Joint Legislative Audit Committee

Good afternoon, everybody. Thank you very much for being here. The Senate has lifted the call, so we may begin as a Subcommittee today so we can hear some of the items that are not in consent. So we will do that, and we will do that by sign in order. Mr. Kalra, Senatoe Kalra is here first, so we will take you up. We will not take action until we have obviously established a quorum.

But at this point, we will begin with as a Subcommittee. Actually, before Mr. Kalra, I apologize. I'd like to give the Auditor an opportunity, our state audit opportunity, just to give a status report for us before we begin hearing the audits for this hearing.

Thank you, Chairman Alvarez. Thank you, Chairman Alvarez. Like to give a committee a brief overview of the status of the State Auditors work in progress. Currently, we have ten statutory audits in progress, depending on the results of the Budget Act. I anticipate starting an 11th, which is our Judicial Council procurement audit.

Examples of our statutory audits currently underway include the State's Financial Statement audit for fiscal year 21-22. We are also reviewing the Department of Fis-Cal's efforts to transition remaining departments onto the Fis-Cal system, as well as the State Controller's efforts to transition onto Fis-Cal. And my office is also currently in the process of finishing up its State Higher Risk list, where we identify state agencies and departments that are at risk of fraud, waste and abuse.

In terms of JLAC statutory Audits we currently have 13 approved audits in progress at the moment, three of them from our prior June 22 hearing, all ten from the March 2023 hearing. And as you recall, Mr. Chairman, we did have an audit of the Labor Commissioner's Office that we put on hold. My Office's understanding is that audit will commence beginning September 1.

Unless I hear differently from the Committee in terms of our availability to start work, we're able to start twelve audits between now and December. It's sort of a staggered start month by month. We can start two in July, one in August, 1 in September, 2 in October, and the remaining six in November and December. So I just wanted to put that out there for you and the Committee Members. And so, you know the scope of our availability with that, more than happy to take any questions.

Thank you very much. Mr. Grants our State Auditor. Appreciate the update. So, again, I'd encourage all Committee Members to please report to room 437 for our hearing so we can establish a quorum and act on today's business. But because we are a Subcommittee at the moment, we will hear Mr. Kalra's request. Welcome and go right ahead.

Thank you so much, Mr. Chair. Thank you for allowing me to present on this audit request regarding state procurement and how California could avoid inadvertently contributing to the destruction of tropical forests through state purchasing. I really want to thank you and your staff and of course, the great work of the auditor for helping inform us in terms of making legislation that helps California move forward.

I first became more aware of the crisis regarding tropical deforestation when I went on a delegation trip with the Environmental Defense Fund and visited the Amazon Forest and the devastation could not be more clear. That was back in 2018. And so this is something that I and our sponsors have been working on for a number of years. And the fact is, tropical forests not only replenish much of the world's oxygen, but also hosts roughly half of all the species that live on the planet.

Deforestation obliterates tens of millions of acres of tropical forests annually undermining environmental integrity, indigenous rights and labor protections. Much of this destruction is done in the name of producing certain common forest risk commodities like paper, pulp, timber, rubber, coffee, palm oil, soy and cattle. As an environmentally conscious economic power, California has the ability and responsibility to combat deforestation.

One way to do this would be for the state to ensure that its supply chain is deforestation free, that is, free of products derived from deforestation activities. This audit can help inform how the issue truly looks and pathways towards addressing it. The need to audit California's procurement system for ties, deforestation and associated human rights abuses is, of course, not unique to California. For well over a decade, a movement in Europe has pushed the EU to review and regulate its links to tropical deforestation.

And this movement just recently resulted in a law that requires EU companies to ensure the agricultural commodities they import or export were not produced on recently deforested land. Here in the United States, the New York State legislatures just passed a bipartisan measure based on an effort we began here in California to make state procurement tropical deforestation free.

That earlier effort was my AB 416, the Deforestation Free Procurement Act, which was unfortunately vetoed by Governor Newsom in 2021, due in part to a lack of awareness around the state's current procurement of these commodities. This audit allows us to work with the Administration by taking a step back to better inform all of us on the current state of affairs regarding procurement of forest risk commodities.

The audit will also shed light on the current implementation of the Transparency and Supply Chains Act of 2010, which was created in part to ensure that large retailers and manufacturers provide consumers with information that could educate them on how to purchase goods produced by companies that responsibly manage their supply chains. We have since based other bills on it, like AB 416, and a better understanding of how California implements and enforces current law will help inform future legislation regarding supply chain transparency. With me to provide supporting testimony is Doug Norlen, Economic Policy Program Director at Friends of the Earth, and Nick Sackett, Director of Legislative Affairs with Social Compassion in Legislation.

Thank you, Assembly Member Kalra. And good afternoon, Chair Alvarez and Members of the committee. Thank you for the opportunity to present here today. My name is Doug Norlen, and I direct the Economic Policy Program at Friends of the Earth, one of the oldest and most respected environmental advocacy organizations min the country founded here in California over 50 years ago.

I'm here to voice our strong support for the audit request submitted by Assembly Member Kalra regarding California's procurement of products linked to the destruction of tropical forests across the world. Governments spend an estimated 13 trillion annually, one 6th of global GDP, in the procurement of wood.

The audit requested by Assembly Member Kalra intends to shed light on the roll of California's procurement in driving one of the most critical problems of our time tropical deforestation. And ideally, this will lead to our state taking greater responsibility for the impacts of its purchasing.

Tropical deforestation is at the nexus of a multitude of critical issues the climate emergency, unprecedented species loss, an epidemic of violence against environmental human rights defenders, widespread abuses of indigenous people's rights, and the ongoing potential of disease pandemics driven by habitat loss.

That's why, for well over a decade, our organization has been leading efforts to reform corporate supply chains and to advocate for demand side regulations to stem the tide of the global deforestation crisis. During the course of this work, we've seen incredible progress. Hundreds of consumer brand and agribusiness companies have adopted policies committing them to zero deforestation supply chains.

Financial institutions representing 9 trillion in assets have committed to addressing the deforestation impacts of their investment and lending portfolios by 2025. And yet the crisis continues to worsen, in large part because these corporate commitments are not backed by similar commitments from governments. This is why Assembly Member Kalra's audit request is so crucial you can't manage what you don't measure.

A preliminary study conducted by Friends of the Earth showed that of the roughly 2.5 billion in California state purchasing in 2019, as much as one quarter may be comprised of products with some links to tropical deforestation. That means our State has tremendous opportunity to use mathis economic leverage to drive positive change. And there is precedent.

As just mentioned, last month the European Union passed a law that requires companies registered in the EU Member states to ensure that agricultural commodities they import or export were not produced on recently deforested lands. And just last week, the New York Legislature voted up its own version of a Bill that would make state procurement deforestation free.

California is a leader in climate response and a sustainability leader as well. The proposed audit will help lawmakers understand the scope of our state's contribution to the problem of tropical deforestation and help guide policies that ensure California is also a global leader in protecting earth's remaining tropical forest. We hope you will accept our recommendation and support Assembly Member Kalra's critical request.

Thank you. Do you like to provide testimony as well?

Thank you, Chair, Members of the Committee, my name is Nickolaus Sackett, Director of Legislative Affairs for Social Compassion in Legislation. I believe the author's statement and the statement of Mr. Norlen says most of it.

I believe the author's statement and the statement of Mr. Norlen says most of it.

I just want to add that we did conduct a poll conducted by Data Orbital that showed 84% of registered voters in the state are concerned about our state procurement policies contributing to tropical deforestation, and that this translated into 81% supporting the legislative policies that grove rise to this addis request.

So I don't want to take up more of your time, but we believe that this audit request will lay the foundation for future policies that can contribute to saving the rainforest. So thank you very much.

Thank you both for your testimony. Now we'll give our State Auditor an opportunity to present analysis.

Mr. Grant Parks, please. Go ahead.

Thank you. Chairman Alvarez, Assembly Member, Kalra and others are seeking an audit essentially to understand the current implementation of the Transparency and Supply Chains Act of 2010, as well as determine how much of the state's procurement dollars are being spent on tropical forest risk commodities. Just taking it hart by part, our first effort is going to be really focused on the Transparency and Supply Chains Act.

My understanding is that the Attorney General's Office and the Franchise Tax Board each play a role in administering that program. Obviously, we'd be working out with the Attorney General's Office to understand what their policies and procedures are to making sure that agencies and vendors aye complying with the transparency requirements of that law.

For example, also to wahab extent, they're conducting investigations of those who aren't complying and what remedies are available to those that don't provide the required information. Also working with FTB, who I understand plays a role in terms of advising the Attorney General in terms of what vendors are subject to the law. The request also asks our office to quantify for the most recent year the amount of procurement dollars spent on tropical forest commodities.

The state has a variety of data sources available to it. The State Contracting and Procurement Registration System, otherwise known as Skippers, is a potential data source for us. There may be others as well over at General Services that we would leverage in terms of trying to answer the Members questioned. It's a fairly focused objective, focusing on the most recent year.

And then the final part of the audit really is the Member and the requesters are interested in understanding how does DGS and the state, essentially track tropical forest commodities and biofuels. What are they doing? What aren't they doing? And what are the laws surrounding those issues. With that, I estimate the audit would take roughly 2500 hours and six months to complete.

Thank you, Mr. Parks. Appreciate that. I'd invite the affected agencies, if they're here, to come forward and provide some commentary.

Thank you, Mr. Chair and Members. Matt Bender, Deputy Director for Legislative Affairs at the Department of General Services. Also in the room is Angela Shell, Deputy Director and Chief Procurement Officer. We appreciate the requester's continued interest in tropical deforestation, and we welcome an addis on this subject, in part because we haven't had the resources to do an in depth study of our own to assess whether state purchases are contributing to tropical deforestation.

However, we are somewhat concerned that the audit scope may not yield the information necessary to answer that question. Supply chain tracing can be labor intensive, given the many different companies and processing stern a raw material can go through as it is converted into a finished product and sold to an end user.

Currently, the DGS Procurement Division is working to implement six new legislative mandates, several of them related to the environment and wilk we're proud to be advancing the state's environmental goals. Given those mandates, we do not have the resources to do the in depth supply chain tracing that would be needed to answer that question. From our standpoint, the involvement of the State Auditor is welcome.

However, we are concerned that if the audit scope is just to review the data we already have, the results may be unsatisfying to everyone. What may be the most beneficial would be for the state auditor to go beyond whether the state is buying general categories of commodities that might have come from a forest that might have been tropical, and evaluate whether the products the state is buying actually contribute to tropical deforestation. Those specific products bearing in mind, many of them are sourced from the United States and Canada. With that, we're happy to answer any questions.

Thank you very much. Appreciate your time. Now is an opportunity for Members of the Committee to ask any questions. Don't see any. Maybe Mr. Parks I'd ask you to perhaps provide comments on what we just heard from the Department on the information that might or might not be available to you as you do this audit.

Sure. As with any audit, our ability to conclude on audit objectives is really dependent on the information that's available to us. In terms of documentation at state agencies, I am open to considering, to the extent feasible, doing the more detailed tracing just to understand what's involved in the level of effort. By no means am I saying my staff is going to be able to do a wall to wall tracing of all products coming into the state, but just an initial feasibility. If one was to do it low might one go about doing it assuming that that information is available?

Okay, just want to make sure that the Author also and myself understand what that is. Obviously, the author's intent is important and so want to make sure that the information that gets gathered is satisfactory and informative enough for you and for all of us. So does anybody else have any other comments or questions? All right.

Do we have any public comments? Members of the public who like to comment on this item is the opportunity to come forward. Any Members of the public? I don't see any. Mr. Karla, would you like to make any closing statements?

Thank you so much, Mr. Chair and to the Auditor, I think the exchange demonstrates the complexity of the nature of trying to get data on our procurement process and supply chains.

And so I'm hopeful that this audit will shed light as to the nature of our supply chain and to the extent we're contributing to tropical deforestation and or shed light on what else we need to do more to really ensure that we have data on what is happening with our supply chain. I think either way, it's worthwhile and wilk help both the Legislature and Administration have a better sense of what we can do to ensure that we're not contributing to what is an international crisis. So with that, I respectfully ask for an aye vote.

Thank you very much, Mr. Kalra. I appreciate your interest and passion in bringing this forward. At the moment, we are still missing a quorum, so we will not take a vote on this yet. And thank you again for coming. As stated, we still don't have a quorum. So I'd remind Members of the Joint Legislative Audit Committee to come to room 437 so we can establish a quorum and begin our take action on our agenda today. But with that, we will grove on to another item that we'll hear as a Subcommittee. This is Mr. Ting, who's here to present on his request. And welcome Mr. Ting. And please proceed.

Thank you, Mr. Chair. I'm here to request that the Joint Legislative Audit Committee approve a state audit of the California Public Utilities Commission's oversight of the state energy efficiency program. The energy efficiency program is used. The funds are collected from independent operating utilities, ratepayers over a billion dollars a year.

However, every year there appear to be hundreds of millions of dollars left over and not being spent. As the watchdog over this program, I think we need to take a hard look as to where the money is being spent, what energy efficiency technologies are being prioritized, and also are there other programs that perhaps are unaware of this funding? As you all know, energy efficiency is one of the fastest ways we can implement to reduce our carbon footprint and reduce our greenhouse gases.

It also has some of the fastest payoff. So money not spent on energy efficiency is money that really is not being used to move us to a cleaner, greener future in 2020. I championed AB 841, which transferred a portion of these program funds to the Energy Commission to facilitate school funding to upgrade their HVAC systems in response to COVID. This has been highly successful.

The money's been used. And we really want to take a look to see if perhaps this is a way to further use those funds, but also making sure that we are absolutely ensuring that energy efficiency funds are being used and not sitting at the PUC, but really out in California in our communities to reduce the energy impacts throughout our state. So we're looking at a couple of questions.

How much money has been collected from Ratepayers over the last ten years and how much money has been spent? What are some of the programmatic barriers contribute to unexpended energy efficiency funds? How the money is being distributed across sectors? What's the breakdown between different types of technologies? And also how does the CUC's Administration of the Cal Shape program compare to the CPUC's process for energy efficiency programs? With that respect for you, ask for your aye vote on the audit request.

I do have Alison Raimi here on behalf of IBW.

Thank you very much. I'm going to just take a pause because we do have a quorum. You know how critical that is. And I'll ask the Secretary to please call the role.

Assembly Member. Alvarez. Present. Borner. Present. Hoover Patterson. Rubio? Here. Valencia Wood? Here. Senator Blakespear? Here. Cortese. Here. Eggman Gonzalez? Laird? Here. Seyarto? Here. Wilk? present.

Okay, We have a quorum. So thank you very much. I wood like to now note now that we have a quorum, that audit request number 2023 125, California Air Resources Board land ports of entry is being held over for potentially our JLAC August hearing. And I'll share another statement about that in a second.

But also I would like to note that audit request 2023 126 regarding the California Community Colleges instructor and administrator spending by Assembly Member Rodriguez is no longer on our consent today, and it will be presented regarding audit number 2023-125. I just wanted to make a brief statement on this because this was an audit request that I had put forward.

I wanted to share that in the absence of funding and supporting infrastructure, I'm concerned that mandates from California Air Resources Board will negatively impact our economy and a long term goal of improving our environment along the border. We need to address the issues facing the ports of entry, whether they are land or sea. In my case, they are land. In my district, the only ports of entry actually in, California.

As each of these provide a vital service to the state of California and to the county of San Diego and our region's economy, I requested that CARB meet once per week with the border truck community. The goal of these meetings will be to create a positive, collaborative working relationship between the community and CARB in the hope of creating a comprehensive plan to improve air quality in our border region.

Additionally, I'm requesting infrastructure investments to be set aside for the border region, including the authorization of funds on both sides of the border to make improvements on fleet and charging concerns. So, again, want to thank CARB for initiating these conversations with us. And I look forward to the continued conversations from now. And hopefully in August, we won't have to hear this audit either. So thank you very much.

Mr. Chair?

Yes.

Could I make a comment on that? I would just like to state that I think the audit request in its current form is flawed because it asked to request to audit a program that hasn't been created yet. And I don't support something that's in that. And I really appreciate the fact that CARB has met with you and has offered some money for border infrastructure and to meet with Truckers.

And I would just encourage you to make an agreement because I am not sure the audit will go forward. And this is your chance to make progress on these issues, and you have that chance now. So thank you, for the opportunity to make that comment.

Thank you, Senator Laird, I really appreciate that. And thanks for your interest on this as well before we still have oh, sure. Ms.Rubio.

Just a comment on that. I know it's being moved over, but just to actually address, I did meet with them as well, and I asked for specific information and I got links copies of links that I can go look up the information on. So that's also of concern for me. So I appreciate the comment, but I also wanted to also make a comment that I was very specific in my asks, and I did not get any kind of information that I asked for. Again, I got a copy to a link that I could go look up the information on my own. So I agree that we have an opportunity to meet. However, when there's specific information being asked, I would appreciate specific answers.

All right, thank you. I think we still have a quorum. I want to make sure we get some votes on our consent agenda. Right. Thank you. Appreciate that. We have a motion and a second. Flora, our consent agenda, which just to be very perfectly clear, are items 1, 2, 4, 5, 6, and seven. Oh, I'm sorry, I read the wrong community college one. 1, 2, 3, 4, 6 and seven.

Item number five, which is 2023-126, as I announced earlier, has been removed from consent and will be heard today. So we have a motion from Senator Cortese and a second by Assembly Member Rubio. Please call the roll.

The motion is to approve today's consent calendar for the following items audit request number 2023-120 Department of Healthcare Services licensed recovery and treatment facilities by Assembly Member Dixon. Audit request number 2023-122. California Public Schools custodial staffing and cleanliness standards by Assembly Member Alvarez. 2023-123 Community College transfers by Assembly Member Alvarez.

2023-124 Local streets and roads program. State and local oversight by Assembly Member Grayson. 2023-128 Department of Pesticide Regulation, registration and assessment funding by Senator Niello. 2023-130. Department of State Hospitals Sexually Violent Predator Conditional release program by Senator Jones.

Assembly Member Alvarez. Alvarez? aye Boerner. Horvath. aye Hoover Patterson. Rubio Rubio. aye Valencia Wood. Senator Blakespeare. Aye, Blakespear. aye Cortese. Cortese. aye Eggman Gonzalez. Gonzalez. aye Laird. Aye, Laird. aye Seyarto Wilk. Aye, Wilk.

Thank you very much. We will need hold that on call. We need Assembly Members to vote on these items. We will return to our item. Mr. Ting, thank you for that presentation and your patience. Appreciate your your patience here. I'll ask your witness to please testify on behalf of this audit request.

Sure. Thank you, Chair and Members Alison Ramey here today on behalf of the IBEW here in support of Assembly Member Ting's audit request of the CPUC's oversight of energy efficiency programs. We think that there wilk be some important information obtained through this audit to help us understand how these ratepayer dollars are bains spent on these programs and guide future use of these funds min a way that helps get to the clean energy goals set forward and also to serve the California ratepayers themselves.

Thank you very much. Appreciate it. We'll ask our State Auditor, Mr. Grant Parks say a few words.

Thank you, Chairman Alvarez. Mr. Ting's request basically has us start off looking at how much has been collected and spent for energy efficiency programs and really trying to understand what programs have been prioritized. He's having us look at a period of 2012 through 2022 asking questions on things, for example, how much has been spent targeting different programs, different user groups.

Also wanting to get some information on specifically what types of energy efficiency programs are being prioritized under the energy efficiency programs, and to what extent there's been a focus on natural gas versus other technologies, and whether or not the programs being funded enable fuel substitution to electricity versus those that do not.

The second part of the audit really focuses on understanding how CPUC determines the effectiveness of these energy efficiency programs, focusing on what's their current methodology historically, what has their methodology been, and also taking a look at how might that cost effectiveness methodology change with the passage of AB 205 and moving into the shift to income graduated fixed charges.

Whether or not that has an implication on how energy efficiency programs are being measured, member Ting is also asking us to compare CPU's process for administering and overseeing energy efficiency programs to those that are administered by the Energy Commission to see if there isn't some best practices or other things there that might be relatable to what's going on over at CPUC.

And finally, Member Ting is asking my office to take a selection of energy efficiency programs to try and calculate the benefits of those programs and also understanding why for some of those programs, the money hasn't been spent as quickly as many may have thought. I estimate the audit will cost roughly 3000 hours and take eight months to complete.

Thank you, Mr. Parks. I appreciate that. Do we have anybody from the CPUC here who wood like to provide testimony? Welcome and please introduce yourself and proceed.

Thank you. Good afternoon, Chair Alvarez and Committee Members. My name is Leuwam Tesfai, and I serve as the Deputy Executive Director for Energy and Climate Policy at the California Public Utilities Commission. Thank you for giving me an opportunity to speak this afternoon about the proposed audit of the CPUC's oversight of energy efficiency programs.

I want to express my appreciation for the Legislature's attention and interest in the benefits from investorowned, utility or IOU energy efficiency programs and potential barriers to program success. Energy efficiency has been a cornerstone of our clean energy policy for decades.

In part due to the success of energy efficiency, energy demand in California has largely remained flat over the past several decades, meaning we have had to build fewer fossil fueled power plants and we have been able to avoid hundreds of tons of GHG emissions in the process. EE programs continue to see success.

California has consistently been ranked first in the nation, including as recently as last year by the American Council for an Energy Efficient Economy in their annual State Energy Efficiency scorecard, this report ranks US States on their policy and program efforts to save energy, advance equity, and pursue efficiency as a cost effective critical tool for reducing emissions and meeting state clean energy goals.

Over the past five years, utility energy efficiency programs reported savings of over 5100 gigawatt hours of electricity and 180,000,000 metric therms of natural gas in 2021. To further our decarbonization objectives, the CPUC established a new EE metric called the Total System Benefit. By realigning energy efficiency goals towards Total System Benefits, investor owned utilities are incentivized to implement EE programs that save energy at the times when the grid and energy resources are most constrained, which in turn, provides the highest opportunity to avoid greenhouse gas emissions from these programs. Thank you again for the opportunity to be here and I'm available to answer any questions.

Thank you. I appreciate you being here. Do we have any questions from Members of the committee? We do have a motion by Ms.. Berner. Thank you very much. Any other questions? Okay, then we're going to move on to public comment. Is there any public comment on this item? If there is, please come forward and state your name, organization and your comment, please.

Good afternoon, Chair, Members, Tiffany Phan. On behalf of the California Efficiency and Demand Management Council, in support. Thank you.

Thank you. Any more testimony or public comment? Okay, seeing none, I'll ask Mr. Ting if he'd like to make a closing comment.

Again, these are very critical ratepayer dollars that the PUC appropriates to reduce the energy footprint in California. We think it's a very critical program and want to make sure it's being spent efficiently. So respectfully ask for aye vote on our audit request.

Thank you. Appreciate you bringing this one forward and your stewardship of our dollars, public dollars. This is again in line with the work that you've done as a Assembly Member. So thank you for bringing this forward, supportive of this. And we do have a motion by Ms.. Berner and we need a second. We don't do a second committee. We do that's right. Thank you, Ms.. Rubio. Secretary, please call the roll.

Motion to approve audit request number 2023-127 California Public Utilities Commission Energy Efficiency Programs. Oversight by Assembly Member Ting. Assembly Member Alvarez. Alvarez. Aye Burner. Aye Becker. Aye Hoover. Patterson. Rubio. Aye. Rubio. Aye Valencia. Yes. Valencia. Aye Wood. Senator Blakespear. Blakespear. Aye Cortese. Cortese. aye Eggman. Gonzalez. Gonzalez. aye Laird. Aye. Laird. aye Seyarto. Wilk? Aye. Wilk.

Its approved, it passes. Thank you very much. We will hold it open for others to add on.

Thank you.

Thank you very much.

Mr. Chair.

Yes.

Would you like a motion on Assembly Member Kalra's audit? but we didn't have a quorum.

Yes, I was going to go to that next We need to also add Mr. Valencia to the consent. So let's do a motion now that we have everybody for Kalra first.

I would so move.

Thank you, Mr. Laird. Second by Becker. Please call the roll on Assembly Weber Kalra's audit request.

Motion to approve audit request number 2023-129 Department of General Services Tropical Forest Commodities by Assembly Member Kalra. Assembly Member Alvarez. Aye. Alvarez, aye. Becker aye. Burner? aye Hoover. Patterson. Rubio. Rubio. aye valencia. Yes. Valencia aye Wood. Senator Blakespear. Blakespear. aye Cortese. Cortese. aye Eggman. Gonzalez. Gonzalez. aye Laird. aye Seyarto. Wilk aye. Wilk, aye.

That motion passes. So, Mr. Kalra, we will keep it open for any absent Members to vote. We will return to the consent agenda. And Secretary, please call the roll on the consent agenda.

Motion to approve items on the consent calendar. 2023-120. Department of Healthcare Services licensed recovery and treatment facilities by Assembly Member Dixon. 2023-122 California Public Schools, Custodial Staffing and Cleanliness Standards by Assembly Member Alvarez.

2023-123 Community College Transfers by Assembly Member Alvarez. 2023-124 Local Streets and Roads Program. State and Local Oversight by Assembly Member Grayson. 2023-128 Department of Pesticide Regulation, registration and assessment funding by Senator Niello. 2023-130. Department of State hospitals, sexually violent predator conditional release program by Senator Jones. Assembly Member Hoover. Assembly Member Patterson. Valencia. Yes. Valencia. AyeSenator Eggman and Senator Seyarto.

The consent calendar has been approved, but we will hold that for the absent Members for them to vote. So with that, we will move to our final item that we are hearing today. And this is Assembly Member Rodriguez request for an audit item number 2023 126. Assemblymember Rodriguez. Welcome and please come forward. And if you have any testimony or witnesses with you, they're welcome to join you as well and proceed as soon as you're ready.

Good Afternoon, Mr. Chair Members and the committee. Thank you for the opportunity to present my audit request of the California Community College Chancellor's office and ten community college districts regarding two related issues. One district Administration expenditures and compensation, and two district compliance with the 50% spending law.

First, this audit request would examine how the growth in administrative positions have contributed or failed to contribute to academic successes. As student enrollment has declined, the faculty and support staff positions have remained stagnant. Evidence reveals an increase in administrators. For example, between 2017 and 2022, the Chancellor's Office reported an 18% growth in full time management and Administration position during a time when colleges experienced a 16% decrease in student enrollment.

Between 2012 and 2022, there was a reported 45% growth in administrators, despite a 20% decline in student enrollment. The audit request would also determine if community college districts are compliant with state law, which requires half of the district expenses to be spent on instructor salaries. A similar state audit conducted in 2000 concluded that spending for six of the ten audited districts fell below the 50% threshold.

This happened despite the Chancellor's Office claimed that all of the community college's districts were compliant. 20 years later. I believe it's time to follow up to ensure that auditors recommendation were implemented and if districts are compliant with existing law. By examining these two issues, the Legislature can ensure funding is being spent in a manner that contributes to academic successes for community college students.

While I do understand the results of an approved audit did not occur under the Administration of the newly appointed Chancellor, I believe an independent review can help the Chancellor's Office to identify areas where improvements may be needed. With me to provide testimony and answer any questions is David Atkins, legislative advocate with the California Community College, Independence. Thank you.

Chair Alvarez. Vice Chair Blakespear. Thank you for this opportunity. I wanted to also thank the JLAC Consultants for their assistance and counsel in developing the audit. We began hearing anecdotal reports from campuses of administrative positions being hired for responsibilities that at least faculty were unaware to figure out why these positions were being enacted.

As the Assembly Member mentioned, we went back and looked at Chancellor's Office data, and over a ten-year period, even though there was close to a 22% drop in full-time student enrollment, there was a 45% increase in administrative full-time positions, and the audit will help us determine if that was necessary.

On the compensation, we were surprised to hear that the average salary for a Superintendent President at the districts is a little over $284,000. The highest paid Superintendent President earned over $386,000, and it's not even the largest district. But what troubled me, as a former advocate for the California Faculty Association dealing with the State Universities, it seemed that the community colleges have now adopted the model of that salary is not enough.

Let's add a car allowance, let's add a housing allowance, and in some instances, let's add a monthly expense account on one district in particular that increased their compensation by over $99,000 a year. And so we felt this was something that the auditor should look at in regards to 50% law.

This is existing law, as mentioned by Assembly Member Rodriguez. This was looked at in 2000. There was a claim that all districts were in compliance. The auditor found that six out of ten were not in compliance. There were also a series of recommendations that we don't know if they've been adhered to min the 20 years since then. So we're hoping the auditor will look at that.

The 50% law was intended to enact in 1961 to reduce class size, increase the effectiveness of classroom instruction, and also help with student academic outcomes. And we think that it's been successful doing that here to answer any questions that Members of the Committee might have. Thank you very much.

I'll give an opportunity to our State Auditor, Mr. Grant Parks, to provide some analysis.

Thank you, Chairman Alvarez. Assembly Member Rodriguez is requesting an audit of community college district compliance with the 50% spending law.

The audit request has our office look at a selection of ten community college districts to assess their compliance over the past five, but up to ten years. If feasible. This will entail reviewing the community college's accounting records to understand how they calculated and determine compliance while performing our own calculations.

We mentioned earlier during the presentation that we had an earlier audit in 2000 where we noted problems during our review. We'll be looking out for the same kind of errors that we noted in that report, among them bains things like community colleges claiming credit for spending on faculty who weren't providing instruction.

So there are a variety of errors that were noted in that prior audit report that our audit staff will be looking for this time. As we review that selection of ten community colleges, we'll also be taking a look at the Chancellor's office in terms of how it's providing leadership and oversight to the community colleges.

To what extent, for example, is the Chancellor's office approving exemptions to the 50% rule? What's the basis for it? What's the methodology? And also, more importantly, what steps has the Chancellor's office taken to ensure campuses address their lack of spending on in class instruction, if that is in fact what's happening? And then also taking a look, as others have mentioned before, following up on the prior recommendations of our audit report from 2000 to see what's happened since then.

And then finally, in terms of spending on administrators and presidents, the audit request has us identify changes to FTEs total compensation and the operating budgets for administrators and executives over the past ten years to understand to what extent those have increased and understand how districts have justified those increases relative to the education provided to students. I estimate this audit will cost roughly 3000 hours. I'll be putting more staff on it, so I'm anticipating six months to complete it.

Thank you, Mr. Parks. Appreciate that. Do we have the Community College Chancellor's office present? Welcome.

Good afternoon, Mr. Chair and Members. I'm David O'Brien, Vice Chancellor for Government Relations for the California Community Colleges Chancellor's office. I want to thank the committee for giving us an opportunity to respond to this issue, and Assembly Member Rodriguez for his commitment to the success of California's 1.8 million community college students today.

I am here to express our concern that the proposed audit, as requested, takes too narrow a vision of student success and the factors that help students achieve their dreams at a community college and beyond. And let me be clear, starting off that faculty are absolutely a critical element of student success and the student journey in the California Community Colleges.

And we at the Chancellor's Office are grateful for the partnership we enjoy with our statewide faculty associations. However, our concern is that a narrow focus on whether colleges are in compliance with the 1961 law requiring that 50% or more of all expenditures be allocated to faculty salary and benefits does not necessarily tell us whether colleges are doing enough to ensure students succeed.

If I may, I'd like to provide a few examples of positions and programs that our colleges offer, most of which have been established by legislation or budget action of the Legislature that have a clear impact on student success, but are not counted as instructional spending under the 50% law, one of which being Basic Needs Coordinators.

In 2021, this Legislature took a groundbreaking step by requiring every community college to identify a single on campus position to coordinate the delivery of basic needs services designed to alleviate factors such as food insecurity and housing insecurity, which we know disproportionately affect community college students, and for which the research is clear that a student who is suffering from food insecurity or housing insecurity is less likely to succeed academically.

Yet that funding that the Legislature provided for Basic Needs centers and coordinators does not count as instructional spending under the 50% law. I would also call your attention to the Disabled Students Programs and Services Program, which provides interpreter, reader transcription, speech and notetaker services, diagnostic assessments, and disability related counseling and advising to over 120,000 students with disabilities throughout the community college system.

These services, and the staff who administer them typically do not count as instructional spending under the 50% law. In addition to Dreamer Resource Liaisons, which provide critical support to undocumented students, veterans Resource Centers, the Next Up programs serving current and former foster youth.

All of these are examples of programs and services that the Legislature, we are proud to see, has invested in that generally do not count towards instructional spending under the 50% law. And yet I don't think anybody would deny that these programs contribute to the success of our students. So, as these examples I hope demonstrate, the question of what contributes to the success of community college students is not a black or white, simple yes or no question.

It deserves to be addressed with the nuance and an understanding of how the demographics of California, our community colleges and our students and faculty have changed over the years. We hope that any audit seeking to understand the correlation between community college expenditures and the success of our students takes into account these complex issues.

And we look forward to working with the Assembly Member, the audit sponsors, and if approved, the state auditor to address the question of how all aspects of the community college experience are serving our students.

Because no matter what percentage of community college district spends on faculty salary or benefits, our expectation is that 100% of dollars spent, as well as 100% of faculty, administrators, staff, district and system office leaders like myself are working towards the goal of student success 100% of the time. I'm happy to take any questions from the committee. Thank you.

Thank you very much. We will move on to questions from Committee Members. Vice Chair Blakespear will be first.

Yes, thank you. Thank you for the presentation. And thank you as well for the testimony. I wanted to support the idea of expanding this audit so it would look at this category that the testimony was focused upon, which has to do with I think of it really as a category of safety net expenditures.

So there are things like food, housing, mental health, showers, educational counseling, the basic needs that he referred to, disabled services, foster services, because I think that it's important to remember that this law, mathis 50% law, used to apply to K through twelve schools as well as other public higher education.

And I don't know when that was eliminated for those other two categories or why, but I do know that we have expanded the expectations of what schools at all levels do and the social safety net services that are being provided by schools at all levels are really filling in the gaps for our society members who need more help. So there used to be a narrower understanding of what schools would do, and I think this is true of many areas.

You can look at law enforcement as well, areas where they're doing a lot more related to homelessness and things than they ever anticipated. I would like to suggest that in support of what the speaker was saying, that we expand the audit and that we look at this as a specific category. And also I'll just state from my perspective, it is important that we are evaluating whether there's an efficient delivery of services and making sure that we don't have admin cost, administrative managerial costs that are redundant or padding or not adding value.

So managers of managers, of managers having very many levels of government on top of government actually is wasteful, I believe, and can be unnecessary and does not add value to the student's experience and also for the taxpayer who's funding the school experience. So I think it is important that we are doing this audit and looking into it many of the things that Weber discussed at the beginning related to salaries and overall compensation should be clear.

I don't think that we should cast judgment on whether it is the right or wrong thing to be doing. We just need the dispassionate analysis of what is happening so that we can evaluate it. I would like to propose the expansion of the audit to include this category of safety net type expenditures. And I would leave it to the auditor to define this in the way that he and his shop would find to be the most useful.

But just distinguishing between that classroom instruction time, which clearly some of this really isn't like showers, but is also not redundant managerial padding and redundant government services or government positions. So that would be my hope. I don't know if, Chair, you think I should make that into a motion or if the auditor wants to respond to it. I know we've made some changes previously at this committee just on the fly, where the auditor can accept suggestions about how the audit is being conceived.

I'm going to ask that the state auditor respond to that.

Thank you for the question. You're right, minor changes that don't substantially affect the audit request can be made and incorporated. But I believe the Audit Committee also has its own rules in terms of if substantive changes to audit requests are made, how that process works, how those rules might be suspended.

When we were working with the Requester's Office, we were drafting this from the standpoint of really ting to evaluate compliance with the 50% law because that was our understanding of what the requester was after. And then, secondly, understanding the administrative and Executive salaries, FTEs and low.

Those amounts have changed over time. This additional scope item focusing on safety net spending, whether it's on food, housing, other items. Although it may be valuable, I would defer to the Chair in terms of how the Audit Committee works its own rules in terms of what's permissible. But I would view this as an additional scope item that would add cost to the audit. That wasn't contemplated in our original analysis. Does that provide clarity to you? Otherwise, I'm going to

I have some other thoughts, but I would defer to my colleagues to make their comments too, to see what the other thoughts are.

Does the author have any comments first before we go to another.

I don't. Have to discuss with the sponsor. Okay. I'm open to any suggestion, but we'll see how this turns out.

Thank you, Ms. Boerner.

Well, I want to piggyback on what Senator Blakespear said since 1961, on our entire system and public education, whether it's a UC or a CSU.

or K through twelve or community colleges. We have drastically expanded the scope on what their function is in our society. And I think, and I don't know if don't want to assume this is what the Senator might have suggested is you already have an item ten in your scope that says other issues significant to the audit.

And I could imagine you could have specifically under item ten costs associated with student support, like addressing food insecurity, educational technology, housing, and anything related directly to the legislation we have passed to really provide that social safety net that the Senator was talking about. Could that be done under the scope of item ten and that just be broken out that way because you're going to collect that information anyways, correct?

Thank you for the question. I could see how you would read it that way. I think traditionally, and I don't want to speak for prior administrations, I've been the State Auditor for a few months now. I'm sensitive to stepping beyond the bounds of what a request is. You're right. We do add that catch all objective at the end of our audit request in case there are other issues that pertain to the prior objectives.

Above that we don't want to leave something important on the table because it wasn't specifically asked for in the original objectives, but just pointing out for the group. I think when you start adding objectives that go, in my opinion, beyond how we originally scoped this audit, it can be done. You have your committee rules in terms of what the process is for amending audit requests and what that process entails.

We are more than happy to do whatever this committee authorizes and directs us to do. I'm just pointing out that this was something that wasn't contemplated when we were working with the requester's office and it wasn't something we were contemplating when we drafted the audit analysis. And I just wanted to be clear for that for Members as you're contemplating that here.

So just I want to clarify what our State Auditor is saying in terms of what comes before this committee and the adopted rules which we voted on at their first meeting regarding audit requests. Rule number 14 says that at the time of the hearing, an audit request may only be amended if the amendment does not substantially affect the feasibility, scope or cost of the proposed audit. So that's an important line that I'd ask the auditor. I would assume if we are adding anything, mathis will increase the cost of the proposed audit. So that means make sure that is that correct?

All of this is preliminary. Recognize that when we draft these audit analyses, we do so they're confidential. We don't talk to the auditees to understand what records are available or the time and effort involved to get them or analyze them. It's essentially our best guess. But having said all that again, if it's the committee's direction that you want us to do this additional work. And I don't have with 100% clarity what that means in terms of cost or time. I just want to put that out there.

And the other thing that I think is important if someone hasn't had an opportunity to submit a request for an audit yet, there is an exchange that occurs between the author, the person requesting and your office to make sure that objectives and the work that you're doing is defined.

Do you feel from what you've heard so far and we have more people, so before we even make a decision here, we have other Members who want to speak that you've been given that kind of direction or are you still unsure of what additional direction has been requested?

No, I think I understand what the committee is asking for. I'm just trying to be clear in terms of articulating what it was when you were developing the audit analysis and it did not include this.

And I'm going to ask our author because we want to be respectful since we would not be having this conversation at all if it weren't for his insight into this important issue to think about the comments that are being said. And it's important for me to hear your response. If you want to give it now or there's more Members who want to speak, go ahead, whatever is easier.

But I'm open to any suggestions and everything. Work with our sponsors well to see what we can and can do based on this new information we're hearing.

Right then. I'll probably come to you to provide some testimony. But let's hear from others before you do that. Senator Laird. Then Senator Wilk.

I was going to agree with the comments of Senator Blakespear and actually offer another example that she didn't list that's the subject of state legislation and she didn't list healthcare services. And when I was in the Assembly at the time and this is a tribute to the fact that things change over time.

So originally there was a law that said you could not charge students on student aid special fees that they were exempt from special fees. And so they were exempt from the health care fee. And then we were so successful at student aid that at some colleges it went from ten percent to 40%. So colleges were cutting health care because they couldn't get it.

And the health care they were delivering was primarily to the students that were exempted from the fees because they were low income and really needed the health care. So I did a Bill that ended up getting enacted after a lot of controversy that allows the optional levying of the fees on people on financial aid for health care. As a result of that, there's more positions in health care.

And so if you're looking at the balance of positions, it's like that is something that as a result of legislative action affected the balance of positions. And so the thing about it is I have a sense that we're caught in a procedural thing where basically I'm sensing people. When I was a community college trustee and I left 20 years ago to come to the Legislature, I never heard about housing insecurity and low.

I ask at all my campuses and it's between one and 4% of the student body is unhoused and we are asking the campuses to have positions and programs to deal with it. And so this is a very, very relevant thing. And I think our question is procedurally, how can we work with the requester and the auditor to make sure that we can accommodate that within our rules? That to me is now our question because I'm sensing that people want to do it. The proposal proposer was open to it and it's something that would have to be part of this for it to have some validity going forward.

Thank you, Mr. Laird. Sorry. Mr. Wilks was first. And then we'll go to Mr. Seyarto.

Thank you, Mr. Chair. I spent six and a half years as a community college trustee before coming to the Legislature and so I want to thank you for bringing this issue forward because it is an important issue. I share the frustration that this is the only segment of higher education that has to comply with this and again, it's because it was spawned out of the K-12 district.

I personally thing this is probably not even relevant anymore because of all the challenges that these students face. I actually did a Bill ten years ago, I had a legislative victory in this committee and then it got killed in appropriations to broaden the 50% rule to include some of these other things counselors, librarians and I think since ten years ago it should be broader.

So I hope you would be if we can, to be opening to broadening because again, it's about student success and student access and I think that's what we're all here for and I wish we had talked earlier because I definitely have some thoughts and I do share concerns about the increase in administrators. I certainly have seen that and I think that is a legitimate issue. So I don't want to dismiss that at all. But ultimately it's about student success and student access and I agree with all the comments that's been made here.

Thank you Senator Seyarto.

It sounds like we're adding a lot to what we're talking about today. And if the community colleges were a little concerned about their ability to do their job and do this all same time that we're probably going into going to make it a lot worse. If we do want to add all this in, this isn't going to get done today, I don't think.

And I feel like if it can be done in a couple of different bites that might be more manageable but, but I think I've heard three different things we want to put in, and those things are not easy to do an addis on if not answering your not answering for you. But it just senses for me, I sense that this is we're expanding this into something that's large, very large and very difficult. And we need more information, frankly, from our auditors on what it entails, how much it costs, and what we're going to accomplish.

Chair, can I make a suggestion? Yes. I wanted to just see if there was a way to narrow this and make it possible today. So the question that you were asking is really a binary question. Is the 50% law for instruction instructors being met or not? And the answer might very well be no.

But then, in the explanation of why it's not being met, it would be explained that this large category, whatever it is, is not just admin, which means non-instructor, but it's this other, which I'm calling social safety net. But you could call any other thing category that the Legislature may or may not have asked for, but is happening at community colleges.

And so it wood just give more color to the actual addis so we would be able to evaluate as legislators, do we want to eliminate the 50% law? Do we want to expand it to include more categories? Do we want to define it differently? But you'd still be able to ask your core question. And I think in order to answer the core question, you're going to be looking at all of the titles of what people's jobs are anyway.

So, you'll know, if they're working in the homeless, students living in their car, that's in their job description, or they're an adjunct admin person. So it seems like if we have it as a concept that it's not just instructors or admin, but there's this other category that it could fall underneath that binary meeting it or not meeting it. Here's what's happening with the not meeting it and why. Because to me, it seems like this might be possible for the Auditor to do.

I think the most important person to answer these questions is our state auditor. If the state auditor doesn't have a clear direction in understanding what you're going to be auditing. Then no matter what we discuss here, that's not going to be helpful. I think it's pretty clear what the author is requesting, so let's set that aside. That's very clear.

The comments you're hearing, which I agree with Mr. Seyarto now seem to be maybe a little bit different, or they'll narrow down just now. Is it narrow enough for you to proceed today with that? I would think that there could be any number of categories that could meet what I agree with is an important safety net or aspect of funding for community college. But we'd probably have to go and look at what those are and define which programs are in and which ones are out, I would think, but I don't know give you a chance to respond.

Well, again, we'd have to look at the community colleges and what data that they have, but your points well taken for those positions and costs that don't count towards the 50% rule. We can try and categorize them into different categories. Broadly speaking, how broad we haveto go is really going to be dependent on what the records are like and how many different classifications of people there are.

But if there is some proportion of staff at these community colleges that don't count towards the 50%, but they are in these safety net programs, perhaps that's something that can be related to the status as an explanation for why an agency or why a community college isn't complying. But I think it would be presented more informational.

The community college either did or did not comply with the rule. Here's what they did. Here's what we found. And for those that aren't counted towards the 50%, here's the various buckets that we were able to classify them in, whether it was for food or housing support, to the extent that those records are available..

I think that's sounding more and more like a fair way to move forward. Because if you've read audits before, even in this space with the funding that was put forward and this audit just was released this year, I believe, on faculty funding, and there was very direct responses as to whether they were meeting it or not.

But then there was a lot of in the narrative in terms of response from the community college as to why they weren't meeting them and they included a variety of reasons. I could see the same thing happening with this audit, especially with that direction that you just provided. So I would be comfortable with that and I think that makes sense. Ms.. Boerner, did you want to make some additional comments?

No,I think we should probably then be more specific in our audit scope when we have something that says or anything else that would be significant to the audit. There's no way to look at the expanded scope of community colleges and not ting that expanded scope, especially from the Legislature, would be significant to this audit.

So if we're going to have that line min there, I'm fine with how you propose going forward. I think that's fine. But then we should be more careful that we're more delineated, because when I read all my information min my briefing for today, I was like, oh yeah, you can totally include that because there's no way that's not significant in meeting that 50% or not, right? Like that's just logical. So I would just ask that be more tailored in the future if that's what it means, is that we couldn't expand it to something that's so obvious that it's affecting the 50% rule.

Okay, did you have more comments?

Yeah, ultimately at the end of the day, my office works for this committee. We take our direction from this committee. I just wanted to point out what your committee's rules are. More than happy to take any direction. This committee gives my staff in terms of what's included in the scope of the audit.

Okay, I think we're getting there, Mr. Laird.

I think we're there. Although when I first asked to comment, I was way away from the conversation, and then it caught up with me. And I think that it was misunderstood that this was being broadening because it was just one category. You're going to have to categorize every position as it is.

That is part of the option now to decide where it is against the 50% rule. We're just adding one category of categorization to make sure if it's categorized as special needs, we see how that fits within what you're doing. That's work that he's going to have to do anyway. It wasn't all these extra categories. It was just things that were in one category that might be the categorization. And I think you got there in sort of the explanation. Well, no, there's a whole issue, a.

Lot of categories in that, isn't it?

Don't misrepresent it, because it it is really you have to look at 100% of the positions and decide what they are and if it is non teaching, but it's really saving students that didn't exist before. Just to check when you have to look at it anyway, is a fair thing. That's going to be work that is done anyway. And I think his solution got us there.

Yeah, I agree. I think the way you presented that gets us to meeting the author's request, I think getting us more clarity as to the number of positions or a flavor, certainly, or a sense of what other positions exist that might support students, but that are not counted as part of the 50%. That could give us more information and could give us an opportunity for future decision making as Ms.. Blakespear and Mr. Wilk has already attempted to.

Did you have something you wanted to add? I just wanted to add, and I haven't done it min a number of years, but the last time I checked at Community College, there was one counselor for every 1582 students, and that just doesn't get the job done. I had to go an extra year of college because I thought I had everything and I didn't because that was on me, that I didn't access those counseling services because they're available.

But now it's very difficult for students. So I think between that, all the other changes and how these students learn and all the challenges that we have in society in General, I really like the way that Senator Blake Spear laid that out, and I think it does fit within the scope of what Assemblyman Rodriguez wants to do. And I'm excited about this.

Thank you. Senator Seyarto, did you have additional? No? Okay, so let's see if we can get us to a point where we can all agree that's always the attempt, at least in this Committee, that I've Chaired. Mr. Rodriguez, any closing comments or your witness like to provide any additional? Okay, taking all your comments into consideration, did you like to provide some comment?

I'll be brief. Chair Alvarez.

I'm very excited about Senator Blakespear's proposal. I do believe it involves a separate audit, though, because we have I've just thrown down all in what I thought were safety net. So healthcare services, mental health services, food pantry, housing, insecurities, transportation, tutoring, access to instructional, office hours, textbook prices, and then EOPS, but these are all essential programs for our students to succeed.

Thank you.

I would be so supportive of having an expansive audit that just focused on student safety net issues. In regards to this audit, I think tweaking the support staff comparison of administrative growth versus faculty changes versus student enrollment versus the classified staff, and then identifying those classified staff by whether they fall within the student safety net category, I think that that piece of information in and of itself would be helpful.

I think anything beyond might actually dilute the outcome or the information that we're trying to gather. What I would be uncomfortable with, just me is trying to incorporate such a complex and comprehensive and needed analysis as an add on to an existing audit. And then having the outcome of that audit be a determining factor in deciding where we go in the future. I would love to have an audit that focuses just on safety net issues.

Thank you. Okay, we will go on to public comment now. Is there anyone in the audience who'd like to make a comment on this? Please come forward and identify yourself and provide comment. You will have two minutes.

Thank you. Mr. Chair and Members, Tristan Brown with the California Federation of Teachers, who represents classified and faculty members at our community college system. And we have heard from many of those members at the gradual shift that we're seeing of our members work, being downgraded to part-time work rather than full-time. To always scrambling for scraps in the budget to make all of the programs that were listed today successful.

You don't have programs if you don't have staff to actually implement the programs. And so we are very excited when Mr. Rodriguez brought this forth to your committee. We're very excited at the direction that it's now heading. This has been a great discussion. So we thank you all for that we hope this passes and that we can continue the great work after we have all the sunshine on the implementation of this current law, which is, I think is important to iterate. They're supposed to be doing this. Let's make sure everything's happening correctly. So we appreciate it. Thank you.

Thank you, Chair Members. Austin Webster on behalf of the Faculty Association of California Community Colleges. Just want to align my comments with my colleague from CFT as well as thank the author for this. Certainly we agree that more data is great as we're looking to see how we can support our students min eventually supporting their overall success. So appreciate the aye vote

Andrew Martinez Community College League of California. We appreciate the conversation today. We think it was terribly insightful. We have been thinking about it the colleges and districts that are part of the Community College League about equity and the wraparound services that our students need to be supported to be successful.

That means more and more resources outside the classroom and that means that there's going to be a harder and harder burden for us to meet that 50% threshold. And was alluded to in one of the letters I was submitted to you from Sierra College. They had to make really, really tremendously minutiae detailed decisions to make that work and it's becoming harder and harder. We appreciate the focus on the Legislature, on equity. We are in line in agreement with you, but it is going to be a burden as we go forward to meet those goals and to meet the objectives and ensure our students successful.

Good afternoon. Michelle Underwood, on behalf of the Association of California Community College Administrators, to align my comments with that of the Community College League, who actually just pointed out who I'm also speaking on behalf of Sierra College, the superintendent chancellor was not able to be here, but submitted a letter. And I wanted to focus on some of the things that fall outside of the 50% law that are so success or so critical for student success, so that's things like collective bargaining, academic senates, the encouragement for faculty to participate.

So these are all things that fall outside the classroom, fall outside of the 50% law, but are so important for the student success. As Andrew just mentioned, they are in compliance. Sierra College is in compliance with the 50% law. They are included in the audit because of their proximity to the 50% law, but they go through the audit every year and they are in compliance with 50%.

But under the scope of this audit they would be included and they every year go through the process of making sure that they are in compliance with the 50% law and sometimes have to add positions within the 50% law to counter positions that they're adding outside. So that if they're adding a counselor outside for student success, they also have to add a faculty Member whether they need it or not.

That's how much that they focus on making sure they're in compliance. So I think in conclusion, the hope is that from this robust conversation there will be a bigger look at student success and wahab things both fall inside and outside of the 50% low to make sure that our students are successful in our colleges today because they're so very different from when the 50% Law was enacted. Thank you.

Thank you.

Hello, Mr. Chair and committee Nick Cruz with the California Labor Federation and also on behalf of SEIU. Just want to align ourselves with CFT and speak in support of this audit. Thank you.

Thank you. Anybody else wish to provide public testimony? Okay, seeing none, it's your turn once again. Assembly Member Rodriguez, to make a closing statement. Well, actually, before you do that, let me just make sure I think the Auditor has some clarity and the Committee as well, appreciate you all engaging conversation. I guess we have one of these every hearing where we engage in conversation, I try to make sure we resolve and come to an agreement to provide.

Certainly the requester, the author, the audit that they are looking for, but also the information that we as legislators would like to have to make better policy in the future. So I think we got there. I appreciate everybody, Senator Blakespear, Assembly Member Boerner and others providing that narrowing of focus. I think your statements earlier meet that moment and that request, and it's pretty clear to me, but I just want to make sure that it's clear to all of us as we take this vote as to what to expect, and obviously also to the author who's requesting this, as to what to expect with an audit.

It's the items you have outlined, and in addition to that, a categorization of positions in a way that allows us to identify and understand positions that might be student support services or safety net services. I think that's the phrase that was used. Is that your intent, clarity? You have enough direction to do that?

Yes, I think I have enough clarity for that. Just as long as my office has the flexibility in terms of is it subsets within that safety net or is it just the broad category safety net? As long as we have that discretion based on the quality of the data that's available, that would be fine.

And I do think that information will be useful to us going forward and perhaps an additional audit or different policy making as it relates to funding for our community colleges. Does that provide you with some clarity to our requesting author?

I think so.

Mr. Rodriguez, I'll give you an opportunity to close.

Once again, I want to thank all the Members of the committee for this robust discussion. Obviously, a lot of good information was presented and obviously discussed as well moving forward. So with that said, I squarely request an aye vote on the audit.

Thank you very much, Mr. Rodriguez. I appreciate your patience and engagement here. So with that, we have a motion on this item. I'll ask the secretary to call the roll and please don't leave after this vote. We're going to also call the roll on the items that you've missed. Wait, do we have a motion on this? Did I hear a motion? I heard a lot of Ms. Boerner. moves Mr. Wilks. Seconds. Thank you very much.

Motion to approve audit request number 2023-126 California Community Colleges Instructor and Administrator Apending by Assembly Member Rodriguez. Assembly Member Alvarez. Alvarez. aye Boerner. aye Hoover. Hoover. aye Patterson. Patterson.

aye Rubio. Valencia. Valencia. aye Wood. Wood. aye Senator Blakespear. Blakespear. aye Cortese. Eggman. Eggman. aye Gonzalez. Gonzalez. aye Laird. aye Seyarto. Seyarto. aye Wilk. Wilk. aye Wilk. aye.

Passes. Thank you very much again. Now, we're going to call the roll on the items that consent agenda and a few other votes. Secretary, please call the roll.

Motion to approve items on the consent calendar. Assembly Member Wood. Wood, aye. Motion to approve audit request number 2023-126. California Community College's Instructor and Administrator Spending by Assembly Member Rodriguez, Assembly Member Rubio and Senator Cortese. Motion to approve audit request Umberg, 2023-127.

California Public Utilities Commission Energy Efficiency Programs and Oversight by Assembly Member Ting. Assembly Member Hoover. Hoover. aye Patterson. Patterson. aye wood. Wood, aye. Senator Eggman. Eggman. aye Seyarto. Seyarto. Not voting. Audit request number 2023-129 Assembly Member Hoover. No. Hoover, no. Patterson? No. Patterson, no. Wood, aye. Wood, aye. Senator Eggman. Eggman. aye Seyarto. Seyarto Not voting.

Okay, we will keep open for five more minutes for any missing Members. Thank you all. Appreciate it. Yes.

2023-126 California Community College's Instructor and Administrative Spending by Assembly Member Rodriguez. Assembly Member Rubio. Rubio. aye Senator Cortese.

Okay, thank you. So five more minutes. We'll hold this open for the items that are remaining. Thank you. Seeing no other business. The Joint Legislative Audit Committee is now adjourned.

All right, good afternoon, everybody. Thank you very much for being here. The Senate has lifted the call, so we may begin as a Subcommitee today so we can hear some of the items that are not in consent. So we will do that, and we will do that by signing in order. Mr. Kalra, Kara is here first, so we will take you up. We will not take action until we have obviously established a quorum. But at this point, we will begin with as a Subcommitee. Actually, before Mr. Kalra apologize, I'd like to give the Auditor an opportunity, our State Auditor, an opportunity just to give a status report for us before we begin hearing the audits for this hearing.

Thank you, Chairman Alvarez. Thank you, Chairman Alvarez. Like to give a Committee a brief overview of the status of the state Auditors work in progress. Currently, we have 10 statutory audits in progress, depending on the results of the Budget Act. I anticipate starting in 11th, which is our Judicial Council procurement audit. Examples of our statutory audits currently underway include the State's Financial Statement audit for fiscal year 21-22.

We are also reviewing the Department of Fi$cal's efforts to transition remaining departments onto the Fi$cal System, as well as the State Controller's efforts to transition onto fiscal. And my office is also currently in the process of finishing up its state high risk list, where we identify state agencies and departments that are at risk of fraud, waste and abuse.

In terms of JLAC statutory audits, we currently have 13 approved audits in progress at the moment, three of them from our prior June 22 hearing, all 10 from the March 2023 hearing. And as you recall, Mr. Chairman, we did have an audit of the Labor Commissioner's office that we put on hold. My office's understanding is that audit will commence beginning September 1. Unless I hear differently from the Committee in terms of our availability to start work, we're able to start 12 audits between now and December.

It's sort of a staggered start month by month. We can start two in July, 1 in August, 1 in September, 2 in October, the remaining six in November and December. So I just wanted to put that out there for you and the Committee Members. And so, you know, the scope of our availability with that, more than happy to take any questions.

Thank you very much. Mr. Grants our State Auditor. Appreciate the update. So, again, I'd encourage all Committee Members to please report to Room 437 for our hearing so we can establish a quorum and act on today's business. But because we are a Subcommitee at the moment, we will hear Mr. Kalra's request. Welcome and go right ahead.

Thank you so much, Mr. Chair. Thank you for allowing me to present on this audit request regarding state procurement and how California could avoid inadvertently contributing to the destruction of tropical forests through state purchasing. I really want to thank you and your staff and of course, the great work of the Auditor for helping inform us in terms of making legislation that helps California move forward.

I first became more aware of the crisis regarding tropical deforestation when I went on a delegation trip with the Environmental Defense Fund and visited the Amazon Forest and the devastation could not be more clear. That was back in 2018. And so this is something that I and our sponsors have been working on for a number of years. And the fact is, tropical forests not only replenish much of the world's oxygen, but also hosts roughly half of all the species that live on the planet.

Deforestation obliterates tens of millions of acres of tropical forests annually undermining environmental integrity, indigenous rights, and labor protections. Much of this destruction is done in the name of producing certain common forest risk commodities like paper, pulp, timber, rubber, coffee, palm oil, soy, and cattle. As an environmentally conscious economic power, California has the ability and responsibility to combat deforestation. One way to do this would be for the state to ensure that its supply chain is deforestation free, that is, free of products derived from deforestation activities.

This audit can help inform how the issue truly looks and pathways towards addressing it. The need to audit California's procurement system for ties, deforestation and associated human rights abuse is, of course, not unique to California. For well over a decade, a movement in Europe has pushed the EU to review and regulate its links to tropical deforestation. And this movement just recently resulted in a law that requires EU companies to ensure the agricultural commodities they import or export were not produced on recently deforested land.

Here in the United States, the New York state Legislature has just passed a bipartisan measure based on an effort we began here in California to make state procurement tropical deforestation free. That earlier effort was my AB 416, the Deforestation Free Procurement Act, which was unfortunately vetoed by Governor Newsom in 2021, due in part to a lack of awareness around the state's current procurement of these commodities.

This audit allows us to work with the Administration by taking a step back to better inform all of us on the current State of affairs regarding procurement of forest risk commodities. The audit will also shed light on the current implementation of the Transparency and Supply Chains Act of 2010, which was created in part to ensure that large retailers and manufacturers provide consumers with information that could educate them on how to purchase goods produced by companies that responsibly manage their supply chains.

We have since based other bills on it, like AB 416, and a better understanding of how California implements and enforces current law will help inform future legislation regarding supply chain transparency. With me to provide supporting testimony is Doug Norlen, Economic Policy Program Director at Friends of the Earth, and Nick Sackett, Director of Legislative Affairs with Social Compassion in Legislation.

Thank you assemblymember Kalra. And good afternoon, Chair Alvarez and Members of the Committee. Thank you for the opportunity to present here today. My name is Doug Norlen, and I direct the Economic Policy Program at Friends of the Earth, one of the oldest and most respected environmental advocacy organizations in the country, founded here in California over 50 years ago.

I'm here to voice our strong support for the audit requested requests submitted by Assembly Member Kalra regarding California's procurement of products linked to the destruction of tropical forests across the world. Governments spend an estimated 13 trillion annually, one 6th of global GDP, in the procurement of goods. The audit requested by Assemblymember Cara intends to shed light on the role of California's procurement in driving one of the most critical problems of our time tropical deforestation.

And ideally, this will lead to our state taking greater responsibility for the impacts of its purchasing. Tropical deforestation is at the nexus of a multitude of critical issues the climate emergency, unprecedented species loss, an epidemic of violence against environmental human rights defenders, widespread abuses of indigenous people's rights, and the ongoing potential of disease pandemics driven by habitat loss.

That's why, for well over a decade, our organization has been leading efforts to reform corporate supply chains and to advocate for demand side regulations to stem the tide of the global deforestation crisis. During the course of this work, we've seen incredible progress. Hundreds of consumer brand and agribusiness companies have adopted policies committing them to zero deforestation supply chains. Financial institutions representing 9 trillion in assets have committed to addressing the deforestation impacts of their investment and lending portfolios by 2025.

And yet the crisis continues to worsen, in large part because these corporate commitments are not backed by similar commitments from governments. This is why Assembly Member Kalrra's audit request is so crucial. You can't manage what you don't measure. A preliminary study conducted by Friends of the Earth showed that of the roughly 2.5 billion in California State purchasing in 2019, as much as one quarter may be comprised of products with some links to tropical deforestation.

That means our state has tremendous opportunity to use its economic leverage to drive positive change. And there is precedent. As just mentioned, last month, the European Union passed a law that requires companies registered in the EU Member states to ensure that agricultural commodities they import or export were not produced on recently deforested lands. And just last week, the New York Legislature voted up its own version of a Bill that would make state procurement deforestation free.

California is a leader in climate response and a sustainability leader as well. The proposed audit will help lawmakers understand the scope of our state's contribution to the problem of tropical deforestation and help guide policies that ensure California is also a global leader in protecting Earth's remaining tropical forest. We hope you will accept our recommendation and support Assemblymember Kalra's critical request.

Thank you. Would you like to provide testimony as well?

Thank you, Chair, Members of the Committee. My name is Nicholaus Sackett, Director of Legislative Affairs for Social Compassion in Legislation. I believe the author's statement and the statement of Mr. Norlen says most of it. I just want to add that we did conduct a poll conducted by Data Orbital that showed 84% of registered voters in the state are concerned about our state procurement policies contributing to tropical deforestation, and that this translated into 81% supporting the legislative policies that give rise to this audit request.

So I don't want to take up more of your time, but we believe that this audit request will lay the foundation for future policies that can contribute to saving the rainforest. So thank you very much.

Thank you both for your testimony. Now we'll give our State Auditor opportunity present analysis. Mr. Grant Parks, please go ahead.

Thank you, Chairman Alvarez, Member Kalra and others are seeking an audit essentially to understand the current implementation of the Transparency and Supply Chains Act of 2010, as well as determine how much of the state's procurement dollars are being spent on tropical forest risk commodities. Just taking it part by part. Our first effort is going to be really focused on the Transparency and Supply Chains Act. My understanding is that the Attorney General's Office and the Franchise Tax Board each play a role in administering that program.

Obviously, we'd be working out with the Attorney General's Office to understand what their policies and procedures are to making sure that agencies and vendors are complying with the transparency requirements of that law, for example. Also to what extent they're conducting investigations of those who aren't complying and what remedies are available to those that don't provide the required information. Also working with FTB, who I understand plays a role in terms of advising the Attorney General in terms of what vendors are subject to the law.

The request also asks our office to quantify for the most recent year the amount of procurement dollars spent on tropical forest commodities. The state has a variety of data sources available to it. The State Contracting and Procurement Registration System, otherwise known as Skippers, is a potential data source for us. There may be others as well over at General Services that we would leverage. In terms of trying to answer the member's question. It's a fairly focused objective, focusing on the most recent year.

And then the final part of the audit really is the Member and the requesters are interested in understanding how does DGS and the state essentially track tropical forest commodities and biofuels. What are they doing, what aren't they doing, and what are the laws surrounding those issues. With that, I estimate the audit would take roughly 2500 hours and six months to complete.

Thank you, Mr. Parks. Appreciate that. I'd invite the affected agencies, if they're here to come forward and provide some comment.

Thank you, Mr. Chair and Members. Matt Bender, Deputy Director for Legislative Affairs at the Department of General Services. Also in the room is Angela Shell, Deputy Director and chief procurement officer. We appreciate the requester's continued interest in tropical deforestation, and we welcome an audit on this subject, in part because we haven't had the resources to do an in depth study of our own to assess whether state purchases are contributing to tropical deforestation.

However, we are somewhat concerned that the audit scope may not yield the information necessary to answer that question. Supply chain tracing can be labor intensive, given the many different companies and processing steps the raw material can go through as it is converted into a finished product and sold to an end user. Currently, the DGS Procurement Division is working to implement six new legislative mandates, several of them related to the environment.

And while we're proud to be advancing the state's environmental goals, given those mandates, we do not have the resources to do the in depth supply chain tracing that would be needed to answer that question. From our standpoint, the involvement of the State Auditor is welcome. However, we are concerned that if the audit scope is just to review the data we already have, the results may be unsatisfying to everyone.

What may be the most beneficial would be for the State Auditor to go beyond whether the state is buying general categories of commodities that might have come from a forest that might have been tropical, and evaluate whether the products the state is buying actually contribute to tropical deforestation. Those specific products, bearing in mind many of them are sourced from the United States and Canada. With that, we're happy to answer any questions.

Thank you very much. Appreciate your time. Now is an opportunity for Members of the Committee to ask any questions. Don't see any. Maybe, Mr. Parks, I'd ask you to perhaps provide comments on what we just heard from the Department on the Information that might or might not be available to you as you do this audit.

Sure. As with any audit, our ability to conclude on audit objectives is really dependent on the information That's available to us. In terms of documentation at state agencies, I am open to considering, to the extent feasible, doing the more detailed tracing just to understand what's involved and the level of effort. By no means am I saying my staff is going to be able to do a wall to wall tracing of all products coming into the state, but just an initial feasibility. If one was to do it, how might one go about doing it, assuming that that information is available.

Okay, just want to make sure that the author also, and myself understand what that is. Obviously, the author's intent is important, and so want to make sure that the information that gets gathered is satisfactory and informative enough for you and for all of us. So does anybody else have any other comments or questions? All right, do we have any public comment Members of the public who like to comment on this item, is the opportunity to come forward. Any Members of the public? I don't see any. Mr. Kalra, would you like to make any closing statements?

Thank you so much, Mr. Chair. And to the Auditor, I think the exchange demonstrates the complexity of the nature of trying to get data on our procurement process and supply chains. And so I'm hopeful that this audit will shed light as to the nature of our supply chain and to the extent we're contributing to tropical deforestation and or shed light on what else we need to do more to really ensure that we have data on what is happening with our supply chain.

I think either way, it's worthwhile and will help both the Legislature and Administration have a better sense of what we can do to ensure that we're not contributing to what is an international crisis. So with that, I respectfully ask for an aye vote.

Thank you very much, Kalra. I appreciate your interest and passion in bringing this forward. At the moment, we are still missing a quorum, so we will not take a vote on this yet. And thank you again for coming. As stated, we still don't have a quorum, so I'd remind Members of the Joint Legislative Audit Committee to come to room 437 so we can establish a quorum and begin our take action on our agenda today.

But with that, we will move on to another item that we'll hear as a Subcommitee. This is Mr. Ting, who's here to present on his request. And welcome Mr. Ting. And please proceed.

Thank you, Mr. Chair. I'm here to request that the Joint Legislative Audit Committee approve a state audit of the California Public Utilities Commission's oversight of the State energy efficiency program. The energy efficiency program is used. The funds are collected from independent operating utilities, ratepayers over $1.0 billion a year. However, every year there appear to be hundreds of millions of dollars left over and not being spent.

As the watchdog over this program, I think we need to take a hard look as to where the money is being spent, what energy efficiency technologies are being prioritized, and also are there other programs that perhaps are unaware of this funding? As you all know, energy efficiency is one of the fastest ways we can implement to reduce our carbon footprint and reduce our greenhouse gases. It also has some of the fastest payoff.

So money not spent on energy efficiency is money that really is not being used to move us to a cleaner, greener future in 2020. I championed AB 841, which transferred a portion of these program funds to the Energy Commission to facilitate school funding to upgrade their HVAC systems in response to COVID. This has been highly successful. The money has been used.

And we really want to take a look to see if perhaps this is a way to further use those funds, but also making sure that we are absolutely ensuring that energy efficiency funds are being used and not sitting at the PUC, but really out in California in our communities to reduce the energy impacts throughout our state. So we're looking at a couple of questions. How much money has been collected from ratepayers over the last 10 years and how much money has been spent?

What are some of the programmatic barriers contribute to unexpended energy efficiency funds, how the money is being distributed across sectors? What's the breakdown between different types of technologies? And also, how does the CEC's Administration of the Calshape program compare to the CPUC's process for energy efficiency programs? With that respect for you, ask for your I vote on the audit request. I do have Alison Ramey here on behalf of IBW.

Thank you very much. I'm going to just take a pause because we do have a quorum. You know how critical that is. And I'll ask the Secretary to please call the role.

[Roll Call]

Okay, we have a quorum, so thank you very much. I would like to now note now that we have a quorum, that audit request number 2023-125, California Air Resources Board land ports of entry is being held over for potentially our JLAC. August hearing. And I'll share another statement about that in a second.

But also I would like to note that audit request 2023-126 regarding the California Community Colleges instructor and administrator spending by Assembly Member Rodriguez is no longer on our consent today, and it will be presented regarding audit number 2023-125. I just wanted to make a brief statement on this because this was an audit request that I had put forward.

I wanted to share that in the absence of funding and supporting infrastructure, I'm concerned that mandates from California Air Resources Board will negatively impact our economy and a long term goal of improving our environment along the border. We need to address the issues facing the ports of entry, whether they are land or sea. In my case, they are land in my district, the only ports of entry actually in California.

As each of these provide a vital service to the State of California and to the County of San Diego and our region's economy. I requested that CARB meet once per week with the border truck community. The goal of these meetings will be to create a positive, collaborative working relationship between the community and CARB in the hope of creating a comprehensive plan to improve air quality in our border region.

Additionally, I'm requesting infrastructure investments to be set aside for the border region, including the authorization of funds on both sides of the border to make improvements on fleet and charging concerns. So, again, want to thank CARB for initiating these conversations with us, and I look forward to the continued conversations from now, and hopefully in August, we won't have to hear this audit either. So thank you very much.

Mr. Chair? Could I make a comment on that? I would just like to state that I think the audit in its request, in its current form, is flawed because it asked to request to audit a program that hasn't been created yet. And I don't support something That's in that. And I really appreciate the fact that CARB has met with you and has offered some money for border infrastructure and to meet with truckers.

And I would just encourage you to make an agreement because I'm not sure the audit will go forward. And this is your chance to make progress on these issues, and you have that chance now. So thank you for the opportunity to make that comment.

Thank you, Senator. Laird. I really appreciate that. And thanks for your interest on this. As before, we still have zero, sure Ms. Rubio.

Just a comment on that. I know it's being moved over, but just to actually address, I did meet with them as well, and I asked for specific information, and I got links, copies of links that I can go look up the information on. So That's also of concern for me. So I appreciate the comment, but I also wanted to also make a comment that I was very specific in my asks, and I did not get any kind of information that I asked for.

Again, I got a copy to a link that I could go look up the information on my own. So I agree that we have an opportunity to meet. However, when there's specific information being asked, I would appreciate specific answers.

All right, thank you. I think we still have a quorum. I want to make sure we get some votes on our consent agenda. Right. Thank you. Appreciate that. We have a motion and a second for our consent agenda, which, just to be very perfectly clear, are items 12456 and seven. zero, I'm sorry. I read the wrong community college. 12346 and seven. Item number five, which is 2023-126, as I announced earlier, has been removed from consent and will be heard today. So we have a motion from Senator Cortese and a second by Assembly Member Rubio. Please call the roll.

The motion is to approve today's consent calendar for the following items audit request number 2023-120. Department of Healthcare Services licensed recovery and treatment facilities by Assemblymember Dixon. Audit request number 2023-122. California public Schools custodial staffing and cleanliness standards by Assemblymember Alvarez. 2023-123. Community college transfers by assemblymember. Alvarez 2023-124. Local streets and roads program. State and local oversight by Assemblymember Grayson. 2023-128. Department of Pesticide Regulation registration and assessment funding by Senator Niello. 2023-130. Department of State Hospitals. Sexually Violent Predator. Conditional release program by Senator Jones. [Roll Call]

Sure. Thank you, Chair and Members, Alison Ramey here today on behalf of the IBW here in support of Assemblymember Ting's audit request of the CPUC's oversight of energy efficiency programs. We think that there will be some important information obtained through this audit to help us understand how these ratepayer dollars are being spent on these programs and guide future use of these funds in a way that helps get to the clean energy goals set forward and also to serve the California ratepayers themselves.

Thank you very much. Appreciate it. We'll ask our State Auditor, Mr. Grant Parks, to say a few words.

Thank you, Chairman Alvarez. Mr. Ting's request basically has us start off looking at how much has been collected and spent for energy efficiency programs and really trying to understand what programs have been prioritized. He's having us look at a period of 2012 through 2022 asking questions on things. For example, how much has been spent targeting different programs, different user groups.

Also wanting to get some information on specifically what types of energy efficiency programs are being prioritized under the energy efficiency programs and to what extent there's been a focus on natural gas versus other technologies, and whether or not the programs being funded enable fuel substitution to electricity versus those that do not.

The second part of the audit really focuses on understanding how CPUC determines the effectiveness of these energy efficiency programs, focusing on what's their current methodology historically, what has their methodology been, and also taking a look at how might that cost effectiveness methodology change with the passage of AB 205 and moving into the shift to income. Graduated fixed charges. Whether or not that has an implication on how energy efficiency programs are being measured.

Member Ting is also asking us to compare CPU's process for administering and overseeing energy efficiency programs to those that are administered by the Energy Commission to see if there isn't some best practices or other things there that might be relatable to what's going on over at CPUC.

And finally, Member Ting is asking my office to take a selection of energy efficiency programs to try and calculate the benefits of those programs and also understanding why for some of those programs, the money hasn't been spent as quickly as many may have thought. I estimate the audit will cost roughly 3000 hours and take eight months to complete.

Thank you, Mr. Parks. Appreciate that. Do we have anybody from the CPUC here who would like to provide testimony? Welcome and please introduce yourself and proceed.

Thank you. Good afternoon, Chair Alvarez and Committee Members. My name is Leuwam Tesfai, and I serve as the Deputy Executive Director for energy and climate policy at the California Public Utilities Commission. Thank you for giving me an opportunity to speak this afternoon about the proposed audit of the CPUC's oversight of energy efficiency programs. I want to express my appreciation for the Legislature's attention and interest in the benefits from Investor Owned Utility or IOU, energy efficiency programs and potential barriers to program success.

Energy efficiency has been a cornerstone of our clean energy policy for decades. In part due to the success of energy efficiency, energy demand in California has largely remained flat over the past several decades, meaning we have had to build fewer fossil fueled power plants and we have been able to avoid hundreds of tons of GHG emissions in the process. EE programs continue to see success.

California has consistently been ranked first in the nation, including as recently as last year by the American Council for an Energy Efficient Economy in their annual state energy efficiency scorecard, this report ranks US. States on their policy and program efforts to save energy, advance equity, and pursue efficiency as a cost effective critical tool for reducing emissions and meeting state clean energy goals.

Over the past five years, utility energy efficiency programs reported savings of over 5100 gigawatt hours of electricity and 180,000,000 metric therms of natural gas in 2021, to further our decarbonization objectives, the CPUC established a new EE metric called the Total System Benefit. By realigning Energy Efficiency goals towards Total System Benefits, investor owned utilities are incentivized to implement EE programs that save energy at the times when the grid and energy resources are most constrained, which in turn provides the highest opportunity to avoid greenhouse gas emissions. From these programs. Thank you again for the opportunity to be here and I'm available to answer any questions.

Thank you. I appreciate you being here. Do we have any questions from Members of the Committee? We do have a motion by Ms. Boerner. Thank you very much. Any other questions? Okay, then we're going to move on to public comment. Is there any public comment on this item? If there is, please come forward and state your name, organization and your comment, please.

Good afternoon, chair and Members, Tiffany Phan on behalf of the California Efficiency and Demand Management Council in support. Thank you.

Thank you. Any more testimony or public comment? Okay, seeing none, I'll ask Mr. Ting if he'd like to make a closing comment.

Again, these are very critical ratepayer dollars that the PUC appropriates to reduce the energy footprint in California. We think it's a very critical program and want to make sure it's being spent efficiently. So respectfully ask for your aye vote on our audit request.

Thank you. Appreciate you bringing this one forward and your stewardship of our dollars, public dollars. This is again in line with the work that you've done as an Assembly Member. So thank you for bringing this forward. Supportive of this. And we do have a motion by Ms. Boerner and we need a second. We don't do we need a second Committee? We do. That's right. Thank you, Ms. Rubio. Secretary, please call the roll.

Motion to approve audit request number 2023-127. California Public Utilities Commission energy efficiency programs. Oversight by Assembly Member Ting. [Roll Call]

It's approved. Passes. Thank you very much. We will hold it open for others to add on. Thank you.

Mr. Chair. Would you like a motion on Assembly Member Kalra's audit?

We already zero, actually, That's what I was heard, but we didn't have a quorum. Yes, I was going to go to that. We need to also add Mr. Valencia to the consent. So let's do a motion now that we have everybody for Kalra first.. Thank you, Mr. Laird. Seconded by Boerner. Please call the roll on Assembly Member Kara's audit request.

Motion to approve audit request number 220 thousand and 3129. Department of General Services tropical Forest Commodities by Assembly Member Kalra [Roll Call]

That motion passes. So, Ms. Okara, we will keep it open for any absent Members to vote. We will return to the consent agenda. And Secretary, please call the roll on the consent agenda.

Motion to approve items on the consent calendar. 2023-120. Department of Healthcare Services licensed recovery and treatment facilities by Assembly Member Dixon. 2023-122. California Public Schools custodial staffing and cleanliness standards by Assembly Member Alvarez. 2023-123. Community college transfers by Assembly Member Alvarez. 2023-124. Local streets and roads program. State and local oversight by Assembly Member Grayson. 2023-128. Department of Pesticide Regulation registration and assessment funding by Senator Niello. 2023-130. Department of State Hospitals sexually violent predator conditional release program by Senator Jones. [Roll Call]

The consent calendar has been approved, but we will hold that for the absent Members for them to vote. So with that, we will move to our final item that we are hearing today. And this is Assembly Member Rodriguez request for an audit item number 2023-126. Assembly Member Rodriguez. Welcome and please come forward and if you have any testimony or witnesses with you, they're welcome to join you as well and proceed as soon as you're ready.

Good afternoon, Mr. Chair Members and the Committee. Thank you for the opportunity to present my audit requests of the California Community College Chancellor's Office and 10 community college districts regarding two related issues one District Administration expenditures and compensation, and two district compliance with the 50% spending law. First, this audit request would examine how the growth in administrative positions have contributed or failed to contribute to academic successes. As student enrollment has declined, the faculty and support staff positions have remained stagnant. Evidence reveals an increase in administrators.

For example, between 2017 and 2022, the Chancellor's Office reported an 18% growth in full time management and Administration position during a time when colleges experienced a 16% decrease in student enrollment. Between 2012 and 2022, there was a reported 45% growth in administrators, despite a 20% decline in student enrollment. The audit request would also determine if community college districts are compliant with state law, which requires half of the district expenses to be spent on instructor salaries.

A similar state audit conducted in 2000 concluded that spending for six of the 10 audited districts fell below the 50% threshold. This happened despite the Chancellor's Office claim that all of the community colleges districts were compliant. 20 years later. I believe it's time to follow up to ensure that auditors recommendations were implemented and if districts are compliant with existing law. By examining these two issues, the Legislature can ensure funding is being spent in a manner that contributes to academic successes for community college students.

While I do understand the results of an approved audit did not occur under the Administration of the newly appointed Chancellor, I believe an independent review can help the Chandler's Office to identify areas where improvements may be needed. With me to provide testimony and answer any questions is David Hawkins, legislative advocate with the California Community College, Independence. Thank you.

Chair Alvarez. Vice Chair Blakespear. Thank you for this opportunity. I wanted to also thank the JLAC consultants for their assistance and counsel in developing the audit. We began hearing anecdotal reports from campuses of administrative positions being hired for responsibilities that at least faculty were unaware. To figure out why these positions were being enacted.

As the Assembly Member mentioned, we went back and looked at Chancellor's Office data, and over a 10 year period, even though there was close to a 22% drop in full time student enrollment, there was a 45% increase in administrative full time positions, and the audit will help us determine if that was necessary. On the compensation, we were surprised to hear that the average salary for a Superintendent President at the districts is a little over $284,000.

The highest paid Superintendent President earns over $386,000, and it's not even the largest district. But what troubled me, as a former advocate for the California Faculty Association dealing with the state universities, it seemed that the community colleges have now adopted the model of that salary is not enough. Let's add a car allowance, let's add a housing allowance, and in some instances, let's add a monthly expense account on one district in particular that increased their compensation by over $99,000 a year.

And so we felt this was something that the Auditor should look at in regards to 50% law. This is existing law, as mentioned by Assembly Member Rodriguez. This was looked at in 2000. There was a claim that all districts were in compliance. The Auditor found that six out of 10 were not in compliance. There were also a series of recommendations that we don't know if they've been adhered to in the 20 years since then. So we're hoping the Auditor will look at that.

The 50% law was intended to enact in 1961 to reduce class size, increase the effectiveness of classroom instruction, and also help with student academic outcomes. And we think that it's been successful doing that here to answer any questions that Members of the Committee might have.

Thank you very much. I'll give an opportunity to our State Auditor, Mr. Grant Parks, to provide some analysis.

Thank you, Chairman Alvarez. Assembly Member Rodriguez is requesting an audit of community college district compliance with the 50% spending law. The audit request has our office look at a selection of 10 community college districts to assess their compliance over the past five, but up to 10 years. If feasible. This will entail reviewing the community college's accounting records to understand how they calculated and determined compliance while performing our own calculations.

We mentioned earlier during the presentation that we had an earlier audit in 2000 where we noted problems during our review. We'll be looking out for the same kind of errors that we noted in that report, among them being things like community colleges claiming credit for spending on faculty who weren't providing instruction. So there are a variety of errors that were noted in that prior audit report that our audit staff will be looking for this time.

As we review that selection of 10 community colleges, we'll also be taking a look at the Chancellor's office in terms of how it's providing leadership and oversight to the community colleges. To what extent, for example, is the Chancellor's office approving exemptions to the 50% rule? What's the basis for it? What's the methodology? And also, more importantly, what steps has the Chancellor's office taken to ensure campuses address their lack of spending on in class instruction, if that is in fact what's happening?

And then also taking a look, as others have mentioned before, following up on the prior recommendations of our audit report from 2000 to see what's happened since then. And then finally, in terms of spending on administrators and presidents, the audit request has us identify changes to FTE's, total compensation, and the operating budgets for administrators and executives over the past 10 years to understand to what extent those have increased and understand how districts have justified those increases relative to the education provided to students. I estimate this audit will cost roughly 3000 hours. I'll be putting more staff on it, so I'm anticipating six months to complete it.

Thank you, Mr. Parks. Appreciate that. Do we have the community college Chancellor's office present? Welcome.

Good afternoon, Mr. Chair and Members. I'm David O'Brien, vice Chancellor for government relations for the California Community College's Chancellor's office. I want to thank the Committee for giving us an opportunity to respond to this issue, and Assembly Member Rodriguez for his commitment to the success of California's 1.8 million community college students today.

I am here to express our concern that the proposed audit, as requested, takes too narrow a vision of student success and the factors that help students achieve their dreams at a community college and beyond. And let me be clear, starting off that faculty are absolutely a critical element of student success and the student journey in the California community colleges. And we at the Chancellor's office are grateful for the partnership we enjoy with our statewide faculty associations.

However, our concern is that a narrow focus on whether colleges are in compliance with the 1961 law requiring that 50% or more of all expenditures be allocated to faculty salary and benefits does not necessarily tell us whether colleges are doing enough to ensure students succeed.

If I may, I'd like to provide a few examples of positions and programs that our colleges offer, most of which have been established by legislation or budget action of the Legislature that have a clear impact on student success, but are not counted as instructional spending under the 50% law, one of which being Basic Needs Coordinators. In 2021, this Legislature took a groundbreaking step by requiring every community college to identify a single on campus position to coordinate the delivery of basic needs.

Services designed to alleviate factors such as food insecurity and housing insecurity, which we know disproportionately affect community college students, and for which the research is clear that a student who is suffering from food insecurity or housing insecurity is less likely to succeed academically. Yet that funding that the Legislature provided for basic needs centers and coordinators does not count as instructional spending under the 50% law.

I would also call your attention to the Disabled Students Programs and Services Program, which provides interpreter, reader transcription, speech and notetaker services, diagnostic assessments, and disability related counseling and advising to over 120,000 students with disabilities throughout the community college system. These services, in the staff who administer them typically do not count as instructional spending under the 50% law.

In addition to Dreamer Resource Liaisons, which provide critical support to undocumented students, veterans Resource Centers, the Next Up program serving current and former foster youth, all of these are examples of programs and services that the Legislature we are proud to see, has invested in that generally do not count towards instructional spending under the 50% law. And yet I don't think anybody would deny that these programs contribute to the success of our students.

So, as these examples I hope demonstrate, the question of what contributes to the success of community college students is not a black or white, simple yes or no question. It deserves to be addressed with the nuance and an understanding of how the demographics of California, our community colleges, and our students and faculty have changed over the years. We hope that any audit seeking to understand the correlation between community college expenditures and the success of our students takes into account these complex issues.

And we look forward to working with the Assembly Member, the audit sponsors, and if approved, the State Auditor to address the question of how all aspects of the community college experience are serving our students. Because no matter what percentage of community college district spends on faculty salary or benefits, our expectation is that 100% of dollars spent, as well as 100% of faculty, administrators, staff, district and system office leaders like myself, are working towards the goal of student success 100% of the time. I'm happy to take any questions from the Committee. Thank you.

Thank you very much. We will move on to questions from Committee Members. Vice Chair Blakespear will be first.

Yes, thank you. Thank you for the presentation. And thank you as well for the testimony. I wanted to support the idea of expanding this audit so it would look at this category that the testimony was focused upon, which has to do with, I think of it really as a category of safety net expenditures. So there are things like food, housing, mental health, showers, educational counseling, the basic needs that he referred to, disabled services, foster services.

Because I think that it's important to remember that this law, this 50% law, used to apply to K-12 schools as well as other public higher education. And I don't know when that was eliminated for those other two categories or why. But I do know that we have expanded the expectations of what schools at all levels do, and the social safety net services that are being provided by schools at all levels are really filling in the gaps for our society Members who need more help.

So there used to be a narrower understanding of what schools would do, and I think this is true of many areas. You can look at law enforcement as well, areas where they're doing a lot more related to homelessness and things than they ever anticipated. I would like to suggest that in support of what the speaker was saying, that we expand the audit and that we look at this as a specific category.

And also I'll just state from my perspective, it is important that we are evaluating whether there's an efficient delivery of services and making sure that we don't have admin cost, administrative managerial costs that are redundant or padding or not adding value. So managers, of managers, of managers having very many levels of government on top of government actually is wasteful, I believe, and can be unnecessary and does not add value to the student's experience and also for the taxpayer who's funding the school experience.

So I think it is important that we are doing this audit and looking into it. Many of the things that were discussed at the beginning related to salaries and overall compensation should be clear. I don't think that we should cast judgment on whether it is the right or wrong thing to be doing. We just need the dispassionate analysis of what is happening so that we can evaluate it.

But so I would like to propose the expansion of the audit to include this category of safety net type expenditures. And I would leave it to the Auditor to define this in the way that he and his shop would find to be the most useful. But just distinguishing between that classroom instruction time, which clearly some of this really isn't like showers, but is also not redundant managerial padding and redundant government services or government positions. So that would be my hope.

I don't know if, chair, you think I should make that into a motion or if the Auditor wants to respond to it. I know we've made some changes previously at this Committee just on the fly, where the Auditor can accept suggestions about how the audit is being conceived.

I'm going to ask that the State Auditor respond to that.

Yeah, thank you for the question. You're right. Minor changes that don't substantially affect the audit request can be made and incorporated. But I believe the Audit Committee also has its own rules in terms of if substantive changes to audit requests are made, how that process works, how those rules might be suspended. When we were working with the Requester's Office, we were drafting this from the standpoint of really trying to evaluate compliance with the 50% law because that was our understanding of what the requester was after.

And then, secondly, understanding the administrative and Executive salaries, FTEs, and how those amounts have changed over time. This additional scope item focusing on safety net spending, whether it's on food, housing, other items. Although it may be valuable, I would defer to the chair in terms of how the Audit Committee works its own rules in terms of what's permissible. But I would view this as an additional scope item that would add cost to the audit. That wasn't contemplated in our original analysis.

Does that provide clarity to you? Otherwise, I'm going to

Well, I have some other thoughts, but I would defer to my colleagues to make their comments too, to see what the other thoughts are.

Thank you. Does the author have any comments first before we go to another....

No, I have to discuss with the sponsor. Okay. I'm open to any suggestion, but we'll see how this turns out.

Thank you, Ms. Boerner.

Well, I want to piggyback on what Senator Blakespear said since 1961 on our entire system and public education, whether it's a UC or.

CSU or K through 12 or community colleges. We have drastically expanded the scope on what their function is in our society. And I think, and I don't know if don't want to assume this is what the Senator might have suggested is you already have an item 10 in your scope that says other issues significant to the audit.

And I could imagine you could have specifically under item 10 costs associated with student support, like addressing food insecurity, educational technology, housing, and anything related directly to the legislation we have passed to really provide that social safety net that the Senator was talking about. Could that be done under the scope of item 10 and that just be broken out that way because you're going to collect that information anyways, correct?

Thank you for the question. I could see how you would read it that way. I think traditionally, and I don't want to speak for prior administrations, I've been the State Auditor for a few months now. I'm sensitive to stepping beyond the bounds of what a request is. You're right. We do add that catch all objective at the end of our audit request in case there are other issues that pertain to the prior objectives.

Above that, we don't want to leave something important on the table because it wasn't specifically asked for in the original objectives, but just pointing out for the group. I think when you start adding objectives that go, in my opinion, beyond how we originally scoped this audit, it can be done. You have your Committee rules in terms of what the process is for amending audit requests and what that process entails. We are more than happy to do whatever this Committee authorizes and directs us to do.

I'm just pointing out that this was something that wasn't contemplated when we were working with the requester's office and it wasn't something we were contemplating when we drafted the audit analysis. And I just wanted to be clear for that for Members as you're contemplating that here.

So just I want to clarify what our State Auditor is saying in terms of what comes before this Committee and the adopted rules which we voted on at their first meeting regarding audit requests. Rule number 14 says that at the time of the hearing, an audit request may only be amended if the amendment does not substantially affect the feasibility, scope or cost of the proposed audit. So That's an important line that I'd ask the Auditor. I would assume if we are adding anything, this will increase the cost of the proposed audit. So that means make sure that is that correct?

Well, all of this is preliminary. Recognize that when we draft these audit analyses, we do so they're confidential. We don't talk to the audities to understand what records are available or the time and effort involved to get them or analyze them. It's essentially our best guess. But having said all that, again, if it's the Committee's direction that you want us to do this additional work. And I don't have with 100% clarity what that means in terms of cost or time. I just want to put that out there.

And the other thing that I think is important, if someone hasn't had an opportunity to submit a request for an audit yet, there is an exchange that occurs between the author, the person requesting and your office to make sure that objectives and the work that you're doing is defined.

Do you feel from what you've heard so far and we have more people, so before we even make a decision here, we have other Members who want to speak that you've been given that kind of direction or are you still unsure of what additional direction has been requested?

No, I think I understand what the Committee is asking for. I'm just trying to be clear in terms of articulating what it was when we were developing the audit analysis and it did not include this.

And I'm going to ask our author, because want to be respectful since we would not be having this conversation at all if it weren't for his insight into this important issue, to think about the comments that are being said. And it's important for me to hear your response. If you want to give it now or there's more Members who want to speak, you know what, go ahead, whatever is easier. But I'm open to any suggestions and everything.

Work with our sponsors as well to see what we can and can do based on this new information we're hearing right then. I'll probably come to you to provide some testimony, but let's hear from others before you do that. Senator Laird, then Senator Wilk, I was.

Going to agree with the comments of Senator Blakespear and actually offer another example that she didn't list That's the subject of state legislation and she didn't list healthcare services. And when I was in the Assembly at the time and this is a tribute to the fact that things change over time. So originally there was a law that said you could not charge students on student aid, special fees, that they were exempt from special fees and so they were exempt from the health care fee.

And then we were so successful at student aid that at some colleges it went from 10% to 40%. So colleges were cutting health care because they couldn't get it. And the health care they were delivering was primarily to the students that were exempted from the fees because they were Low income and really needed the health care. So I did a Bill that ended up getting enacted after a lot of controversy that allows the optional levy of the fees on people on financial aid for health care.

As a result of that, there's more positions in healthcare. And so if you're looking at the balance of positions, it's like that is something that as a result of legislative action affected the balance of positions. And so the thing about it is, I have a sense that we're caught in a procedural thing where basically I'm sensing people. When I was a community college trustee and I left 20 years ago to come to the Legislature, I never heard about housing insecurity.

And now I ask at all my campuses, and it's between one and 4% of the student body is unhoused, and we are asking the campuses to have positions and programs to deal with it. And so this is a very, very relevant thing. And I think our question is procedurally, how can we work with the requester and the Auditor to make sure that we can accommodate that within our rules? That to me, is now our question because I'm sensing that people want to do it. The proposal was open to it, and it's something that would have to be part of this for it to have some validity going forward.

Thank you, Mr. Laird. Sorry. Mr. Wilk was first. And then we'll go to Mr. Seyarto.

Thank you, Mr. Chair. I spent six and a half years as a community college trustee before coming to the Legislature, and so I want to thank you for bringing this issue forward because it is an important issue. I share the frustration that this is the only segment of higher education that has to comply with this. And again, it's because it was spawned out of the K 12 District. I personally think this is probably not even relevant anymore because of all the challenges that these students face.

I actually did a Bill 10 years ago. I had a legislative victory in this Committee, and then it got killed in appropriations to broaden the 50% rule to include some of these other things counselors, librarians, and I think since 10 years ago it should be broader. So I hope you would be, if we can, to be opening to Broadening, because again, it's about student success and student access and I think That's what we're all here for.

And I wish we had talked earlier because I definitely have some thoughts and I do share concerns about the increase in administrators. I certainly have seen that and I think that is a legitimate issue. So I don't want to dismiss that at all. But ultimately it's about student success and student access. And I agree with all the comments That's been made here.

Thank you, Senator Seyarto.

It sounds like we're adding a lot to what we're talking about today. And if the community colleges were a little concerned about their ability to do their job and do this all at the same time, that we're probably going into going to make it a lot worse. If we do want to add all this in, this isn't going to get done today, I don't think. And I feel like if it can be done in a couple of different bytes, that might be more manageable.

But I think I've heard three different things we want to put in, and those things are not easy to do an audit on if not answering for you. But it just senses for me, I sense that we're expanding this into something That's large, very large, and it'd be very difficult. And we need more information, frankly, from our auditors on what it entails, how much it costs, and what we're going to accomplish.

Chair, could I make a suggestion? Yes. I wanted to just see if there was a way to narrow this and make it possible today. So the question that you were asking is really a binary question. Is the 50% law for instruction instructors being met or not? And the answer might very well be no.

But then, in the explanation of why it's not being met, it would be explained that this large category, whatever it is, is not just admin, which means non instructor, but it's this other, which I'm calling social safety net. But you could call any other thing category that the Legislature may or may not have asked for, but is happening at community colleges. And so it would just give more color to the actual audit.

So we would be able to evaluate as legislators, do we want to eliminate the 50% law? Do we want to expand it to include more categories? Do we want to define it differently? But you'd still be able to ask your core question. And I think in order to answer the core question, you're going to be looking at all of the titles of what people's jobs are anyway.

So, you'll know, if they're working in the homeless, students living in their car, That's in their job description, or they're an adjunct admin person. So it seems like if we have it as a concept that it's not just instructors or admin, but there's this other category that it could fall underneath that binary meeting it or not meeting it. Here's what's happening with the not meeting it and why. Because to me, it seems like this might be possible for the Auditor to do.

I think the most important person to answer these questions is our State Auditor. If the State Auditor doesn't have a clear direction and understanding what you're going to be auditing, then no matter what we discuss here, That's not going to be helpful. I think it's pretty clear what the author is requesting, so let's set that aside. That's very clear. The comments you're hearing, which I agree with Mr. Seyarto now seem to be maybe a little bit different.

Although narrowed down just now, is it narrow enough for you to proceed today with that? I would think that there could be any number of categories that could meet what I agree with is an important safety net or aspect of funding for community college. But we'd probably have to go and look at what those are and define which programs are in and which ones are out, I would think, but I don't know if give you a chance to respond.

Well, again, we'd have to look at the community colleges and what data that they have. But your point is well taken for those positions and costs that don't count towards the 50% rule. We can try and categorize them into different categories. Broadly speaking, how broad we have to go is really going to be dependent on what the records are like and how many different classifications of people there are.

But if there is some proportion of staff at these community colleges that don't count towards the 50%, but they are in these safety net programs, perhaps That's something that can be related to the status as an explanation for why an agency or why a community college isn't complying. But I think it would be presented more informational. The community college either did or did not comply with the rule. Here's what they did. Here's what we found.

And for those that aren't counted towards the 50%, here's the various buckets that we were able to classify them in, whether it was for food or housing support, to the extent that those records are available.

I think That's sounding more and more like a fair way to move forward. Because if you've read audits before, even in this space with the funding that was put forward, and this audit just was released this year, I believe, on faculty funding, and there was very direct responses as to whether they were meeting it or not. But then there was a lot of in the narrative in terms of response from the community college as to why they weren't meeting them.

And they included variety of reasons. I could see the same thing happening with this audit, especially with that direction that you just provided. So I would be comfortable with that, and I think that makes sense. Ms. Boerner, did you want to make some additional comments?

No, I think we should probably then be more specific in our audit scope when we have something that says or anything else that would be significant to the audit. There's no way to look at the expanded scope of community colleges and not think that expanded scope, especially from the Legislature, would be significant to this audit. So if we're going to have that line in there, I'm fine with how you propose going forward. I think That's fine.

But then we should be more careful that we're more delineated, because when I read all my information and my briefing for today, I was like, zero yeah, you can totally include that because there's no way That's not significant in meeting that 50% or not. Like, That's just logical. So I would just ask that be more tailored in the future if That's what it means, is that we couldn't expand it to something That's so obvious that it's affecting the 50% rule.

Okay. Did you have more comments?

Ultimately at the end of the day, my office works for this Committee. We take our direction from this Committee. I just wanted to point out what your Committee's rules are. More than happy to take any direction this Committee gives my staff in terms of what's included in the scope of the audit.

Okay, I think we're getting there Mr. Laird.

I think we're there. Although when I first asked to comment, I was way away from the conversation, and then it caught up with me. And I think that it was misunderstood that this was being broadening because it was just one category. You're going to have to categorize every position as it is. That is part of the option now to decide where it is against the 50% rule.

We're just adding one category of categorization to make sure if it's categorized as special needs, we see how that fits within what you're doing. That's work that he's going to have to do anyway. It wasn't all these extra categories. It was just things that were in one category that might be the categorization. And I think you got there in sort of the explanation. Well, no, there's a whole issue, a lot of categories in that.

Don't misrepresent it, because it is really you have to look at 100% of the positions and decide what they are, and if it is non teaching, but it's really saving students that didn't exist before. Just to check when you have to look at it anyway is a fair thing. That's going to be work that is done anyway. And I think his solution got us there.

Yeah, I agree. I think the way you presented that gets us to meeting the author's request, I think getting us more clarity as to the number of positions or a flavor, certainly, or a sense of what other positions exist that might support students, but that are not counted as part of the 50%. That could give us more information and could give us an opportunity for future decision making as Ms. Blakespear and Mr. Wilk has already attempted to. Did you have something you wanted to add?

I just wanted to add, and I haven't done it in a number of years, but the last time I checked at community college, there was one counselor for every 1582 students, and that just doesn't get the job done. I had to go an extra year of college because I thought I had everything and I didn't because that was on me, that I didn't access those counseling services because they were available. But now it's very difficult for students.

So I think between that, all the other changes and how these students learn, and all the challenges that we have in society in General, I really like the way that Senator Blake Spear laid that out, and I think it does fit within the scope of what Assemblyman Rodriguez wants to do. And I'm excited about this.

Thank you. Senator Seyarto, did you have additional no? Okay, so let's see if we can get us to a point where we can all agree That's always the attempt, at least in this Committee, that I've chaired. Mr. Rodriguez, any closing comments or your witness like to provide any additional okay. Taking all your comments into consideration, did you like to provide some comment?

I'll be brief, Chair Alvarez. Thank you. I'm very excited about Senator Blakespear's proposal. I do believe it involves a separate audit, though, because I've just thrown down all what I thought were safety net. So healthcare services, mental health services, food pantry, housing and securities, transportation, tutoring, access to instructional, office hours, textbook prices, and then EOPS, Bunte, and Mesa are all essential programs for our students to succeed. I would be so supportive of having an expansive audit that just focused on student safety net issues.

In regards to this audit, I think tweaking the support staff comparison of administrative growth versus faculty changes versus student enrollment versus the classified staff, and then identifying those classified staff by whether they fall within the student safety net category, I think that that piece of information in and of itself would be helpful. I think anything beyond might actually dilute the outcome or the information that we're trying to gather.

What I would be uncomfortable with, just me, is trying to incorporate such a complex and comprehensive and needed analysis as an add on to an existing audit and then having the outcome of that audit be a determining factor in deciding where we go in the future. I would love to have an audit that focuses just on safety net issues.

Thank you. Okay, we will go on to public comment now. Is there anyone in the audience who'd like to make a comment on this? Please come forward and identify yourself and provide comment. You will have two minutes.

Thank you. Mr. Chair and Members Tristan Brown with the California Federation of Teachers, who represents classified and faculty Members at our community college system. And we have heard from many of those Members that the gradual shift that we're seeing of our members'work being downgraded to part time work rather than full time, to always scrambling for scraps in the budget to make all of the programs that were listed today successful. You don't have programs if you don't have staff to actually implement the programs.

And so we were very excited when Mr. Rodriguez brought this forth to your Committee. We're very excited at the direction that it's now heading. This has been a great discussion, so we thank you all for that. We hope this passes and that we can continue the great work after we have all the sunshine on the implementation of this current law, which is, I think, is important to iterate. They're supposed to be doing this. Let's make sure everything's happening correctly. So we appreciate it. Thank you.

Thank you.

Chair Members, Austin Webster. On behalf of the Faculty Association of California Community Colleges, Just want to align my comments with my colleague from CFT, as well as thank the author for this. Certainly, we agree that more data is great as we're looking to see how we can support our students in eventually supporting their overall success. So appreciate the aye vote.

Andrew Martinez, Community College League of California. We appreciate the conversation today. We think it was terribly insightful. We have been thinking about it at the colleges and districts that are part of the Community College League about equity and the wraparound services that it needs. Our students need to be supported to be successful.

That means more and more resources outside the classroom, and that means that there's going to be a harder and harder burden for us to meet that 50% threshold, and was alluded to in one of the letters that was submitted to you from College. They have to make really, really tremendously minutiae, detailed decisions to make that work, and it's becoming harder and harder. We appreciate the focus on the Legislature, on equity. We are in line in agreement with you, but it is going to be a burden as we go forward to meet those goals and to meet the objectives and ensure that our students successful.

Good afternoon, Michelle ... Underwood on behalf of the Association of California Community College Administrators, to align my comments with that of the Community College League, who actually just pointed out, who I'm also speaking on behalf of Sierra College, the Superintendent Chancellor was not able to be here, but submitted a letter.

And I wanted to focus on some of the things that fall outside of the 50% law that are so successful or so critical for student success, so That's things like collective bargaining, academic senates, the encouragement for faculty to participate. So these are all things that fall outside the classroom, fall outside of the 50% law, but are so important for the student success. As Andrew just mentioned, they are in compliance. Sierra College is in compliance with the 50% law.

They are included in the audit because of their proximity to the 50% law, but they go through the audit every year and they are in compliance with 50%. But under the scope of this audit, they would be included. And they every year go through the process of making sure that they are in compliance with the 50% law and sometimes have to add positions within the 50% law to counter positions that they're adding outside.

So that if they're adding a counselor outside for student success, they also have to add a faculty Member whether they need it or not. That's how much that they focus on making sure they're in compliance. So I think, in conclusion, the hope is that from this robust conversation, there will be a bigger look at student success and what things both fall inside and outside of the 50% law to make sure that our students are successful in our colleges today. Because they're so very different from when the 50% law was enacted. Thank you.

Thank you.

Hello, Mr. Chair and Committee Nick Cruz with the California Labor Federation and also on behalf of SEIU. Just want to align ourselves with CFT and speak in support of this audit. Thank you.

Thank you. Anybody else wish to provide public testimony? Okay, seeing none, it's your turn once again. Assembly Member Rodriguez, to make a closing statement. Well, actually, before you do that, let me just make sure I think the Auditor has some clarity and the Committee as well, appreciate you all engaging conversation.

I guess we have one of these every hearing where we engage in conversation, I try to make sure we resolve and come to an agreement to provide, certainly the requester, the author, the audit that they are looking for, but also the information that we as legislators would like to have to make better policy in the future. So I think we got there. I appreciate everybody, Senator Blakespear, Assembly Member Boerner and others providing that narrowing of focus.

I think your statements earlier meet that moment and that request, and it's pretty clear to me, but I just want to make sure that it's clear to all of us as we take this vote as to what to expect, and obviously also to the author who's requesting this as to what to expect with an audit. It's the items you have outlined, and in addition to that, a categorization of positions in a way that allows us to identify and understand positions that might be student support services or safety net services. I think That's the phrase that was used. Is that your intent, clarity? You have enough direction to do that?

Yes, I think I have enough clarity for that. Just as long as my office has the flexibility in terms of is it subsets within that safety net or is it just the broad category safety net? As long as we have that discretion based on the quality of the data That's available, that would be fine.

And I do think that information will be useful to us going forward and perhaps an additional audit or different policy making as it relates to funding for our community colleges. Does that provide you with some clarity to our requesting author?

I think so.

Mr. Rodriguez, I'll give you an opportunity to close.

Once again, I want to thank all the Members of the Committee for this robust discussion. Obviously, a lot of good information was presented and obviously discussed as well moving forward. So with that said, I correctly request an aye vote on the audit.

Thank you very much, Mr. Rodriguez. I appreciate your patience and engagement here. So with that, we have a motion on this item.

I'll ask the secretary to call the role and please don't leave after this vote. We're going to also call the roll on the items that you've wait. Do we have a motion on this. Did I hear a motion? I heard a lot of Ms. Boerner moves. Mr. Wilk. Seconds. Thank you very much.

Motion to approve audit request number 23. One, 26. California community colleges instructor and administrator spending by Assemblymember Rodriguez. [Roll Call]

That passes. Thank you very much again. Now, we're going to call the roll on the items that consent agenda and a few other votes. Secretary, please call the roll.

Motion to approve items on the consent calendar. Assemblymember Wood. Wood, aye. Motion to approve audit request number 2023-127. California Public Utilities Commission energy efficiency programs and oversight by Assemblymember Ting.[Roll Call] Audit request number 2023-129. [Roll Call]

Okay. We will keep open for five more minutes for any missing Members.

2023-126. California community colleges instructor and administrative spending by Assembly Member Rodriguez.[Roll Call]

Thank you. So five more minutes. We'll hold this open for the items that are remaining. Thank you. Thank you very much. Seeing no other business, the Joint Legislative Audit Committee is now adjourned.