Report 2017-030 All Recommendation 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 #1 To: Bar of California, State

To better align its compensation practices with those of comparable agencies, the State Bar should update and formalize its salaries and benefits policies by continuing its negotiations with the union to transition represented employees to an eight-hour workday and a 40-hour workweek, and to implement new salary and job classifications.

6-Month Agency Response

Labor negotiations are ongoing. While it is not clear when the negotiation process will conclude, the State Bar has proposed implementation of a new market-based classification and compensation structure, as well as a transition to a 40-hour work week, at the bargaining table.

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

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

We look forward to the State Bar providing a more complete description of its actions to implement our recommendations, as well as evidence of those actions, at its one-year response in June 2018.


60-Day Agency Response

Labor negotiations are ongoing. While it is not clear when the negotiation process will conclude, the State Bar has proposed implementation of a new market-based classification and compensation structure, as well as a transition to a 40-hour work week, at the bargaining table.

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

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


Recommendation #2 To: Bar of California, State

To better align its compensation practices with those of comparable agencies, the State Bar should update and formalize its salaries and benefits policies by implementing an eight-hour workday and a 40-hour workweek, as well as new salary and job classifications, for its nonrepresented employees by July 2017.

60-Day Agency Response

The Board of Trustees approved implementation of new classification and salary structure and 40-hour work week for non-represented employees in two phases. As an initial step, non-represented employees hired after April 17, 2017, were subject to the new structure and work week requirement. Subsequently, the Board acted to impose the new structure and work week requirement on all existing non-represented employees effective July 17, 2017.

  • Completion Date: August 2017
  • Response Date: August 2017

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


Recommendation #3 To: Bar of California, State

To better align its compensation practices with those of comparable agencies, the State Bar should update and formalize its salaries and benefits policies by requiring a contribution rate to health care costs for nonrepresented employees that is equal to the contribution rate for represented employees by January 2018.

60-Day Agency Response

In April, 2017, the Board of Trustees modified the State Bar's Executive and Confidential Staff Rules to require health care cost sharing at a rate equal to the contribution rate for represented employees, effective January 1, 2018.

  • Completion Date: May 2017
  • Response Date: August 2017

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


Recommendation #4 To: Bar of California, State

To better align its compensation practices with those of comparable agencies, the State Bar should update and formalize its salaries and benefits policies for executive employees hired on or after January 1, 2018, to require that contributions to post-retirement health care costs are at a rate equivalent to their contributions during employment at the State Bar.

60-Day Agency Response

In April 2017, the Board of Trustees directed changes to the State Bar's post-retirement benefit plan document and Executive Rules to reflect a requirement that executive employees, hired on or after January 1, 2018, would be responsible for a share of post-retirement health care costs at a rate equivalent to their contribution rate while employed.

  • Completion Date: May 2017
  • Response Date: August 2017

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


Recommendation #5 To: Bar of California, State

To better align its compensation practices with those of comparable agencies, the State Bar should update and formalize its salaries and benefits policies by developing and adopting a formal policy by December 2017 to regularly compare staff compensation and benefits with those of comparable agencies.

6-Month Agency Response

The State Bar will develop and adopt a formal policy requiring a compensation and benefits review to be completed on a regular schedule, likely every five years, no later than January 31, 2018.

  • Estimated Completion Date: January 31, 2018
  • Response Date: December 2017

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

We look forward to the State Bar providing a more complete description of its actions to implement our recommendations, as well as evidence of those actions, at its one-year response in June 2018.


60-Day Agency Response

The State Bar will develop and adopt a formal policy requiring a compensation and benefits review to be completed on a regular schedule, likely every five years, no later than December 31, 2017.

  • Estimated Completion Date: December 31, 207
  • Response Date: August 2017

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


Recommendation #6 To: Bar of California, State

To assign purchasing cards only to appropriate staff, ensure that the State Bar's records of employees' credit limits reflect those established with the bank, and to verify that staff use purchasing cards only for allowable and necessary expenses, the State Bar should immediately develop a policy that requires justification of the business needs for employees to receive purchasing cards, and use this policy to limit the number of staff issued a purchasing card.

6-Month Agency Response

The State Bar is reviewing its purchasing card policies and will implement this recommendation by January 2018.

  • Estimated Completion Date: January 31, 2018
  • Response Date: December 2017

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

We look forward to the State Bar providing a more complete description of its actions to implement our recommendations, as well as evidence of those actions, at its one-year response in June 2018.


60-Day Agency Response

The State Bar is reviewing its purchasing card policies and will implement this recommendation by January 2018.

  • Estimated Completion Date: January 2018
  • Response Date: August 2017

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


Recommendation #7 To: Bar of California, State

To assign purchasing cards only to appropriate staff, ensure that the State Bar's records of employees' credit limits reflect those established with the bank, and to verify that staff use purchasing cards only for allowable and necessary expenses, the State Bar should immediately restrict the use of purchasing cards to its original purpose, which was for low-dollar and frequently occurring purchases. For purchases above $5,000, the State Bar should require the vendor to bill for payment.

6-Month Agency Response

The State Bar is reviewing its purchasing card policies and will, by January 2018, limit purchasing card purchases of $5,000 or more to a more restricted set of expense categories, likely related to facilities and other support operations.

  • Estimated Completion Date: January 2018
  • Response Date: December 2017

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

The State Bar provides minimal explanation of the actions it is taking. We look forward to the State Bar providing a more complete description of its actions to implement our recommendations, as well as evidence of those actions, at its one-year response in June 2018.


60-Day Agency Response

The State Bar is reviewing its purchasing card policies and will, by January 2018, limit purchasing card purchases of $5,000 or more to a more restricted set of expense categories, likely related to facilities and other support operations.

  • Estimated Completion Date: January 2018
  • Response Date: August 2017

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


Recommendation #8 To: Bar of California, State

To demonstrate its commitment to the board's prohibition of all State Bar spending on alcohol, the State Bar should immediately update its procurement manual to reflect this prohibition.

60-Day Agency Response

The procurement manual has been updated to reflect the prohibition on spending on alcohol.

  • Completion Date: August 2017
  • Response Date: August 2017

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


Recommendation #9 To: Bar of California, State

To ensure that its costs are reasonable and appropriate, the State Bar should update its meal and catering policy to align with the meal policy of the State's Executive Branch and should require individuals attending committee meetings for the State Bar to comply with standard meal per diem rates.

6-Month Agency Response

On July 10, 2017 the State Bar adopted Executive Branch per diem limits for onsite catering expenditures and modified its travel and expense policy accordingly.

  • Completion Date: August 2017
  • Response Date: December 2017

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

The State Bar adopted a travel and business-related expense policy that requires individual employee travel meal reimbursements and onsite catering costs to match the State's Executive Branch per diem rates. However, its action does not fully address our recommendation because State Bar confirmed that it does not intend to impose the same per diem limits on offsite catering, citing that it has few offsite events. The intent of our recommendation is to address all catering costs, not just those incurred on-site. As we indicate on page 25 of our report, the State Bar should limit the costs of catering at off-site events to the State's meal per diem rates.

  • Auditee did not address all aspects of the recommendation

60-Day Agency Response

On July 10, 2017 the State Bar adopted Executive Branch per diem limits for onsite catering expenditures and modified its travel and expense policy accordingly.

  • Completion Date: August 2017
  • Response Date: August 2017

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

The State Bar adopted a travel and business-related expense policy that requires individual employee travel meal reimbursements and onsite catering costs to match the State's Executive Branch per diem rates. However, its action does not fully address our recommendation because State Bar confirmed that it does not intend to impose the same per diem limits on offsite catering, citing that it has few offsite events. The intent of our recommendation is to address all catering costs, not just those incurred on-site. As we indicate on page 25 of our report, the State Bar should limit the costs of catering at off-site events to the State's meal per diem rates.

  • Auditee did not address all aspects of the recommendation

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.

  • Response Date: December 2017

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.

  • Response Date: August 2017

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.


Recommendation #11 To: Bar of California, State

To ensure that its lobbying expenses are reasonable and cover only allowable activities, the State Bar should revise the terms of its pending lobbying contract to require that the lobbyists provide sufficiently detailed invoices that support the amounts they bill for their services.

60-Day Agency Response

Recently executed lobbying contracts require detailed invoices which will support the amounts billed for services.

  • Completion Date: August 2017
  • Response Date: August 2017

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

Although the State Bar's lobbying contracts will continue to pay the lobbyists a flat monthly fee, the revised contracts require that the lobbyist's monthly invoice must include an itemized list of activities performed and deliverables produced during the invoiced period, and require that the invoiced items tie to the contract scope of services. As a result, the State Bar should receive documentation sufficient to ensure that its lobbying expenses are reasonable and cover only allowable activities.


Recommendation #12 To: Bar of California, State

To ensure that it contracts only for appropriate and necessary services from outside law firms at a prudent rate, the State Bar should put its informal practice into a written policy regarding its assessment of the need for outside counsel, including whether the State Bar's attorneys can provide the specified legal services.

6-Month Agency Response

The informal practice continues to be in place; formal codification will occur as part of a larger set of revisions to the State Bar's procurement manual, to be completed by January 2018.

  • Estimated Completion Date: January 2018
  • Response Date: December 2017

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

We look forward to the State Bar providing a more complete description of its actions to implement our recommendations, as well as evidence of those actions, at its one-year response in June 2018.


60-Day Agency Response

The informal practice continues to be in place; formal codification will occur as part of a larger set of revisions to the State Bar's procurement manual, to be completed by January 2018

  • Estimated Completion Date: January 2018
  • Response Date: August 2017

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


Recommendation #13 To: Bar of California, State

To ensure that it contracts only for appropriate and necessary services from outside law firms at a prudent rate, the State Bar should put its informal practice into a written policy regarding its evaluation of the State Bar's past experiences with the law firms being considered.

6-Month Agency Response

The informal practice continues to be in place; formal codification will occur as part of a larger set of revisions to the State Bar's procurement manual, to be completed by January 2018.

  • Estimated Completion Date: January 2018
  • Response Date: December 2017

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

We look forward to the State Bar providing a more complete description of its actions to implement our recommendations, as well as evidence of those actions, at its one-year response in June 2018.


60-Day Agency Response

The informal practice continues to be in place; formal codification will occur as part of a larger set of revisions to the State Bar's procurement manual, to be completed by January 2018

  • Estimated Completion Date: January 2018
  • Response Date: August 2017

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


Recommendation #14 To: Bar of California, State

To ensure that it contracts only for appropriate and necessary services from outside law firms at a prudent rate, the State Bar should put its informal practice into a written policy regarding its process to select the outside legal firms, including documentation of proposals from other prospective law firms and the costs it considers reasonable for the legal services.

6-Month Agency Response

The informal practice continues to be in place; formal codification will occur as part of a larger set of revisions to the State Bar's procurement manual, to be completed by January 2018.

  • Estimated Completion Date: January 2018
  • Response Date: December 2017

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

We look forward to the State Bar providing a more complete description of its actions to implement our recommendations, as well as evidence of those actions, at its one-year response in June 2018.


60-Day Agency Response

The informal practice continues to be in place; formal codification will occur as part of a larger set of revisions to the State Bar's procurement manual, to be completed by January 2018

  • Estimated Completion Date: January 2018
  • Response Date: August 2017

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


Recommendation #15 To: Bar of California, State

To reduce its reliance on outside legal counsel, the State Bar should continue its efforts to hire staff to fill its remaining vacant attorney positions.

6-Month Agency Response

The State Bar continues to actively recruit for all vacant positions, including vacant attorney positions.

  • Estimated Completion Date: October 2018
  • Response Date: December 2017

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

We look forward to the State Bar providing a more complete description of its actions to implement our recommendations, as well as evidence of those actions, at its one-year response in June 2018.


60-Day Agency Response

The State Bar continues to actively recruit for all vacant positions, including vacant attorney positions.

  • Estimated Completion Date: October 2018
  • Response Date: August 2017

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


Recommendation #16 To: Bar of California, State

To increase transparency, the State Bar should disclose annually to the board a list of all contracts with outside law firms—including a description of the services provided, the need for such contracts, and the value and length of the contracts.

6-Month Agency Response

Staff will bring the a report containing a list of all contracts with outside law firms, including a description of the services provided, the need for such contracts, and the value and length of the contracts, to the Board of Trustees annually at its January planning meetings.

  • Estimated Completion Date: January 2018
  • Response Date: December 2017

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

We look forward to the State Bar providing a more complete description of its actions to implement our recommendations, as well as evidence of those actions, at its one-year response in June 2018.


60-Day Agency Response

Staff will bring the a report containing a list of all contracts with outside law firms, including a description of the services provided, the need for such contracts, and the value and length of the contracts, to the Board of Trustees annually at its January planning meetings.

  • Estimated Completion Date: Janiuary 2018
  • Response Date: August 2017

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


Recommendation #17 To: Bar of California, State

To better measure how well its attorney discipline program is meeting the State Bar's core mission to protect the public from attorney misconduct, the State Bar should, by December 2017, identify key goals and metrics for the attorney discipline system.

6-Month Agency Response

State Bar staff is working with the Board of Trustees' Committee on Regulation and Discipline to develop key goals and metrics for the attorney discipline system.

  • Estimated Completion Date: May 2018
  • Response Date: December 2017

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

We look forward to the State Bar providing a more complete description of its actions to implement our recommendations, as well as evidence of those actions, at its one-year response in June 2018.


60-Day Agency Response

State Bar staff is working with the Board of Trustees' Committee on Regulation and Discipline to develop key goals and metrics for the attorney discipline system.

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

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


All Recommendations in 2017-030

Agency responses received are posted verbatim.