Report 2009-501 Recommendations and Responses in 2012-041

Report 2009-501: State Mandates: Operational and Structural Changes Have Yielded Limited Improvements in Expediting Processes and in Controlling Costs and Liabilities

Department Number of Years Reported As Not Fully Implemented Total Recommendations to Department Not Implemented After One Year Not Implemented as of Most Recent Response
Commission on State Mandates 3 5 1 1
State Controller's Office 3 2 2 0

Recommendation To: Mandates, Commission on State

To ensure that it resolves sufficiently its backlog of test claims, incorrect reduction claims, and the boilerplate amendment request, the Commission should work with Finance to seek additional resources to reduce its backlog, including test claims and incorrect reduction claims. In doing so, Commission staff should prioritize its workload and seek efficiencies to the extent possible.


Commission staff discuss staffing and resource needs with Department of Finance staff and our Commission members on an ongoing basis each year. The Commission has submitted a Budget Change Proposal (BCP) for the 2013-14 budget year requesting additional staff resources.

Please note that the Commission and its staff took several steps to reduce the test claim backlog using existing resources. Beginning in 2011, staff has prepared an annual Backlog Reduction Plan to eliminate the backlog. When the BSA audit findings were issued in October 2009, the Commission still had pending 53 test claims, 32 of which were large claims pleading regulations and statutes dating back to 1975 (i.e. the 2002-2003claims). As of this writing, all 2002 test claims have been decided and the last of the 2003 test claims are scheduled for hearing on December 7, 2012. There are currently 36 test claims pending decision. The workplan indicates that the currently pending backlogged test claims may be decided by 2014 or 2015.

Staff also established a workplan to eliminate the incorrect reduction claim (IRC) backlog. The Commission has made progress on the IRC backlog, completing 61 IRCs since October 2009. Commission staff continues to work with the State Controller's Office and claimants to resolve the remaining 121 incorrect reduction claims. Though this process may take significantly longer than anticipated in the Commission's earlier workplans, we are making positive strides towards completing these claims and will continue to do so.

Recommendation To: Controller's Office, State

To ensure that it can meet its responsibilities, including a heightened focus on audits of state mandates, the Controller should work with Finance to obtain sufficient resources.


When the final audit report was issued, the SCO had 33 of the 43 mandated cost audit positions filled. The 10 vacancies were held vacant due to economic uncertainties that could negatively impact the SCO's budget. As anticipated, effective June 30, 2010, the SCO lost funding for 11 positions. At that time, the SCO had 25 of the 32 mandated costs audit positions filled.

Recommendation To: Controller's Office, State

The Controller should increase its efforts to fill vacant positions in its Mandated Cost Audits Bureau.


We worked closely with the Department of Finance to restore funding for the 10 vacant positions, which are identified in the 2010 Budget Act adopted October 8, 2010. However, of the ten positions requested, we lost four General Fund positions effective July 2, 2012, due to salary savings reductions. Consequently, we have 38 authorized positions. We currently have 37 filled mandated costs audit positions and are conducting interviews for the last vacant position.

Current Status of Recommendations

All Recommendations in 2012-041