Report 2017-030 Recommendation 10 Responses

Report 2017-030: The State Bar of California: It Needs Additional Revisions to Its Expense Policies to Ensure That It Uses Funds Prudently (Release Date: June 2017)

Recommendation #10 To: Bar of California, State

To make certain that the costs for sections events are reasonable and prudent, the State Bar should require that the sections follow the State Bar's meal per diem and lodging rates, and require the sections to limit expenses for events to only those activities that are reasonable and necessary. For off-site events, the State Bar should require the sections to follow the State Bar's existing policy of providing written justification of a significant business need to hold the event off-site and obtain approval from the executive director or chief operating officer.

6-Month Agency Response

Given that the State Bar expects the Sections to be separated from the Bar by 1/1/18, the State Bar does not feel that the recommended actions are needed. The State Bar remains committed to ensuring that no State Bar funds are being used to support any Sections activities.

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

We consider this recommendation resolved with the legislative action to remove the sections from the State Bar. Senate Bill 36 (2017-18 State Bar Fee Bill) amended state law and established the sections as a private, nonprofit corporation (separate from the State Bar). The law further provides that it shall be a voluntary association and shall not be part of the State Bar or funded in any way through mandatory State Bar dues.

60-Day Agency Response

Given that the State Bar expects the Sections to be separated from the Bar by 1/1/18, the State Bar does not feel that the recommended actions are needed. The State Bar remains committed to ensuring that no State Bar funds are being used to support any Sections activities.

California State Auditor's Assessment of 60-Day Status: Will Not Implement

We disagree with the State Bar's response and stand by our recommendation. As we indicate on page 27 of our report, regardless of whether the sections separate from the State Bar, we believe it is reasonable for sections to implement controls to ensure a prudent use of funds. Based on the questionable expenses we observed in this audit, a more prudent use of funds would allow sections to host events for as many of its members as possible.

All Recommendations in 2017-030

Agency responses received are posted verbatim.