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June 27, 2017
The Honorable Elaine M. Howle State Auditor
Bureau of State Audits
621 Capitol Mall, Suite 1200Sacramento, CA 95814Re: State Bar of California Response to State Audit Report 2017-030
It should be noted that the recommendation reflects the State Bar’s intention. However, contribution rates for represented employees are currently the subject of collective bargaining. If agreement is not reached in time for the 2017 Open Enrollment period, non-represented employee contributions, effective January 1, 2018, will be set at the current contribution level for represented employees. If, subsequent to the Open Enrollment period, an agreement is reached with the union reflecting a different contribution structure, the State Bar would not likely be able to modify required contribution levels further until January 1, 2019.
The State Bar appreciates the fact that the report recognizes the State Bar’s significant progress in addressing its post-retirement health plan, and agrees that, executive employees, hired on or after January 1, 2018, will be required to contribute to post-retirement health care costs at a rate equivalent to their contributions during employment at the State Bar. Imposing this change on current management staff can be expected to persuade many key managers to retire early, destabilizing the Bar at a time of significant reform of its internal management. Moreover, the expected retirements of these managers over the next few years will accomplish the objective of this recommendation over a somewhat longer timeframe without disrupting the Bar’s services.
To ensure that purchasing cards are assigned only to appropriate staff, to ensure that 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 do the following immediately:
In our view the technical safeguards and multiple levels of review and approval noted above provide a significant level of internal control and oversight of the purchasing card program.
The State Bar has not finalized currently pending lobbying contracts. Audit recommendations will be considered as part of the contract finalization process.
To contract only for appropriate and necessary services from outside law firms at a prudent rate, the State Bar should put the following informal practices into a written policy: