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Tuesday, Mar 5, 2024

California Leads with Inspector General Position

In the wake of the questionable spending of the “Bailout” proceeds concerns have been mounting regarding controlling disbursements of the approximately $787 billion in economic stimulus funds being made available by the American Recovery and Reinvestment Act (ARRA). On April 3, Gov. Arnold Schwar-zenegger signed Executive Order S-04-09, making California the first state in the nation to create the position of Inspector General (I.G.) to act as a watchdog over the ARRA funds as they are disbursed in California. The Governor named Los Angeles City Controller Laura Chick to the position. I consider Chick, who refers to herself as a “controlling chick,” to be an outstanding choice for the position of I.G.. Known to many of us as the “czar of performance audits,” Chick is, in my opinion, without a doubt the best person for the job. While serving as the controller of Los Angeles, she released over 170 audits, exposing contracting improprieties at the city airport and harbor, millions in over-billing by a public relations firm, hazing and harassment at the Los Angeles Fire Department and other instances of waste in the use of public resources, As I.G., Chick will be independent from the California Federal Economic Stimulus Task Force, a.k.a. the California Recovery Task Force (created by the Schwarzenegger administration to track ARRA funding coming into the state, ensure the funding is spent efficiently and effectively, and maintain a website for Californians to be able to track the stimulus dollars) and will report directly to the Governor. Her duties and responsibilities will include protecting the integrity and accountability of the expenditure of ARRA funds in the state by preventing and detecting fraud, waste and misconduct in the use of the funds; conducting periodic reviews and audits to ensure compliance with federal requirements; providing independent and objective reports to the Governor, Legislature, and accountability and transparency officials; coordinating with the Bureau of State Audits, the State Controller, the Department of Finance and local auditors and controllers; and, providing technical and consultative advice to the California Recovery Task Force. California will receive as much as $85 billion in ARRA funds and tax benefits for education, infrastructure investment, energy efficiency, housing, health and human services, transportation, science and technology, unemployment assistance and various other programs. It is essential for the funds to be used efficiently and effectively. We cannot expect another bite of the apple. It is comforting to know that our own “controlling chick” is on the job. Job Killer Bills Here are a couple of “job killer” bills to be aware of: – AB 2112: This bill directs the California Energy Commission to require that any new residential construction commenced on or after Jan. 1, 2020* be certified as zero net-energy. A zero net-energy home is one that produces enough of its own energy to offset the amount purchased from the utility. Therefore, this bill effectively mandates that each new home generate its own electricity. A study prepared by the National Renewable Energy Laboratory for Sacramento Municipal Utility District estimates the cost of meeting a net-zero mandate in a new home (including a 4.5 kilowatt photovoltaic system) to be approximately $20 per square foot, or $50,000 for a 2,500-square-foot home. Additionally, many new homes may not have enough roof space to accommodate such a large PV system. This problem is more acute in multi-story apartment and condominium settings where there is very little roof space in comparison to floor space. *(Or on a date of the CEC’s determination – that the use of photovoltaic technology is cost-effective, whichever is later.) Status: Passed Assembly, currently in Senate Energy, Utilities and Commerce Committee Valley Assemblymembers voting for bill: Brownley, Feuer, Fuentes, Krekorian, Levine. Valley Assemblymembers voting against bill: Smyth, Strickland. – AB 2716: This bill would expand employers’ costs and liability by mandating that employers provide paid sick days to employees (who work seven or more days in a calendar year) at a rate of no less than one hour for every 30 hours worked. The calculated sick days may be used beginning on the 90th calendar day of employment. Any sick days unused at the end of a calendar year would be carried over to the following calendar year. Status: Passed Assembly, held in Senate Appropriations Suspense File. Valley Assemblymembers voting for bill: Brownley, Feuer, Fuentes, Krekorian, Levine. Valley Assemblymembers voting against bill: Smyth, Strickland. Gregory N. Lippe, CPA, is Managing Partner of the Woodland Hills-based CPA Firm of Lippe, Hellie, Hoffer & Allison, LLP, Chairman of the Valley Industry and Commerce Association (VICA) and a Director of First Commerce Bank

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