in a reduced level of oversight, it could potentially result in unidentified wasteful practices continuing, thereby resulting in unnecessary General Fund costs.
In view of the above, we recommend the Legislature reject the Governor's proposal to eliminate OIG and transfer the positions to YACA. Retaining OIG as a separate agency would enable the state to maintain a significant level of oversight of the correctional system. In addition, it would allow the office to retain some independence from correctional officials, thereby decreasing potential conflicts of interest. Finally, it may reduce General Fund costs to the extent the OIG is able to identify wasteful prison policies. (At the time this analysis was prepared, the administration announced it was modifying its proposal. The specifics of the modified proposal were unknown.)
Although the Office of the Inspector General has made several significant findings and recommendations over the years, few of these have been acted upon by the Youth and Adult Correctional Agency. While the Legislature has taken some actions to strengthen the office, the Legislature may wish to consider additional options for strengthening the office, as we discuss below.
Making the OIG's Findings and Recommendations Stick. One concern that has been raised regarding OIG is that its audit and investigation recommendations often are not adopted or implemented by the correctional system, specifically CDC. The Inspector General's role has been mainly to conduct audits and investigations within the correctional system and report its findings. However, there is no mechanism in state law for routinely holding the correctional system accountable for addressing OIG's findings, and thus little incentive for departments to implement OIG's findings and recommendations. To address this concern, the Legislature may wish to consider the following options.
Enhance OIG's Independence. One option for strengthening the independence of the office is to appoint the Inspector General for a fixed term of six, eight, or ten years. The benefit of the longer 10-year term is that the Inspector General's terms of office could span the length of at least two gubernatorial terms.
What Is the Optimal Size of the Office of the Inspector General? There are a couple of issues to consider in regards to this question. First is the size of the correctional system. California's correctional system is large and its prisons and youth correctional facilities are spread across the state. For this reason, it may make sense to have regional offices—perhaps one in the northern part of the state and one in the south with central headquarters in Sacramento. This is essentially how the office was structured prior to recent budgetary reductions.
Second, the size of the office would be determined, in part, by the level of oversight desired by the Legislature, and the OIG's relationship to other investigative offices within the system. For example, in addition to investigations of alleged misconduct, if the Legislature wished to have the OIG perform management reviews of individual prisons, this may require a higher level of staff resources. If the OIG's role in relation to CDC investigators, for example, were to provide a second level of review, this would tend to offset the need for additional resources.
In sum, the size of the office should be based on the size of the system, the level of oversight responsibility the Legislature requires of the OIG, and the role of OIG in relation to other investigation efforts such as CDC's Office of Investigative Services. Initially, a restoration of the current-year funding level of $2.8 million (and 24 positions) would seem reasonable. In subsequent years, funding could be based on a plan required to be submitted to the Legislature by the incoming Inspector General as part of the 2005-06 budget.
Conclusion. The serious issues currently facing the state with regard to its correctional system suggest a need for significant independent oversight of the system. The Governor's proposal would reduce the level of state oversight, as well as the independence of the Inspector General by significantly reducing the number of investigative staff, and by requiring that OIG report directly to the Secretary of YACA. We recommend that the Legislature reject the Governor's proposal and consider options for strengthening OIG's office, such as providing greater public access to investigations, requiring routine reports to the Legislature, and appointing the Inspector General for a fixed term in office.