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CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

91

Introduced by Assembly Member Boerner

January 30, 2025

An act to amend Section 307.6 of the Public Utilities Code, relating to the Public Utilities Commission.

Vote: majority   Appropriation: no   Fiscal committee: yes   Local program: no

LEGISLATIVE COUNSEL’S DIGEST

Existing law requires the Public Utilities Commission to appoint a chief internal auditor who holds office at the pleasure of the commission. Existing law makes the chief internal auditor responsible for the oversight of the internal audit unit. Existing law requires the chief internal auditor to plan, initiate, and perform audits of key financial, management, operational, and information technology functions within the commission to improve accountability and transparency to executive and state management, and to report their findings and recommendations directly to an audit subcommittee of the commission.

This bill would instead require the Governor to appoint an Inspector General, subject to Senate confirmation, to be responsible for the oversight of the internal audit unit and would instead require the Inspector General to plan, initiate, and perform audits of key financial, management, operational, and information technology functions within the commission to improve accountability and transparency to executive and state management. The bill would also require the Inspector General to ensure, among other things, that the commission administers funds and programs in a prescribed manner, fulfills mandated requirements, develops an annual audit plan, administers an effective enterprise risk management program, and monitors reporting compliance. The bill would provide for the appointment and removal of the Inspector General, as specified. The bill would authorize the Inspector General to access and examine all records, files, documents, accounts, reports, correspondence, or other property of the commission, public utilities, and other entities regulated by the commission, commission and public utilities, and would require other entities that are regulated by the commission and participate in programs administered by the commission, upon request of the Inspector General, to provide or make available to the Inspector General for examination all relevant records, files, documents, accounts, reports, correspondence, or other property pertaining to participation in those programs, as specified. The bill would require the Inspector General to report specified information to the Governor and the Legislature, as provided.

The people of the State of California do enact as follows:

SECTION 1.

Section 307.6 of the Public Utilities Code is amended to read:

307.6.

(a) The Governor shall appoint an Inspector General, subject to Senate confirmation. The Inspector General shall serve a six-year term and shall not be removed from office during that term, except for good cause. Any basis for removal of the Inspector General shall be stated in writing, shall be sent to the Secretary of the Senate and the Chief Clerk of the Assembly at the time of the removal, and shall be deemed to be a public document.

(b) (1) The Inspector General shall be responsible for the oversight of the internal audit unit and shall plan, initiate, and perform audits of key financial, management, operational, and information technology functions within the commission to improve accountability and transparency to executive and state management.

(2) In addition to the duties pursuant to paragraph (1), the Inspector General shall ensure all of the following:

(A) The commission administers funds under its control, including ratepayer funds, efficiently, effectively, economically, and in compliance with applicable state and federal requirements.

(B) The commission’s programs function consistent with applicable accounting standards and practices and are administered effectively, efficiently, and economically.

(C) The commission fulfills mandated requirements, develops an annual audit plan, administers an effective enterprise risk management program, and makes efficient, effective, and financially responsible decisions.

(D) The president of the commission, the Legislature, and the Governor are fully informed concerning fraud, improper activities, and other serious abuses or deficiencies relating to the expenditure of ratepayer funds or the administration of commission programs and operations.

(E) The commission monitors compliance for reports prepared by the commission that are required to be submitted to the Governor and Legislature.

(c) The Inspector General shall be vested with the full authority to exercise all responsibility for maintaining a full scope, independent, and objective audit and investigation program.

(d) (1) The Inspector General shall have access to, and authority to examine, all records, files, documents, accounts, reports, correspondence, or other property of the commission, public utilities, and other entities regulated by the commission. An commission and public utilities.

(3) An authorized representative of the Inspector General may enter any public office or institution in this state, during regular business hours, and access, examine, and reproduce all records, files, documents, accounts, reports, vouchers, correspondence files, and all other records for any audit or investigation. An officer or employee of an agency or entity that has records or property in their possession or under their control, or otherwise has access to records, shall permit access to, and examination and reproduction of, the records or property upon the request of the Inspector General or the Inspector General’s authorized representative.

(e) (1) In order to achieve independence and objectivity pursuant to this section, the Inspector General shall do both of the following:

(A) Report all audit findings and recommendations made under the Inspector General’s jurisdiction to the Governor and the Legislature on an ongoing and current basis.

(B) Report to the Governor and the Legislature at least annually, and upon request, with a summary of the Inspector General’s investigation and audit findings and recommendations. The summary shall be posted on the commission’s internet website and shall otherwise be made available to the public upon its release to the Governor, the commission, and the Legislature. The summary shall include, but not be limited to, significant problems discovered by the Inspector General and whether the Inspector General’s recommendations relative to audits and investigations have been implemented by the affected units and programs of the commission or affected external entities.

(2) A report submitted to the Legislature pursuant to paragraph (1) shall be in compliance with Section 9795 of the Government Code.

(f) The Inspector General shall comply with Part 3.5 (commencing with Section 13885) of Division 3 of Title 2 of the Government Code.