Joint Legislative Audit Committee

So, seeing that we have a quorum, I'll ask the secretary to please call the roll.

[Roll call]

All right, we have a quorum present. Before we take any of the items on the agenda, there are a couple of housekeeping items that we need to take care of. We need to elect a Chair of this Committee and adopt the Committee rules for this session 23-24. First, the Committee needs to select a Chair. This does take a majority vote of JLAC members. I need to have a motion and a second for this.

I will move that we elect Assemblymember Alvarez to be the Chair.

Thank you. We have a motion by Senator Blakespear, seconded by Ms. Rubio. Secretary, please call the roll.

The motion is to elect Assemblymember Alvarez as Committee Chair. [Roll call]

Rules have been approved. Thank you, Members. Now we need to adopt the Committee. Sorry, that was for the Chair. Now we need to adopt the rules for our legislative session. A copy of the rules was provided to all the Members before the hearing today. These rules are very similar to the prior Audit Committee's rules for the 21-22 session. And again, Members, this takes the majority of the vote of the Committee to approve the Committee rules. Is there a motion and a second?

Moved by Senator Wilk, seconded by Assemblymember Rubio. Secretary, please call the roll.

The motion is to adopt the 2023-24 Committee rules. [Roll call]

The rules are adopted. Thank you, everybody. I want to start by letting you- Well, first of all, thanking all of you for being here today.

And I want to quickly let you know that the Committee is charged with selecting the state's first Inspector General for the California High Speed Rail Authority. The Committee has received applications for the position and is moving forward with that process. Unless there are any other questions on that, I wanted to just share some comments. As Chair of the Committee, I've had the opportunity to have conversations with several members of the Committee in both houses.

And first of all, it's really an honor to be able to serve as Chair of this Committee. I'm looking forward to the work this Committee will do, really focused on trying to make sure government works best. When government works best, that just means that our constituents, Californians, have better services.

And that's what, for me, in this role, I really value the opportunity to engage in fact finding missions and get information that could be useful to all of us as we move forward with trying to improve California, whether it's legislatively or through process improvements at the different departments. I am aware that in the past, oftentimes, audits can create an adversarial relationship between the Legislature and the Administration.

It is my intent and my hope that we continue to one respect the separation, certainly, of powers of the Legislature and the Administration, but also to try and work collaboratively. In fact, some of you may have noticed that in today's agenda, a couple of items have been pulled.

One was an audit request that I had put forward, and that was as a result of conversations with the Department on how to potentially improve the audit and make it better and maybe come back with a more comprehensive audit that does a more comprehensive review of the goals that I'm hoping to accomplish with my particular audit.

And there are others that have been pulled back as a result of conversations, of also figuring out how to make these audits, perhaps the scope of the audits, a little bit more useful for all of us. That is my intent.

And I invite anybody who's interested in moving forward with an audit to engage our office and the JLAC Committee staff on conversations and how to do that so that we can accomplish the goals of every member who wants to see an audit and the work that this Committee is charged with of oversight and improving our government. We have other audits today where there's been a combination, and I want to thank Members who have done that, who perhaps submitted audits on similar topics.

And we asked for folks to get together and talk about how to potentially again create a better pathway forward. And we've been able to accomplish that. So I'm looking forward to that being the case with the work of this Committee this year.

And again, I welcome every Member that's interested in moving forward with an audit to really engage, certainly with the departments or the agencies that you're interested in auditing, but also with our JLAC staff, so that we can again produce a scope that will hopefully get you answers to the questions you're really seeking to accomplish. So again, I thank all of you for indulging me in that, and I look forward to all of our work together.

And with that, we also not only have a new Chair of this Committee, but we have a new State Auditor. And our new State Auditor, who was just selected a few months ago, is here. And I'd like to welcome Mr. Grant Parks, who is our State Auditor. We look forward to a productive relationship with the Auditor's office, and I invite Mr. Parks to share a few words, if you like.

Thank you very much, Chairman Alvarez. It's a pleasure to be with you all this morning. It's a privilege to represent the hardworking and dedicated staff of the State Auditor's office. And I look forward to echoing the Chair's comments about balance, tone, working with the Administration, and ultimately trying to get to a good spot at the end of our audits, where the ultimate goal is to improve government. We're not looking out to get people or to gain media attention, per se.

What we're really trying to do is just take an honest, hard working look at how government programs are operating and how collectively we can work together to make them better and more efficient. So I appreciate the Chair's comments.

Thank you, Mr. Parks. And again, congratulations, and we look forward to years of your work. Thank you. Okay. I would like to note that the audit request number 2023-101 which is the Santa Clara Valley Transportation Authority, is no longer on the consent calendar. That has been pulled from the consent calendar, and it will be presented today. So with that, that leaves us with 11 still total audit requests to consider this morning.

Two of the audit requests are on the proposed consent calendar, and nine will be presented this morning. I will also note that of particular interest and probably engagement, I have lots of questions on, make sure I get the audit number, item number six on our agenda. It's 2013-104. Senator Glazer's request. I do expect that to be back and forth with some questions that I know I have.

And so invite the colleagues who are here, hopefully to stay with us and listen to that conversation as we make a decision. Obviously, if this is an opportunity for the public to comment and you to ask questions. I hope you utilize that time to that extent. And some just have more questions than others, and that's one that I think will keep us today a little bit longer.

Mr. Chair?

Yes?

Would you like a motion for item 2 and 3 on the consent agenda?

I would. Thank you.

I so move.

We have a motion by Senator Laird, second by Senator Rubio. Please call the roll.

The motion is to adopt the proposed consent calendar. Audit 2023-105, Franchise Tax Board Middle Class Tax Refunds by Assemblymember Alvarez. Audit 2023-106, University of California Online Program Management by Assemblymember Alvarez. [Roll call]

The consent agenda is approved. I should have made a comment on specifically the item on the middle class tax refunds 2023-105. I look forward to the information that we gather. I know that there's been a lot of headlines that's already been captured, the results of the program.

Again, as stated earlier, I'm looking forward not to create new headlines, but to certainly get down to the facts and information and understand our systems when it comes to the Franchise Tax Board and the work that was done to get dollars out to our constituents. But thank you again for your vote and the consent agenda is approved. Thank you very much. For the audit request that we present today, we will follow Audit Committee's established format with Members presenting their audit in sign-in order.

Thank you to the Members who've showed up early. I appreciate you being here. Members of the Committee will present their audit request. Each Member will have up to two witnesses to make brief comments during their presentation. This will be followed by the State Auditor's presentation of his office's analysis. I will then invite the agency to come forward to make a brief comment and answer questions from the Committee.

And this will be followed by the public being able to comment on their support or opposition for each of the audit requests. So we will be starting with the first Member. Assemblymember Weber was the first one to join us today. So that is item number 10 on our regular calendar. It's 2023-115, Departments of Health Care Services and Managed Health Care Access to Behavioral Health Services for Children. Assemblymember Weber, welcome and thank you. Go ahead.

Good morning, Chair and Committee. I am here to request the Joint Legislative Audit Committee approve a state audit regarding the lack of timely access to behavioral health services for children in the medical and California Children Services, also known as CCS programs. Medi-Cal is responsible for providing comprehensive health benefits to more than 6 million of our children here in California.

If a child has certain chronic medical conditions, they may also be included in the CCS program, which provides diagnostic and treatment services, medical case management, and physical and occupational therapy services to more than 185,000 children under the age of 21 with CCS eligible medical conditions. Examples of some of these CCS eligible conditions include, but are not limited to cranial facial anomalies like cleft palate, disorders of the nervous system like cerebral palsy, and disorders of blood like sickle cell anemia, among other conditions.

The Department of Healthcare Services, along with the Department of Managed Care, are responsible for ensuring health plans provide timely access to health care as required under the current law. Health plan networks providing care to Medi-Cal enrollees must meet these timely access standards and these standards include wait time to access urgent and non urgent care appointments. The specific times for appointments in the current law for Medi-Cal or CCS enroll include urgent care appointments within four days and non-urgent care appointments within 10 to 15 days.

I am concerned that California is not fulfilling its obligation to ensure that children enrolled in Medi-Cal or the CCS program are obtaining behavioral health services within timely access under the standards in our current law. Children with these chronic conditions not only need medical care, but also behavioral health services to promote their mental and emotional well being. We all know that addressing mental health needs is just as important as physical health, especially for our children and teens who are particularly vulnerable.

For this reason, I'm requesting that the State Auditor answer the following questions. How long does it take for children to obtain behavioral health appointments in the Medi-Cal program and CCS program? And what are the reasons for the delay? Are there any trends as act related to delays in timely access for certain ethnic groups, certain regions of the state, or any trends for certain medical conditions? What impact has this had on the health of children?

And finally, what has been the trend in payer source for emergency room visits? And how many behavioral health providers in California accept Medi-Cal? This audit is sponsored by the California Society of Plastic Surgeons and I'm joined by Tim Madden, the organization's representative.

Thank you Chair, Members. Tim Madden, representing the California Society of Plastic Surgeons and we have a number of our plastic surgeons, largely academic centers, are part of what we describe as a craniofacial care team. These care teams are comprised of a number of different providers, not only plastic surgeons, but oral surgeons, dentists, speech therapists, pediatricians.

And it's their job to take care of these kids from birth, really up to age 18, like kind of map out all of their procedures over this timeline for a number of the kids, particularly the ones that have cleft lip and cleft palate conditions, which are very visible conditions, they're subject to teasing and bullying in schools.

And when they are in a part of their care teams, the plastic surgeons feel it's necessary to then refer them to a behavioral health specialist to get that care to help them through this tough time. Unfortunately, we've had a really hard time referring them to behavioral health specialists, for commercial payers to private payers, it's not as bad, but particularly for Medi-Cal and CCS, it can take months at a time, and there are certain situations where they're just not able to connect to services at all.

We've heard stories, unfortunately, so some of these kids attempting to take their own lives as a result of not having access to this type of a care. We believe this audit will shed more light on the extent of this problem, as Dr. Weber outlined.

I know for a number of you on this Committee, particularly those part of Assembly Budget Sub 1, and if I had eyes in the back of my head, Senator Eggman behind me, as a part of the Budget Sub and the Chair of Health, this topic has been discussed, and also Assembly Member Wood has been a part of a lot of these discussions. So I don't think it's any surprise that this is a problem. But what's missing is the level of detail we're pursuing in this audit.

Exactly how long does it take? And I think just as important, what's the ramifications of not having timely access to care for these kids? What happens to them? So we're hoping this will shed more light on this issue, to provide the Legislature more information to make informed decisions on how to best address this problem. For these reasons, we respectfully ask for your aye vote.

Thank you, Ms. Weber. No other testimony?

No other testimony.

Thank you. Mr. Parks, would you like to provide some response?

Thank you, Mr. Chair. Assemblymember Weber, seeking an audit on the access of behavioral health services to children. The audit is fairly straightforward. I anticipate our staff, under objectives 2 and 3, will seek to obtain Medi-Cal data, trying to understand the time elapsing between when services were requested and when those appointments were actually made. As the Member mentioned, there was a request for some detail on the demographic breakdown of those trying to access those services.

So getting information on how timely those services are by gender, by race, I think by geographic region, were all considerations that we'll focus on when we develop our planning procedures. We also anticipate in objective four, probably selecting a sample of cases where requests have been made to understand, just building the timeline for how long it took to actually get in to see somebody. We think through that process, it might highlight for us where some of the bottlenecks may be occurring.

A key aspect of this audit request, I think, also is to take a look at just how many health providers are out there that provide the kinds of services that the Member is asking for. That could be a potential cause for why services aren't as timely as we otherwise would like.

And then another significant part of the audit is trying to understand just how frequently emergency room visits are being used in lieu of the behavioral health services that I think, ideally, the program is structured to provide. Overall, it's a fairly straightforward audit request with eight unique audit objectives. I do anticipate using our IT audit staff quite a bit when we get into the Medi-Cal data and we start doing extracts, trying to figure out how many people have accessed these services and the timeliness of that. Overall, I'm anticipating roughly 3500 hours in between six to seven months.

Thank you, Mr. Parks. The agency invite the representatives. You're here, either Department of Healthcare Services or Managed Health Care, if you'd like to make any remarks or comments at this time. We have someone here. You can join us here at the table if you like. Just make sure you introduce yourself, please.

Hi there.

Go ahead.

Okay. Thank you. Melissa Rolland, Assistant Deputy Director at the Legislative Office for Department of Healthcare Services. Just wanted to be here and acknowledge the audit request and appreciate the comments related to the request. And we're happy to work with the Auditor and the Committee if it's adopted, to go through.

Thank you. Would you like to?

Good morning. Christin Hemann, Deputy Director of Legislative Affairs at the Department of Managed Health Care. I'd like to echo my colleague's comment, and we're happy to work with the Committee and also the State Auditor's office if the audit passes through the Committee today. Thank you.

Thank you both for being here. Are there any questions from the Committee Members? On this audit request? All right, we'd like to take a public- Yes, Senator Eggman.

Yeah, I would just thank the Assembly Member for bringing this forward. We recently had an oversight on this as well, and there's acknowledged time problems, there's acknowledged resource problems. So if we can drill down and see what they are and we all know that there's a huge workforce issue right now, especially as it relates to behavioral health. But we need to figure out a way to get it done. And hopefully through this audit, we'll be able to do that.

And with that, I would move this Bill.

Thank you, Ms. Eggman. We're at this point going to take public comment. If there are members of the public who wish to speak in support or opposition or somewhere in between, this is the time to come forward. Seeing none. Senator Weber, any closing remarks?

So I want to thank the Committee for considering this, and I respectfully ask for your aye vote.

Thank you, Ms. Weber. We have a motion by Senator Eggman. It was seconded by Rubio. Please call the roll.

The motion is to approve audit 2023-115 Departments of Healthcare Services and Managed Health Care- Access to Behavioral Health Services for Children by Assemblymember Weber. [Roll call]

Thank you, Ms. Weber. It's been approved.

Thank you.

Thank you. We're moving on to, again, in order we have Assemblymember Ramos. Assemblymember Ramos has a audit request on our agenda. It is item number seven. It's request 2023-107 Riverside and San Bernardino's Counties- Proposition 47. Assemblymember Ramos, welcome. And as soon as you're ready, go right ahead.

Well, thank you, Mr. Chair and Members, today I'm presenting an audit request for Proposition 47. Proposition 47, specifically for the counties of San Bernardino and Riverside. Prop 47, approved by California voters in 2014, categorized nonviolent offenses as misdemeanors rather than felonies. However, supporters of Prop 47 has stated that this Prop 47 has been able to reduce recidivism in many counties.

And in order to determine the overall effect of Prop 47, we are requesting the State Auditor's Office conduct an audit of Prop 47 focused again on San Bernardino and Riverside County. We ask that the audit include statistics regarding Prop 47 crimes pre-2014 post-2014, the impact of COVID era public safety policies on these numbers, a review of the San Bernardino and Riverside County policies on release pursuant to Prop 47 and the effects on recidivism in San Bernardino and Riverside counties.

With me today is Topo Padilla, on behalf of the Crime Victims United and Rachel Michelin, President and CEO of the California Retailers Association.

Thank you. Please introduce yourself and go right ahead with your testimony.

Thank you. Good morning to the Chair and the staff, Topo Padilla, on behalf of Crime Victims United. As the state's leading crime victims organization, Crime Victims United was an adamant opponent of Proposition 47 from the beginning. The reason is simple. We believe accountability is an essential component to every aspect of our lives, from public safety to corporations to elected officials. Accountability means consequences for wrongdoing. And we believe that Proposition 47 greatly removed that, especially when it comes to criminal activity.

By raising the felony threshold from $400 to $950, we believe Proposition 47 has basically resulted in allowing a person to steal up to $950 at a time, and they often include tax to make sure they're under that threshold, repeatedly without fear of real consequences, such as getting arrested. Think of it this way. This is the difference between a felony and misdemeanor. It is, versus a note going home or being put on detention at school.

One stays with you for life, the other one, it just disappears soon thereafter. So I think we need to really and truly look at the crime data. I say this, that I get that Proposition 47 passed, and I understand it. I don't think any bill is perfect. I don't think any ballot initiative is perfect. But looking at this one, it's had an impact on all of our lives, every one of us, especially the offenders.

As I told Assemblyman Reggie Jones-Sawyer in Los Angeles recently, let's stop these people at a candy bar rather than graduating to an iPhone and then a car and worse. Therefore, we read about these expenses and the dramatic rise in crime and the smash and grabs around the state. We see them every day on TV. These are not victimless crimes. Even in the cases where people are not harmed, the prices of goods and services are going up, stores are closing.

People that live in those communities are being affected. They can no longer go to the local drugstore. So therefore, we really and truly ask for your support of this. It is a very finite review and audit of two counties. These two counties will give us an overall look at the entire state. So thank you very much.

Thank you.

Thank you. Hi. Rachel Michelin. I'm the President and CEO for the California Retailers Association. Thanks for having me and asking me to talk about an issue that I have been very much engaged in for the past two years. And we are so supportive of this because it's something we've been asking for since really, we started seeing smash and grabs happening and the retail theft increasing across the state, because the challenge we have right now is we do not have data.

I mean, the reality is, and I will say retailers have some responsibility. Retailers, it's a lot of finger pointing. So retailers are not calling the police because the police won't show up. The police won't show up because the DAs won't prosecute. The DAs won't prosecute because of Prop 47. Prop 47, says the supporters, it's working because the data is showing it because we have all these unreported crimes. I don't think we can even address fixing Prop 47.

And our position from the Retailers Association is that there's some good things in Prop 47 that we support. We do need criminal justice reform. We need to fix it. But we can't even begin to have those conversations until we have the data to support it. That's why we're so supportive of this. While it's two counties, we think it provides a great snapshot to see. We know, prior to Prop 47, we had a shoplifting diversion program in the State of California.

We don't anymore because people don't take advantage of it. We believe that we're not going to see any real changes when it comes to homelessness and our mental health issues facing the state because we can show anecdotal data of folks coming into our stores, stealing, selling goods on the street, buying more drugs, and not taking advantage of all the different social programs that we're offering. We want to see more folks being taken, being given the opportunity to go into diversion programs.

We want to see people being able to get help that they need. And more importantly, what we're seeing, and it's unfortunate, is the trend of folks that are going into stores and shoplifting. They're becoming younger and younger. So we need the data to have the conversations. And I will commit to all of you when we have that data. I stand ready to work with each and every one of you to find solutions to this.

This is not about standing up there saying, we need to throw out Prop 47. This is, we need to make it work. I think Californians voted for this initiative thinking they were going to get a certain outcome. I think we can all agree we're not necessarily seeing that right now. And until we have the data that I think this audit will provide, we're not going to be able to have really good, substantive conversations about how we fix it. So thank you.

Thank you very much. Next, I'd like to ask Mr. Grant to provide some feedback.

Thank you very much, Chairman Alvarez. It's a fairly straightforward audit. I think an objective to where we would start is trying to get our hands on state level data that may pertain to those two counties at San Bernardino and Riverside. I expect the Department of Justice, Cal Department of Justice, may have some data that is relevant. Again, trying to focus in on Prop 47 eligible offenses, trying to see the pattern pre-Prop 47, post-Prop 47.

If that information isn't available, obviously we'd be doing additional work down at the local level at San Bernardino and Riverside. We'll be going down there regardless. For objective three, I preliminarily envision that we'll be probably hitting six different agencies down there, three in each of the counties. In terms of law enforcement, I think a fundamental question of this audit is, given Prop 407's passage, is it crime is going down or is it just not being reported anymore? And I think that's one of the key things that our audit is going to try and get at to the extent possible.

That's one of the reasons why, in objective three, we're really trying to understand the volume of calls that have come in from the public to the police and understanding have police policies changed in terms of what the typical response is to a Prop 47 type offense, and then also getting towards the objective four, towards the end of the request, really trying to understand recidivism rates again, for Prop 47 eligible offenses.

What did it look like before the passage of Prop 47 and how has that changed after the fact? Again, fairly straightforward audit, only four unique audit objectives. Again, there is an IT component in terms of trying to extract data from the Department of Justice, which obviously would include some data validation and additional work on our end. But I'm preliminarily estimating about 3100 hours to do the audit, which is roughly six months.

Thank you, Mr. Grant. Do we have any agencies that like to make comment on this item? Anyone present for this item? Seeing none. We now will go over questions from our Members of the Committee.

Thank you, Mr. Chair. Just a question. I don't know if the audit's direction can include this at this point or not, but a question for the author. It seems to me, based on my own county, obviously that could be different from the two counties that are the subject of this audit, that there's a lot of misunderstanding about whether or not misdemeanor charges on conviction qualify for jail time, incarceration time.

What we hear a lot from constituents is complaints about Prop 47, that what's happened is basically criminals go free, meaning as if they aren't eligible for jail time.

We also hear from some law enforcement agencies, and I'm not going to get specific because they're not here to clarify on their own that, since Prop 47, they have been reluctant to engage in bookings on some suspects and in effect, are doing what I would call a patrol decision, executive decision, sort of catch and release, rather than bringing people in because of a perception that that suspect is going to be released and out on the street anyway.

Now, some of that may be urban legends, some of it may be true. I can only go by what people tell me as an elected official, but I think the question that would be great for the Auditor to follow up on is what is the differential between folks who are booked under the new reduced sentencing scheme of Prop 47 and receive jail time versus those who are booked and don't receive jail time versus those who are never booked at all based on patrol stops?

I think that would really give us a true indication of what's happening between what may start off as a routine traffic stop and in some cases end up in jail time, many other cases not. Anyway, I'm sorry if that was elongated. There's probably a much quicker way of, concise way of saying that. But I know I had a chance to exchange a communication with you, Assemblymember Ramos, prior, so hopefully that question is clear.

Thank you. Thank you for the question. And it is our hope to identify within Prop 47 from the call to the actual booking or not booking in between. So the questions that you're asking, I think specifically to the catch and release, the site and release, or just right there within the patrol officer's discretion, I believe I would be open to having that also looked at, and I think it probably would fall under category three.

But we will clarify that with the Auditor once the audit continues to move forward. So let's take that into consideration and make sure that that's part of it.

Thank you. Thank you, Mr. Chair.

Thank you, Senator Cortese. I would just remind the Members of the Committee that we cannot substantively change the audit scope. Again, another invitation to everybody to reach out to authors ahead of time, to JLAC staff, but good input, and I think we'll leave it to the Auditor. I think he heard feedback, if you'd like to respond.

Yeah, just a quick response. I think when we were planning the audit and envisioning the kinds of steps we would be doing at the counties, clearly trying to get an understanding of how many individuals who have Prop 47 offenses are being placed in jail versus being released, I think that will come up in the nature of our conversations with law enforcement and what their procedures and implementation practices are for Prop 47.

Good, Senator Cortese. Okay, Senator Seyarto.

Thank you very much. And thank you to the author for bringing this request forward, Assembly Member Ramos. I think it's important in today's environment that we actually separate fact from fiction, and that's what these audits are accomplishing. And I believe that's what you were trying to do with this audit is there is a lot of- I mean, you can read articles on it every day, just go Google it, and there'll be an article on Prop 47. And the perspective of that article is the perspective of the author.

It's not necessarily a fact. And I think, if I'm not mistaken, what I perceive is that you're just trying to get the facts about Prop 47 and the actual parts of it that are working, and perhaps some of it that might not be working. It might all be working. We don't know, and we can't trust a lot of the things that are out there.

So having an independent audit, to me, is critical in evaluating whether legislation or propositions, whether it's passed by us or it's passed by the citizens, are able to have an objective look at the outcomes and ensure that it's doing what the vision of it was. And so, thank you very much for bringing this. I think it's important. I think it's important for the public also, so that they can see what are the actual results.

So with that, I will make a motion when the time is appropriate for it. But affirming that is your goal, right? It's just getting the information.

Thank you. Thank you, Senator Seyarto. We will move on, unless there's any other questions by Committee Members. I see none. Members of the public, anyone wish to comment on this? I don't see anybody standing or raising their hand. So, Mr. Ramos, would you like to close?

Thank you, Mr. Chair. Thank you for the questions and the comments. The goal of this audit is to take a neutral, objective look at Prop 47 and to determine the effectiveness. That's the main purpose of requesting this audit. I respectfully ask for your aye vote.

Thank you, Mr. Ramos. We have a, I think, intended motion by Mr. Seyarto to approve and second by Mr. Valencia. Secretary, please call the roll.

The motion is to approve audit 2023-107 Riverside and San Bernardino's Counties- Proposition 47 by Assembly Member Ramos. [Roll call]

That's approved. 12 to zero. Thank you. Thank you, Mr. Ramos. Moving on to Senator Seyarto. Senator Seyarto will be our next presenter. He has item number nine on our agenda, which is 2023-112. Department of Housing Community Development Mobile Home Residency Law Protection program. Mr. Seyarto, welcome and proceed.

Thank you, Mr. Chair. And I'm here to propose audit number 2023-112. First, I would like to thank the chair committee staff for working with my staff and giving me this opportunity to present this audit request. My audit request is to examine the use and performance of the Mobile Home Residence Protection act program, or MRLPP, for short. And I don't know if that's short, but to clarify, I am not auditing the policy or purpose of the MRLPP, but simply seeking to understand its performance thus far, since its implementation in January of 2019 and the operative start of it in 2020. The MRLPP is set to sunset in 2024 and we will need to assess and evaluate the program this year to address the sunset. To discuss this more, I have here with me Chris Wasaki, who is a state advocate for Western Manufactured Housing Communities Association, and Andrew Govenar from governmental advocates. Andrew will not be here, so I just have Chris Wysocki.

Mr. Chair, Madam Vice Chair, thank you for the opportunity to speak with you today about the Mobile Home Residency Law Protection program. My name is Chris Wysocki and I represent WMA. WMA wants to make sure, first of all, that we have more inspections in mobile home parks. This ensures that park owners and residents alike are protected and they're made aware of violations that be corrected in a timely manner. Unfortunately, HCD is already overworked and understaffed. The MRLPP was created in 2018, began collecting fees in 2019, and became operational in 2020. It's added more responsibilities to HCD, which already operates the Mobile Home Assistance center and the Ombudsman program, and these programs provide HCD and residents an avenue to collaborate and lodge complaints. When the MRLPP was created, HCD estimated that the program would refer anywhere from 3400 to 4700 complaints a year to a legal services provider. An annual fee of $10 per space is collected by HCD to Fund the program, and this fee can be assessed to residents. HCD does a good job of reporting the complaints received, and the results were surprising to us at WMA. The last report was made public on March 10 of this year, and the results were surprising. Since the inception of the program, 3866 complaints were received. HCD has processed 3550 of them. Yet over the last three years, since the program became operational, only 77 cases were referred to a legal services provider, and only 28 of them have been resolved. No matter how many complaints are resolved, the lack of substantiated claims shows a lack of the need for the program. Further, over the lifetime of the program, HCDs collected more than $11.2 million, but spent just under $4 million. That means a surplus exists in this account right now of approximately $7.3 million, HCDs received fewer than 95% of the complaints that were expected. WMA believes an audit of the MRLPP is justified so we can learn more about the need for the program that's set to sunset January 1 of 2024. Maybe we beef up the existing Ombudsman program or hire more inspectors. How many more inspectors would have been hired if the money spent on MRLPP was diverted into the inspection program? The MRL, the mobile home residency law, already allows residents to directly contact a legal services provider and pursue litigation against the park owner. Simply continuing a program that isn't being used diverts resources away from HCD's mission of protecting the health and safety of residents in mobile home parks. For these reasons and those stated in our letter, we respectfully request that this audit be approved by this Committee, and I'm here to answer any questions. Thank you.

Thank you. Mr. Seyarto. No other witness at this moment?

No.

I apologize, Mr. Chair. I was uncovering a couple hearings today. Jason Ikerd with Edelstein, Gilbert, Robest, and Smith. On behalf of the California Mobile Home Park Owners Alliance. I will not echo everything that Mr. Wysocki said. It was well stated, but just wanted to thank the Senator for bringing this audit request forward. And just note, I mean, obviously, you all know the program in question is scheduled to sunset. We think it's entirely appropriate to have a review of how that program has performed. There's a considerable amount of money that the park owners and residents have invested in the operation of this program. And to date, we're not confident that the program is performing and delivering on the kind of referrals that were anticipated. And so I think it's absolutely appropriate, or CMPA, rather, believes it's appropriate and supports this audit for that reason. Thank you very much.

Thank you. We'll go to our State Auditor, Mr. Parks.

Thank you, Chairman Alvarez. The audit will start off primarily with objective two, trying to get a handle on complaint data that have been flowing in under the program. How much has HCD processed over roughly a four calendar year period from calendar year 19 through 2022? Roughly a four year period. Trying to evaluate how many cases have been processed, investigated, how many cases have ultimately been found to have merit, what the outcomes of those cases and investigations have been. Also taking a look, as the member mentioned, what has the referral rate been to legal service providers, what enforcement actions have been taken as a result of those referrals, and obviously, as the member mentioned, really trying to understand the fund balance situation in the fund, what kind of staffing decisions are being made. How is HCD using the resources in that fund? Are they just staffing individuals that are staffing up this program, or perhaps are they using it for other purposes? I think that's one of the reasons we want to take a hard look at how that fund is being utilized. But overall it's a fairly straightforward audit. I have the staff resources available to start it. I expect it's roughly 2400 hours and would take five months.

Thank you very much. We'll move on to the affected agency, housing community development like to make a comment?

Good morning, Mr. Chair. Kyle Krause, Deputy Director, HCD's Codes and Standards Division. HCD is in receipt of Senator Kelly Seyarto's letter requesting an audit of the Mobile Home Residency Law protection program, otherwise known as MRLPP. It is a pilot program, as you've heard this morning, that sunsets at the end of this year. Thank you for the opportunity to provide response to the Senator's audit request of the program created by the Mobile Home Residency Law Protection act. While HCD does not have a position on this audit and will collaborate with any audit that should arise from the Committee's decision, any audit is unlikely to have findings beyond what the Department has already shared in its annual report to the Legislature, transmitted on March 9 of this year. By way of background, the stated legislative intent of the Mobile Home Residency Law Protection act is to protect and safeguard the most vulnerable homeowners by affording them an additional avenue to enforce violations of the mobile home residency law. Funding is provided via the Mobile Home Dispute Resolution Fund, which was established to receive funds collected from mobile home parks subject to the law, via an annual $10 per fee or permitted mobile home lot fee. The Mobile Home Residency Law Protection act requires HCD to make good faith effort to select the most severe and economically impactful alleged violations of the mobile home residency law and to select a geographically representative sample of complaints to participate in the program. If no resolution is reached between two parties, the allegations may be referred to a contracted nonprofit legal service provider, otherwise referred to as an LSP. The department's experience with the program so far has been that it provides a beneficial path for some homeowners to obtain legal assistance, especially low income homeowners. HCD realizes there have been challenges with the program and did not receive a significant volume of complaints in the program. HCD only received 2737 total complaints since it started in 2020, and has now only been able to refer 342 of those complaints with associated mobile home residency law allegations to LSPs to date. There are many potential reasons for the comparatively small number of referrals, but one significant reason is the Covid-19 pandemic, as there were moratoriums on evictions for some time during the first years of the program that may have led to fewer complaints being filed. HCD has identified there will be some six plus $1.0 million in fee revenue on the table at the program's sunset. These are due to a number of challenges with the program, including a possible lack of confidence in the program by homeowners that allege violations will be referred to an LSP or that the LSP will even take action. Cumbersome process and lengthy timeframes required by statute and possible fear of retaliation by park owners as they engage in the good faith negotiation process. These are critical and known issues for the Legislature to consider as they address through the legislative process. The Department just delivered a report to the Legislature earlier this month outlining the program data and HCD recommendations for improvement. Specifically to the Senator's letter, HCD's report to the Legislature is responsive to items one through six in the letter. As a result, it may be premature to audit this pilot program given the potential legislative solutions that may arise from your consideration of the department's report. It is also important to note the MRLPP program is set to sunset the beginning of January 1, 2024 and whether or not to extend the program, thereby creating a path to implement potential audit recommendations are open questions for the Legislature to consider. I can shorten this I won't go through all the details of the program we talked about, the sunset date and the fees. HCD's role I might clarify it's to receive and review MRL complaints or mobile home residency law complaints and to select the most severe, deleterious and materially and economically impactful alleged violations. Request documents from the complainant and the parks, refer those complaints to qualified and experienced nonprofit legal service providers, but HCD shall not arbitrate, mediate, negotiate or provide legal advice in connection with the mobile home park rent disputes, lease or rental agreements, or disputes arising from lease or rental agreements. The timeline I think we've talked about and the report to the Legislature. Don't want to restate what's been stated. I will get to the recommendations, a summary of what was submitted in the report to the Legislature. HCD identified some options, including extending the program two years and transition it to a grant program or direct referral to LSPs, similar to the health and safety complaints that HCD already handles. Eliminating HCD's good faith efforts to select the most severe complaints, eliminate the document request process and 25 day good faith negotiation period, or allow LSPs to provide and Bill for outreach and training as part of their work. Thank you.

Thank you. Mr. Krause, I'd like you to stay there because I know I'll have questions for you and others might as well take. Actually, we will take questions at this point from Members of the Committee and if I'll just take the privilege of going first. One of the things that concerns me is the lack of enforcement. While there has been sounds like very few number of complaints submitted, I know that certainly in my district and probably in others throughout the state, there are residents that do have complaints and that do have concerns. And really my concern with the program at the moment is this is not about casting blame at all, but really the lack of success, maybe the way it was envisioned. I think it was well intentioned. I think it's the right thing to be doing. But it does seem like we haven't hit the marks where I think we'd hope, or at least where the Legislature hoped when this was enacted some years ago. And so my first question for you, Mr. Krause, would be about the. You provided some recommendations in the report you referenced from March, but I understand there was a report that was due to the Legislature January 1 of this year. That's not the same report as the report that you've submitted, is that correct?

It is the intent that HCD's report that was submitted on March 9 is included in the annual report that HCD submitted. So the MRLPP report was included in that annual report to the Legislature.

I just want to make sure, you're referring to the report that I have, and again, I might not have the latest one here. It's actually dated October 21, 2022. There was a subsequent report you said submitted?

No, there was one report submitted to the Legislature, Mr. Chair.

And it's the October dated October 21

It would be dated that date and included in HCD's annual report. Yes, sir.

Okay. And you believe that meets the statutory requirement of the pilot program to submit report by January 1, 2023 to the Legislature?

That's correct.

Mr. Seyarto, do you want to make a comment?

I could make a comment, yes. This is the purpose for doing an audit, is ensuring that the numbers add up. We're talking about a substantial amount of money that's supposed to be used for people to address their issues that they have out there. And it appears that a substantial amount of that money is sitting in the bank or sitting in an account, and it's not being used currently. And we want to make sure that this program is having the desired effect that it was put into place for. So it's not an attack on HCD. It's not an attack on anybody. What it is, is trying to do fact finding, so that we can make a decision on whether this program is something that can be modified or it needs to be modified going forward or if it goes forward at all, sometimes. We're going to make that decision and we need accurate information, and that's why an independent audit is the right way to go on this.

I appreciate your clarity on that. That certainly would be my desire going forward is not to eliminate a program like this. I think, in fact, it needs to be a little more robust in terms of making sure that people are having access to services. How we change that, I don't know. I think information is warranted at the moment in order to perhaps enact an extension or a permanent program in the long term. Mr. Grant Parks, our State Auditor, to that effect, do you think that an audit that is performed by you would provide information useful to the Legislature on how to more effectively implement this program? Is that something that you foresee potentially being part, that is part of this scope and potentially part of your report?

I do think it's part of the scope. I think as part of our review, one of the things we would do was try and understand the statutory purpose and intent of the program when it was set up and through the course of our audit work, understanding just what was the original intent and where are we now? Part of the value of an audit is identifying gaps where recommendations could be made to make program improvements to the extent that they're warranted. So, yes, direct answer to your question. I think we could add value, and maybe the report ends up confirming the information HCD has already provided, or maybe it provides additional information that you weren't aware of previously.

Ms. Rubio.

Thank you, Senator Seyarto, for bringing this forward, and I really appreciate the discussion. I also want to welcome the Auditor, but I wanted to make a comment about the Committee's purpose. This is by far one of my favorite committees to sit on because we get so much more information than we do when we ask. As legislators, we get a lot of pushback on information. But I found that in the last six years that I've sat in this Committee, the Auditor's office has provided not just clarity as to what's happening, but also steps of how to improve. And I think for us as legislators, and we are supposed to provide oversight. And I think the Auditor's office provides detailed information not only on what's happening, but on next steps. And if the program is supposed to sunset in 2024, that will give us the data I think that we need to either continue the program or to change some of the aspects of the program. So I really appreciate the information. And again, I also want to reiterate that, for me, it's not meant to be a gotcha. It's meant to augment the work that you're doing and help you and provide some oversight and some suggestions as to how to make it better, because it is a program to support those vulnerable people. And if we don't do our job to make sure that the program is working, then it's just money that we're throwing away. And again, appreciate your willingness to participate, but also appreciate the Auditor's office involvement in this. Thank you.

Thank you, Ms. Rubio. Ms. Horvath.

I want to thank the Senator for bringing this forward. I know my office had many complaints, especially in my old district, had a lot of, especially senior mobile home parks and some of the egregious cases we've had. It's shocking to me that there are so few complaints, and I wonder if that's, that people don't know there's a process for complaining about what's going on. So I support this audit, and when the time is right, I'm happy to move it.

Thank you very much. Mr. Laird.

Thank you, Mr. Chair. I was actually a year ago in this very room in front of an Assembly Committee on a mobile home rent control Bill that the Legislature ended up adopting and sending to the Governor because there had been an exemption in 1992 for any new park or any new space from any local mobile home rent control effort. And a middle ground was found where 15 years to recover, and then the mobile home rent control will kick in, immediately kicking in for 15 years after the date of 1992. And in the course of that discussion, the very issue that is at this audit came up because it wasn't enough to deal with the financial side. It was also that there were big concerns about things that were going on at the mobile home parks. And I've been very ambivalent about this audit because I know that Covid was one of the big reasons for complaints being down. At the same time, I am committed to this process being extended because I think there always should be oversight for issues at mobile home parks, and that this audit may allow us to focus that extension on a way that it absolutely makes the program work. And so if I vote for this audit, I do not want it to be construed as not supporting the extension of this program, because I think this program needs to be extended because there is a need. And if you saw the news stories that led up to this audit around the state in the last few days, they documented things that are going on at many mobile home parks. And so, it would be my hope that if this audit goes ahead, it focuses on any deficiencies in this program and how to make sure it works, because I know I have thousands of thousands of people. Until my mom went into assisted living, she was one. And there is a certain powerlessness for residents that do not own the land, but own the mobile home and cannot move it. And as a result, I think there might be a reticence to use this program because of that power imbalance. And so I'm just hoping that those questions get addressed and are clear and are not misconstrued as being against the need for this program. Thank you.

Do you have any comments to that?

No. Essentially, that's what we're here for, is to evaluate a program to see how it's working, how it's functioning, and if we're going to make a decision on an extension of it, how it can be improved. That's, I think, right up.

Thank you very much for testimony. Anyone else like to come forward? All right, seeing none, the public process is important and comments certainly were made. I think, though if I understand correctly, in the scope, Mr. Parks, and certainly I think the intent of the author is to get information as was stated by the public. Member of the public commented on this, on the outcome of some of these. I think that's captured in your scope. [It is.] All right, thank you. Just for clarity with that, any other comments, questions? Seeing none, we need a motion. I think we have a motion by Ms. Boerner Horvath. Yes, and a second by Mr. Patterson. Secretary, please call the roll. Sorry. Before you do that, I just want to clarify to my colleagues I had a recommendation of no on this audit request because I was concerned of the same things that Mr. Laird was about making sure that we have a robust program, and this is not about removing protections or finding ways to not provide individuals with a resource. That's not the intent, certainly, and I hope that we get information that potentially makes this a more robust program. And so I'm changing my recommendation on that to yes for this audit. Please call the role.

Thank you, we'll move on to public comment. Is there any Member of the public who wish to comment, please come forward and state your name. Yes. Go ahead, sir.

Yes. Good morning. My name is Roger Johnson. On behalf of GSMOL, we oppose the audit request on the basis that it's premature, unwarranted, and the MRL protection program is paid for by us, the mobile home residents. By design, the program was limited to five years and to the most egregious alleged violations of the MRL, such as evictions. To fund the program, we self imposed a $10 space fee, which could be passed on to us and that we pay. We want our neighbors, seniors, veterans, and immigrant families who need the assistance of the state and nonprofit legal providers to work towards resolving violations of state law. So we pulled our low and fixed incomes together to benefit everyone. The program was modeled after Washington state's well established program with over a decade of similar data. HCD's comprehensive report issued this year has more sufficient data and information to appropriately review the pilot phase of this program. The audit request before you fails to mention other data points such as good faith negotiations settled before they ever got to a nonprofit legal service provider and excludes violations of other civil and criminal laws referred to other enforcement agencies. Finally, some people may view us as a little less sophisticated because of what our homes look like. One thing you should be reassured of is that we do know how to live modestly and that includes how to count our money. We are baffled that the funding surplus funded with our money is being targeted as a sign of failure or a red flag. Given the budget deficit the state is facing today, surpluses like ours are waving flags of success. We are a model, not a problem. We look forward to the opportunity for additional MRI violations to be addressed through the program. Thank you for your consideration.

The motion is to approve audit 2023-112 Department of Housing and Community Development Mobile Home Residency Law Protection Program by Senator Seyarto Senator Member Alvarez. Alvarez, aye. Boerner Horvath. Horvath. aye. Hoover. Hoover, aye. Patterson. Patterson, aye. Rubio. Rubio, aye. Valencia. Wood. Senator Blakespear. Blakespear, aye. Cortese. Cortese, aye. Eggman. Eggman, aye. Gonzalez. Gonzalez, aye. Laird. Laird, aye. Seyarto. Seyarto, aye. Wilk.

11 to zero that's been approved. Thank you, Mr. Seyarto. Mr. Berman, welcome surprise to you. This morning you were on consent, but now you're not. So here you are. Please begin when you are ready, and if there are any members who are here to testify as witnesses, you can come forward at this time as well. Otherwise, Mr. Berman, welcome to go ahead. Thank you.

Mr. Chair and Members, I respectfully request an audit of the Santa Clara Valley Transportation Authority, known as VTA, with a focus on the areas of governance structure, project planning and management, financial viability and fiscal oversight. Over the last 20 years, three civil grand jury reports, multiple consultants hired by VTA, and a 2008 audit by the State Auditor have identified the need for change to VTA's governance structure in order for the board to be best equipped to provide high quality oversight of the agency. After two years and hundreds of conversations, I worked closely with VTA's board chair last year, towards the end of last year, to request this audit in lieu of legislation in 2019, the Santa Clara County Civil grand jury reported that virtually all of the individuals interviewed, including directors and senior staff, agreed that VTA would benefit from a more knowledgeable and engaged board of directors that is more sharply focused on VTA's role as a regional transit agency and less on local political interests. These findings are in line with what I've heard from dozens of current and former board members, labor representatives and transit writers, nearly all of whom recognized the need for governance reform. My hope is that this audit will give VTA the objective feedback and direction it needs to make substantive governance reform so that the board can provide the high quality oversight of the agency that riders, VTA staff and Santa Clara County taxpayers deserve. And I noticed one thing this morning when I was actually on VTA's website that I think really symbolizes the problem, which is that the VTA issued a press release a couple of months ago announcing that seven of the 12 board members this year are brand new. So at a time when transit is facing its most difficult challenges, over a majority of the board is brand new to being voting members of the board of the VTA, which really symbolizes the issue that I'm hoping we can address. I want to thank Senator Cortese, who has served on the VTA board during his prior elected service, for a very productive conversation that he and I had last week regarding the audit request. Per Senator Cortese's good suggestion, I would like to make a special note to ask that the Auditor outline a process that VTA can use to reform their governance structure internally. The goal of this effort is for VTA to be equipped to lead its own governance reform process and propose to us a legislative fix for their governance reform, as opposed to us coming up with governance reform proposals on our own. With that, I respectfully ask for and aye vote.

Thank you. Mr. Berman, you have no witnesses with you today?

I don't think so.

Okay. Seeing none. Thank you. Our state auditors provide analysis.

Thank you, Chairman Alvarez. So a significant portion of the audit will be in looking at the effectiveness of VTA's board, looking at their roles and responsibilities, and comparing those roles to what we see at other local transportation agencies. I think a portion of this audit is not just looking at how VTA operates, but understanding how they compare to similar organizations. There is also some interest in having our office examine the extent to which advisory committees are involved in policy development as opposed to board members themselves, and just how engaged board members are, versus alternate board members who may attend significant meetings. Obviously, as the member mentioned, there's an interest in understanding a VTA strategic planning process, how it sets goals, how it measures performance. And we'd also be looking at a selection of projects to understand the accuracy of cost estimates, timelines for a sample of large projects, and understanding whether or not there are alternative techniques whereby they might implement best practices and track those projects more effectively. And then finally, just briefly, there's a financial viability fiscal transparency component to the audit request. There are several objectives that have us look at expenditures and ridership over the past four years, looking at things like cost per trip, passengers per trip, other financial metrics that we would be comparing VTA against other similar transportation agencies. I expect that's where the bulk of our field work would be. But overall, it's a fairly comprehensive audit. There's over 20 audit objectives. I'm anticipating when you count the subparts roughly, it's probably about 3300 hours to do, and I'm anticipating roughly six months. And I do have the staff to start the work.

Thank you. Mr. Parks. The agency affected, are they present? Would they like to make a comment? Please come forward. Identify yourself.

Go right ahead, Mr. Chairman. Remember Scott Wetch here. I want to thank you for allowing me to speak on behalf of my client, the Valley Transportation Authority. I want to make it clear that the VTA has always held itself to the highest standards, and consequently, we do not object to the audit, although we do believe it to be unnecessary. As you are all too painfully aware, most transit operators in California are facing tremendous financial consequences from the pandemic. I'm proud to report that because of prudent fiscal management, VTA does not find itself in similar circumstances as many of the other operators throughout the state. We find it unfortunate that during these very difficult times, we'll have to dedicate precious resources and staff time to this audit that could be better focused elsewhere. VTA continues to receive billions of dollars in federal funding for projects that receive the highest level of scrutiny, and they continue to deliver them on time, under budget and using union labor, I might mention. The Assembly Members request has several items listed in it that we simply disagree with. I won't go into detail on all of them, but there's one assertion that I feel compelled for the Committee's information to address. The request to the Committee suggests or asserts that there is a, quote, unwillingness amongst the board to perform audits. The fact is that VTA employs a full time Auditor who provides audits to the board on a regular basis. VTA is primarily funded through not one, but four different local sales tax measures passed by the voters of Santa Clara County. Each and every one of those measures requires an annual audit and the highest transparency standards I think that you would find. In addition to that, I don't think anybody here is a stranger to the requirements of receiving federal funding, but the VTA has to produce audits and face incredible amount of scrutiny from the Federal Government as a result of those funds. Nonetheless, we trust the process and look forward to working collaboratively with the State Auditor and this Committee as the process proceeds. On a personal note, for the record, in my judgment, the fact that we have over 30 new members of the legislatures does not reflect negatively on their ability to perform their job. Thank you.

Thank you. You're also representing the agency?

Yes. Mr. Chairman, my name is Jim Lawson. I'm the chief external affairs officer for the Valley Transportation Authority. Like to express my thanks to you and the Committee for hearing this item to Mr. Berman for his ongoing efforts to have a better operating VTA. And I would like to say that it sounds from his remarks that what he's looking at is some form of governance change to VTA. As all of you know, especially Senator Cortese and Mr. Laird, that VTA is Santa Clara County, which has the odd dynamic that there is one very large city and a large number of very small cities. So I was involved in the formation of VTA at the beginning, and the representation on the board of directors is a compromise. Did I like it when it was first proposed? No. But there have been many attempts to look at it since then. We would welcome the State Auditor's opinion on a better way to do. You know, I guess it was Churchill's remark about democracy is really messy, but it's the best we can come up with. I hope there is a better way, and we look forward to working cooperatively with Mr. Berman and with the Auditor. I'd also, on a personal note, like to take this opportunity to thank the Legislature, specifically Mr. Cortese, for the $20 million that was provided to VTA to help with the recovery from the disaster that we suffered two years ago this March. We do really appreciate that, and I will mention to you and to the Auditor that we are going through a culture and climate assessment at this point, which is scheduled to be finished at the end. And I think it would be helpful if we coordinate closely with his efforts to come out with the best result for this audit.

Thank you for the opportunity. Happy to answer any questions.

Thank you.

Thank you very much. Do we have any questions from members of the Committee?

Thank you, Mr. Chair. And thank you, Assembly Member. I just have a question relative to one of the speakers on how you see this aligning with the existing audits already outlined in many of the measures.

Yeah, my hope is that. Thank you for the question. Through a lot of the conversations that I had with current board Members, former board Members, transit advocates, just other local elected officials, a lot of them asked for an objective analysis of how VTA and how VTA, in regards to governance structure, there's other issues in the audit request, but in regards to governance structure, how it might compare to comparable transit agencies across the country, really across North America, which is an analysis that me and my staff tried to do. That's how we came up with some ideas. But we realized that it would be best if the VTA board itself were to come up with really substantive suggestions that they could then offer up to the Legislature for us to codify into the existing law. So that's kind of my hope, is that this will be just another objective analysis to provide great feedback for the VTA board themselves to come up with suggestions.

Thank you, Mr. Laird. I think first.

I just wanted to speak to this as one of the two Members that has part of Santa Clara County in our districts, and there's just a number of factors at play. And I know I spent nine years on my local transit board, and at the time, my home city, where I was mayor, had over half the population of the four incorporated cities in the county. And in the time since then that has completely changed. While it's still the biggest city, the other three have grown in a way that we used to have half the city appointments to the transit board, and now it has been more equitably adjusted on population to match the changes in population since the original act was made. And I'm caught in the middle in that I have a small portion of the City of San Jose, which is the big city that was referred to here, but two smaller ones in the southern part of the county in Morgan Hill and Gilroy, that probably feel like they're not represented totally in the way VTA happens and have to split appointments. And I think this is on the backdrop of transit being challenged, coming out of COVID in a way that I know they're real efforts and VTA is one of them, completely separate from the incident that was so horrible there that the ridership is dropped in a way that we want to know at some point it can come back and once again in an audit, I don't want this to be misconstrued as sort of pointing that out when bad things are happening because of low ridership, when it's really trying to look at the changes that might have happened. And it's just difficult because there's going to be winners and losers if there is a change made. And I unfortunately represent two of the possible winners and one of the possible losers. And I just want this to be a thoughtful look and not preordain what people feel about transit or what a fair, objective analysis might be at the governance that this is designed to look at. So I appreciate the possible direction here.

Thank you, Mr. Laird, Mr. Seyarto.

Thank you, Assembly Member Berman, for bringing this forward, because right now we're going through some real crucial talks in budgeting and transportation regarding our transit agencies and the difficulties that they're going through. And you are absolutely right in requesting that we have some objective information. Everybody has their own opinions, but that's what our Auditor's job is, is to give us the objective information so that we can take that forward and help in our deliberations, trying to figure out how we can help, how we can help people be successful. If I'm reading right, that is what your audit is all about, is just trying to help us be in a position to have the information we need to be able to help people be successful.

Thank you, Mr. Cortese.

Thank you, Mr. Chair. Thank you, Senator Berman, for wading into what's really been one of many long term governance disputes around agencies in the Bay Area. It's not just something that comes up at VTA, but waiting into it as an elected official is challenging. I've done that twice in my career, not with the VTA, but with a particular regional agency. And it sometimes, of course, takes years to get to any kind of consensus. I have appreciated the conversation that we had before that was alluded to in Assembly Berman's presentation. Part of that conversation was because I was there when the responses to the grand jury reports were made by the VTA, which I thought pretty comprehensively dealt with any significant issues that may have been brought up that had the tone of accusations. Sometimes those things with a grand jury that's not staffed, that's a volunteer group, a civil grand jury, tend to be just a little bit misinformed. So in my reading of the audit request, and I wanted to express this publicly, you know, I was less concerned about those reports and the responses, not that they shouldn't be looked at, but more concerned about how to once and for all get to perhaps what may end up being a menu of process ideas about how to get in a way that's local, as you said, Mr. Berman, what kind of a process could or should be used to get to some really legitimate recomposition recommendations that would not come from the state but come locally? And I think it's really the process in the past that's been a problem. If VTA brings on a consultant, and from an administrative standpoint, without the full engagement of labor and community stakeholders just proceeds, it's very difficult to get consensus that way. Obviously, there's ways I don't think any of us would recommend, like just throwing the idea of a recomposition to the electorate. Having the workforce, the unionized workforce there, decide without input by the Administration or a counterbalance wouldn't work either. But VTA has been very successful in the past, especially around financial issues, and clearly they've done well enough financially to stay out of trouble by bringing in, during tough times, a sort of three legged stool or tripartite process where labor is represented, Administration is represented, and community stakeholders are represented, all with their own independent consulting or representation, in an effect much like you do if you were trying to get to a valuation proposal on real estate or something. Those three teams, those three consultants, are really charged with coming up with the final recommendations to go to the board. In my humble opinion, after obviously informed by over 20 years serving on that board and seeing this dispute fester, it's just my hope that the audit, the scope of the audit was written around governance elastic enough to perhaps allow the Auditor to go down that path and say, here's, if not what I'm suggesting, but here's some successful process designs that have been utilized, not just what are successful board compositions in other agencies or not just how other people did it, because, as Mr. Lawson said, these counties are unique. This one has 14 small cities, one big city. But what processes have been successful in avoiding excessive contentiousness and acrimony between the usual stakeholders? And let's face it, it's a pretty simple world out there, management, labor and the community stakeholders. So there's got to be a way to recommend to them how to stand up that kind of a process. And hopefully that's one of the things that come out of the audit. I'll be supporting the audit in that spirit. And I hope VTA does not in any way, shape or form, or frankly, anyone else I've heard from today consider these audits as some sort of an indictment. These are intended to hopefully tackle some of these thorny issues and come back with a productive conversation. So that's, in that spirit that I'll be supporting the audit. Thank you.

Thank you, Mr. Cortese. Mr. Patterson.

Just a note of, I hope, the experience that I have had with audits, EDD, DMV, others, and I want to first of all, welcome the new State Auditor. I think it was a sterling choice and we've had conversations about that. And I think that going forward, again, I think we can have significant trust in the professionalism. This is not about Gotcha. This is about finding fact, dealing with it in a professional and in confidential ways, and then providing suggestions for improvement. So with that, I appreciate bringing the audit and also just to assure other members here that the audit, and I've been here 10 years now, the audit process that I have seen come forward has been sterling, and I have every confidence that it will remain sterling with this new individual in charge.

Thank you. Thank you. Mr. Patterson, do you have any members of the public who wish to comment on this? I don't see anybody raising hand or walking up. So with that, would you like to make some closing comments?

Just very briefly, really appreciate all the comments from my colleagues and looking forward to more conversations as hopefully the process moves forward. I also want to make clear that my intention isn't to pit smaller cities versus the big city or anything like that. My hope is really to get more stability in the governance of VTA, to get much more transparency about how those board members are selected. And that applies to the small cities, not as much to the big city and to hopefully get some areas of expertise that would be helpful for governance of this very important, very large, very complicated transit agency. And then lastly, to create a system where folks look more regionally and less kind of parochially. So want to make clear to those who are watching, this isn't about big city versus small city, small city versus big city. This is really about just creating the best governance structure possible, as well as looking at the other issues that were raised in the audit. Thank you very much for the conversation.

Thank you. Mr. Berman, I need a motion for approval, if there is one, and a.

The motion is to approve audit 2023-101, Santa Clara Valley Transportation Authority by Assembly Member Berman. Assembly Member Alvarez. Alvarez, aye. Boerner Horvath. Hoover. Hoover, aye Patterson. Patterson, aye. Rubio. Rubio, aye. Valencia, yes. Wood. Senator Blakespear. Blakespear, aye. Cortese, aye. Eggman. Gonzalez. Gonzalez, aye. Laird. Laird, aye. Seyarto. Wilk.

All right, that was nine to zero. It's been approved.

Thank you very much.

Thank you, Mr. Berman. We have two members present, and I know one was here and the other one. I'll let you decide who wants to go first. Mr. Jones Sawyer. Welcome. Mr. Jones Sawyer will be presenting his request. Mr. Jones Sawyer has item number 11 on our agenda, which is 2023-116 auto request, local government cannabis licensing. Mr. Jones Sawyer, welcome. And go right ahead.

Thank you. Since people are mentioning my name, not knowing I'm in the room, but okay, we mentioned all the time. Good morning, chair and members. I am respectfully requesting the Joint Legislative Audit Committee to approve an audit to evaluate the conflicts of interest and opportunities for corruption and municipal cannabis licensing. Allegations of corruption during the awarding of municipal cannabis operating licenses are far from new, especially in California. Tales of backdoor wheeling and dealing between companies and public officials have been circulating for years as the state works to establish a regulatory framework for honest brokers. Recent News has highlighted plea deals from local elected officials throughout the state admitting their participation in pay to play schemes involving cannabis businesses. For example, a City Council Member admitted to soliciting bribes as donations from a cannabis business in exchange for support of the company receiving the city's sole cannabis distribution license. In another jurisdiction, a county planning Commissioner admitted to acting as an intermediary to funnel bribes from cannabis businesses as well. That plea deal agreement also alleges a city manager doubling as a consultant for cannabis businesses participated in a pay to play scheme. Today, state and local licensing authorization processes ensure that facilities are properly cited and licensed prior to the operation of a business. Over 800 retail cannabis stores have received local and state cannabis licenses, and in light of recent news regarding licensing concerns in some cities, I strongly believe an audit is imperative. The cannabis licensing process exists so local governments can thoroughly vet new businesses and select trusted partners. Corruption undermines the integrity of the system, allowing bad actors to participate in the legal market and ultimately threatens both public health and safety. Most importantly, corruption by elected officials erodes trust in government, a bedrock in a civil society. This proposed audit would ensure that the local officials fiduciary obligations to their constituents are being fulfilled honorably and public funds are managed effectively without any personal benefit or enrichment to elected officials, appointees, staff, or associates. It also would ask the State Auditor to determine if any particular type of determining licenses is less susceptible to fraud and mismanagement. This is important as more jurisdictions continue to roll out their equity license programs and we work to expand cannabis access in the state. With me today is Amy Jenkins. On behalf of the California Cannabis Industry Association, I respectfully ask for your aye vote.

Thank you, Mr. Chancellor. Ms. Jenkins, please proceed.

Thank you. Good morning, Mr. Chairman and Committee Members. Again, Amy Jenkins, representing the California Cannabis Industry Association, also commonly known as CCIA. We were very pleased to partner with Assembly Member Jones Sawyer and four other Members of the Legislature back in 2015 when we enacted the Medicinal Marijuana Regulation and Safety Act. The landmark legislation established a framework for the regulation and licensure of medicinal cannabis in California. A key component of that framework was the creation of a dual licensing structure whereby cannabis businesses must be permitted by both the state and the appropriate local jurisdiction to legally operate. This structure was later incorporated into the adult use framework when California voters overwhelmingly approved Proposition 64. So the question we now ask ourselves is, how are we doing under this framework? And the answer is not so good. Because California allows local governments to ban California businesses completely or to impose caps on the number of licenses, only 44% of cities and counties allow at least one cannabis business type. This is particularly acute when we talk about cannabis retail. That number drops to 39%. We actually have fewer legal stores than we did decades ago. A May 22 reason foundation study validated previous reports that California's legal cannabis industry represents approximately one third the size it should be. The study further found a significant statewide lack of access to legal retail, noting that more than half of these retailers are located in just 18 cities. Now, in these locally approved areas, approval processes are complex. License caps are the norm. Strict limits are placed on their location. Community benefit agreements are requirement and licenses have become a highly valued commodity. In an investigative series, as I believe the Assemblyman noted, the LA Times described some of the resulting problems, citing allegations of conflicts of interest, bribery, and bias in the permitting process. In other words, rather than embrace the intent of Prop 64 by matching the level of voter support with the appropriate number of cannabis retail operations, local governments have done the opposite. As a result, legal cannabis, whether it is medicinal or recreational, has failed and will continue to fail until we are able to fully integrate California cannabis into our economy. Small cannabis retail businesses, which were the backbone of California's cannabis economy for decades, have been replaced by well capitalized, well connected business owners, and those are the ones that can obtain permits. It should not be the role of local governments to create choke points in burgeoning industries, but rather to create sensible regulations that support economic growth and protect public health and safety. Caps on cannabis business licenses inherently foster corruption and incentivize illicit activity. In your approval of this audit request today, it is our hope that it will produce findings and recommendations that encourage a more liberal licensing structure, supporting large and small businesses as well as social equity operators, recommendations that encourage more normal zoning rules for locating businesses, and discourage bans and artificial licensing caps. As one retailer once told me, competition belongs in the market and not in the license application process. For these reasons, we support this audit request today and urge your support as well. Thank you.

Thank you very much. Any other witnesses? Mr. Jones Sawyer that's it. That's it. All right. Thank you. We have a presentation from the Auditor.

Thank you, Chairman Alvarez. It's a fairly straightforward audit, very tightly crafted, with specific audit objectives. First, our office will start off with selecting six jurisdictions to go out and review their policies and procedures as part of the permitting and licensing process. Some of the key things we want to make sure we're looking at as part of the audit is making sure that the rules are clearly communicated to people who may be applying for these permits and licenses, making sure that the jurisdiction's rules are compliant with state and federal laws and regulations, and also making sure that we have a good understanding of what these jurisdictions have set up in terms of internal controls to prevent fraud and abuse. Some of the things that the members and the other testifier had mentioned. Moving on from looking at their policies and procedures, I think we're also going to be selecting a fairly good sample of permits that have flowed through these jurisdictions to make sure that we can follow the trail from when it came into the organization to the final decision point, and making sure along the way that we're seeing evidence that the policies and procedures these jurisdictions have implemented have actually been put in place and are being used in actual practice. But I think the key part of the audit that's going to come out of looking at these six different jurisdictions is understanding the different processes these organizations are following. And it's my hope that by comparing and contrasting the different approaches of these different organizations, these different jurisdictions, we might be able to come up with some ideas on what practices are more susceptible to fraud and abuse than others, which may be helpful to members seeking statutory changes.

Thank you. Mr. Parks. Any of the agencies impacted by this present wish to testify? Anybody here on this item? I see none. Any questions from our Committee Members? Mr. Patterson.

First of all, appreciate bringing this forward. What are the parameters for choosing the six jurisdictions? And I say that as the former mayor of Fresno and representing that area, there is an undercurrent of, I think, misconduct. Are you experienced in and capable in what amounts to almost a public safety kind of inquiry or a District Attorney inquiry? I mean, it seems like there's this undercurrent of concern that the processes and the systems are throwing council members together with permittees and something not kind of happening right. Have you done similar audits like that?

We're currently doing an audit that's required by statute that focuses on a cannabis grant program. But in terms of the specific objectives in this request, I can't recall one specifically like this. Your question about methodology and what six jurisdictions we want to visit. Clearly, I think looking at some jurisdictions where perhaps there's some indicators of problems already that would be insightful, but also making sure that we're selecting organizations and jurisdictions where there haven't been reports of problems. I think we're trying to select a group of jurisdictions where we can see the wide parameters of what works well and what doesn't work well, we don't want to just be focusing only on those where there are indications of problems, because we also want to identify opportunities to find best practices.

Fresno is now the fifth largest city in the State of California. It's the capital City of a significant region of the state. For whatever it's worth, I think the Fresno region ought to be considered as part of that for the reasons you just outlined.

I think, just want to add as a suggestion, obviously, I have my own ideas of which. But maybe just to start with the four c's, California corrupt cannabis cities. If you Google that, you'll probably get a whole list of where you can start the four c's.

I hope we're not in that pool. But undercurrents of implementation, there's always this chatter when regulatory permitting tries to be used to either help a competitor or hurt a competitor. And I think that this is important. Whatever permitting a city might be given, it's got to be fair, transparent, and it's got to be above suspicion.

And that's why we want them to choose.

Thank you, Mr. Patterson. Ms. Gonzalez.

Yes, thank you, Mr. Chair. And I too, want to thank the Assembly Member for bringing this forward. I know you've been working on this for some time just to get it right, and I think I agree wholeheartedly with Mr. Patterson as well, in terms of what the methodology will look like. Obviously, we've had some problems back home that have been highlighted in the LA Times, but I do think there are some problems that we don't know about at all that have not been highlighted. I think to respected to the Auditor's comments as well. But I look forward to really figuring out what we can do with these six cities. I know at the end of the day, these are incredible communities, but just have, unfortunately, unscrupulous activity happening in these incredibly wonderful communities. So I thank you for bringing it forward, and I look forward to working with you and figuring out the findings from the Auditor's office. So thank you again.

Thank you, Ms. Gonzalez. Are there any Members of the public who want to make comment on this? Right. Seeing none. Then Mr. Jones lawyer, any closing remarks?

Respectfully, after your. I vote.

Thank you very much. We have a motion by Mr. Patterson, seconded by Mr. Hoover. Secretary, please call the roll.

The motion is to approve audit 2023-116 local government cannabis licensing by Assembly Member Joan Sawyer. Assembly Member Alvarez. Alvarez, aye. Boerner Horvath. Hoover. Hoover, aye. Patterson. Patterson, aye. Rubio. Valencia. Valencia, yes. Wood. Senator. Blakespear. Blakespear, ayeye. Cortese. Eggman. Gonzalez. Gonzalez, aye. Laird. Laird, aye. Seyarto. Wilk.

Item will be on call. Rule of the Committee is that majority of Senate and Assembly vote aye. So we'll have it on call. Thank you. Should I call you up now before somebody walks up. Bauer-Kahan has a request for us today. This is item on the agenda, item number five. It's auto request 103 departments of Health Care Services and Public Health Comprehensive Perinatal services program. Please proceed.

Thank you, Mr. Chair and Member. And thank you. I think this is my first time before this Committee in my time in the Legislature. It's been fun to sit here and listen. You do important work. So I'm proud to present my request for the State Auditor to review the Comprehensive Perinatal Services program administered by the Department of Healthcare Services and the California Department of Public Health. The comprehensive Perinatal Services medical benefit covers psychosocial services to address social determinants of health, breastfeeding, and education for new parents. Without this audit, women's lives are literally at stake. African American women in California are three to four times as likely as California women of other races or ethnicities to die during pregnancy or during the year after. The rate of pregnancy related deaths. Rates for those covered by Medi Cal is nearly double the rates for those with private insurance. Medi Cal needs a rigorously implemented CPS program benefit to address these grave health disparities. Despite these needs, DHCs and DPH have failed to provide accurate data about program utilization and communication with patients and providers about program eligibility. Thousands of patients may be eligible for the program without knowing it or may not be getting the services they need. Due to the lack of inadequate reporting, the state has little way to know. The audit is needed more than ever. On April 12022 eligibility for medical has been expanded from 60 days to one year days postpartum, one year postpartum with the passage of Senator Skinner's amazing mom novice Bill. There is a huge access gap for this critical benefit, a gap that endangers lives and weakens support for new mothers. The state must step in with an audit to ensure this program is strong enough to support our state's maternal health needs. With me in support is Lucy Quatchinella with maternal health access.

Chair and members, Lucy Quatchinella on behalf of maternal and child health access in strong support of the Assembly Members request for an audit of the medical benefit, also known as the Comprehensive Perinatal Services program. MCHA's health navigators and home visitors assist over a thousand individuals a month in Los Angeles County. In MCHA's experience, many medical enrollees who need the support covered by this comprehensive perinatal services benefit are not offered it. We find a great unmet need during pregnancy for help with social conditions that impact health such as food insecurity, not having a regular place to sleep or being homeless, having to move due to problems paying the rent or your mortgage, losing a job, or not having any practical or emotional support. State data confirm what we see in the field. Families with MediCal during pregnancy bear a disproportionate burden of social needs. Without help and early intervention, the resulting anxiety and stress can lead to severe maternal depression. Suicide is a leading cause of perinatal related deaths in California. Covid has only made the situation worse. A recent CDC report found that US maternal mortality rates increased nearly 40% during the pandemic. Under this medical benefit, comprehensive perinatal health workers are part of the pregnancy care team. They can help address social needs before the impacts worsen a person's health or require higher levels of care from psychiatrists, other doctors or nurses. CPSP, this part of the medical benefit, has been in the code and in our federally approved state medical plan since the early 1990s. But the Department of Healthcare Services has not included this benefit in the health plan audits until this year 2023. And DHCs still does not review available fee for service data about CPSP. All medical beneficiaries should be offered CPSP's supportive services if they need and wish to receive them. The current lack of oversight needs to be remedied. We respectfully ask for your aye votes. Thank you.

Thank you very much. Any other witnesses behalf today? No? Okay, then I'll go over to our State Auditor for a report. Thank you.

Chairman Alvarez Member Bauer Cahan is requesting an audit of the perinatal services program. I think we'll start off the audit with obtaining medical data from the state, trying to figure out utilization rate data for those that are getting services through a managed care plan versus fee for service, and looking at service delivery at the pregnancy period and also postpartum at 60 days and also during 12 months postpartum. We will also be evaluating the guidance that the state has been providing to providers to make sure that they're aware of the various component services of the program, whether that's nutrition counseling or psychological services, health education, and also taking a really hard look at what enforcement mechanisms are available to the state, if we find instances where providers aren't providing the level of services that they're required to. And as the Member mentioned, there are these perinatal service coordinators who are out there doing work at, I believe, these local health jurisdictions. Understanding what the results of their reviews have been and to what extent that information has been shared with the state and what the state has done with that information will be a key part of our audit. But overall it's a modest number of audit objectives. I'm anticipating roughly 3000 hours and six months to complete and I have the staff to do the work.

Thank you. Mr. Parks. Do we have affected agency here that like to speak on the item? Welcome to join the table here. Just please introduce yourself and provide your testimony.

Hi, Maral Farsi with the California Department of Public Health. Happy to answer any questions. And should the Committee pass this, we'd be happy to comply with the Auditor's requests.

Thank you.

Hi, Melissa Rowland, assistant Deputy Director for the legislative office at Department of Health Care Services echoing the same comments as my colleague from CDPH. And we're happy to work with the Auditor and the Committee if it's approved.

Thank you as well. Appreciate you both being here. We have any questions from the Committee? Vice Chair.

This seems really important and. I'm glad you brought it forward.

Thank you, Senator.

Any other comments or questions? Okay, any public comments on this? Public wishing to comment on this item? Seeing none. Any closing remarks by Ms. Bauer-Kahan.

No. Respectfully ask your aye vote.

Thank you.

I'll move it.

Have a motion by Vice Chair and a second by Ms. Gonzalez. Please call the roll.

The motion is to approve audit 2023-103 Departments of Healthcare Services and Public Health Comprehensive Perinatal Services program by Assembly Member Bauer-Kahan. Assemblymember. Alvarez. Alvarez, aye. Boerner Horvath. Hoover. Patterson. Patterson, aye. Rubio. Valencia. Valencia, yes. Wood. Senator Blakespear, aye. Blakespear, aye. Cortese. Eggman. Gonzalez. Gonzalez, aye. Laird. Laird, aye. Seyarto. Wilk.

This will be held on call.

Thank you.

Thank you very much. We will take a couple minute recess. We'll be right back. That's fine.

All right, in order to keep us moving, I'm going to lift the call on audits. Secretary, please call the roll on the absent members.

On call, motion to approve audit 2023-103: Departments of Healthcare Services and Public Health, Comprehensive Transitive Perinatal Services program by Assemblymember Bauer-Kahan. Assemblymember Boerner Horvath? Hoover? Rubio? Wood? Senator Cortese? Eggman? Seyarto? Seyarto aye. Wilk?

So the item is still on call. Item 103 still on call. Call the roll on the other item.

Audit 2023-116: Local Government Cannabis Licensing by Assemblymember Jones-Sawyer. Assemblymember Boerner Horvath? Rubio? Wood? Senator Cortese? Eggman? Seyarto? Seyarto aye. Wilk?

That item is approved. We have eight votes. Four in the Senate, four in the Assembly. Just so everyone's aware, we're waiting for the three Senators with the last remaining requests. Senator Cortese, Agenda Item 4, which is Audit 2023-102: State and Local Government Homelessness Funding. Item number 6, which is 2023-104: California Labor Commissioner's Office Backlog of Wage Theft, which is Senator Glazer. And Item 8 on our agenda, which is 2023-110: Fetal Death and Still Birth Certificates by Senator Ashby.

As soon as any one of those Senators arrives, we will begin with that item. Secretary, please call the list for add ons for Item number 9 on your agenda, the Department of Housing Community Development Mobile Home Residency Law Protection Program. Any add ons, please call the roll.

Audit 2023-112: Department of Housing Community Development Mobile Home Residency Law Protection Program by Senator Seyarto. Assemblymember Valencia? Valencia yes. Wood? Senator Wilk? Audit 2023-103 Departments of Healthcare Services and Public Health Comprehensive Perinatal Services Program by Assemblymember Bauer-Kahan. Assemblymember Boerner Horvath? Assemblymember Hoover? Rubio? Valencia? Wood?

All right, we're still going to hold that open.

We're going to try to do items placed on call. Once again with the new members present. Secretary, please call the roll.

Audit 2023-103. Departments of Healthcare Services and Public Health Comprehensive Perinatal Services program by Assemblymember Bauer-Kahan. [Roll Call]

Assemblymember Bauer-Kahan's request has been approved with a total of nine votes.

All right, welcome back, everybody. We will take item number four on our agenda, which is audit request 2023-102. State and local government homelessness funding by Senator Cortese. Senator, please come forward, and if there are any witnesses in support, you also can join the Senator at the table here.

Senator Cortese. Please proceed.

Thank you, Mr. Chair. And good morning, Mr. Chair and members. I've been coming in and out, haven't had a chance to say good morning to each and every one of you, so check that off. I'm here today to present a state audit request related to public homelessness funds.

With a request, my colleagues and I, who are signed on, would like to know how the state, as well as municipalities, including my home district municipality, San Jose, have used state, federal, and local funds to address the homelessness crisis and more importantly, how effective the investment of public funds has been to date.

About one year ago, I took a tour of San Jose's Columbus Park encampment in my district within the City of San Jose, which was one of the largest homeless encampments in the state at the time. As I understood it then, the largest homeless encampment in the City of San Jose at the time. We've all seen homeless encampments, but what I saw was far worse than a tent city. It was a public health disaster.

Rodents running around your feet, massive piles of trash, tons of broken RV's and abandoned cars, cars turned upside down with people living inside. These homeless encampments are not safe. They're not humane. We all know that. They are actually brutal and unacceptable. The people living in these awful conditions deserve better. And we can do better, really, as a matter of decency. In 2019, San Jose saw a 40% increase in its unhoused population from 4,350 individuals to 6,097, just a one-year snapshot point in time.

Those numbers go up and down, but have gradually gone up over the years, just like other parts of the state. According to homeless census data released last year, that number increased to nearly 7000 unhoused individuals and accounts for the majority of Santa Clara County's 10,000 unhoused individuals. To make matters even worse, for every person connected to housing, two more experience homelessness for the first time.

To add, the State of California has spent nearly $10 billion or more, scratched the nearly, over the last five years on homelessness. That's an unprecedented investment for a problem that grew out of decades of neglect. That state investment, including Project Homekey, which gave money to communities for housing and homelessness. San Jose is the third largest city in California, so the city would presumably receive a significant share of this public funding.

Our residents deserve to know how the dollars are getting there and how they're being invested, what's working and what's not. And I think we need to know that as well. Adding transparency will help both the state and local jurisdictions work together to figure out how to best spend these dollars going forward. We want to shelter the largest number of people possible, get them into permanent housing and wraparound services. I think that's a general consensus.

While our region is building permanent supportive housing as completely and competently as any community in the state, the reality may be several years before most of these housing units are ready. Meanwhile, we have too many people living out in the elements in conditions like we see right outside today. We need transparency. We need to know which strategies have worked best. We need to know how we can improve our future efforts. I think we need this action now.

In light of these conditions, the effective and efficient use of external funds to address homelessness is of critical importance. We respectfully request your support to examine and review the State's and two municipalities' use of public dollars for homelessness.

One again, being my own city, the City of San Jose within Senate district 15. I want to pause and just punctuate with a sense of urgency that perhaps my greatest concern with this unprecedented level of investment is that we check in now, not four years from now or five years from now, at a time when it may be too late to redirect funds that are out the door, if indeed we should have done that.

I have here with me today Gail Osmer, a San Jose homeless advocate. She was actually with me on the tour. I mentioned during my presentation. She can share more context about what's been happening in the district. Thank you, Mr. Chair.

Thank you, Mr. Parks.

Thank you, Chairman Alvarez. This is a fairly comprehensive audit. Our approach would start off at the state level, trying to evaluate the roles and responsibilities of the Interagency Council on Homelessness, focusing on the measures used by the state to calculate the cost-effectiveness of its programs and whether existing state and federal laws impede the ability to track and assess the population that are experiencing homelessness.

There's also been a request for our office to try and determine how many individuals have actually received shelter services over a three-year period from 20-21 through 22-23. As the member mentioned, we'd also be moving on not just to look at the state level, but also at two cities, San Jose, and one to be determined by my office.

As a part of that review, we'd be looking at how those cities have been spending federal and state funding so non city sources, projects such as Project Roomkey, Homekey, and other programs to make sure that those programs are being run in compliance with the rules that operate those programs. We'd also be looking to determine whether or not how much of the funding has been used for program delivery versus city overhead and administration.

Moving on from non city sources, we'd also be looking at city sources that have been contributed to address the homelessness problem. Also over a three-year period, again, focusing on administration versus service delivery. And I think an important aspect of the request also has us evaluate the funding that's been dedicated to the health and safety implications of homelessness encampments to make sure that it is a safe environment or as safe as it can be, and whether or not that there's opportunities to look there as well.

There are several other objectives associated with the audit, among them getting data on the specific outcomes of each city in terms of performance metrics, trying to figure out data points such as the rate of placing individuals into shelters and how long it takes them to do so. There's a number of requests seeking demographic data on those who are being served and whether or not there are any homelessness groups that are underserved.

And finally, there's an audit objective that asks us to evaluate how cities go about deciding and placing homelessness sites and whether those are evenly distributed throughout the city, or more specifically, how those procedures at those jurisdictions take place. But overall, it's a fairly large audit with over 20 unique audit objectives. Some of these objectives span multiple years. It's going to require me to put a large team. I have the staff to do it, but I'm preliminarily estimating about 5000 hours in six to seven months.

Thank you, Mr. Parks. Appreciate that. Do we have the agency, any agency comments at this moment? Please introduce yourself. Welcome.

Morning. Chair Alvarez, Vice Chair Blakespear. Pleasure. Committee. My name is Myles White. I'm testifying on behalf of the California Interagency Council on Homelessness. We appreciate the opportunity to be able to respond to this audit request today. So while the request is specific to local activities within San Jose, I'd like to share a few remarks about our efforts at the state level. Specifically, our efforts over the last several years really rooted in housing, housing that is affordable, and housing that is attainable.

Ultimately, from 2019 through 2021, the state has directly financed approximately 60,000 permanent housing units, with another 20,000 units rewarded and in the pipeline, these are just units directly financed by the state. A lot of these efforts have also been complemented by efforts from this body, the legislature, on regulatory streamlining and project delivery, and removing ultimately barriers and impediments to development.

These efforts have really been strategically paired with flexible homelessness aid, which provides the necessary services to actually support these long-term capital subsidies that have regulatory covenants spanning 55 years.

So while this progress has been captured through a lot of recent policy initiatives that directly relate to the scope of this audit request, earlier this year, the state released its first homelessness landscape assessment, and that assessment was with the support of the legislature and appropriation in fiscal year 2021, tasked the council to evaluate 35 state programs, ultimately spanning nine different agencies, through three fiscal years, starting with fiscal year 2018-19 and fiscal year 2020-2021.

And these efforts have really been complemented similarly through the local action plans that we required localities, including cities, counties and continuums of care to conduct as a condition of funding for their flexible state aid through the HAPP program administered by the council. These local action plans are specific to including fiscal analysis sections which really look at federal, state and local resources available.

So really the totality of funds that are necessary to pair, ultimately, whether it's through federal resources, through HUD, state funding through my agency HCD, among others in the administration, and local resources such as Measure E, which has been identified in the audit.

So ultimately, a lot of these efforts that we're proud of in the progress we've made at the state last several years has been captured through different reporting mechanisms we have in place and also standardized through the collection of this data at the state level, in aggregate through the homeless data integration system. So with that, in concluding, we'll just share that a lot of the progress we've made provides really a solid foundation for us to continue in the days ahead. Thank you for your time.

Thank you. Any other affected agency present wishing to speak, please come forward.

Ask you to just identify yourself and you can proceed. Thank you.

Thank you, Honorable Chair, Committee Members. My name is Sarah Zarate. I'm the Director of the Office of Administration, Policy and Intergovernmental Relations for the City of San Jose, and I'm joined by Jacky Morales-Ferrand, the Director of Housing for the City of San Jose. Thank you for the opportunity to comment. The systemic factors driving homelessness are stronger than ever in California, and the City of San Jose and its partners' resolve to meet the challenge is equally strong.

In 2019, the city, the County Housing Authority, Destination Home, the community came together and spent a year discussing the root causes of homelessness and solutions required to end it in Santa Clara County. In 2020, the city and county adopted the Community Plan to End Homelessness, a five-year plan that guides our collective work through three key strategies. In Santa Clara County, we implement the plan through a strong cross-sector collaboration, leading us to work as a system on a system level change as partners.

San Jose does not work in isolation as we can't effectively address the issue without our partners. By forging new partnerships and investing strategically, we're driving effective solutions with real impact around homelessness prevention, affordable housing development, and the deployment of innovative crisis response solutions that reduce street homelessness and mitigate its impacts on communities. In 2019, in our county, for every person housed, almost three became homeless. That's not our story today.

Today, for every person we house, about 1.7 become homeless, and that is still too many. Together, we can do better, but our system made significant progress over the last three years to reduce the inflow of new households becoming homeless by nearly 30 percent. This is a result of intentional and strategic use of pooled funding, helping create a prevention system that since 2020, has assisted over 23,000 people of which 97 remained housed 12 months after receiving assistance.

Last fiscal year, this program prevented nearly 2,500 people in San Jose from becoming homeless. This is an effective and efficient use of state funds and other funding to prevent and not just delay homelessness. Guided by our community-planned collective goals, our system also successfully aligned public resources to stably house more than more people than ever in 2022. Last fiscal year alone, over 4,800 people in San Jose were served in permanent supportive housing and rapid rehousing.

San Jose and its partners are also developing the ultimate solution to homelessness by building permanent housing that results in 96 percent of people remaining housed. The city and county have worked closely to jointly fund 12 developments in our pipeline, which will result in nearly 600 permanent homes over the coming three years. We're working together to bring hundreds more units of permanent supportive housing in the coming years as well.

This will add to the already existing over 3,600 permanent supportive homes and over 1,800 rapid rehousing units already operational. San Jose is a leader in expanding temporary housing capacity. We've wasted no time putting state dollars to really great use.

Using HEAP and HHAP 1 and 2, the city constructed five interim housing sites since 2020 during the pandemic, adding 453 beds that have served nearly 1,300 individuals, families with children, and are most vulnerable during Covid. We did not have a major Covid-19 outbreak in our encampments because of the coordinated response between the city and the county. Our flexible solutions allow residents to go from encampments to interim housing, and we're not done yet.

The city has a goal of building 1,000 total beds over the coming months, some of which we're deploying Homekey funds for. In all, Homekey funding will add about 475 interim housing units over the next two years.

While a lot of our effort is going into building a spectrum of solutions that can help people off the streets and into housing, we're also building and scaling solutions that minimize the human suffering on the streets and in encampments. San Jose is proud of the outcomes it is driving in collaboration with its partners. The city has been transparent, efficient, and effective in its work, yet we alone can't solve the systemic issues driving homelessness.

We live in an area with major income inequality, economic instability, and a rampant housing crisis. Homelessness is ultimately a housing supply and affordability problem. One of the biggest obstacles to obtaining permanent housing is the affordability of rent and lack of income. These issues can only be tackled through robust cross-sector collaboration, and state partnership in legislative solutions and investments is essential.

While we don't believe that this audit is ultimately required of San Jose for four reasons, one: transparency and reporting is really baked into the way we operate with all funding sources. Two: our county participated in an audit of state homelessness programs in 2021 and we work as a system. Three: we're hosting a review of city federal funding with HUD in April. And four: an audit of this magnitude will necessarily reduce our capacity, our operational capacity to deliver services, core services that are needed on the streets.

We're open to this audit and just hope you consider objectives that are tailored to provide actionable recommendations that are applicable to a statewide problem. We greatly value our partnership with Senator Cortese and Assembly Member Low on many issues, and we look forward to our continued cross-sector work to end homelessness. Thank you very much.

Thank you. Appreciate you. Now we'll move on to questions from Members of the Committee. I think one of the things I'd just say very briefly is, you closed really well with a statement of hoping to identify recommendations that could be applied, as all of us, I'm sure, in all of our districts and all of our cities are facing similar challenges and could use any recommendations from the auditors to apply locally as well. Thank you for saying that. I agree with that. Senator Blakespear. Vice Chair, please.

Thank you. Thank you. I want to--thank you to the Chair, and then also thank you to Senator Cortese for bringing this forward. I identify homelessness, as I think so many people do, as the top problem in the state, and part of the housing accountability meetings that we were having last week, the data is so stunning around how much money is being spent and how bad homelessness is and how it is getting worse. So 23 billion dollars in homelessness and homeless-serving housing over five years.

That amount of money, even though there are--as I appreciate the testimony about all of the great things that are happening in San Jose--but it's important to recognize that good things are happening, but yet the problem is getting worse. And so I really would like, and I'm happy that San Jose is the third largest city and you're going to choose another city. I would recommend Sacramento, that you consider that since all the legislators come here every week and see the conditions on the streets here.

And if you don't want to choose Sacramento, I'd recommend Los Angeles, if you're considering other cities. I don't represent Los Angeles, and we could choose almost every city, but there are places that are just epicenters of this disaster. And so what I wanted to really focus on, though, when I read through this audit report, is to really make sure that, Mr. Parks, that you are focused on--what is it when you're asking the question, what is the question you're trying to answer?

Because statements that say, for example, 'evaluate the effectiveness of each city's use of these funds,' I want to make sure that we're not evaluating the effectiveness of spending money, of creating committees, of having more programs, that we're evaluating the effectiveness of helping people permanently exit homelessness.

So I have read a number of different audit reports and heard presentations from all levels of government that focus so much on the amount of money spent or the amount of people served or the amount of meals that were provided or the amount of nights, and that it has to go to the next step, which is how are we actually effectively reducing homelessness with a goal of having no encampments, of having nobody living unsheltered? So that focus should drive all the questioning.

I think that we're asking--when we're looking at how much money has been spent and what exactly has been spent on and how effective is it. It's effective at having people exit homelessness. So, and the other thing is, I just wanted to focus on is that number nine, I think, is very important. So it's identifying San Jose and other cities proposed sites for building interim and permanent housing. I believe that siteing is a major problem.

So having come from local government and as the mayor of a city, there are many cities who don't want anything to do with solutions to homelessness. They also don't want homelessness. But the reality of where are these site--where are the interim and permanent housing sites, and how is that being chosen? And is it being chosen at all by some cities?

I think just like affordable housing in the RHNA process, where every city has to do their part, we have to evolve our thinking to be really clear-eyed about homelessness is affecting every community, and every city has to do their part when it comes to solving for homelessness. So looking into that specifically is really important. I'm very glad that you brought this forward.

And the fact that it's ambitious and deep to me will mean that it's likely to be more effective at allowing us to make sure that our money is directed properly, but also that our policies are because solving for homelessness will--is a policy and a funding decision together.

So making sure that this audit allows for us as state leaders to say, 'if we want to do better, we could do X and so related to removing encampments and keeping people out of homelessness and exiting homelessness once they get there.' So thank you again, Senator Cortese, for bringing this forward, and I very much look forward to the results.

Thank you. Mr. Laird.

Thank you very much. I agree in thanking you. I want to comment on two pieces of this, and I was triggered by the previous speaker in that if it were San Jose and Sacramento, if two of the largest cities in the state, and yet one of the biggest issues is smaller cities trying to deal with this. For example, my home city has a higher per capita homeless population than Oakland, San Francisco, San Jose, Los Angeles, and San Diego.

And yet a lot of the programs don't reflect the capacity of a smaller city to apply or get it or to target in different ways because if you just look at the differences, I know the point in time comes originally from a federal thing, but point in time in the City of San Francisco is such that you know where everybody is, you know where you can find them in an urban environment, in a city that has green belts, state parks and everything around it, and this year, the point in time was during a driving, atmospheric river.

You cannot get an accurate count on which the services are based. The big versus the small is a very relevant issue, and in a district where I've 21 cities, setting aside San Jose where I'm part of the City of San Jose, the next largest city is 60,000 people, and it goes down, and there's people sleeping in rural riverbeds in different places where it is hard to get the services.

So then you have the issue--I made the point in the last year of visiting every homeless service provider that is in a Senate district spread across 200 plus miles with almost a million people. And many of them had to move ahead without state assistance because they didn't fit it quite right or they didn't have the capacity. So in one city, they bought a Motel 6 without being able to get into the state program when they made the decision to do it.

In another place, they have tiny homes. They didn't qualify for a grant in the right cycle to do it. Yes, there was a veterans one in the Santa Cruz Mountains that is a project Homekey. And then our biggest homeless service provider in my home county, which does everything, a locked ward, transition from hospitals for rehab, overnight beds, tiny houses, has clothes, has mailboxes, has showers, has a clinic, has everything, they realize they can't dent it without actually providing housing.

So they're building 118 unit low of the low income housing on their property, and they launched into it without having any idea whether they were going to get financial support and whether they had the capacity to apply in some of these mega programs. And so for me, I read this, and it's about identifying the results of the state efforts.

But first, you have to look at the differences in the jurisdictions in the state, and secondly, you can evaluate the efforts if people can get into the programs to get the efforts to evaluate and whether there's a barrier due to size or--one complaint I had recently was all the state programs have different funding cycles at different times, at different applications, and it is really hard to get in.

And I know that we can't change an audit without reconsidering it, but to the extent within the existing framework these questions can be addressed, it will really be valuable to us. And I think that we had an oversight hearing with the Senate Budget Committee, and Dr. Galley was talking about how, and he told me later, he was surprised that under CalAIM, cities could apply for street teams and being reimbursed for street teams. And my private question was, 'how do they know?'

And he said, 'I'm really surprised I'm not hearing from more mayors.' And I thought, 'well, I was a mayor. How would I even know to do that?' And was sort of like, 'go to a web page.' Well, how would you know to go to the web page? And so it seems to me that some of the state efforts--really, the question is how people get into them, how they know, how can we educate people for what they might actually be eligible for if you're one of the almost 500 mayors in the state?

And to the extent that can be part of this, it would be really, really helpful. And I appreciate the fact that Senator Cortese and others on this are making us talk about this in a good way that might actually focus it in a meaningful outcome.

Thank you, Mr. Laird. Ms. Gonzalez.

Thank you, Mr. Chair, and I want to build off of my colleague's comments as well. I know we're all going to pitch our own cities and districts, and I would hope that--and I thank Senator Cortese again for bringing this forward because this does give us a roadmap, whomever is selected as this other municipality--but it's easy for everyone to say, and I--no disrespect to our Vice Chair, Los Angeles--but Los Angeles is so very big and diverse.

Long Beach, the City of Long Beach has its own health department. We sort of do our own thing. We don't even get direct funding for mental health. So there's a lot of different nuances there. Southeast Los Angeles, many smaller cities there, 20,000, 10,000, 60,000 population--don't get a lot of the love from LA County at large.

And I've talked at the federal level, of course, with our state partners that we have to look more mindfully at Los Angeles in not just the City of LA proper, but looking at these other smaller cities that also have challenges to Senator Laird's point, and also larger ones that actually have the resources. So there could be a lot of different nuances there as well. So thank you very much.

Thank you. Mr. Wood.

Thank you, and I want to appreciate the comments from our Senators and particularly from Mr. Laird as he talks about the diversity of the size of the communities and how spread out they are. And how do some of these smaller communities actually find out about some of these things? So I guess, while you could, I would urge you to look at a smaller community. San Jose is obviously really large, but a smaller community, I don't know what that size is.

I mean, I have one large city in my district, and then the next biggest city is 27,000. I have two of those, and then it drops to 16 and gets smaller and smaller and smaller. And so what I know from experience is that small jurisdictions--and I'm not encouraging you to come to my district. Only if you'd like to, I'd give you a list of cities.

But the challenge for so many smaller jurisdictions who are dealing with on a per capita basis, it's a crisis in their city based on the per capita numbers and how they're trying to deal with it. But the smaller the city, the less they know what's going on, and it's not their fault. They're doing multiple things all the time. It is a problem that is not just isolated to large cities, and it is the major problem in every city in my district.

So just as you think about--as the auditor thinks about the questions they ask and how this gets prepared, I would hope that some of the outcomes would be helpful to smaller jurisdictions because at the end of the day, often what we want in smaller jurisdictions is flexibility and technical assistance, and those are things with state government that are almost impossible to get at times. So thank you.

Thank you, Mr. Wood. Mr. Hoover.

Thank you, and first, I just want to start off by echoing Senator Blakespear. I actually think--well on a lot of her comments--but I actually think that adding Sacramento would be a fantastic choice, and that would certainly be the suggestion that I would make to the auditor. But I appreciate any work that is done on this topic. Senator, thank you for bringing this forward. I'm thankful to be a joint author on this request as well, so thank you for that.

Your comments really, I think, got to the heart of this issue. I personally, as a parent, have found needles in the park where my kids play. I think that this is the greatest public health and safety crisis that we face today, and it's no wonder that voters in most of the recent polling have put solving our homelessness crisis at the very top of the list of priorities that they want their leaders to address.

So I really appreciate this audit today and urge my colleagues to support it. I think it's a critical first step in solving our homelessness crisis. As we were told recently by our nonpartisan Legislative Analyst Office, we've spent 20 billion dollars since 2018 on homelessness, and we've seen a 77 percent increase in homelessness during that time.

I think most of us would agree that is unacceptable, and I believe that this audit will give us the information that we need to determine which programs and strategies are working, but also to determine which programs and strategies are not working so that we can move to invest our money in something that's actually going to get results.

I think we need to figure this out as quickly as possible so we can better target our investments, protect taxpayers, restore our public spaces, and also get people the help that they need. So thank you, Senator. I really appreciate you bringing this forward and I look forward to supporting it.

Thank you, all the Members of the Committee, for your comments and questions. Any members of the public want to make a one minute statement? This would be a good time to come up.

This is my lead witness. She was walking up to sit down before we went to agency witnesses, but if you would rather have her speak under public comments, she has a one page set of comments.

As quick as you can make. It would be appreciated.

Thank you. I'm sorry I was late. So good morning everybody. Is it still morning? Yes. Good morning, Chair and good morning, Members of the Joint Legislative Audit Committee. My name is Gail Osmer, and I'm honored to be here and to speak with all of you today on behalf of our unhoused in Santa Clara County. I have been an unhoused advocate for over 30 years. In the past ten years alone, the issue has only increased within San Jose.

I would like to personally thank you for inviting me in your invitation, Senator Cortese, today, and supporters of the audit request for leading this effort. While there are many issues facing the unhoused community, I'd like to highlight first and foremost the lack of the city's transparency and accountability in addressing homelessness, which has been a contributing factor in our homelessness growing in San Jose.

From 2017 to 2019, the unhoused population increased 40 percent, and as of this year, we have nearly over 7,000 unhoused folks. To add to this issue, there are currently a lack of lack of low income housing and ELI housing for many folks. Through this audit, we will be able to see the benefits where our public funds are being spent, which is only going to benefit all of us. In closing, this issue is bigger than any of us.

It is about ensuring transparency in our policy and funding solutions. It is about our unhoused neighbors and how you can make their lives a little bit better. I also just want to say quickly, I have many, many unhoused friends and most of them, they're in the queue for housing or any kind of shelter for up to three years to be placed in a safe parking program or interim housing.

On behalf of the thousands of individuals and families living on our streets, in camps and RVs, in their cars, in shelter beds, and everything in between, I urge you to support your aye vote on this audit request. The lives of our unhoused community is on all of you to decide. Please take action now. Thank you for your time, and I apologize for being late.

Thank you for your testimony. Any other public comment on this item? All right. Seeing none, I want to recognize the work of the author and also of Assembly Member Hoover, who I know is very interested in this and appreciate the collaborative effort taken to approach this problem. Obviously, as so many of us spoke up during this item, it's a critical issue.

And again, the intent always of--at least from my perspective--working with our staff is to make sure we have audits that are meaningful and that provide information that could be used throughout our state and improving processes or, if needed, policies. So that's, again, the intent, and I appreciate everybody who stated those comments. With that, would you like to make a closing statement, Mr. Cortese?

Thank you, Mr. Chair. First of all, thank you for all the attention and all the comments, and I'm sure that the auditor's taking a note of whatever he can do and his team can do going forward. As was noted, one of the cities has remained to be determined.

I think I would be subject to far more criticism if I didn't put forward the county seat, the city that is the heart and soul of my own district, as one part of this sample size. And certainly, I know, I trust that the auditor will come up with whatever will counterbalance that.

But this audit isn't really about any city. It's certainly not about going after any city. It's not an indictment. It's an audit. It's not an indictment on any city, but it is an indictment on the indecency that's going on out there right now. And I know we all feel that way. I could tell by the engagement of my colleagues, not just in this hearing, but in many hearings that we have attended together recently and over the past session.

And we need to use this audit to try to remedy that indecency, to try to do better. That's what this audit is about, our ability, which I think we all have confidence in as a state, to do better. And that starts with us taking a hard look at the issues that were outlined by the auditor. I thank you again for all the time spent today, and I respectfully ask for your aye vote.

Thank you very much. Do we have a motion?

I'll move.

Ms. Blake--Vice Chair Blakespear moved. Mr. Laird seconds. Please call the roll.

The motion is to approve audit 2023-102 State and Local Government Homelessness Funding by Senator Cortese.' [Roll Call].

That is approved. 12 to zero vote. Thank you very much. Moving on to Item Number Six on the agenda, which is Item 2023-104: California Labor Commissioner's Office Backlog of Wage Theft Cases. Senator Glazer is here to present on the item. Senator Glazer, welcome, and please proceed.

Thank you, Chair Alvarez, for your support on this request. Thank you to Vice Chair Blakespear and the Committee for allowing me to present this audit request today. I want to extend my appreciation to the Committee staff for working with me on this, and I'm going to talk about this persistent backlog of wage theft cases, as well as so many workers who have not been given the money that they earned, but I want to say this at the start.

The folks that are involved in this situation, it goes back more than a decade, and they're the best of intentions. The folks--it's not just the current Governor, the past Governor cared about this issue. I know the current Labor Commissioner, the previous labor commissioners care about this issue, as I know all of you do, and they have had the best of intentions about trying to deal with this problem. But it has been a persistent problem that has been around for year after year after year.

Look at the numbers on this, if you don't know it already. The Labor Commissioner's Office is required to review and process a case within 120 days. But as of October of this past year, the average wait time is 780 days. 780 days. More than two years. That means a harmed worker has to wait over two years to have a potential hearing on their case.

Now, the Legislature, and I know the Administration, has paid a lot of attention to this issue of low staffing levels that could be contributing to these delays. However, we lack a lot of information on employee retention and turnover. We don't have a lot of information on the caseload assigned to each employee and the number of personnel required to meet this mandated 120-day review.

To my knowledge, there's never been an independent oversight on potential sources of low employee retention in the department and the high turnover rate that this audit would provide. And in addition, as I mentioned, to understanding this issue of processing delays, the workers are struggling to even get the money that they are owed. In fact, a 2020 report from the legislative analysts found that the larger the judgment, the less likely a worker is able to collect their wages. What a tragedy. They've had to wait so long.

The adjudication has been found in their favor and they don't ever get the money back. An independent audit could assess resources available for workers needing to collect their judgments, why workers struggle to obtain their owed wages, and how the office can improve available resources. This audit will provide a more holistic view by asking for data and recommendations, not just on staffing levels, but also on training procedures, process inefficiencies that are creating these terrible bottlenecks.

And finally, this independent, objective audit will provide data and policy recommendations for the Labor Commissioner's Office, the Governor, and of course, the Legislature to use as a guide for future budget and legislative decisions. With me today, I have Ashley Hoffman, who's the Policy Advocate with the California Chamber of Commerce to testify in support. Thank you.

Good morning. Ashley Hoffman on behalf of the California Chamber of Commerce in support of the proposed audit. I really appreciate the opportunity today to talk about why addressing this backlog is also important to the employer community. It is essential that workers in our state who are owed wages are made whole. This is a goal that we share with all of you. It is also essential that the state agency hold employers accountable who are skirting the law.

Additionally, it is important that employers and employees have disputes resolved in an efficient manner. The complaint and hearing process through the Labor Commissioner's Office often takes shorter amounts of time to resolve disputes than through civil litigation and promotes better outcomes for employees. If a worker has not been able to hire an attorney, the staff at the Labor Commissioner's Office is there to help them navigate the entire process and help to fill out their claim forms.

It is a good process, and we should address the underlying reasons for the existing backlog, which we believe this audit will help to identify. The backlog is likely due in part, as been mentioned, to hiring and staffing challenges. A tight labor market is something that all employers are facing in California, not just the state.

We are hopeful that the audit will help identify any processes within the Labor Commissioner's hiring process that could be revised or reformed to expedite hiring as well as to fill the existing vacancies.

Adding more employees does not necessitate additional spending from the General Fund, as DIR is employer funded. Annual employer assessments, which are approximately 1.5 billion dollars this year, a 14 percent increase from 2022, are used to provide funding, and these are the special funds that are proposed in this year's budget to use to increase the number of positions at the Labor Commissioner's Office to handle wage claims.

We appreciate sincerely the efforts that the Labor Commissioner is taking to address this backlog, but we believe that it's time for the Legislature to step in. The audit will help pinpoint where funds and changes and processes should be directed to improve the system, otherwise, we are left guessing what the solution is. Some may say that increased penalties or private enforcement is the answer, but those assumptions are not backed by data.

Research into wage and hour claims shows that private enforcement often actually leads to lower monetary awards for workers because of the amount of money that goes to attorneys, which is often substantially more than the worker receives. We need thoughtful, directed enforcement through this agency, and we believe the audit will help ensure that becomes a reality. Thank you.

Thank you. Our Auditor, Mr. Parks, do you have a comment?

Thank you, Chairman Alvarez. Senator Glazer's request will basically have a start off trying to compile data to understand the size and duration of backlog cases over a five-year period. So I imagine getting data from the Department over that period of time, trying to also identify the medium time to adjudicate those claims and to what extent increases in the backlog may be correlated with statutory changes on protections for workers.

As the Member also mentioned, taking a looking at staffing levels, to what extent training programs for new employees are well-positioning those employees to effectively work in their jobs. Looking at retention, I also envision that my audit team will be selecting multiple samples to test the claims process through the organization, both upfront, trying to understand where bottlenecks in the process occur.

I think that would be one sample that we'd select, but separate from that sample, I think we'd also be selecting from a universe of cases where a judgment has been issued so that we can follow that one forward to see what was the end result of that process. And clearly there are some objectives here. Trying to understand, even after you get to the end of the judgment process, what's the Labor Commissioner's authority to compel employers to pay? So understanding what the enforcement mechanisms are, what's available to the state, maybe there's an opportunity for some statutory or legislative change there.

But overall it's a fairly straightforward audit, 14 unique objectives. When you consider the subparts, I'm guessing right now roughly 3,000 hours, and based on the staffing that I think I can put on it, you're looking at six to seven months.

Thank you, Mr. Parks. The Agency, would you like to come forward?

Welcome. And if you can just introduce yourself and go right ahead.

Good afternoon, everybody. My name is Lilia Garcia Brower. I am the State Labor Commissioner. Before I get started on my comments, I just like to share, as in are acknowledged by the Senator. Previous to my appointment for 20 years, I worked as a frontline on frontline enforcement, representing janitors and employers who are undercut by the unfair advantage that's created. And I worked closely with this agency. So as Labor Commissioner, I bring that perspective.

And my priority has always been to bring attention to the most vulnerable workers and to direct our limited resources to ensure that we are exposing the most egregious violations and doing the best that we can by workers. Thank you, Mr. Chair, for this opportunity. Thank you, Senator Glazer, for your interest in ensuring that working families are paid the wages they are owed. In Senator Glaser's letter dated January 192023 he identified several items that are of public concern.

I have been working on filling vacancies, improving operational efficiencies, and strengthening capacity to adjudicate claims and recover owed wages. I will provide an overview of the work we are currently doing as an employer. My office, like other employers, faces the same challenges of labor shortages and filling vacancies. To overcome some of these challenges, I'm working with the University of California to build a career pipeline to the LCO.

These efforts include helping workers understand the civil service hiring process and requirements, saturating networks with employment opportunities, and providing potential candidates the opportunity to learn about the powerful work that we do. This model will be applied to other interested organizations. We're also advertising, attending job fairs, promoting job postings on social media, and newly developed recruitment video. Given the vacancy rate, I had to redirect seven enforcement professionals to prioritize hiring efforts for their respective programs and have implemented 10 other strategies to maximize each recruitment.

In the last two years, we have completed 366 hires, 186 which were external candidates. Of these 366, 141 were in the wage claim adjudication program and 70 of them were external hires. Another issue connected to staffing is that while authorized positions have increased over the past two administrations, authorized supervisors and managers positions have not. This has resulted in expanding ratios when it comes to the number of staff to supervisor manager ratio.

One of my reform efforts is to address this issue by conducting reorganizations for each program to bring supervisor and manager positions within civil service allocation guidelines, creating additional supervisor and manager positions that play a critical role in training and general oversight of the work. In the last two years, we've conducted four reorganizations, creating seven new regional manager positions, one assistant chief, and seven new senior labor deputy commissioners. Two of the new regional manager positions are in the wage claim adjudication program.

These positions are instrumental as they play a critical role in implementing and monitoring strategic initiatives like those I will discuss today to address the backlog. In addition to developing team members and supporting local operations, they also ensure work meets quantitative and qualitative expectations. The mentorship, guidance, and support provided by managers and supervisors in onboarding new team members and providing technical assistant on new laws and protocols is a key component to retaining team members. Given the vacancies and the additional complications created by the Covid-19 pandemic.

Our team has been evaluating process inefficiencies and improvements since 2020. As a result, our team has developed 14 reforms to strengthen skills, eliminate inefficiencies, and improve operations. In 2022, we received more than 38,000 wage claims, representing more than 127,000 violations of law. This year, we are projected to receive more than 40,000 wage claims. I will now provide an overview of our reform efforts. The 14 reforms we have implemented cover a wide array of issues facing our agency.

Some of these reforms include providing training to our team to ensure that the appropriate parties are all named, to utilize negotiation techniques and tools to resolve cases more swiftly, and to focus and refine our efforts to promote best practices consistently throughout all of our offices. Other reforms are aimed at improving system efficiencies and building resources for workers to maneuver the wage claim process. I will now highlight two primary reforms. The first is our concentrated conferences.

Our concentrated conferences project involved the San Bernardino office and the San Diego office. The idea of this project is to maximize our resources across the different offices to allow scheduling of conferences in a focused time period. The effectiveness of the concentrated conferences is most evident in San Bernardino. San Bernardino has been involved in this project since the beginning. When we started, the San Bernardino office had 5000 cases pending conference, the oldest case dating back to July of 2019.

Currently, the San Bernardino office has down to 2000 cases, the oldest case facing back to August of 2022. Through this strategy, we were able to decrease the number of cases waiting conference by 60%. I will now review the low-wage industry initiative. The low-wage industry initiative was implemented to test to decrease the number of days in processing claims where we've designated deputies and hearing officers in four offices, Long Beach, Santa Ana, Bakersfield, and Fresno, to specifically process low-wage industry claims.

Prioritizing these claims assigned to the designated deputy and hearing officers has also shown a decrease in processing times for low-wage claims. The following data was reported in March of 2023 demonstrating a reduction in the number of days from docket to hearing by 22% and a reduction in the number of days from docket to transmittal, which is where we get approval to move forward with a hearing by 18% and a reduction in the number of days from docket to resolution by 46%.

Each of these initiatives requires daily focused attention from a regional manager to support the local offices in implementing the new pilot reforms and regularly adjusting to the new challenges and need for accommodations and reengineering. These initiatives are being thoughtfully implemented to ensure they comport with best practices, have maximized impact within our offices, and continue to expand reforms statewide. As models are perfected and vacancies are filled, most of the bottlenecks in our systems are caused by vacancies.

The strategies I discuss will alleviate these bottlenecks by maximizing resources and treating multiple offices as one clearing staff calendars allowing them to focus on particular tasks for a certain number of days, investing in communication with parties early prior to the scheduled appearance and streamlining processes. These pilots have been successful and are being thoughtfully implemented to not compromise the quality of adjudication. The last item raised in the audit request is how difficult is it for workers to obtain their own wages following a judgment? Yes, absolutely.

Workers face an uphill battle when it comes to collecting their owed wages. Aside from our various efforts to filling vacancies, we also have focused reforms in the area of judgment enforcement. We have implemented several reforms, including redirecting positions to open office in San Bernardino, San Francisco, Riverside. We've also redirected additional staff to our Oakland office. The issue of wage recovery is a herculean problem that cannot be addressed in isolation.

We have streamlined the entry of judgment process to ensure workers judgments are entered into the Superior Court system as quickly as possible. This will begin the civil court wage recovery process for workers. We have also focused in training team Members outside of our judgment enforcement unit on recovery tools so that more of our professionals are ready to assist workers in recovering o wages. One of the 14 initiatives I mentioned earlier on is the naming pilot. This pilot is instrumental in the recovery of wages.

We did small pilots in 2000 and 22,021 where this was led by an attorney who provided focused training to local offices to review claims and ensure that all the potential parties are names. We found as a result of those pilots that workers who named all potential liable parties were two times as likely to recover their wages.

Therefore, once we have often the problem is that workers do not name all the parties they name the individual who may have hired them, but it's not the individual who has the assets, and often they are judgment proof.

Commissioner Garcia, I'm going to, sorry to interrupt, but we have to be out of this room at some point. Do you have a final comment you can make?

Well, lastly, I'll say that I agree that there is a lot that needs to be done and a lot more that we need to do, not only in our wage claim adjudication program but in all of the programs at the Labor Commissioner's office. And all of these problems are extremely complex and they all require multifaceted approaches, as I've reviewed here, that include educating the workers.

So working with our community leaders, working with responsible employers, expanding partnerships with enforcement partners, as well as continuing to fill our vacancies and improve our systems. Thank you, Mr. Chair. I'm available for questions.

Thank you. Appreciate that. And are you speaking on behalf of an agency as well? Okay, we're going to go to Committee Members. Questions and comments. First of all, I'd like to start by thanking Commissioner the report that you just provided to us here is very thorough, and I will just acknowledge at least myself, or myself, that there seems to be a lot of progress that is being made.

I think clearly we have the right person for the job as it relates to what the desires are of. I think everybody, including the author who's requesting this audit. And I think that's all really good. I will also just again acknowledge that this is all information that I've just learned now. And I can tell you I'm not going to remember more than probably half of what you said. That's not because you didn't say it well, but just because there was a lot.

And I think there's probably some really important information that you provided that could help us determine whether there's progress being made or if there's more work that we can help support that you can continue to make that progress.

So I wanted to make those statements because I think specifically what I heard you mention, which I was going to ask about, are what are the initiatives that are taking place in order to adjudicate more quickly, reduce processing time, and all the things which you mentioned, a few of those statistics which really, again, is important and appreciated, but all literally information brand new to me at the moment, which makes it a little challenging to sort of decipher whether in this case is there significant enough progress being made again or are there other ways that we can support the work that you're doing.

So I think my first question will be to Senator Glazer? I don't know. Have you had an opportunity to have these conversations and understand? Do you have a response to what's being testified here today?

Yeah. Thank you, Chair Alvarez. No, I love the report and the update. And I think, as I said earlier, I know that the folks that are involved in this Commissioner, as well as others, have the best of intentions. They're there to do the right thing. Their staff is there to do the right thing. Some of these reforms sound great, but the fundamental question is, when are the bottlenecks going to go away? You know, are they going to meet the 120 day requirements in the law?

So a person who takes that incredible courage to come forward, which we know is so hard to begin with, and when she talked about 38,000 wage claims last year, it's a big, like, whoa. That we just need to have justice be done. So my response is that I love the report and I loved the passion that the Commissioner has brought to this concern. But all we're asking for in this audit is a separate set of expertise and eyes to take a look at it.

That's all and if they can learn some things that could help us in this work, in addition to what the Commissioner is doing in her office, that's a good thing for us to have as much data and information as possible going forward.

Okay, I'll take a few other questions. I do have some closing comments and some thoughts before we take a motion. So, Mr. Wood, I saw your request.

Yeah, thank you. Thank you, Senator Glazer, for bringing this forward. I think people are always concerned about an audit. Doesn't always like people looking in from the outside. I think it's a good thing we commissioned an audit early on when I first got here, around skilled nursing facilities and licensing and some of the things going on. What we found from that audit was surprising to us. We found the Department of Healthcare Services had some criteria they followed.

We had Department of Public Health had some criteria they followed, and neither Department knew what the other Department was doing. So I think that was a valuable outcome for both departments, and I think we've made some headway there. I have a constituent who's been in contact with my office since April of 2020. He was told at the time that he would get a hearing in 18 months to two years, which is consistent with the 700 plus days that we're hearing from Senator Glazer.

We're at three years now, and since he reached out, and every time he calls, the time gets longer. He reached out on the status of his claim last month and was now told it was four to five years for a hearing that's clearly going in the wrong direction. First it was 18 months, then it was three years, now it's four to five years. And he was also told the Oakland office only has one hearing officer currently. That begs the question, how many claims are there?

How many hearings a day happen? And we actually met with DIR in my office and we asked for some data and it wasn't exactly easy to get forthcoming, wasn't easy to get a commitment. We kind of wanted to know how many cases are in our district, give us the aging on those cases, and when we might expect to hear that those people might get hearings. I would think that wouldn't be too difficult to do, but there was resistance to that even giving that information to us.

I worry about what happens if five years out my constituent doesn't have, he finally gets his hearing. What happens if the company's gone? And that's a real possibility. We just saw three teenagers in Sonoma county. Story in our local newspaper filed a claim. Pretty brave for teenagers, high schoolers to file a claim. You've got a company that's got the subject of 19 claims since January of 1819. Claims. Now we're talking about money taken from children.

12 of the 19 cases await the scheduling of settlement conferences or hearings. One of the other claims was settled in favor of the worker. When are these young people, brave young people, teenagers coming forward to contest? We're not talking about a huge amount of money. I mean, are they going to be waiting until they're eligible for Social Security to get access to mean, I don't know part of what this is to see. Can we examine this? There are things that an outside eyes can see.

What is this geographically? You talked about San Bernardino and how you've made progress there, but certainly it doesn't seem to have affected some of the constituents in my area. So is this a regional problem? I mean, could we be refocusing our resources in different areas to get some of the same kinds of progress you've seen in San Bernardino, in the North Bay or Oakland or whatever? That's kind of the purpose of this.

And I appreciate all the work you're doing and the initiatives sound great, but I got people waiting for wage that are victims of wage theft. And I think someone being told four to five years is beyond unacceptable. Considering you have, I think it's 120 days to respond. That's 10 times plus the amount of time past the statute. Help me help our constituents.

Absolutely. We help them every day. I'm concerned by what you're sharing. I have not, and I just received updates this morning in inquiries about our delays. I haven't seen any figure that indicates the four to five years that your constituent received information. And so a lot of the challenges in obtaining information, like what you experienced in the meeting with Dir, which I was not a part of, but I will inquire about that.

Your request to receive information about particular geography fees seems to be something we should be able to do. However, the reality is that every request we make, including those requests from me, take our team away from focusing on moving those conferences and hearings. And sometimes that falls off the plate because our indication is to prioritize those conferences and hearings. But it is very disturbing if a Member of the public is receiving this information of four to five years.

So I would like to look at that also get information of the employer. You have identified with 19 claims, because if an employer is in our system, the same employer with multiple claims like that, we should be referring them over to our Bureau of Field Enforcement. So I'd like to follow up with you. I appreciate the inquiries you have made to our office. I know that your inquiries have helped us improve processes that we have with legislative inquiries so we can follow up on these two.

But I just want to be clear that this is a statewide problem. There's not a particular unique problem to any of the regions. There are unique situations of those constituents and those particular economies that as an enforcement agency we have to take into consideration and should be aware of. But these problems that we're talking about are systemic, and these reforms need to happen throughout our offices. So the examples I gave you are programs that once we perfect that model, our intention is to expand it.

We already are expanding the concentrated conferences into other offices. So that's the goal that these 14 strategies that we have, once we have enough staff to monitor them and to execute them, we will have these in all of our offices.

Well, just final thing, I would say I have to marvel at someone who's willing to fight for as long as they have and be in continual contact with our office asking for help, asking for help. And we can't move the needle on some of these cases. And that case I just told you about with those young people, there's an article in the newspaper. We're happy to send you that newspaper article. It gives you the name of the employer, lays out exactly what I just told you.

And so I want to thank the Center for bringing this forward. We had thought about bringing this auto forward just because of some of what we're hearing from our constituencies, but also just the feedback and the way we hear that sometimes the people in the Department that you supervise or that the Labor Commission supervisors are not always terribly friendly and very dismissive sometimes to the people calling, asking for help.

And when someone calls with a problem and the person on the other end of the line is dismissive and not helpful, it doesn't do much to encourage them to be persistent. But this guy is still trying. He wants his money, and God bless him for trying. And we're doing everything we can to try to help them.

And I couldn't agree with you more, just if I may, on this last comment, that we've also initiated an effort to become trauma informed. In my 20 years as an advocate sitting in those lobbies, I experienced that directly. The workers and employers I represented experienced that. I sat across six different labor commissioners, and most of them were dismissive.

So this is a deep, systemic problem within the culture of this agency, which is why we're digging down deep to ensure that people understand we are a public facing agency. We were created to serve the public, and that is absolutely not acceptable from any of our team. And I'd love to opportunity to share with you these reforms because that's a whole other list of our effort of becoming trauma informed.

Thank you. I just want to remind everybody, I did give the reminder early on that this item was going to take a while because everybody has questions and I still have some more. But, Mr. Cortese, you're next.

Thank you, Mr. Chair. First of all, I want to stipulate as a former Member during the entire prior session of Senate Subcommittee Five, which budget Subcommittee Five, which deals very much with some of the issues around staffing and vacancies, and so forth. And there's been rigorous back and forth in that Committee over the last two years and requests by Members to get to the heart of the vacant position issue, the funded vacant position issue there, among other issues.

So I also want to say that in the County of, of Santa Clara a few years ago, we stood up our own office of Labor Standards enforcement because we felt like the backlog on collections, on state judgment collections was in our county, was so extreme that we should start going.

Going after them ourselves. We found out we could do that. So they're problems. I want to stipulate to that before I say what I'm going to say next. That was my point. That budget process, as we all know, is going on again right now as we speak. Subcommittee five is over in the other building, meeting with my policy Committee on labor issues. And on May 10, for example, we are going to have another hearing, a joint hearing on accountability and effectiveness that's focused on wage theft.

There, sub five will continue to have its own hearings, and I've asked Senator Durazo to have a dedicated hearing on these topics in subcommittee five. Should that displace the need for an audit? We don't know. I've been in discussions with labor fed and others about introducing a vehicle, and we have a spot bill in waiting to focus on potentially creating a dedicated hiring unit at DIR to break down other barriers to hiring that exist.

I'm actually not sure if what's really needed is an audit of this agency, but an audit of HR in terms of what's it going to take to get hiring moving, given what I've seen so far. But I'm not an Auditor or an expert on state HR, at least at this point.

What I'm worried about is, and I think every elected Member here from both houses has heard this before, is that as we are pushing hard in the budget process to try to get these issues addressed, if we have an audit that's outstanding, that comes out of this Committee today because there's problems justifiable.

But if we have that outstanding clouding this budget process, what we will hear back, with all due respect to the administration, is, well, let's see what the audit comes up with first before we fix anything else. Therefore, the stories, like Assemblymember Wood brought up, many like that in the rest of our districts, to me, get replicated over and over again for another extended period of time, my suggestion would be, and I'd be happy to move it.

But I don't know, in terms of a point of order, if and when it's appropriate, I think, would be to retain this audit until the budget process is completed, see what progress we made, see if, in fact, there's a vehicle, either a budgetary vehicle or a bill that's moving to address a substantial number of these issues, and if not, come back and let's get the audit out of Committee.

But I am, call me cynical or whatever, I just think it's a natural reaction to say by those who were trying to get to make change outside of our two houses. Look, you guys sent an audit out. Thank you very much. We're going to deal with that right now and talk to us some other time about fixing these problems, and I think that would be a tragedy in and of itself. So, Mr. Chair, again, I'd like some clarity in terms of a point of order as to whether or not a motion like that can be put on the floor.

So I'll make some comments here. Again, I would say I hear, I think, the sentiment from everybody, including the author and others who have spoken up on the desire for this system to work much more effectively. Again, just heard, I don't know if you had heard this report before from the Office of Labor Commissioner, but there's some initiatives that have begun that maybe could address some of these issues. I still haven't heard how we're going to get to 120 days.

I think that's a question that needs to be answered, and I think an audit can answer that question. But in the spirit of trying to, the work we've done so far, we've been unanimous on every single vote, a single vote here, and the spirit of trying to work to address the actual issue, I'd like to entertain that idea, but I'd have to see what that would be dependent on.

I'd like to see that the budget process in the Committee oversight hearings actually deliver measurable, actionable items that get taken by the office to reduce that number to where it needs to be. I don't think I have that evidence before me today. I don't know if you all feel otherwise, but I'd be willing to consider that, at least personally.

I'd like the author to, again, we've been doing all this work collaboratively, the author to comment as well on sort of what his take is on that alternative approach. But I think it's something we should put on the table.

Thank you, Chair Alvarez, and certainly my respect and appreciation to Senator Cortese for trying to find the right path here, because I know we share the same goal. The challenge that I have with it is that it's very easy to rationalize a failure to act. And what we are talking about today, it's not a new issue. It didn't just happen in 2023. It's happened every year. Every year.

And when we hear from the Commissioner that there's deep systemic problems on her own acknowledgment, it's an understanding that this is not a one time, one year situation and that we have to be a little bit more aggressive. I believe in getting the facts. Again, an audit does not force any policy change or any budgetary change. And if the administration is going to use an audit as a reason to not do the right thing, that's a serious problem.

And that means that we're perpetuating that failure by the rationalization that, hey, let's give them the chance to come in with a budgetary proposal. The budget is just a budget. They've had the money. So I don't think the issue is just about money. It's about how they are operating as an agency and whether people are getting their hearing and getting their money back. And so I so respect the consideration of alternatives and of the desire to be together. I appreciate that.

But I just want to acknowledge that we have fraudsters, fraudsters and cheaters that have been operating in the state, 38,000 wage claims this past year. Guys, come on. Are we going to just keep repeating the same cycle with the best of intentions? And so I guess that's my honest feedback. Mr. Chair.

We'll continue with the conversation on. Thanks, Ms. Gonzalez.

Well, thank you very much, Mr. Chair. And I appreciate this dialogue as well. And I thank Senator Cortese for raising this as well, because I do align my comments with him and speaking with the good Senator, who I think we all have, the same goals here is to ensure that people, workers are getting their fair share. They're getting their checks, they're being compensated. But I want to make sure that we take this time in the oversight process through the budget subcommittee five to be able to get and gain more details on this. If we're going to do the audit, let's do it the right way. I think most of the information that. I see here.

Pertains to staffing, which is okay, that is one part of it. But I also want to see what we're going to do to compel employers to pay employer compliance. I don't really see explicitly outlined in here.

Number eight.

Yes, but I mean, well, review and assess any other issues that are pertinent to the audit is not necessarily specific. So I would like it to be more worker focused because that's exactly who needs the checks and who actually needs justice in this process. I agree with my colleagues here. I don't want folks waiting 780 days to get paid, but this audit needs to be focused on them, like solely on them and how we can get them to pay.

And again, reiterating the compliance, because what we know in the 120 days, oftentimes it's lack of records, inaccurate records, missing records, and who are they from? Employers who are not providing those records. It's hard. So I commend our Commissioner for doing this good work. But I also think that we should take our time to incorporate items that have been listed out by the labor fed, our Commissioner.

Of course, many of the colleagues here who I think have difference of opinions in some cases, but with the one goal of ensuring that workers get their checks and their fair share first. I think we all agree with that. And so I would align and hope that we can take a little bit more time. No one's saying that we don't need an audit, but the timing would be my preference.

Thank you, Ms. Gonzalez. Vice Chair Blakespear.

Yes, thank you. Well, I listened very carefully to the audit, the things that were shared today, and also my colleagues. And to me, this doesn't seem like it's different from the other things we're choosing to audit. So if the requester and I would be interested in Assemblymember Woods, I mean, the testimony that he gave about these very specific examples in his district are really telling, and it's a very big problem, obviously.

And so to me, it seems like this is the kind of thing that we should audit. And the Auditor himself, when he was describing it, when he said, this is a straightforward audit, and you'll be looking at things like size and duration of backlog, as well as what is the enforcement mechanism. These are the beginning and end of. So it is more than just employees. So not being on a budget subcommittee, I don't know if the budget subcommittee would come up with something different.

But to me, if the requester and Assemblymember Wood, with these examples, don't think that that's the right vehicle and think the audit is, I'd be inclined to support that because of all the things that we've heard here today. And it does seem like the Commissioner herself explained a lot of systemic and major problems that could be helped by having the analysis of the audit. In the same way, the massive problem of homelessness is going to be helped by the audit.

And I think every organization that we audit maybe has a sense initially that this is some type of a punishment. But the reality is, and I've been on several audit committees, an airport Audit Committee and others, that you actually do uncover really useful things. And so being able to spend the time needed to produce the information and then hear back from the Auditor, it's objective, it's broad. So I would be inclined to support that.

But if Assemblymember Wood, and the requester don't want that because you think the budget subcommittee approach is better, as Senator Cortese and also my colleague over here believe, then I would be inclined to go with that. But otherwise, I'd like to hear back from you. Thank you.

Thank you, Mr. Seyarto, I think I saw your hand next.

Thank you very much. I do sit on budget sub five, and one of the things I have to consider is, are we investing enough money and are we solving the problems so that a program is maximum effectiveness? And I think we're struggling with that. With a lot of our agencies. It's hard for me to make decisions that say we're going to put forth this money and then not have the outcomes for our citizens that are depending on our agencies to be effective.

So for me, I don't see it as a, you have to stall the process in budgeting going forward. If we put off doing an audit and figuring out exactly what we need to do to help, it's not an either or thing. We have to continue helping people in the meanwhile. But if we decide later on, oh I guess we do have to do an audit, that's six more months that we lose in potentially solving a problem.

So I think doing an audit, just like I said before, it's all about giving us the information we need to make the best decisions so that we have the most effective agencies and they have the tools that they need. And that's the big part of this. A lot of agencies, we have a lot of passionate people working for them. They're good, competent people, but they don't have the tools they need.

We need to know where we're falling short, and that's what the audit process is to me, and that's how it helps me on that budget subcommittee to ensure that we're putting money into the right places so that we can be effective for the people that are suffering because of the lack of our ability to serve them. I favor doing this audit, getting it started. It's not going to stall the budget process, and I think it will be very helpful in the end.

Thank you, Mr. Seyarto, Mr. Laird.

Thank you. I came into this hearing prepared to vote against this audit for one reason, and that was that I've been on the other side of this. And when I was resources secretary, we had the fire marshal, and the fire marshal had this humongous backlog of building approvals and things were being stalled because they were not being turned out. And there was an audit privately suggested at the time, and I thought, well, it's a clear issue. There's 44 vacant positions.

And if we fill the positions, we will move these. And the audit is just going to tell us that it'll be a waste of auditing time. And I felt the same here. Then the department representative argued against that position by saying, this is a systemic problem that's been going on for 20 years. If that was the issue, it would have said, we need more positions and we can produce it. And that's not what the argument was that was made.

And so it flummoxes me because it puts me in a position to vote, not the way that I was going to vote walking in the room. And I actually believe in good faith that Senator Cortese was right. There's so many times that it's so easy, if you're in an administrative position, to say, oh, there's an audit out there, we have to wait till it's done and it slows things down.

But if it's truly a systemic problem, it is not a budget problem, even though it's clear to me from reading everything that there needs to be more positions to move these quickly. But there needs to be, if there is a systemic thing, and Assemblymember Woods example is very powerful, I don't know that that's necessarily addressed by just more positions.

And the fact that it appeared, even though it's been in the newspaper and I've similar ones in my district, the fact that it sort of wasn't known in a way is troubling. And so in the end, I'm thinking of voting for this audit because if it's systemic, we've got to address it.

All right, well, stay tuned because we now have public comment, and that might make you, we're going to try to get to something that we can have unanimous support. I have something in mind, but please public comment. State your name and your position.

Thank you, Mr. Chair and Members. Caitlin Vega for the California Labor Federation. Thank you. I think this has been a very interesting and thought provoking discussion, and I appreciate all the time that you all have put into it. As the Labor Federation, there is nothing more important to us than what happens to workers when they go through the Labor Commissioner process. And I think it is noteworthy that every organization representing workers who was asked about this audit said, no, this is not the right answer.

That's because every one of these issues, beginning with the fact that the departments have 30% to 40% vacancies, there is no way to be functional with that level of vacancies. We have to speed up the hiring. We have to hire more bilingual staff we have to address those most pressing issues. This agency is deeply underfunded for the economy that we have in California over the last couple of decades. Yes, we've had challenges with the Labor Commissioner's Office.

We have also had changes in our economy where companies have moved from direct hire to the use of multiple labor contractors, which makes it much harder for workers to know who their claim is against, to prove their claim, and to collect their wages. We have done numerous bills on this and administrative advocacy, but that makes the job much more complicated. We believe that without adequate funding, without filling those vacancies, it's almost impossible to assess anything deeper. Are there systemic issues? Of course there are.

It's an agency that has changed through different administrations with radically different missions and guiding priorities. But I think this Labor Commissioner has laid out her priorities and the initiatives that she's working on and that they are consistent with all of the goals that everyone here has spoken about. I've been working on labor legislation for 20 years. Every bill we do depends on the Labor Commissioner.

In addition, because of my job, everyone I know calls me about their friends and family and their struggles to get the money they are owed. But much of this, as Senator Gonzalez mentioned, is on the employers and the ways that they have found to evade being held accountable. That is why we believe strongly give us the opportunity to go through the budget process with the oversight of the labor chairs and make immediate reforms. Those reforms take place immediately.

Hold on to the audit if you don't like those reforms, if you don't see a direct impact on the staffing, on the vacancies, on the ability to serve immigrant workers who work in the most the industries with the highest rates of violations and yet don't have adequate staff that are able to process their claims, come back and move the audit.

We have no objection to that, but we would ask for the opportunity to move forward through the process and try to get those immediate changes that we need.

Thank you. Anybody else wishing to comment on this item? Okay. All right. So I think everybody's had a chance to share. Here's what I've heard and what I think, at least in my opinion, and I'd like to get the Senator Glazer's comment on this. There's some work that is set, seems to be happening that I know I was not aware of in terms of reforms and some changes within the office. Those are all, I think, good things. I like to hear more about that.

I like to hear more details about that to see whether that those are enough reforms to continue to move, have forward progress on the ultimate purpose of all this, which is to get people their wages back? I don't know that I can make that assessment today. I've heard about hiring of new people and it was mentioned obviously in the testimony, public comment, that that could really help resolve the issue. I don't know what hiring an additional person means to the delays.

I like to really know what that means, and I would hope that the budget subcommittees would ask questions. If you hire and your vacancy rate is only 15%, which is typically what's normal, I think, in a state agency or an government agency, what does that mean? What is that going to get us to? I don't think, we don't have that answer today. I would hope that the budget subcommittee could ask that question, what is it going to take to get to 120 days?

Is it additional measures to make to compel employers to participate? And if that's the case, in which ways I'm willing to give an opportunity for those questions to be answered. But I like to see detailed answers, not just, we're going to do better when we hire more people, that's not a good enough answer. That doesn't give us a metric that we can hold up and say, this is how we're going to get to where we want to get to.

There's been mentioned, Senator Glazer, of the threat. If there's an audit happening, budget won't be able to move forward with some of the things that they want to do because perhaps the administration says we're going to wait for the audit.

I think something that we can consider at this point, and I think it'd be appropriate, is to move forward with the audit at this time, as I think seems to be the desire of the body, but I also feel the desire of the body is to wait and allow to see what that process delivers.

So I believe it's appropriate to move forward with the audit, but not allow it to begin until after the new fiscal year, July 1, depending on what happens in budget, and it's something we can revisit. I intend to have a, and first of all, thank you. For those of you who have been here for the almost 4 hours, I really appreciate your engagement, especially on this issue.

I intend to have a Committee meeting after we approve a budget, and at that point we'll see whether or not there's sufficient progress really being made. I would encourage the department to spend time with each one of the Members of this Committee to provide those updates that you've shared to demonstrate what is happening in terms of progress and how we're going to see better results. And I would ask that you consider that as a way to move forward, I hope collectively, unanimously today.

Thank you. Chair Alvarez, with respect to your thoughtfulness, I would accept that as a compromise step forward, that the Committee is willing to authorize the audit to begin July 1. But to allow, if some actions were to occur on the budgetary side, to somehow allow the Committee to reconsider at some point, then I think that would be an acceptable alternative.

I would note that even though the administration has been aware of this problem for years now, what changes have they made in the budget proposed by the Governor? Because it's really the governor's operation that's supposed to drive these changes, the resources that are required. We provide the oversight in our budgetary process, and I know our subcommittees will do that, but it usually is in response to actions that have been proposed by the administration.

And if they're proposing no new changes, what is it that we are going to do in that process to somehow make them spend more money, make them do this or that? And I'll respect that process as it goes forward to see what comes out of it. But I think that what you have proposed is something I would accept as at least a progress point, that we're not afraid of getting data and facts as we try to examine this problem going forward. And it's all its complexity, but with a compelling feeling that we have 38,000 people this past year who say they've been cheated and we're not doing enough.

Well, I think certainly moving forward with an audit demonstrates that we want to see those results and we want to see that action budget, even though it's not in the current budget proposed. And I hope that our subcommittees can work on that. Is there any comment on the approach that I've just put forward, Mr. Cortese?

Just questions on what I'm understanding is a motion, basically, and being new to this Committee, I don't know where all the authority starts and stops, but I think what you're suggesting is sort of consistent with reconciling my concerns, as stated earlier, so that we're not clouding the budget process or we can, those of us who are in that process, or the legislative process, frankly, including dealing with Committee consultants on policy issues. And I do that at Senate Labor.

I think people are going to want to know in those committees whether or not a piece of legislation to deal with this work should go forward or not, or whether the audits going forward. I think your suggestion or motion allows us to say, but I want to know if this is correct, that an audit was approved but held in advance until July 1 in order to determine what legislation or budget vehicles may have moved or be moving at that time.

Is it further understood that it would automatically be on the next agenda for an up or down decision to move forward? I don't have a problem with it sort of being in the absence of another vote moving forward, but there's got to be an opportunity for the Committee to move for reconsideration. Otherwise, the Auditor, I think, and interesting to hear from the Auditor at some point has to start working and deploying resources, which I think could just compound the problem.

Let me answer your question very clearly. It would be the intent for that to be the case, that we would have an opportunity at our June meeting to rescind that audit request. And, Mr. Parks, if you want to comment on us putting a future date and what that would mean for when you initiate the work, as was just.

Thank you, Chair Alvarez. I just wanted to make sure I'm in sync with what the Committee is proposing here. The way I understood your remarks was that the item today would be to approve the audit, and the directive to my office would be not to start it until July 1. So if that's correct, we would be starting it July 1.

Unless you have a different direction at our June meeting, which would be to not move forward with the audit. Right. Okay.

Yes. Thank you. I just mostly want to make sure it's within the jurisdiction of the Committee. That's not a callback. But again, under ordinary parliamentary procedure, someone who supported the audit today would be able to move for reconsideration at that time. I don't know if that's true or not, because normally those reconsiderations under Robert's rules have to be done within 30 days.

So I'm going to take it as a representation of the Committee that we can entertain a motion for reconsideration or rescission when we get to that date. I just don't want to be blindsided with, oops, we didn't fully understand the rules when we made that initial decision.

We'll ask if staff to try to ascertain that before we take a vote right now. But that is the intent. Gonzalez. No. Mr. Laird.

Yeah. I had a wonky question that mostly got addressed, but my wonky question was just whether we were going to know by the time of the June meeting or whether the budget process is between the June meeting and July 1. And we're supposed to act and we won't know. That was my only question. But the chair is in another conversation, so I don't know what to do about that.

Senator Laird. So we have a deadline of budget July 15, June 15.

But the Governor, you have yet to experience the governor's veto.

Okay. Well, I mean, the intent here would be, again, everything we've done today up until now has been a collaborative effort and attempt to. And that would be the intent that we would see what the budget process.

No, I really appreciate your suggestion. I really appreciate Senator Glazer's willingness to do it. Appreciate the clarification of Senator Cortese. But if we don't know when we meet on June 15, I'll call you and say, how are we figuring this out?

We haven't scheduled the date yet. It will be sometime in June. But good point. Thank you. Maybe we wait till after July 1. So maybe we date this motion differently in order to make sure we get that enough space of time. Thank you for saying that.

Hi. Just as a note of precedent, when I did request in my audit of the UC admission scandal, they were undergoing their own internal audit at the time. So we did direct the Auditor to, we approved the audit with the understanding the Auditor would wait until, I want to say, we requested in August, wait until December to start the auditing process. So we do have a precedent for doing this. And if we are unsure about July 1, we can also say August 1, right.

We can also say September 1. Whatever we decide, we can decide that date. And I would say it's prudent to not put us under pressure of the July 1 deadline. That's just like a date we came up with. So I would suggest that we go for September 1, and then usually we have a GLAC meeting in August, too. So that gives us plenty and ample time to review it if we needed to.

Appreciate that. Feedback, Ms. Boerner Horvath, Vice Chair, please. Vice Chair.

Vice Chair, yes, I completely agree with Assembly Member Bernard Horvath about the date. There's no reason to put ourselves under that pressure with the budget. And so I would recommend we do choose a little bit outer date. But more importantly, the reason that I articulated that I support this audit, which I actually think Senator Laird expressed it the best way, which is it's not just about the staffing.

So if the budget Subcommitee says we want to do more staffing and it's in the budget, I still feel like I'm going to want to support the audit because of all the other things that were said today that were not actually exclusively related to just that. The idea of reconsidering. It's an okay mechanism, I think, to have. But just to put it out there that it's this larger cultural.

The issues that she went into in great depth and that were described by Assemblymember Wood that are really quite troubling, as well as just the huge backlog that was described. So those are my comments. Thank you.

Thank you. So, Mr. Laird?

Well, I was prepared to make a motion.

Okay.

I move the framework of approving the audit, delaying the start date till September 1.

Second.

I would just add, noting, just to be very specific, Senator Cortese's request that the Committee may rescind the audit at a subsequent hearing.

That was implied in the motion.

Yes. Thank you. Right. Anybody else want to comment on that motion? Senator Glazer?

Yeah. Thank you for the consideration and the thoughtful conversation. I know we all share the same goals and values here, and I know we all hope that we're just not repeating the same mistake again and again to the detriment of so many workers who have been cheated. So thank you for your consideration today.

Well, that's not the intent. We're looking forward to the Budget Subcommittee's work. And again, not just driven with filling vacancies, but how we're going to get to the numbers of reducing the backlog and getting to 120 days. That's what I expect to see out of budget discussions before we see this again. So we have a motion by Senator Laird. It was seconded. Or by Blakespear. Vice Chair Blakespear. Thank you. Secretary, please call the role.

Thank you.

The motion is to approve Audit Request 2023/104. California Labor Commissioner's Office, backlog of wage theft cases by Senator Glazer and not begin the audit until September 1, noting the Committee may rescind the audit at subsequent hearing. [Roll call].

That will be on call as we do not have a majority of the Assembly voting at the moment. Thank you all and thank you, Senator Ashby, for your patience. I will note we have 25 minutes until this room goes to the next Committee. So, Senator Ashby, welcome, and please proceed. And if everybody can be as succinct as possible respecting the work that's been done on this, Senator Ashby, thank you. Please proceed.

Yes. Thank you so much. Thank you all for hanging in there with me. We will get you back on time as quickly as we can. Today I'm presenting a request to perform an audit on California's fetal death certificate process. A stillbirth is a death or loss of a baby before during delivery. Stillbirths affect about one in 175 births. Black women experience stillbirth rates that are over twofold higher compared to white women. California defines a stillbirth as a fetal death occurring from 20 weeks of pregnancy on.

According to the Center for Disease Control and Prevention, California loses 2,465 babies a year to stillbirth. When a mom has a child that is stillborn. California takes an average of six to eight weeks, nearly two months, to process their certificate of stillbirth or their fetal death certificate. This is an average some families wait much longer. Six to eight weeks is far too long for a parent to wait to be able to bury their baby.

This is why I'm requesting an audit of the fetal death certificate process. The fetal death certificate is complicated. It's nuanced, has many different offices and departments to go through in order to receive approval. After a stillbirth occurs, a family will begin by selecting a funeral home. The funeral home will work with the family on specific information. Once this information is completed, the funeral home will contact the hospital or doctor's office to try to release the baby.

Please understand that means that the deceased infant lies in wait for those weeks after the causes of death are determined. The worksheet is then sent to the county doctor, where they'll review and accept or deny the documentations. If and when it's accepted, the doctor will then attest to the death by voice recording or signature. Depending on the county, the worksheet will then be sent to the coroner's office.

Only after the coroner's office has approved it, can the California Department of Public Health be approved and finalized or rejected. Taking on average between six to eight weeks to file a fetal or stillbirth death certificate is unacceptable. Florida takes one week. The existing process disproportionately impacts low-income families, as many do not have the ability to take additional time off to grieve or to make arrangements or to be with their family. This forces many people to wait for months to bury their recently lost baby.

In this waiting period, families are unable to make final decisions about their child, like burial or cremation. And most importantly, they're unable to gain closure for their loss. We need to find a way to shorten the amount of time it takes for these certificates to be filed and create one less burden, one less thing that exasperates the grief that families will face after their baby dies. Today, I have my communications Director, Michelle Sherwood here with me.

I would like to note that prior to coming here, this audit was signed by more than half of the Women's Caucus. It has bipartisan and bicameral support and is heavily lifted by the many amazing women who serve in this Legislature. I'm new, but I understand that normally we bring up an expert in a topic and we have them talk about their work. Please understand, Michelle's expertise is personal.

Michelle's sitting by me today bravely to share her story and tell you what happened to her. As a new member, she came to me as a staff and asked me to do this audit. And I can think of no braver thing than for her to sit in front of her peers and me and tell you her story and ask you for help for the women she knows will suffer the same thing she suffered. So, Michelle, here you go.

Hi. Good afternoon, chair and Members. Thank you for hearing this. My name is Michelle Sherwood. I'm a staffer here in the Legislature. On June 16, my son passed away. He had no heartbeat, and I had to deliver him. To give you an idea. The room was completely quiet. There was no sound. No one said congratulations. It was one of the, if not the worst experience of my life. My death certificate for my son was denied five times by the doctor.

It was denied once by the county and once by CDPH. I'm trying to be brief. I went through all of my maternity leave and then an additional month of bereavement leave before I was able to actually bury my son. And while this was occurring, he was in a cooler in the funeral home and at the hospital. It was absolutely horrible. And I implore you to please support this audit. Thank you.

Sir. I would just like to, first of all, thank Michelle for her bravery, for coming forward and telling that story, and for all the women who do not want to be paraded in here to do this, but would ask you for your help. She's very brave. She served her country and now she serves her state. And on behalf of all the women who went before her and all those that will come after, we're asking you for an I vote on this audit, please.

Thank you, Senator Ashby and Michelle, thank you for being here and the courage you demonstrated. Thank you. We've been asked to leave this room, so I'm going to try to go through this real quickly and hope I don't get in trouble by the sergeants so we can get a vote and get you all to where you need to be. Any comments from Members of the public? That's the most important part. Seeing none. Any the affected agency. Any comment that you need to make?

It's 4 hours later. I know you guys want to go. Morale Farsi from the California Department of Public Health. Happy to answer any questions, appreciate testimony that was given here today and have reached out, offer ourselves, make ourselves available to support the Members, office and staff.

Thank you very much.

They've been great.

Thank you. Seeing no other public comment. Members of the Committee?

I'll move.

I'm sorry. Oh, I'm sorry. Just if you can.

Troy Sander, Captain Placer Sheriff. First of all, Michelle, sorry for your loss. I know you went through a traumatic experience. We have no objections to the audit. We look forward to providing all data relative to any improvements we can make in the process. It is multifaceted, it has a lot of prongs to it. But whatever we can do to help grieving families and move this process forward in a positive fashion, more than happy to do that.

Thank you for your testimony. Appreciate it. Vice Chair Blakespear?

Yes, I will move this item.

Thank you. We have a motion by Vice Chair. Any other comments? Committee questions? Motion by Vice Chair Blake Spear. Second by Ms. Gonzalez. Please call the roll.

The motion is to approve Audit 2023/110. Fetal death and stillbirth certificates by Senator Ashby. [Roll call].

We will leave that on call. We need another Assembly Member to vote in support. Thank you again for coming forward. And with that, I will be now, no objection, calling a recess. We will reconvene in 10 minutes in room 437 for the two open items for the Members. Everyone else who is here, thank you very much. Have a great rest of your day. Thank you.

Thank you, guys. Thank you.

We are not doing any public comments. We're going to be able to start earlier.

All right, thank you, everybody. I appreciate your patience. As we moved up to lift the call on two items that we did not have enough votes from, particularly the Assembly. So I'm going to ask Secretary to lift the call on the two items, and we will take a vote. Thank you.

First one, audit. Motion to approve Audit 2023/104. California Labor Commissioner's Office, backlog of wage theft cases by Senator Glazer. [Roll call].

That audit is approved with a vote of 10 to zero. Next item.

Motions to approve Audit 2023/110. Fetal death and stillbirth certificates by Senator Ashby. [Roll call].

That's been approved by a vote 11 to zero. All of the audits have been approved. We are going to add on anyone who like to add on to any other votes. Otherwise, everything's been approved. Thank you. For those of you who made time to come up here.

Did I vote for all of them?

Here we go. There you have it. We're going to go through now. We're going to go through the consent and then every single item. So here we go.

The motion to adopt the consent calendar. [Roll call]. Okay. Motion is to adopt Audit 2023/101. The Santa Clara Valley Transportation Authority by Assembly Member Berman. [Roll call]. Motions to adopt Audit 2023/102. State and local government homelessness funding by Senator Cortese. [Roll call].

Motions to adopt 2023/103. Departments of Healthcare Services and Public Health, Comprehensive Perinatal Services program by Assembly Member Bauer-Kahan. [Roll call]. Motion is to adopt 2023/104. California Labor Commissioner's Office backlog of wage theft cases by Senator Glazer. [Roll call].

I think we just want to clarify on that motion so it's clear on the record.

Clarification. Motion is to approve Audit Request 2023/104. California Labor Commissioner's office backlog of wage theft cases by Senator Glazer and not begin the audit until September 1, noting the Committee may rescind the audit at a subsequent hearing.

Thank you. Next item.

Audit 2023/107. Riverside and San Bernardino counties, Proposition 47, Assembly Member Ramos. [Roll call]. Audit 2023/110. Fetal death and stillbirth certificates by Senator Ashby. [Roll call]. Audit 2023/112. Department of Housing and Community Development Mobile Home Residency Law Protection Program by Senator Seyarto. [Roll call]. Audit 2023/115. Departments of healthcare services and managed healthcare access to behavioral health services for children by Assembly Member Weber. [Roll call].

Audit 2023/116. Local government cannabis licensing by Assembly Member Joan Sawyer. [Roll call].

Thank you, everybody. That concludes today's hearing is adjourned.