Report 2012-112 Summary - August 2013
Office of the Secretary of State:
It Must Do More to Ensure Funds Provided Under the Federal Help America Vote Act Are Spent Effectively
Our audit of the Office of the Secretary of State's (Office) administration of the federal Help America Vote Act of 2002 (HAVA) funds highlighted the following:
- The State has not effectively spent HAVA funds for new voting systems; over $22 million has been spent on replacing voting systems with new systems that counties and voters cannot fully use.
- The Office has not adopted regulations that define the State's process for voting system approval, as required by state law.
- Many counties need additional funding to replace their voting systems and some have concerns about the Office's process for voting system approval or are waiting for vendors to develop new systems.
- The Office has not declared its compliance with certain HAVA requirements to the federal government, which would enable the Legislature to determine how best to appropriate the remaining HAVA funds.
- The first attempt to develop VoteCal failed, costing the State at least $4.6 million.
- The Office's practice of providing the Legislature with financial information that does not come from its accounting system unnecessarily weakens a key accountability and transparency tool.
- The Office can do more to implement important requirements of the National Voter Registration Act to increase the rates of voter registration.
RESULTS IN BRIEF
The federal Help America Vote Act of 2002 (HAVA) provided more than $380 million in federal funding to California to help improve the State's administration of elections by complying with requirements contained in three different sections of the act. These three sections provide funding for activities such as educating voters, training election officials and poll workers, replacing punch card voting systems, and complying with HAVA Title III (Title III) requirements. Among other provisions, Title III requires the Office of the Secretary of State (Office) to meet voter information criteria, to upgrade voting systems in all California voting precincts so as to meet HAVA's voting system standards, and to develop and deploy a statewide computerized voter registration list. Once in compliance with Title III, the Office can declare its compliance to the federal Election Assistance Commission (EAC). This would provide the Legislature with greater flexibility in deciding how best to spend the remaining HAVA funds.
However, the State has not effectively spent HAVA funds for new voting systems. Specifically, over $22 million in HAVA funds have been spent on replacing voting systems with new systems that counties and voters cannot fully use. This problem resulted from various secretaries of state reaching different conclusions as to whether particular direct recording electronic voting systems—such as computer-based push-button or touch screen systems—were suitable for use in California. As a result, some counties that used HAVA funds to buy certain voting systems subsequently found that they could no longer use these systems or could use them only with significant restrictions. State law requires that all voting systems used in California be approved by the secretary of state.1 At the same time, the secretary of state may, according to state law, withdraw approval of voting systems with sufficient notice should he or she later deem them unsuitable. Adding to the problem, there appears to be a lack of clarity for the counties buying voting systems, the manufacturers who make them, and the general public as to what California's expectations are for its voting systems and what standards are being applied as part of the secretary of state's process for voting system approval. State law has required the Office to develop regulations that define this process since 1994; however, the Office has not adopted such regulations, although it currently hopes to have them in effect sometime in 2015. Our survey of all 58 California counties found that a number need additional funding to replace their voting systems, and some expressed concern about the Office's process for voting system approval, highlighting both the conflicting guidance coming from the Office as to what systems can be used and the lack of vendors bringing forward new voting systems.
Furthermore, if the Office takes certain actions, the Legislature would have greater flexibility to decide how best to appropriate the remaining HAVA funds, such as providing counties with additional funding for voting system replacement or other activities. According to the Office and our own analysis, the Office is in full compliance with Title III. Therefore, the Office could reasonably declare its compliance to the EAC, thus freeing up the remaining $131 million in HAVA funds for any purpose related to HAVA that the Legislature deems sufficiently important.2
However, the Office has chosen not to declare its compliance because it has yet to successfully deploy a new statewide computerized voter registration list called VoteCal, which it committed to completing under an agreement it executed with the United States Department of Justice (Justice). During our audit, the deputy secretary of state for HAVA activities explained that in addition to its agreement with Justice, the Office is pursuing VoteCal because its current system—CalVoter—is old, inefficient, and not sustainable. Although the Office may have valid reasons for pursuing VoteCal, the lack of a fully deployed VoteCal system should not prevent it from declaring the State's compliance with HAVA to the EAC. Doing so would enable the Legislature to determine how best to use the remaining HAVA funds. After already costing the State at least $4.6 million due to a failed contract on its first attempt to implement VoteCal, the Office's total budget for the VoteCal project is $98.2 million through fiscal year 2016-17.
Moreover, the Office could enhance the value of the annual HAVA spending plan it provides to the Legislature. Currently, the historical spending information contained in the HAVA spending plan is not based on information from the Office's accounting system. In some instances the previous HAVA spending differed significantly—sometimes by millions of dollars—from the Office's official accounting records. The Office's acting deputy secretary of state for operations stated that the Office never intended for the spending plan's historical spending data to be based on its financial records, explaining that the document is simply a planning tool and that the Legislature has not complained about the spending information previously provided. Nevertheless, the Office's practice of providing the Legislature with financial information that does not come from its accounting system unnecessarily weakens a key accountability and transparency tool for the Legislature and limits its ability to effectively evaluate HAVA's costs in relation to its policy outcomes.
In addition, our review of the State's implementation of the National Voter Registration Act of 1993 (NVRA) found that a key component of this law—sometimes referred to as the "Motor Voter" law—is the requirement that an application submitted for a driver's license simultaneously serve as an application to register to vote for an eligible citizen. However, our visits to some California Department of Motor Vehicles (DMV) offices in Sacramento found that the driver's license application does not act as a simultaneous application for voter registration. Instead, applicants for a driver's license complete a driver's license application form and receive a separate voter registration card. Although we recognize that these practices were designed to respond to a 1995 court order, that court order was lifted in 1999, and California has not taken the steps necessary since then to come into full compliance with this important NVRA requirement. As a result, applicants for driver's licenses must provide duplicate information—such as their name, address, date of birth, and other information—when registering to vote. A strict reading of the NVRA statute prevents states from requiring duplicate information, stating that the voter registration application portion of the driver's license application "may not require any information that duplicates information required in the driver's license portion of the form."
Finally, our audit found that although the State may have met the minimum requirements for designating voter registration agencies under the NVRA, it should designate more agencies. For example, as an unemployment compensation office, the California Employment Development Department plays an important service role and could serve as a voter registration agency. Also, the State could designate other state departments and agencies as well as county- and city-based entities that have significant interaction with the public. These additional designations could, in our view, further increase the rates of voter registration in California.
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.
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 for deciding how best to appropriate the remaining HAVA funds.
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.
To ensure that 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.
To maximize voter registration, the State should designate additional state and local entities that could reasonably assist with increasing voter registration.
The Office agreed with all but one of our recommendations. The Office disagrees with our recommendation that it should revise its record retention policy for long-term federal awards such as HAVA because it believes its current policy meets the federal requirements. We discuss this issue on page 15 and this recommendation appears on page 36.
1 Senate Bill 360 of the 2013-14 Regular Session of the Legislature, if enacted, would allow the secretary of state to certify or conditionally approve voting systems independently of the voluntary federal qualification and certification process.
2 This amount represents unappropriated HAVA funds remaining in the State's Special Deposit Fund as of June 2012.