Report 2009-030 All Recommendation Responses

Report 2009-030: State Bar of California: It Can Do More to Manage Its Disciplinary System and Probation Processes Effectively and to Control Costs (Release Date: July 2009)

Recommendation #1 To: Bar of California, State

To explain and justify cost increases, and to measure the efficiency of its disciplinary system as well as the impact of policy changes, the State Bar should account separately for the expenses associated with the various functions of the disciplinary system, including its personnel costs. This can be accomplished through a study of staff time and resources devoted to a specific function.

1-Year Agency Response

In its 60-day response, the State Bar stated that beginning with its 2010 budget it will adjust its methodology to track the component costs of its disciplinary system separately and consistently. In its one-year response, the State Bar indicated that it retained a consulting firm to assist in the study of staff time and resources. Based on subsequent inquiry, the State Bar provided us with documentation summarizing the results of its efforts to track staff time for a five-week period in March 2010. The State Bar gathered data across the budgeted component functions of the discipline systems, i.e., Intake, Investigation, Trials, Audit and Review, and Management. According to the State Bar, the data gathered supports the budget allocation methodology the Office of Finance adopted in response to our recommendation to track and report costs, particularly including personnel costs, by discipline system function. The hours allocated to each function by the time study correlates closely to the budget dollars allocated to the same functions. (See 2011-406 p. 66)

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

Recommendation #2 To: Bar of California, State

The State Bar should ensure that all its offices track expenses consistently.

1-Year Agency Response

In its 60-day response, the State Bar stated that beginning with its 2010 budget it will adjust its methodology to track the component costs of its disciplinary system separately and consistently.

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

Recommendation #3 To: Bar of California, State

To make certain that the State Bar provides accurate and complete descriptions to its various stakeholders so they can evaluate the effectiveness of its disciplinary system over time, the State Bar should adjust its methodology going forward for calculating case processing times for investigations so that the calculations include time spent to process closed and forwarded cases for the relevant year only. For example, for its 2009 annual discipline report, the State Bar should report the average processing time for only cases it closed or forwarded to the State Bar Court in 2009.

1-Year Agency Response

The State Bar provided a copy of its 2009 Annual Discipline Report demonstrating that it had begun including this information. The State Bar stated that it will include this information in each subsequent annual discipline report. (See 2011-406 p. 67)

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

Recommendation #4 To: Bar of California, State

To make certain that the State Bar provides accurate and complete descriptions to its various stakeholders so they can evaluate the effectiveness of its disciplinary system over time, the State Bar should include additional information regarding backlog in its annual discipline report to the Legislature. Specifically, the State Bar should identify the number of complex cases over 12 months old in its backlog.

1-Year Agency Response

The State Bar provided a copy of its 2009 Annual Discipline Report demonstrating that it had begun including this information. The State Bar stated that it will include this information in each subsequent annual discipline report. Additionally, the State Bar stated that reporting the backlog composition is a work-in-progress and it continues to refine its methods for presenting the data to provide more clarity. (See 2011-406 p. 68)

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

Recommendation #5 To: Bar of California, State

To make certain that the State Bar provides accurate and complete descriptions to its various stakeholders so they can evaluate the effectiveness of its disciplinary system over time, the State Bar should identify in its annual discipline report the types of cases that it does not include in its calculation of backlog and explain why it chooses to exclude these cases. Specifically, the State Bar should identify that it presents its backlog by case rather than by member, and that it does not include intake, nonattorney, abated, and outside examiner cases.

1-Year Agency Response

The State Bar provided a copy of its 2009 Annual Discipline Report demonstrating that it had begun including this information. The State Bar stated that it will include this information in each subsequent annual discipline report. Additionally, the State Bar stated that reporting the backlog composition is a work-in-progress and it continues to refine its methods for presenting the data to provide more clarity. (See 2011-406 p. 68)

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

Recommendation #6 To: Bar of California, State

To make certain that the State Bar provides accurate and complete descriptions to its various stakeholders so they can evaluate the effectiveness of its disciplinary system over time, the State Bar should identify the composition of each year's backlog to allow for year-to-year comparisons, as the law requires.

1-Year Agency Response

The State Bar provided a copy of its 2009 Annual Discipline Report demonstrating that it had begun including this information. The State Bar stated that it will include this information in each subsequent annual discipline report. Additionally, the State Bar stated that reporting the backlog composition is a work-in-progress and it continues to refine its methods for presenting the data to provide more clarity. (See 2011-406 p. 68)

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

Recommendation #7 To: Bar of California, State

To ensure that it maximizes the amounts that it may recover to defray the expense of disciplining attorneys, the State Bar should update annually its formula for billing discipline costs and include due dates on all bills.

1-Year Agency Response

The State Bar indicated that its consultant reviewed the State Bar's discipline cost formula and methodology for updating the cost formula. In subsequent documentation provided in December 2010, the State Bar provided a copy of its consultant's report recommending that the State Bar increase the discipline cost formula and adjust it annually based on the U.S. Department of Labor, Bureau of Labor Statistics, Employment Cost Index. The State Bar stated that these recommendations will be presented to the State Bar's Board of Governors for consideration in January 2011. Additionally, the State Bar adjusted its billing system to include due dates on all notices to disciplined members and reported to us that it has adjusted its cost recovery database application to track how much it anticipates receiving against how much it actually receives in payments each year. (2011-406 p. 69)

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

Recommendation #8 To: Bar of California, State

To report accurately its collection amounts and to analyze the effectiveness of its collection efforts, the State Bar should track how much it anticipates receiving against how much it actually receives in payments for discipline costs each year.

1-Year Agency Response

The State Bar indicated that its consultant reviewed the State Bar's discipline cost formula and methodology for updating the cost formula. In subsequent documentation provided in December 2010, the State Bar provided a copy of its consultant's report recommending that the State Bar increase the discipline cost formula and adjust it annually based on the U.S. Department of Labor, Bureau of Labor Statistics, Employment Cost Index. The State Bar stated that these recommendations will be presented to the State Bar's Board of Governors for consideration in January 2011. Additionally, the State Bar adjusted its billing system to include due dates on all notices to disciplined members and reported to us that it has adjusted its cost recovery database application to track how much it anticipates receiving against how much it actually receives in payments each year. (2011-406 p. 69)

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

Recommendation #9 To: Bar of California, State

To make sure that it is using the most cost-effective methods to recover discipline costs, the State Bar should complete a cost-benefit analysis to determine whether the benefits associated with using collection agencies outweigh the costs. If it determines that the collection agencies are, in fact, cost effective, the State Bar should redirect in-house staff to other disciplinary activities.

Annual Follow-Up Agency Response From January 2012

The State Bar determined it is more beneficial and effective to use collection agencies to collect all delinquent accounts for discipline costs, and has contracted with a collection agency for all delinquent discipline, Client Security Fund, and assistance program accounts. The State Bar has redirected the staff members that were working on cost recovery efforts back to their primary function of billing and collecting member dues. (See 2011-041 p. 188)

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

Recommendation #10 To: Bar of California, State

The State Bar should research the various collection options available to it, such as the Tax Board's intercept program.

Annual Follow-Up Agency Response From January 2012

Effective in January 2011, the State Bar began referring its delinquent disciplinary debtor accounts to a professional collection agency. On an ongoing basis, the State Bar does not anticipate performing in-house collection activity. (See 2011-041 p. 188)

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

Recommendation #11 To: Bar of California, State

To fulfill its responsibility to protect the public and its mission to assist attorneys to successfully complete the terms of their probation, the State Bar should ensure that it effectively communicates with and monitors attorneys on probation by continuing its efforts to determine the appropriate caseload level for its staff to effectively monitor probationers and adjust staffing as appropriate.

Annual Follow-Up Agency Response From January 2011

Based on the consultant's review of staffing and existing resources and the experience of the Probation Unit in meeting mission goals with its current staffing level, the State Bar has set a caseload 170 for probation deputies. To make appropriate adjustments as may be needed, the State Bar is continuing to monitor and evaluate this caseload on the effectiveness of staff to communicate and monitor probationers. (See 2010-041 p. 157)

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

Recommendation #12 To: Bar of California, State

To fulfill its responsibility to protect the public and its mission to assist attorneys to successfully complete the terms of their probation, the State Bar should ensure that it effectively communicates with and monitors attorneys on probation by ensuring that staff comply with procedures for promptly sending initial letters reminding disciplined attorneys of the terms of their probation.

1-Year Agency Response

In its 60-day response, the State Bar stated that it will review its procedures for notifying disciplined attorneys of the terms of their probation and will take steps to ensure greater compliance and prompt notice to probationers. In November 2010 the State Bar stated that the probation office worked with the State Bar Court to assure receipt of copies of disciplinary orders within two weeks after filing. (See 2011-406 p. 72)

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

Recommendation #13 To: Bar of California, State

To make certain that it does not create a perception of favoritism or leniency, the State Bar should increase compliance with its goal to improve timeliness and consistency of probation violation referrals to the Office of the Chief Trial Counsel.

1-Year Agency Response

In its one-year response, the State Bar stated in order to increase compliance with its goal to improve timeliness and consistency of probation violation referrals to the Office of the Chief Trial Counsel, the probation staff is implementing a tiered system for violation referrals. According to the State Bar's new policy, this system maintains the standard 30-day goal but also establishes 60-day and 90-day deviations. The tiered system of referral also establishes conditions for deviation from the 30-day goal and the documentation in each case that such conditions were met. (See 2011-406 p. 72)

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

Recommendation #14 To: Bar of California, State

If the State Bar believes instances occur when probation staff appropriately deviate from the 30-day goal, it should establish parameters specifying time frames and conditions acceptable for a delay in the referral of probation violations and clearly document that such conditions were met.

1-Year Agency Response

In its one-year response, the State Bar stated in order to increase compliance with its goal to improve timeliness and consistency of probation violation referrals to the Office of the Chief Trial Counsel, the probation staff is implementing a tiered system for violation referrals. According to the State Bar's new policy, this system maintains the standard 30-day goal but also establishes 60-day and 90-day deviations. The tiered system of referral also establishes conditions for deviation from the 30-day goal and the documentation in each case that such conditions were met. (See 2011-406 p. 72)

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

Recommendation #15 To: Bar of California, State

To ensure that it has adequate internal controls in place, the State Bar should fully implement recommendations from audits and reviews of the State Bar and its functions.

1-Year Agency Response

In its 60-day response, the State Bar indicated that it had completed this recommendation. According to the response to the audit report, the State Bar stated that it had implemented changes in its manual and automated processes and controls to address issues raised in the 2007 report on its cost recovery process. These processes and controls apply to the new cost recovery system. Because it did not inform us of these changes until after it had received a draft copy of our report, we were not able to verify whether these changes fully address our concerns. As part of our next statutorily required audit, we plan to review the cost recovery system to determine whether the new system corrects the identified issues.

The State Bar retained a consultant that reports directly to the Board's Audit Committee, to perform an internal audit function. The State Bar's internal auditors began a review of all internal audit functions to assess risks associated with its organization-wide internal control functions, provide training to staff, and recommend improvements to strengthen internal controls. The consultant completed internal audits of the State Bar's payroll, accounts payable, procurement, and budget control functions in July 2010. According to the State Bar it will implement all recommendations contained in the audit reports before the end of 2010. (See 2011-406 p. 72)

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

Recommendation #16 To: Bar of California, State

The State Bar should ensure that its new cost recovery system and related processes address the issues identified in the consultant's 2007 report on its cost recovery process.

1-Year Agency Response

In its 60-day response, the State Bar indicated that it had completed this recommendation. According to the response to the audit report, the State Bar stated that it had implemented changes in its manual and automated processes and controls to address issues raised in the 2007 report on its cost recovery process. These processes and controls apply to the new cost recovery system. Because it did not inform us of these changes until after it had received a draft copy of our report, we were not able to verify whether these changes fully address our concerns. As part of our next statutorily required audit, we plan to review the cost recovery system to determine whether the new system corrects the identified issues.

The State Bar retained a consultant that reports directly to the Board's Audit Committee, to perform an internal audit function. The State Bar's internal auditors began a review of all internal audit functions to assess risks associated with its organization-wide internal control functions, provide training to staff, and recommend improvements to strengthen internal controls. The consultant completed internal audits of the State Bar's payroll, accounts payable, procurement, and budget control functions in July 2010. According to the State Bar it will implement all recommendations contained in the audit reports before the end of 2010. (See 2011-406 p. 72)

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

Recommendation #17 To: Bar of California, State

To improve its effectiveness, the State Bar's audit and review unit should establish a formal process to follow up on and ensure implementation of recommendations from its twice-yearly audits.

1-Year Agency Response

The State Bar provided a copy of its Office of the Chief Trial Counsel's policy directive issued in January 2010 creating a formal process for the Audit and Review Unit to follow up on and ensure implementation of recommendations from its twice-yearly audits. The formal process includes the preparation of a memorandum summarizing the overall findings of the audit. The memorandum is then shared with and discussed by the Office of the Chief Trial Counsel's management team and used as the basis for an all-staff meeting and training. (See 2011-406 p. 73)

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

Recommendation #18 To: Bar of California, State

The State Bar should continue acting on recommendations from our 2007 report related to continuing its efforts to enter all of the Client Security Fund and disciplinary debtor information into its database.

1-Year Agency Response

In its 60-day response, the State Bar stated that it has completed the uploading of Client Security Fund and disciplinary debtor information required for tracking it cost recovery efforts from its existing database into its new database and application. (See 2011-406 p. 74)

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

Recommendation #19 To: Bar of California, State

The State Bar should continue acting on recommendations from our 2007 report related to taking steps to reduce its inventory of backlogged cases.

1-Year Agency Response

In its six-month response, the State Bar stated that it continues to develop evolving strategies for backlog management in an effort to keep the backlog as low as possible. In its one-year response, the State Bar indicated there was a substantial increase in new client complaints arising out of the recession, mortgage crises and resultant misconduct by attorneys offering loan modification services, coupled with the absence of additional staff resources, that has made backlog management more challenging. As a result, the State Bar has not been able to reduce its backlog. However, the State Bar indicates that despite challenging workloads, it continues to take steps to manage case inventory. Specifically, the State Bar states that on a monthly basis, it tracks existing backlog of matters in investigation as well as cases expected to roll into backlog within the next 30, 60, and 90 days. Staff target these cases to ensure the lowest possible statutory backlog at all times consistent with office priorities, resources and public protection. (See 2011-406 p. 74)

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

Recommendation #20 To: Bar of California, State

The State Bar should continue acting on recommendations from our 2007 report related to improving its processing of disciplinary cases by more consistently using checklists and performing random audits.

1-Year Agency Response

In its one-year response, the State Bar stated that it continues to conduct its monthly random audit of open investigations and ensure that checklists are being used consistently and effectively so that all significant case processing tasks are completed, as appropriate. In late December 2009, the Office of the Chief Trial Counsel issued a new policy directive implementing new case file checklists for trials and investigations. Additionally, the State Bar reported that it is still in the process of automating its intake checklist and that staff will continue to use the manual checklist until the automated one is available. The State Bar stated that implementation of the automated checklist is expected by the end of 2010. (See 2011-406 p. 74)

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

Recommendation #21 To: Bar of California, State

To ensure that it can justify requests to fund the remaining information technology upgrades, the State Bar should follow its IT plan.

1-Year Agency Response

The State Bar stated that it is fully utilizing its internal information technology resources for project, program, and information technology infrastructure support. Additionally, in November 2010, the State Bar provided copies of its status in implementing various portions of its IT plan and continues to implement portions of the plan as resources become available. (See 2011-406 p. 75)

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

All Recommendations in 2009-030

Agency responses received after June 2013 are posted verbatim.