Auditor-Controller Legislation

I’m still reeling from Thursday’s final vote count for SB 1, the so-called “Road Repair and Accountability Act of 2017.” It barely passed out of both the Senate and the Assembly chambers and the reverberations continue. How this was accomplished is rather disturbing and the repercussions will be felt for some time. My Floor speech opposing the bill is below:

In a recent Governance and Finance Committee meeting, we heard SB 292 (Bates), that would allow a County Auditor-Controller to retain outside counsel.

This would be desired if this office holder felt that County Counsel was conflicted by representing the Board of Supervisors and his or her department. This is simple on its face, but the subject is deeper. The proposed purpose of the bill, and its accompanying testimony, was a little frustrating for me because I felt that three stories were not told correctly.

Allow me to provide a little history. When I ran for Orange County Treasurer-Tax Collector in 1994, one of the appointments I made as a constituent with an elected official immediately after the conclusion of tax season, which concludes the evening of April 15th, was with Steven E. Lewis, the elected Orange County Auditor-Controller.

Hoping that Mr. Lewis was doing his due-diligence as an auditor, I asked him a number of questions about the investment strategy of Robert Citron and how he justified the multiple layers of leveraging of the portfolio. After listening to a few of his answers, I was dissatisfied and very disturbed. I can remember saying to myself, “Dang, if I get elected, I’ll have to fix the Auditor-Controller’s office, too.” I was that appalled.

Shortly after the filing for bankruptcy protection, the new County Administrative Officer, Bill Popejoy, saw the same problems that bothered me. One of the first things that Bill Popejoy did was to segregate out the internal audit function from the Auditor-Controller and created a new, stand alone department. The elected Auditor-Controller had failed the citizens of Orange County and this was a worthy solution, based on the circumstances.

The next County Administrative Officer, who would change the title to County Executive Officer, was Jan Mittermeier. She also had a beef with countywide elected officials, as she felt that she could not control them. She certainly understood that there were appointed department heads and elected department heads, and it made a few things awkward, but we worked through them.

I also recall that it may have been Jan Mittermeier who established the Public Financing Advisory Committee (PFAC) as a result of a scathing SEC (Securities and Exchange Commission) report. I served on this Committee for many years as the County Treasurer-Tax Collector and it provides a second set of eyes for county officials in their fiduciary roles. In fact, one concern that came out of PFAC recently provided the genesis for my bill, SB 671, which I can address at a later date.

Many years before I arrived on the scene, the District Attorneys and Sheriffs around the state decided to do a ballot measure that would make their positions permanently elected in the state’s constitution. If the proposition passed, then their Boards of Supervisors would not be able to ask their county’s voters to approve making these positions appointable.

The DAs and Sheriffs invited the other countywide electeds to participate. Only the Assessors joined in. Consequently, counties have been slowly converting the positions of Treasurer-Tax Collector and Auditor-Controller to appointed positions, usually with the campaign assistance of the outgoing individuals who were elected to these positions.

This is a long story to state that only the District Attorneys, Sheriffs, and Assessors have the right to request outside counsel. One of my first votes as County Supervisor was to oppose Sheriff Michael Carona’s request for outside counsel. It passed, but it certainly started an interesting relationship between me and the now disgraced Sheriff.

Now a non-Constitutional officer, the Auditor-Controller, wants the same option. And, in order to get it, instead of going to a statewide ballot, he is doing it through legislation. I perceive this as an end run, and have protocol reservations with this strategy. (To make a clarification on the piece below, it was the Board of Supervisors that retained outside legal counsel to address SB 69.)

The Orange County Auditor-Controller did the same thing in the last Session, with Assembly Bill 783 (Daly). Before leaving the Board of Supervisors, I advised Eric Woolery to ease into the new position, work with the Audit Oversight Committee and allow everyone to buy in to the concept of moving the Internal Auditor Department back under the control of the Auditor-Controller.

Instead of diplomatically following this recommended approach, the Auditor-Controller went to Sacramento to get the job done. I voted against AB 783 in Governance and Finance. It later died on the Senate inactive file because the Board of Supervisors relented, concluding that the bill would eventually pass the Senate and Assembly and most likely be signed by the Governor. This leveraged tactic worked and the Board acquiesced.

So Bill Popejoy’s astute move has now been forcibly merged back into the Auditor-Controller’s office.

In Governance and Finance, I asked Eric Woolery, since he is the Auditor-Controller, why he hasn’t performed audits on the matters that have concerned him. His response was that he had to present an audit plan every year and that it would take some time to make this request. This was not a correct response. I believe that the appointed Internal Auditor had to make emergency requests to the Board of Supervisors, but an independently elected Auditor-Controller can perform any type of audit at any time that he or she wishes.

I’m very circumspect about SB 292, so I did not vote for it in Governance and Finance, but out of respect for my new Senate Leader, I did not vote against it. See how much fun goes into making a decision on a particular bill? Especially when you have the twenty-three year history of this unique setting? Fun life. The Voice of OC provides its opinion on this story in the piece below


Santana: OC Auditor Controller Leads CA Public Accountants Uprising

Former Supervisor John Moorlach, who is now serving on the state senate committee looking into Woolery’s bill, voiced some misgivings about the legislation.
Moorlach indicated Sheriffs and Assessors amended their powers as part of a broader look at their offices, a ballot initiative, which he seemed to support in this case for Auditors. Absent that, he seemed reluctant to piecemeal revisions to the authority of an independently elected office.
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