Report 2012-112 All Recommendation Responses

Report 2012-112: Office of the Secretary of State: It Must Do More to Ensure Funds Provided Under the Federal Help America Vote Act Are Spent Effectively (Release Date: August 2013)

Recommendation #1 To: Secretary of State, Office of the

To ensure that the public, county registrars, and potential voting system developers understand how the secretary of state will make voting system approval decisions, the Office should make it a priority to develop regulations describing voting system standards in accordance with state law. It should begin the formal rule-making process by January 2014.

1-Year Agency Response

The Secretary of State (SOS) began the formal rulemaking process on October 25, 2013, with the publication of the Notice of Proposed Regulatory Action and the commencement of the public comment period. A public hearing was held on December 13, 2013. The written public comment period ended on January 3, 2014, and the SOS received a substantial number of comments. The SOS has been working with stakeholders to address all of the comments in the final rule-making package that will be submitted to the Office of Administrative Law for final approval.

California State Auditor's Assessment of 1-Year Status: Fully Implemented

6-Month Agency Response

The Secretary of State (SOS) began the formal rulemaking process on October 25, 2013, with the publication of the Notice of Proposed Regulatory Action and the commencement of the public comment period. A public hearing was held on December 13, 2013. The written public comment period ended on January 3, 2014, and the SOS is currently reviewing the comments submitted.

California State Auditor's Assessment of 6-Month Status: Pending

60-Day Agency Response

The Secretary of State (SOS) began developing and drafting voting system regulations prior to the audit's inception. The SOS anticipates beginning the formal rule-making process in November 2013 and anticipates the regulations will be effective by July 2014.

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation #2 To: Secretary of State, Office of the

To comply with federal requirements for record retention, the Office should revise its record retention policy for long-term federal awards such as HAVA.

1-Year Agency Response

Based on its review of OMB Circular A-102 (Common Rule) and Code of Federal Regulations (105-71.142 - Retention and access requirements for records), and after consulting with the U.S. Election Assistance Commission, the Secretary of State (SOS) continues to believe the current record retention policy meets or exceeds the federal requirements. However, the SOS does see merit in the State Auditor's recommendation regarding retaining all books and records until the agency submits its final expenditure report. Thus, the SOS has implemented a policy to retain all records for three years following the submittal of the final expenditure report for all HAVA funds.

California State Auditor's Assessment of 1-Year Status: Fully Implemented

6-Month Agency Response

The SOS continues to disagree with the recommendation to revise its record retention policy and maintains its position that its current policy meets or exceeds the federal requirements. However, the SOS is continuing to review the applicable federal requirements to ensure full and robust compliance and will revise its policy if necessary or appropriate.

California State Auditor's Assessment of 6-Month Status: Pending

We are skeptical as to whether the SOS intends to implement our recommendation given its disagreement with our audit finding. Nevertheless, the SOS recently hired a new chief for its management services division, who is planning to determine whether to implement our recommendation.

60-Day Agency Response

The SOS continues to disagree with the recommendation to revise its record retention policy and maintains its position that its current policy meets or exceeds the federal requirements. However, the SOS is reviewing the applicable federal requirements to ensure full and robust compliance and will revise its policy if necessary or appropriate.

California State Auditor's Assessment of 60-Day Status: Pending

We disagree that the Office's current record retention policy meets or exceeds federal requirements. Federal regulations require that the Office keep financial and programmatic records for three years following the submittal of its final expenditure report. The Office has yet to fully spend HAVA funds, and as a result, has yet to submit a final expenditure report. Further, the federal Election Assistance Commission has issued guidance informing states that the record retention period may extend several years as the initial award of funds is often spent over many years. Consequently, we stand by our recommendation for the Office to modify its record retention practices

Recommendation #3 To: Secretary of State, Office of the

To ensure that the State has maximum flexibility in how it spends the remaining HAVA funds, the Office should do the following:

Formally renegotiate its agreement with Justice by discussing the need to pursue VoteCal and obtaining clarity as to what aspect of the current CalVoter system, if any, does not meet HAVA's requirements.

Report, by December 2013, the results of these discussions with Justice to the Legislature. If the Office continues to believe it is compliant with Title III requirements, it should take the necessary steps to maximize the Legislature's flexibility to decide how best to appropriate remaining HAVA funds.

6-Month Agency Response

On January 29, 2014, the SOS received a letter from the United States Department of Justice (USDOJ) regarding the Memorandum of Agreement (MOA). In that communication, the USDOJ indicated that it is unwilling to renegotiate the MOA and that it should remain in place until such time as the VoteCal system is completely implemented. A copy of the USDOJs letter was provided to Grant Parks, Audit Principal, at GrantP@auditor.ca.gov on January 30, 2014.

The SOS provided the recommended report to the Legislature regarding the status of discussions with the USDOJ on December 31, 2013. A copy of the letter was provided to Grant Parks, Audit Principal, at GrantP@auditor.ca.gov on January 7, 2014. In addition, on February 5, 2014, the SOS provided an update to the Legislature and enclosed a copy of the USDOJs correspondence dated January 28, 2014. A copy of this letter will be provided to Grant Parks, Audit Principal, at GrantP@auditor.ca.gov.

California State Auditor's Assessment of 6-Month Status: Fully Implemented

60-Day Agency Response

The SOS has made several attempts to discuss its Memorandum of Agreement with the United States Department of Justice (USDOJ) regarding CalVoter and VoteCal. Specifically, the SOS initiated communication with the USDOJ via email on August 12, 2013, and sent a letter dated October 2, 2013, requesting the USDOJ contact the SOS to discuss the Auditor's recommendations. A copy of the October 2, 2013, correspondence will be sent directly to Grant Parks, Audit Principal, at GrantP@auditor.ca.gov. The SOS will continue to attempt to engage the USDOJ on this subject. The SOS will also provide the recommended report to the Legislature regarding the status of discussions with the USDOJ by December 2013.

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation #4 To: Secretary of State, Office of the

To enhance the value of the HAVA spending plan as a transparency and accountability tool for the Legislature, the Office should make the following modifications to its annual HAVA spending plan:

Clearly state the methodology used to report prior HAVA expenditures in the HAVA spending plan. Such a methodology should use the financial information contained in its accounting system.

Reconcile the prior HAVA expenditures with the year-end financial reports the Office provides to the California State Controller's Office.

Present prior HAVA expenditures by activity and by specific appropriation.

1-Year Agency Response

The current HAVA Spending Plan was developed with the Department of Finance (DOF) and the Legislative Analyst's Office (LAO) several years ago. The SOS was in contact with DOF regarding specific areas where additional financial information might aid in understanding how HAVA funds are expended or administered. The DOF indicated its preference for receiving the HAVA Spending Plan and supporting documentation in the format that was originally agreed to by the Legislature, the LAO, and the DOF. Through the budget and reporting process, the SOS worked closely with the Legislature and the DOF, but no additional information was requested and all parties indicated their continued preference for the Spending Plan in its current format.

California State Auditor's Assessment of 1-Year Status: Will Not Implement

We disagree with the Secretary of State's decision not to implement this recommendation. As we state on pages 28 and 29 of our audit report, the historical spending information reported in the HAVA spending plan contained variances - sometimes amounting to millions of dollars - from the information contained within the Secretary of State's accounting system. Providing the Legislature with financial information that is not based on its accounting records unnecessarily diminishes the value of the HAVA spending plan, which serves as a key transparency and accountability tool for the Legislature.

6-Month Agency Response

The current HAVA Spending Plan was developed with the Department of Finance (DOF) and the Legislative Analysts Office several years ago and the SOS is reluctant to make unilateral changes to the document. The SOS has been in contact with DOF regarding specific areas where additional financial information might aid in understanding how HAVA funds are expended or administered. At this time, the DOF has indicated its preference for receiving the HAVA Spending Plan and supporting documentation in the format that was originally agreed to by the Legislature and the DOF. Through the budget and reporting process, the SOS will continue to work closely with the Legislature and the DOF to identify areas where additional information would be helpful and/or useful.

California State Auditor's Assessment of 6-Month Status: Pending

We are skeptical as to whether the SOS plans to ultimately implement our recommendation. The SOS is waiting for the end of the fiscal year 2014-15 budget cycle to see if either the Legislature or the Department of Finance request the changes we list in our recommendation. Nevertheless, we stand by our recommendation given our report's conclusion that the SOS has provided the Legislature with historical spending information on HAVA that could not be corroborated by its accounting records. We discuss these concerns in more detail on pages 28 through 30 of our audit report.

60-Day Agency Response

The current HAVA Spending Plan was developed with the Department of Finance (DOF) and the Legislative Analyst's Office several years ago and the SOS is reluctant to make unilateral changes to the document. The SOS has been in contact with DOF regarding specific areas where additional financial information might aid in understanding how HAVA funds are expended or administered. At this time, the DOF has indicated its preference for receiving the HAVA Spending Plan and supporting documentation in the format that was originally agreed to by the Legislature and the DOF. Through the budget and reporting process, the SOS will continue to work closely with the Legislature and the DOF to identify areas where additional information would be helpful and/or useful.

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation #5 To: Secretary of State, Office of the

To ensure the State complies with the NVRA, the Office should take all necessary steps, including seeking any necessary legislative changes, and work with the DMV to modify the driver's license application so that it may simultaneously serve as a form for voter registration.

1-Year Agency Response

While the status reflected above is "Will Not Implement," the SOS views this as a recommendation that it is unable to implement. The SOS continues to work closely with state and local NVRA agencies to ensure the State complies with the NVRA. A copy of the SOS' NVRA Accomplishments & Next Steps document detailing those efforts was provided as part of the SOS' six month response. However, the DMV is not a department under the purview or control of the SOS. That is why the United States District court for the Northern District of California, in its 1995 order in Wilson v. United States, approved procedures allowing the DMV to incorporate a voter registration form with the driver license application, known as the DL 44, making the DL 44 a two-page form. The SOS has worked closely with the DMV to: (1) simplify and shorten the voter registration portion of the DL 44; (2) ensure seamless electronic transfer of all change of address data; and (3) speed the forwarding of completed voter registration forms from the DMV to county elections offices. The SOS will continue to work closely with the DMV and make recommendations to further improve that department's implementation of the NVRA.

California State Auditor's Assessment of 1-Year Status: Will Not Implement

Although the Secretary of State (SOS) does not have control over the DMV, we would have expected the SOS to have engaged in discussions with the DMV or sponsored legislation to modify the driver's license application. Doing so would have promoted the full implementation of the National Voter Registration Act. We discuss this issue on pages 31 and 32 of our audit report.

6-Month Agency Response

The SOS continues to work closely with state and local NVRA agencies to ensure the State complies with the NVRA. A copy of the SOS NVRA Accomplishments & Next Steps document detailing those efforts will be provided to Grant Parks, Audit Principal, at GrantP@auditor.ca.gov.

With regard to the DMV specifically, as previously indicated, the DMV is not a department under the purview or control of the SOS. That is why the United States District Court for the Northern District of California, in its 1995 order in Wilson v. United States, approved procedures allowing the DMV to incorporate a voter registration form with the driver license application, known as the DL 44, making the DL 44 a two-page form. The SOS has worked closely with the DMV to: (1) simplify and shorten the voter registration portion of the DL 44; (2) ensure seamless electronic transfer of all change of address data; and (3) speed the forwarding of completed voter registration forms from the DMV to county elections offices. The SOS will continue to work closely with the DMV and make recommendations to further improve that departments implementation of the NVRA.

California State Auditor's Assessment of 6-Month Status: Pending

The SOS does not appear to be taking steps towards fully implementing our recommendation. We recognize that the SOS would need to coordinate with the DMV in order to change the driver's license application as we state in our recommendation. However, the SOS has yet to provide any evidence that it has had such discussions with the DMV.

60-Day Agency Response

As previously indicated, the DMV is not a department under the purview or control of the SOS. That is why the United States District court for the Northern District of California, in its 1995 order in Wilson v. United States, approved procedures allowing the DMV to incorporate a voter registration form with the driver license application, known as the DL 44, making the DL 44 a two-page form. The SOS has worked closely with the DMV to: (1) simplify and shorten the voter registration portion of the DL 44; (2) ensure seamless electronic transfer of all change of address data; and (3) speed the forwarding of completed voter registration forms from the DMV to county elections offices. The SOS will continue to work closely with the DMV and make recommendations to further improve that department's implementation of the NVRA.

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation for Legislative Action

To ensure that the secretary of state has the authority to designate voter registration agencies under the NVRA, the Legislature should expressly define who may make such designations.

Description of Legislative Action

N/A

California State Auditor's Assessment of 6-Month Status: Legislation Introduced

AB 1446 (Mullin, 2014) would authorize the Secretary of State to designate voter registration agencies pursuant to the federal National Voter Registration Act of 1993 (NVRA).

All Recommendations in 2012-112

Agency responses received are posted verbatim.