Report 2015-047 All Recommendation Responses

Report 2015-047: The State Bar of California: Its Lack of Transparency Has Undermined Its Communications With Decision Makers and Stakeholders (Release Date: May 2016)

Recommendation #1 To: Bar of California, State

To reduce the length of time that victims of dishonest lawyers must wait for reimbursement from the Client Security Fund, the State Bar should continue to explore fund transfers, member fee increases, and operating efficiencies that would increase resources available for payouts.

Annual Follow-Up Agency Response From November 2017

The State Bar continues to explore fund transfers, attorney licensing fee increases and operating efficiencies that would increase resources available for payouts. The 2018 fee bill includes a requirement that the Bar complete this analysis by March, 2018.

  • Estimated Completion Date: March 31, 2018

California State Auditor's Assessment of Annual Follow-Up Status: Pending

A provision of the 2018 fee bill (Business and Professions Code 6140.56(a)-(c)), which will take effect on January 1, 2018, requires the State Bar to analyze the Client Security Fund including a determination of the ongoing needs of the fund to satisfy claims in a timely manner and a review of additional efforts that can be taken to increase the collection of payments from responsible attorneys, among other things. It defines 'timely' as the later of 12 months from either the time the claim is received by the State Bar or the resolution of the underlying discipline case involving an attorney member that is a prerequisite to paying the claim. It also requires that the State Bar report the results of its analysis to the Legislature by March 15, 2018.


1-Year Agency Response

The Supreme Court did not include.an increase in the Client Security Fund as part of its 2017 licensing fee assessment. Bar staff has continued to work with the Special Master to identify and advocate for additional funding for the CSF. See attached March 2017 report to the Special Master.

  • Estimated Completion Date: continuous activity
  • Response Date: May 2017

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


6-Month Agency Response

The legislature did not act on the 2017 fee bill. The Bar's most recent effort to explore additional CSF funding is codified in the Bar's October 31, 2016, supplemental Supreme Court filing seeking authorization of 2017 fees. The Bar specifically requested a $25 CSF fee increase. The supplemental filing can be found here:

https://www.dropbox.com/sh/n17jg4yyeuao7da/AADQjbcEGR9Wr_NaJbU6FkTTa?dl=0&preview=28.+Supplemental+Submission+Concerning+Methodology+of+Options+for+a+Special+Regulatory+Assessment+to+Fund+the+State+Bar+in+2017_S237081-In+re+Attorney+Discipline+System.pdf

  • Estimated Completion Date: ongoing
  • Response Date: November 2016

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


60-Day Agency Response

The 2017 attorney fee bill contains specific provisions regarding such an assessment of the Client Security Fund; that work is to be completed by the end of March 2017.

  • Estimated Completion Date: March 31, 2017
  • Response Date: July 2016

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


Recommendation #2 To: Bar of California, State

To ensure that it maximizes its cost-recovery efforts related to the Client Security Fund, the State Bar should adopt a policy to file for money judgments against disciplined attorneys for all eligible amounts as soon as possible after courts settle the discipline cases.

1-Year Agency Response

The State Bar is filing judgments for all eligible cases. Dedicated staff have been assigned to this activity.

  • Completion Date: February 2017
  • Response Date: May 2017

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

The State Bar asserts that it is now filing judgments for all eligible cases, however, it has not provided us with an adopted policy to file for money judgments for all eligible amounts as soon as possible after courts settle discipline cases.


6-Month Agency Response

No change from previous submission.

  • Estimated Completion Date: 6/30/17
  • Response Date: November 2016

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


60-Day Agency Response

Under the direction of the State Bar's General Counsel, dedicated staff are now addressing a backlog of judgment filings covering a several year period during which the Bar had put such work on a hiatus; while the State Auditor's recommendation may in fact be appropriate, a cost benefit analysis of the current effort should be conducted prior to adoption of a policy regarding universal judgment filing.

  • Estimated Completion Date: 12/31/2016
  • Response Date: July 2016

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


Recommendation #3 To: Bar of California, State

To ensure that it maximizes its cost-recovery efforts related to the Client Security Fund, the State Bar should adopt a policy to evaluate annually the effectiveness of the various collection methods it uses to recover funds from disciplined attorneys.

Annual Follow-Up Agency Response From November 2017

The State bar is delayed in adopting such a policy but will do so by the end of 2017.

  • Estimated Completion Date: End of 2017

California State Auditor's Assessment of Annual Follow-Up Status: Pending


1-Year Agency Response

The State Bar is delayed in implementing this recommendation but will do so by the end of 2017.

  • Estimated Completion Date: December 31, 2017
  • Response Date: May 2017

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


6-Month Agency Response

Staff has begun development. As part of this process, a significant amount of work has been done to enhance collections. Initially, this effort focused on addressing a years-long backlog in judgment filing. Most recently, staff has moved to secure a collections vendor through a Judicial Council master agreement vendor. As part of both sets of activities, policies are being developed; we are unlikely to meet the previously stated goal of policy adoption by the end of the year however.

  • Estimated Completion Date: 6/30/17
  • Response Date: November 2016

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


60-Day Agency Response

The State Bar will adopt such a policy by the end of 2016; the policy may call for a biennial, instead of annual, review.

  • Estimated Completion Date: 12/31/2016
  • Response Date: July 2016

California State Auditor's Assessment of 60-Day Status: No Action Taken

As of August 2016 the State Bar has not yet adopted a policy as recommended.


Recommendation #4 To: Bar of California, State

To reduce the risk of errors in financial reporting, the State Bar should update its procedures to include guidance on detailed steps that staff should take to prepare financial statements and to ensure that the statements are accurate and complete.

6-Month Agency Response

Staff has developed a tool by utilizing Excel VlookUp function to roll general ledger revenue and expense object lines/balances to the consolidated operating statement and balance sheet. This process will create accurate financial reports in a consistent manner because after downloading the accounting balance from Oracle, the account mapping and grouping processes are fully automated. In addition, to standardize the account grouping, this report writing tool is built based on the Financial Statement Grouping documented in the Budget Policy Manual (Attached, see pages 16-27).

  • Completion Date: October 2016
  • Response Date: November 2016

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


60-Day Agency Response

Staff has updated the fiscal policies and added guidance and steps for financial statement preparation (section VII in the General Accounting Policy). In addition, to ensure the accuracy and consistency of financial reporting, staff has developed a report template to automatically roll up revenue and expenditure categories for financial reporting.

  • Completion Date: July 2016
  • Response Date: July 2016

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

The State Bar plans to submit supporting documentation at its 6 month response.


Recommendation #5 To: Bar of California, State

To reduce the risk of errors in financial reporting, the State Bar should update its procedures on management's review and approval of financial statements.

6-Month Agency Response

see 60-day response.

  • Completion Date: July 2016
  • Response Date: November 2016

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

The State Bar established a policy stating, "All financial reports (quarterly, annual, external and internal financial reports) are required to be reviewed and approved by the Chief Financial Officer and the Chief Operating Officer before releasing for Board presentation or legislative filing."


60-Day Agency Response

Staff has updated the fiscal policies and incorporated this procedure (section VII in the General Accounting Policy). In the revised policies, all quarterly financial reports and annual financial statements are required to be reviewed and approved by the Chief Operating Officer before presenting to the Board and filing with the Legislature.

  • Completion Date: July 2016
  • Response Date: July 2016

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

The State Bar plans to submit supporting documentation at its 6 month response.


Recommendation #6 To: Bar of California, State

To increase the transparency and comparability of its financial information, the State Bar should limit significant changes in its indirect cost reporting.

6-Month Agency Response

Formal Board adoption of a cost allocation methodology was an important foundational step in limiting modification of that methodology and related reporting. At this time, no additional policies in this regard are contemplated.

  • Completion Date: February 2016
  • Response Date: November 2016

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


60-Day Agency Response

In February 2016, the Board adopted an updated Cost Allocation Plan (CAP). This CAP clearly identifies all support cost centers, indirect cost pool and allocation bases which will limit any significant changes in future indirect cost allocation and reporting.

  • Completion Date: February 2016
  • Response Date: July 2016

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

The State Bar plans to submit supporting documentation at its 6 month response.


Recommendation #7 To: Bar of California, State

To increase the transparency and comparability of its financial information, the State Bar should clearly disclose any changes in its accounting practices.

6-Month Agency Response

see 60 day response

  • Completion Date: June 2016
  • Response Date: November 2016

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

The State Bar updated its accounting policies to state, "Disclose and explain in the financial statements all significant changes in program costs, accounting policies, practices, cost allocation methodology and management assumption."


60-Day Agency Response

Significant changes in accounting practices are disclosed in the State Bar's 2015 audited financial statement. Staff also updated the General Accounting Policies to include this required procedure for future financial reporting practices.

  • Completion Date: June 2016
  • Response Date: July 2016

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

The State Bar plans to submit supporting documentation at its 6 month response.


Recommendation #8 To: Bar of California, State

To increase the transparency and comparability of its financial information, the State Bar should disclose the reasons for any significant changes to program costs.

1-Year Agency Response

See State Bar's 2017 budget submission which reflects implementation of this recommendation.

  • Completion Date: March 2017
  • Response Date: May 2017

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


6-Month Agency Response

see 60-day response

  • Estimated Completion Date: 1/31/17
  • Response Date: November 2016

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


60-Day Agency Response

Explanations regarding significant changes to program costs are included in the 2015 audited financial statement. Staff also updated the General Accounting Policies to include this required procedure for future financial reporting practices. The State Bar's 2017 budget submission will reflect full implementation of these new disclosure practices.

  • Estimated Completion Date: 1/31/2017
  • Response Date: July 2016

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

The State Bar plans to submit supporting documentation at its 6 month response.


Recommendation #9 To: Bar of California, State

To ensure that it accounts appropriately for information technology project costs and their related funding sources, the State Bar should develop a reasonable method for allocating information technology project costs.

Annual Follow-Up Agency Response From December 2017

The State Bar is in agreement with the recommendation that a written policy regarding cost allocation for IT projects should be adopted. Cost allocation will vary by project, but a policy requiring the funding source and cost allocation methodology for each project to be identified is consistent with the Bar's commitment to improving the fiscal and operational management of the State Bar, emphasizing integrity, transparency, accountability and excellence. This recommendation will be implemented with the submission of the Bar's final budget in February 2018.

  • Estimated Completion Date: February 2018

California State Auditor's Assessment of Annual Follow-Up Status: Pending


1-Year Agency Response

IT projects have been fully incorporated in State Bar cost allocation methodology as reflected in the Bar's 2017 adopted budget.

  • Completion Date: March 2017
  • Response Date: May 2017

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

Although the State Bar says it has fully incorporated IT projects into its cost allocation methodology as reflected in its 2017 adopted budget, it did not provide us with a written methodology for allocating IT project costs.


6-Month Agency Response

Allocation methodology completed and analysis conducted. Conclusion of the analysis was that $1,211,193 of the IT Special Assessment Fund balance should remain restricted, and $3,642,377 of the IT Improvement Fund balance should remain unrestricted.

  • Completion Date: October 2016
  • Response Date: November 2016

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

While the State Bar provided us an updated reconciliation of its IT Special Assessment Fund and Technology Improvement Fund, it did not provide a methodology for allocating information technology projects. We will reassess the State Bar's implementation of this recommendation after the State Bar provides us with its methodology.


60-Day Agency Response

IT project costs have been tracked properly and separately by project in the existing Oracle financial system. Staff also reconciled and corrected the issues related to inter-fund transfers and mingling of restricted and unrestricted funds/resources in previous years. Staff is still working on a cost allocation plan for future information technology project costs, and expects to complete this effort by 9/30/2016.

  • Estimated Completion Date: 09/30/2016
  • Response Date: July 2016

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


Recommendation #10 To: Bar of California, State

To ensure that it accounts appropriately for information technology project costs and their related funding sources, the State Bar should apply its new cost-allocation method to the costs of its Technology Improvement Fund.

Annual Follow-Up Agency Response From December 2017

The State Bar is in agreement with the recommendation that a written policy regarding cost allocation for IT projects should be adopted. Cost allocation will vary by project, but a policy requiring the funding source and cost allocation methodology for each project to be identified is consistent with the Bar's commitment to improving the fiscal and operational management of the State Bar, emphasizing integrity, transparency, accountability and excellence. This recommendation will be implemented with the submission of the Bar's final budget in February 2018.

  • Estimated Completion Date: February 2018

California State Auditor's Assessment of Annual Follow-Up Status: Pending


1-Year Agency Response

The cost allocation methodology has been applied to the costs of the Technology Improvement Fund.

  • Completion Date: March 2017
  • Response Date: May 2017

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

Although the State Bar says it has applied a cost allocation methodology to its Technology Improvement Fund costs, it has not provided us with a written methodology for allocating IT project costs.


6-Month Agency Response

Once completed, the cost allocation methodology will be applied.

  • Estimated Completion Date: February 1, 2017
  • Response Date: November 2016

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


60-Day Agency Response

Once implemented, the cost-allocation method for IT projects will be applied.

  • Estimated Completion Date: 09/30/2016
  • Response Date: July 2016

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


Recommendation #11 To: Bar of California, State

To ensure it informs stakeholders of conditions that may affect its policy and programmatic decisions, the State Bar should document the assumptions and methodology underlying its budget estimates.

1-Year Agency Response

See State Bar's 2017 budget submission which reflects implementation of this recommendation.

  • Completion Date: March 2017
  • Response Date: May 2017

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


6-Month Agency Response

Due to budget uncertainties, the proposed 2017 budget submitted to the legislature on November 15, 2016, largely reflected the adopted 2016 budget. The Bar's January 2017 final budget submission will reflect assumptions and methodology.

  • Estimated Completion Date: February 1, 2017
  • Response Date: November 2016

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


60-Day Agency Response

Budget assumptions and methodology for deriving same will be fully documented in the Bar's 2017 recommendations.

  • Estimated Completion Date: 1/31/2017
  • Response Date: July 2016

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

We will review implementation in 2017.


Recommendation #12 To: Bar of California, State

To ensure it informs stakeholders of conditions that may affect its policy and programmatic decisions, the State Bar should concisely present its budget assumptions and methodology in the final budget document it provides to its board and the Legislature.

1-Year Agency Response

See State Bar's 2017 budget submission which reflects implementation of this recommendation.

  • Completion Date: March 2017
  • Response Date: May 2017

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


6-Month Agency Response

Due to uncertainties regarding the level of Bar funding for 2017, the proposed budget for that year to be submitted on November 15, 2016, will reflect very few changes from the 2016 adopted budget. The November budget submission will essentially be a placeholder document pending the Court's decision on the Bar's fee authorization request. The 2017 final budget to be submitted in February, 2017, will include budget assumptions and methodology.

  • Estimated Completion Date: 3/1/17
  • Response Date: December 2016

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


60-Day Agency Response

Budget assumptions and methodology for deriving same will be fully documented in the Bar's 2017 budget submission.

  • Estimated Completion Date: 1/31/2017
  • Response Date: July 2016

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

We will review the implementation of this recommendation in 2017.


Recommendation #13 To: Bar of California, State

To make certain that its budget documents conform to the requirements in state law and that they are comparable to prior budgets, the State Bar should establish a process for ensuring that budget documents conform to the requirements in state law.

6-Month Agency Response

See attached Budget Polices, page 2.

  • Completion Date: September 2016
  • Response Date: December 2016

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

The State Bar provided us with the following response, which is not reflected above: To ensure the consistency and completeness of the budget document preparation, staff also developed a checklist which identifies all criteria and elements that needs to be included in the annual budget document. Staff will implement this change when preparing the 2017 document for Board presentation and Legislative filing. The State Bar provided us with its Budget Policies and Procedures Manual, which includes a Budget Document Checklist.


60-Day Agency Response

To ensure the consistency and completeness of the budget document preparation, staff also developed a checklist which identifies all criteria and elements that needs to be included in the annual budget document. Staff will implement this changes when preparing the 2017 budget document for Board presentation and legislative filing.

  • Estimated Completion Date: 1/31/2017
  • Response Date: July 2016

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

We will review the implementation of this recommendation in 2017. We requested the checklist referenced in the agency response.


Recommendation #14 To: Bar of California, State

To make certain that its budget documents conform to the requirements in state law and that they are comparable to prior budgets, the State Bar should update its budget policies to require supplementary schedules and narratives for any budget in the year in which the State Bar implements changes to the presentation of its budget.

6-Month Agency Response

Budget policies have been updated and provided to the State Auditor.

  • Completion Date: August 2016
  • Response Date: November 2016

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


Recommendation #15 To: Bar of California, State

To ensure that the State Bar's board can make informed decisions about its consultant's recommendations regarding budgeting and financial reporting, the State Bar should analyze the costs and benefits of implementing its consultant's recommendations about budgets and present this analysis to its board for consideration.

6-Month Agency Response

The Board considered the cost-benefit analysis at its July 2016 meeting; the analysis has been submitted to the State Auditor.

  • Completion Date: August 2016
  • Response Date: November 2016

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

In July 2016, State Bar staff reported that the State Bar had implemented 587 of 748 budget and financial reporting elements and recommended implementation of 66 additional elements to its board based on an analysis of the costs and benefits of doing so.


60-Day Agency Response

The Board will consider a cost-benefit analysis regarding consultant recommendations as to budget preparation and reporting at its July22, 2016, meeting.

  • Estimated Completion Date: 7/22/2016
  • Response Date: July 2016

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


Recommendation for Legislative Action

To make certain that the Legislature is not limited in its ability to set member fees, the Legislature should require the State Bar to notify or seek its approval when the State Bar plans to pledge its member fee revenue for a period that exceeds 12 months or overlaps fiscal years.

Recommendation #17 To: Bar of California, State

To ensure that it retains appropriate supervision and control over the State Bar's financial affairs, the board should establish a policy that includes a description of the parameters for the creation of nonprofit organizations limiting such organizations to the purposes consistent with the law and the State Bar's mission.

Annual Follow-Up Agency Response From November 2017

The 2018 fee bill directs the Bar to establish a non-profit entity to support the transition of the State Bar Sections to a standalone entity. A policy establishing eliminating the Bar's ability to establish such entities will be established once the transition of the Sections is complete.

  • Estimated Completion Date: March 31, 2018

California State Auditor's Assessment of Annual Follow-Up Status: No Action Taken


1-Year Agency Response

Since submission of the last Update, the Bar was advised by Legislative staff that it should maintain its ability to establish non-profit entities pending the transition of the State Bar Sections to a standalone entity.

  • Estimated Completion Date: Unclear
  • Response Date: May 2017

California State Auditor's Assessment of 1-Year Status: No Action Taken


6-Month Agency Response

The Board intends to adopt a policy eliminating its ability to establish nonprofits at an upcoming meeting.

  • Estimated Completion Date: June 1, 2017
  • Response Date: November 2016

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


60-Day Agency Response

The 2017 fee bill includes provisions which eliminate the State Bar's ability to establish nonprofits, rendering this recommendation moot. Should these provisions not ultimately be adopted, the State Bar will revisit this recommendation.

  • Estimated Completion Date: 10/1/2016
  • Response Date: July 2016

California State Auditor's Assessment of 60-Day Status: No Action Taken


Recommendation #18 To: Bar of California, State

To ensure that it retains appropriate supervision and control over the State Bar's financial affairs, the board should establish a policy that includes a description of the board's oversight role in relation to the State Bar's nonprofit organizations.

Annual Follow-Up Agency Response From November 2017

The 2018 fee bill directs the Bar to establish a non-profit entity to support the transition of the State Bar Sections to a standalone entity. A policy establishing eliminating the Bar's ability to establish such entities will be established once the transition of the Sections is complete.

  • Estimated Completion Date: March 2018

California State Auditor's Assessment of Annual Follow-Up Status: No Action Taken


1-Year Agency Response

Since submission of the last Update, the Bar was advised by Legislative staff that it should maintain its ability to establish non-profit entities pending the transition of the State Bar Sections to a standalone entity.

  • Estimated Completion Date: Unclear
  • Response Date: May 2017

California State Auditor's Assessment of 1-Year Status: No Action Taken


6-Month Agency Response

The Board intends to adopt a policy eliminating its ability to establish nonprofits at an upcoming meeting.

  • Estimated Completion Date: June 1, 2017
  • Response Date: November 2016

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


60-Day Agency Response

The 2017 fee bill includes provisions which eliminate the State Bar's ability to establish nonprofits, rendering this recommendation moot. Should these provisions not ultimately be adopted, the State Bar will revisit this recommendation.

  • Estimated Completion Date: 10/1/2016
  • Response Date: July 2016

California State Auditor's Assessment of 60-Day Status: No Action Taken


Recommendation #19 To: Bar of California, State

To ensure that it retains appropriate supervision and control over the State Bar's financial affairs, the board should establish a policy that includes requirements to make sure that the board reviews and approves all documents the State Bar uses in the creation and use of a nonprofit organization, including original and amended bylaws as well as agreements between the State Bar and the organization.

Annual Follow-Up Agency Response From November 2017

The 2018 fee bill directs the Bar to establish a non-profit entity to support the transition of the State Bar Sections to a standalone entity. A policy establishing eliminating the Bar's ability to establish such entities will be established once the transition of the Sections is complete.

  • Estimated Completion Date: March 31, 2018

California State Auditor's Assessment of Annual Follow-Up Status: No Action Taken


1-Year Agency Response

Since submission of the last Update, the Bar was advised by Legislative staff that it should maintain its ability to establish non-profit entities pending the transition of the State Bar Sections to a standalone entity. Anticipating that the Bar will not retain this ability in perpetuity, the Bar has not acted to establish policies.

  • Estimated Completion Date: Unclear
  • Response Date: May 2017

California State Auditor's Assessment of 1-Year Status: No Action Taken


6-Month Agency Response

The Board intends to adopt a policy eliminating its ability to establish nonprofits at an upcoming meeting.

  • Estimated Completion Date: June 1, 2017
  • Response Date: November 2016

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


60-Day Agency Response

The 2017 fee bill includes provisions which eliminate the State Bar's ability to establish nonprofits, rendering this recommendation moot. Should these provisions not ultimately be adopted, the State Bar will revisit this recommendation.

  • Estimated Completion Date: 10/1/2016
  • Response Date: July 2016

California State Auditor's Assessment of 60-Day Status: No Action Taken


Recommendation #20 To: Bar of California, State

To ensure that it retains appropriate supervision and control over the State Bar's financial affairs, the board should establish a policy that includes requirements ensuring that the board reviews, approves, and monitors regularly the budgets and other financial reports of any nonprofit organizations.

Annual Follow-Up Agency Response From November 2017

The 2018 fee bill directs the Bar to establish a non-profit entity to support the transition of the State Bar Sections to a standalone entity. A policy establishing eliminating the Bar's ability to establish such entities will be established once the transition of the Sections is complete.

  • Estimated Completion Date: March 31, 2018

California State Auditor's Assessment of Annual Follow-Up Status: No Action Taken


1-Year Agency Response

Since submission of the last Update, the Bar was advised by Legislative staff that it should maintain its ability to establish non-profit entities pending the transition of the State Bar Sections to a standalone entity. Anticipating that the Bar will not retain this ability in perpetuity, the Bar has not acted to establish policies.

  • Estimated Completion Date: Unclear
  • Response Date: May 2017

California State Auditor's Assessment of 1-Year Status: No Action Taken


6-Month Agency Response

The Board intends to adopt a policy eliminating its ability to establish nonprofits at an upcoming meeting.

  • Estimated Completion Date: June 1, 2017
  • Response Date: November 2016

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


60-Day Agency Response

The 2017 fee bill includes provisions which eliminate the State Bar's ability to establish nonprofits, rendering this recommendation moot. Should these provisions not ultimately be adopted, the State Bar will revisit this recommendation.

  • Estimated Completion Date: 10/1/2016
  • Response Date: July 2016

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


Recommendation #21 To: Bar of California, State

To ensure that it retains appropriate supervision and control over the State Bar's financial affairs, the board should establish a policy that includes requirements that the State Bar develop policies and procedures to prevent the mingling of its funds and any nonprofit organization's funds.

Annual Follow-Up Agency Response From November 2017

The 2018 fee bill directs the Bar to establish a non-profit entity to support the transition of the State Bar Sections to a standalone entity. A policy establishing eliminating the Bar's ability to establish such entities will be established once the transition of the Sections is complete.

  • Estimated Completion Date: March 31, 2018

California State Auditor's Assessment of Annual Follow-Up Status: No Action Taken


1-Year Agency Response

Since submission of the last Update, the Bar was advised by Legislative staff that it should maintain its ability to establish non-profit entities pending the transition of the State Bar Sections to a standalone entity. Anticipating that the Bar will not retain this ability in perpetuity, the Bar has not acted to establish policies.

  • Estimated Completion Date: Unclear
  • Response Date: May 2017

California State Auditor's Assessment of 1-Year Status: No Action Taken


6-Month Agency Response

The Board intends to adopt a policy eliminating its ability to establish nonprofits at an upcoming meeting.

  • Estimated Completion Date: June 1, 2017
  • Response Date: November 2016

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


60-Day Agency Response

The 2017 fee bill includes provisions which eliminate the State Bar's ability to establish nonprofits, rendering this recommendation moot. Should these provisions not ultimately be adopted, the State Bar will revisit this recommendation.

  • Estimated Completion Date: 10/1/2016
  • Response Date: July 2016

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


Recommendation for Legislative Action

To improve its oversight of the State Bar's financial affairs, the Legislature should require the State Bar to disclose the creation of and use of nonprofit organizations, including the nonprofits' annual budgets and reports on their financial condition explaining the sources and uses of the nonprofits' funding.

Recommendation #23 To: Bar of California, State

To ensure that the compensation it provides its executives is reasonable, the State Bar should include in the comprehensive salary and benefits study that it plans to complete by October 2016 data for the salaries and benefits for comparable positions in the state government's executive branch.

6-Month Agency Response

The State Bar's contract with CPS HR Consulting was amended to reflect the inclusion of executive branch positions; the amendment has been submitted to the State Auditor.

  • Completion Date: May 2016
  • Response Date: November 2016

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

In addition to the contract amendment, the State Bar provided an excerpt of its compensation salary and benefits study, which includes salaries and benefits for positions in the state government's executive branch.


60-Day Agency Response

The State Bar's contract with CPS HR Consulting, the contractor performing the classification and compensation analysis, has been amended to include executive branch salaries.

  • Completion Date: June 2016
  • Response Date: July 2016

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

The State Bar plans to submit supporting documentation at its 6 month response.


Recommendation #24 To: Bar of California, State

To ensure that the compensation it provides its executives is reasonable, the State Bar should revise its policy for housing allowances and relocation expenses to align with the requirements in the state law that are applicable to managerial employees.

1-Year Agency Response

The Board adopted a revised policy per this recommendation at its January 2017 meeting.

  • Completion Date: February 2017
  • Response Date: May 2017

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

The State Bar provided a copy of its new policy, which states that "The guidelines used for the interim housing allowance will be the same as those applied by the State of California under the California Code of Regulations." Although the State Bar's policy does not give the same level of detail found within CalHR's policy, if the State Bar's policies are implemented as intended, it would fully address the recommendation.


6-Month Agency Response

The State Bar explained that it intends to implement the entirety of the recommendation, but has not revised the Executive Rules to date.

  • Estimated Completion Date: 2/1/2017
  • Response Date: December 2016

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

Per the State Bar's response, its implementation of this recommendation is currently pending.


60-Day Agency Response

Staff has completed research with regard to housing allowances and reimbursement of relocation expenses for state employees. With respect to relocation expenses, staff is working with the Office of the General Counsel to incorporate in to Executive Rules. With respect to housing allowances, no applicable state provisions have been identified pursuant to staff research.

  • Estimated Completion Date: 12/31/2016
  • Response Date: July 2016

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


All Recommendations in 2015-047

Agency responses received are posted verbatim.


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