Report 2022-031 Recommendations
When an audit is completed and a report is issued, auditees must provide the State Auditor with information regarding their progress in implementing recommendations from our reports at three intervals from the release of the report: 60 days, six months, and one year. Additionally, Senate Bill 1452 (Chapter 452, Statutes of 2006), requires auditees who have not implemented recommendations after one year, to report to us and to the Legislature why they have not implemented them or to state when they intend to implement them. Below, is a listing of each recommendation the State Auditor made in the report referenced and a link to the most recent response from the auditee addressing their progress in implementing the recommendation and the State Auditor's assessment of auditee's response based on our review of the supporting documentation.
Recommendations in Report 2022-031: The State Bar of California: It Will Need a Mandatory Licensing Fee Increase in 2024 to Support Its Operations (Release Date: April 2023)
|Recommendations to Bar of California, State|
By October 2023, the State Bar should identify any service fees that do not fully cover the costs of providing the services. The State Bar should increase the fees it has identified to the amount necessary to recoup its costs unless it determines that doing so would limit the public's access to the services. It should also identify any service fees that have not been updated in five years or more and assess whether they should be updated. The State Bar should then determine the effect that the increased service fees will have on the amount of mandatory licensing fee revenue that it needs.
To ensure that it appropriately plans for its upcoming funding needs and takes all steps possible to maintain an adequate reserve level, the State Bar should reinstitute its practice of producing and posting on its public website forecasts for its general fund starting with its 2024 budget. These forecasts should encompass at least the following three years.
To ensure that it can correctly calculate the timeliness of its administration of external disciplinary cases, the State Bar should immediately review the accuracy of the data in its Odyssey system for these cases and should correct any errors. Unless required, it should not report data from the system to the public and the Legislature until it verifies the data's accuracy.
To ensure the impartiality of the processing of external disciplinary cases, the State Bar should, by October 2023, formalize the administrator's process for identifying her own and any external investigators' conflicts of interest related to these cases.
To ensure the cost-effectiveness of its external investigation process, the State Bar should, by October 2023, conduct in-depth audits for a selection of the external investigators' billing statements to ensure that their billed amounts are reasonable. In addition, by September 2023, it should complete its fiscal analysis to determine how much money and time is spent on external disciplinary cases from the time cases first open to when they close.
|Recommendations to Legislature|
The Legislature should set the maximum annual licensing fee that the State Bar may charge for 2024 to $414 for actively licensed attorneys and $103.40 for inactive licensees. However, before the Legislature finalizes the maximum annual licensing fee amounts for 2024, it should request that the State Bar provide it with the following information:
-An itemized listing of the mandatory licensing fee revenue that the State Bar will need to fund its operations in 2024 program by program. This breakdown should identify any changes in the State Bar's financial situation following the release of this audit, such as the sale of its San Francisco building or the State Bar choosing not to increase some of its service fees to fully recoup its costs as we recommend below. The State Bar will need to identify the effect that any changes to its financial situation will have on the mandatory licensing fee amounts we have identified as necessary.
-A list of any programs funded by licensing fees that need additional funding beyond the program-by-program breakdown to operate effectively and to meet related performance metrics. The list should specify the State Bar's understanding of the amount of funding needed per program.
The Legislature should require the State Bar to provide the above information each year when submitting its annual budget to the Legislature, as required by state law, or it should otherwise specify the format and level of detail needed through statutory change.
For 2024 the Legislature should maintain the Lawyer Assistance fee at $10 for active licensees and $5 for inactive licensees, the Client Security Fund fee at $40 for active licensees and $10 for inactive licensees, and the discipline fee at $25 for all licensees.