Appendix A

SCOPE AND METHODOLOGY

The Joint Legislative Audit Committee (Audit Committee) directed the California State Auditor to examine the commission’s enforcement activities, funding, operational needs, and structure. Table A lists the objectives that the Audit Committee approved and the methods we used to address them.

Table A
Audit Objectives and the Methods Used to Address Them
AUDIT OBJECTIVE		METHOD
1	Review and evaluate the laws, rules, and regulations significant to the audit objectives.	Reviewed relevant state laws and regulations related to the commission.
2	Review the commission’s enforcement program, including its policies and procedures for opening, prioritizing, investigating, and closing alleged violations of the commission’s permits. Determine the frequency and extent to which enforcement staff work with alleged violators to resolve confirmed violations or refer the violations to the enforcement committee or the Office of the Attorney General for prosecution.	Interviewed key enforcement staff and managers. Because the commission’s own database is still in development, we created a database of commission enforcement activity from 2012 through 2017 to develop statistics related to that activity. Reviewed a selection of 10 enforcement cases from that time period in detail, including seven that staff processed pursuant to the commission’s standardized fines regulations and three that they closed without enforcement action. Reviewed the seven enforcement cases referred to the commissioners in 2016 and 2017. The commission did not refer cases to the Office of the Attorney General during our review period.
3	Analyze the role and function of the enforcement committee and assess the enforcement committee’s process for reviewing staff-recommended enforcement decisions and penalties.	Reviewed regulations and procedures related to the enforcement committee. Interviewed staff, management, enforcement committee members, and the deputy attorney general concerning their processes for reviewing enforcement case files.
4	Determine whether the commission has adequate procedures in place to document and track the permits it issues and alleged violations. Identify the number of alleged violations for the most recent five years and identify any unusual trends in the volume and types of alleged violations and the reasons for these trends.	Reviewed regulations and procedures related to permitting and violations. Developed statistics related to enforcement using the database we created for Objective 2.
5	Review a selection of alleged violations, including those related to violation of unpermitted or unauthorized Bay fill, to determine the following:
	a. Whether enforcement staff consistently followed laws, regulations, and internal policies and appropriately documented their investigation and penalty assessment. Additionally, determine whether serious violations and minor violations are given proportional penalty assessments.	Reviewed a selection of 10 enforcement cases staff closed from 2012 through 2017, including seven cases in which staff initiated the standardized fines process and three that they closed with no enforcement action. Reviewed seven enforcement cases in which the commission commenced formal enforcement. Interviewed enforcement staff and managers.
	b. The frequency and extent to which the enforcement committee adopts, modifies, or rejects staff recommendations.	Reviewed the enforcement committee’s enforcement decisions for seven enforcement cases in 2016 and 2017. For these cases, the enforcement committee modified the staff recommendation in three cases and adopted it in three cases. The seventh case went to the commissioners, who adopted the staff recommendation.
	c. To the extent possible, whether the enforcement committee members and the full commission approve enforcement decisions and penalties after a comprehensive and thorough review of the complete record.	Reviewed the enforcement committee’s decisions from 2012 through 2017. We reviewed the documents submitted to the commissioners in advance of hearings on these enforcement cases. Surveyed commissioners and alternates to assess their level of comfort with the time given to review the record of enforcement actions. Reviewed meeting minutes and the corresponding audio files to determine the amount of time the enforcement committee and commissioners spent on enforcement hearings. We determined that enforcement committee hearings average two hours per case and commission hearings average one hour. We did not identify significant concerns.
	d. The length of time the enforcement committee and the full commission take to reach their final decisions and the reasonableness of the time frame.
	e. Whether the commission has adopted and implemented procedures for enforcement hearings before the enforcement committee and before the commissioners that provide for notice, time limits, the admissibility of evidence, and other factors affecting the ability of a respondent to address the proposed enforcement action.	Reviewed the audio files and transcripts for the enforcement hearings related to the seven enforcement cases that commission staff referred for formal enforcement in 2016 and 2017. Reviewed the commission’s regulations and observed that they include the procedures of the enforcement committee.
	f. Whether the hearings comply with open meeting requirements.	Reviewed the commission’s agendas, meeting minutes, and other meeting records to assess compliance with open meeting requirements.
	g. For permit violations, whether the terms and conditions included in the permits are clear and reasonable and are consistent with the commission’s authority under state law, regulations, and applicable court decisions. To the extent possible, identify best practices and opportunities that may help mitigate potential compliance issues.	Reviewed the terms and conditions in a selection of five permits to determine reasonableness and adherence to requirements. Reviewed six permit applications to ensure that the commission adhered to required time frames. Reviewed enforcement processes in other jurisdictions to identify best practices.
6	Examine the policies and procedures the commission has established to prevent real or perceived conflicts of interest in the enforcement program.	Reviewed commission policies and procedures related to conflicts of interest. Assessed the commission’s compliance with state conflict-of-interest filing requirements and did not identify any significant issues.
7	Review the commission’s use of the abatement fund to determine whether its use of the fund is consistent with its duty and authority and whether such uses are allowable and consistent with applicable state law.	Interviewed commission management. Identified how the commission used the abatement fund from fiscal years 2012–13 through 2017–18. Reviewed information related to the abatement fund from the Department of Finance and the State Controller’s Office.
8	Determine whether the commission has adequate resources and staffing levels to meet current and anticipated permit and enforcement workload demands and to address sea-level rise.	Interviewed the executive director, chief deputy director, and regulatory program director to determine whether the commission had conducted workforce studies. Reviewed attendance records for the planning, permit, and enforcement units for fiscal years 2016–17 and 2017–18 to determine overtime levels.
9	Review and assess the governance structure of the commission and, to the extent possible, compare it to similar organizations to determine whether other structures may lead to a more engaged commission with more effective oversight.	Assessed the size of the commission and noted similarities between it and the California Coastal Commission. Conducted additional work related to commission governance in objectives 5f and 6.
10	Review and assess any other issues that are significant to the audit.	Reviewed documents related to the Suisun Marsh Habitat Management, Preservation, and Restoration Plan. Interviewed key personnel at the California Department of Fish and Wildlife and the Suisun Resource Conservation District regarding the Suisun Marsh Habitat Management, Preservation, and Restoration Plan.

Sources: Analysis of the Audit Committee's audit request number 2018-120, as well as information and documentation identified in the table column titled Method.

Assessment of Data Reliability

As we note in Table A, we did not rely on electronic data that we obtained from the commission and instead created our own database of the commission’s enforcement activities to address certain audit objectives.

Appendix B

ENFORCEMENT ACTIONS TAKEN BY THE COMMISSION FROM 2012 THROUGH 2017

In about 80 percent of the cases it closed from 2012 through 2017, the commission took no enforcement action. Staff closed cases without action for a variety of reasons, including merging the case with others, discovering there was no violation, issuing a permit amendment, or stating that the respondent fixed the violation before staff sent a notice letter. Of the 33 cases the commission closed after initiating enforcement, half were closed after staff levied a fine through the standardized fines process. Figure B shows the percentage of cases closed after the commission began enforcement and the types of enforcement actions taken.

Figure B
The Commission Took Enforcement Actions in Less Than 20 Percent of the Cases It Closed From 2012 Through 2017

A bar chart showing the percentage of cases closed from 2012 through 2017 in which the commission took enforcement action.

Source: Commission enforcement data.

* Case total does not include cases in the backlog that were opened before 2012.

Appendix C

COMMISSIONERS' AND ALTERNATES' RESPONSES TO SELECTED SURVEY QUESTIONS

We surveyed all 26 commissioners and 22 alternates regarding the enforcement process. We received 22 verified responses—14 from commissioners and eight from alternates.¹⁰ In Table C, we present aggregated responses to selected questions. Most of the respondents indicated that they did not have any concerns with commission staff’s processes or performance. Additionally, most respondents indicated that they were satisfied with the rate at which staff have been resolving enforcement cases at the staff level.

Table C
Responses to Selected Survey Questions
QUESTION
As it pertains to enforcement matters, do you have any concerns with commission staff processes or performance?	32% Yes
	68% No

Are you satisfied with the rate at which commission staff have been resolving enforcement cases at the staff level?	77% Satisfied
	23% Dissatisfied

As it pertains to the enforcement cases that the full commission will hear, what is your level of review for the staff-provided materials?	41% In-depth (substantially all documentation)
	59% Moderate (i.e., violation report and exhibits)

As it pertains to enforcement cases that the full commission has heard, did you generally receive sufficient time to review the related enforcement documentation before the enforcement hearing?	100% Yes
	0% No

Would you like commission staff to provide you with additional guidance or documentation concerning the enforcement process?	32% Yes
	68% No

Source: Survey responses from 14 of the 26 commissioners—one position was vacant—and eight of 22 alternates as of December 2018.

Footnote

¹⁰ At the time when we conducted our survey, 26 commissioners served on the commission. Go back to text