CA Senate passes bill in light of UC audit interference

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The California State Senate passed a bill Thursday to penalize obstruction of future audits made by the California State Auditor.

AB-562 was introduced by state Assemblymembers Al Muratsuchi, D-Torrance, Kevin McCarty, D-Sacramento and Philip Ting, D-San Francisco, in February but was amended in June after the California State Auditor, or CSA, found in April that UCOP had interfered with the audit process.

“The Office of the President made inaccurate and unsubstantiated claims about its budget during regents meetings, such as claiming the Office of the President is not funded using state money even though campuses use money from the State’s General Fund to pay for the campus assessment,” the audit stated.

The audit also reported that UCOP had spent less than its budget and asked for increases based on previous overestimated budgets, provided atypical employee benefits and intentionally interfered with the audit process.

According to a report written by Muratsuchi, current law states that any person who does not give the CSA access to records requested in audit is guilty of a misdemeanor. No such law exists, however, for people who interfere with an audit. The bill would fix a loophole and penalize people who intentionally obstruct the California State Auditor.

“AB 562 … prohibits any person, with intent to deceive or defraud, from obstructing the California State Auditor,” said a fact sheet issued by Muratsuchi. “Anyone in violation of these provisions would be subject to a fine of up to $5,000.”

UC spokesperson Claire Doan said in an email that the university has not taken a position on the bill. According to UCOP, the internal task force set up by UC President Janet Napolitano has started to implement the recommendations set out by the auditors.

The bill passed with 36 out of 40 votes on the senate floor Thursday. According to Kerry Jacob, communications director for Muratsuchi, the bill will be heard in the Assembly Committee on Accountability and Administrative Review.

The bill will then have to be passed on the Assembly floor by Sept. 15 before it is given to the governor for a signature or a veto. If the bill is passed, it would be fully implemented by Jan. 2018.

Laws do currently exist that punish individuals for the altering or falsifying of documents. It is a misdemeanor for an officer to give written statements that they know to be false. The bill will help the CSA in completing its audits, according to State Auditor Elaine Howle.

“AB 562 is a good step in further strengthening the State Auditor’s existing statutory authority,” Howle said in a letter of support to Muratsuchi. “(The bill) would provide a disincentive for any auditee from obstructing the State Auditor from conducting an audit in the future.”

Contact Hyunkyu Michael Lee at [email protected] and follow him on Twitter at @_HyunkyuL.