Audit finds chronic waste & accounting violations at ALRB

The Department of Finance audit faulted ALRB in all these areas. (Image from Department of Finance audit report)

The Department of Finance audit faulted ALRB in all these areas. (Image from Department of Finance audit report)

A California Department of Finance audit ripped the Agricultural Labor Relations Board (ALRB) for sloppy financial practices and an inability to justify its budget, and for failing to fulfill its primary mission of supervising worker elections on union representation.

The ALRB, according to the report, provided auditors with “incomplete, unavailable, or inaccurate” data.

PickJustice.com just discovered the audit, dated February 4, 2015, covering the fiscal years 2009-10 through 2013-14.

[Update, April 2017: We found that the California state government removed the above link to the audit. Pick Justice retrieved an electronic copy of the audit, and provides it here: WEBFinalReport-AgriculturalLaborRelationsBoardPerformanceAudit]

“We identified significant weaknesses preventing ALRB from producing reliable workload and financial data,” a Department summary of the audit said. “Workload data was incomplete, unavailable, or inaccurate for quantifying current resource utilization, as well as limiting the ability to forecast resource needs.”

The audit chided ALRB for being irresponsible in it’s duty to provide reliable data. According to the audit summary, “ALRB is responsible for ensuring accurate financial and administrative reporting. Although the roles and responsibilities performed by ALRB appear consistent with the broad purpose of the [Agricultural Labor Relations] Act, the following weaknesses impair ALRB from justifying or supporting, with data, its operational decisions on how best to accomplish its program goals:

  • “Inability to justify effectiveness or efficiency of resource utilization.
  • “Ineffective organizational structure.
  • “Misuse of limited-term blanket authority.
  • “Inefficient use of state funds.
  • “Incomplete and inaccurate accounting records.”

“ALRB must implement and strengthen internal controls related to the above-described weaknesses to produce reliable metrics to assist in managing and forecasting its resources,” the DOF summary continued. “ALRB must develop a corrective action plan to address the observations and recommendations noted in this report.”

ALRB violating its primary purpose

The first “principal function” of the ALRB under state law is to conduct “secret ballot elections to determine whether agricultural employees wish to be represented by a labor organization,” according to the audit.

Although not mentioned in the audit, the ALRB spent 34 percent of its increased budget on litigation and other actions against the employers and employees of Gerawan Farming, to force them to accept a UFW contract. ALRB has used those resources to do the opposite of what the audit says is ALRB’s primary role. ALRB is spending $10 million to deprive Gerawan workers of their voting rights on whether or not to decertify a union that claims to represent them. The workers voted in an ALRB-supervised election in 2013, and ALRB has refused to count their ballots.

The second “principal function” of ALRB, according to the audit, is “preventing practices that the Act regards as impediments to the exercise of agricultural employee free choice, i.e., unfair labor practices.”

Board not performing main purpose, according to audit

The board itself is not performing its primary purpose. It should have five members, but “only three member positions were filled from fiscal years 2009-10 through 2013-14.”

According to the audit, “The Board is responsible for overseeing and certifying the results of secret ballot elections. Elections, facilitated by employees in the regional offices, determine whether a majority of the employees of an agricultural employer wish to be represented by a labor organization or, if the employees are already represented, to determine whether they wish to continue to be represented by that labor organization, another labor organization, or no organization.” (Emphasis added.)

The ALRB purposely failed to certify the results of the secret ballot elections of the Gerawan farmworkers that it oversaw in 2013.

The DOF report described the audit objectives and the methodology in collecting and analyzing information.

ALRB could not account for its expenses for 3 of 5 fiscal years

Auditors found that the ALRB could not provide basic information needed to carry out the audit for three of the five fiscal years examined.

According to the audit report, “ALRB was unable to provide reports needed to evaluate expenditures for a major portion of the audit period. Detailed expenditure reports for 2010-11 and 2013-14 were available, while 2009-10 and much of 2011-12 and 2012-13 were unavailable.”

ALRB unable to provide reliable financial data for all 5 fiscal years

“Significant weaknesses prevent” ALRB “from producing reliable workload and financial data,” the audit said. “ALRB’s inability to adequately and completely capture workload and financial data precludes efforts to determine whether existing resources were efficiently and effectively utilized for fiscal years 2009-10 through 2013-14, as well as limiting its ability to forecast its future resource needs,” according to the audit.

‘Inability to justify operational decisions’

The ALRB was unable to justify its operational decisions to the Department of Finance. “Although the roles and responsibilities performed by ALRB appear consistent with the broad purpose of the Act, significant weaknesses exist with ALRB’s internal controls compromising its ability to justify or support, with data, its operational decisions on how to efficiently and effectively accomplish its goals and mission,” the audit said.

“The inability to justify operational decisions with supporting data could detract from its accomplishments by raising questions about the appropriateness of resource utilization,” according to the audit.

“Workload data was incomplete, unavailable, or inaccurate for quantifying current resource utilization, as well as limiting the ability to forecast resource needs,” the auditors reported.

Audit devotes entire sections to the poor accountability within ALRB

ALRB’s internal accountability is so poor that the audit devoted entire sections that tell the story in the section headings:

  • “Case Time Data Is Unreliable.”
  • “Case Management Structure Is Ineffective.”
  • “A More Effective Organizational Structure Is Needed.”
  • “Misuse of Limited-Term Blanket Authority.”
  • “Inefficient Use of State Funds.”
  • “Incomplete and Inaccurate Accounting Records.”

General Counsel office abused its authority, audit says

The ALRB General Counsel abused its authority in 2013-2014, according to the audit. This period coincides when the Board’s top lawyer, Sylvia Torres-Guillen, abused the authority of the Office of General Counsel to go after Gerawan workers and employers who opposed the UFW. Governor Jerry Brown forced Torres-Guillen out of office in June, 2015.

The section describing the abuse of authority is titled “Observation 3: Misuse of Limited-Term Blanket Authority.”

“The Office of the General Counsel did not justify the need for its seven limited-term, blanket position employees,” the audit said.

“As of June 2014, ALRB had a total of ten employees hired in blanket positions, which included three retired annuitants and seven limited-term employees. The hiring documentation for the limited-term employees did not include an analysis or justification of why a limited-term position was appropriate or necessary in lieu of an authorized, permanent position, as required by State Personnel Board ‘Personnel 14 Management Policy and Procedures Manual’ Section 331.7,” according to the audit.

“At the time these limited-term employees were hired, discussions between the General Counsel and Associate Personnel Analyst occurred regarding the need for the appointments, but these discussions were not documented or retained in the hiring files,” the audit said. The audit report added that the ALRB did not provide justification documentation to the auditors until after the fact.

ALRB wasted state taxpayer dollars

The ALRB made “inefficient use of state funds” in its spending, paying rent for vacant office space at a dormant regional office, according to the audit, and made substantial “errors in recording accounting transactions.”

The Board had such “incomplete accounting records” that it could not prove efficient or prudent use of appropriated funds. “The Administration unit was unable to provide the CALSTARS monthly transaction detail reports for fiscal years 2009-10 and parts of 2011-12 and 2012-13,” the audit stated. “For the years where detailed reports were available, it was also unable to provide supporting documentation for some of the transactions selected for testing.

“ALRB’s policy is to retain accounting files for the current year plus the four previous years; therefore, records dating from 2010-11 should have been available,” according to the audit.

“The incomplete accounting records prevent ALRB from substantiating claims made and prevented us from thoroughly evaluating, categorizing, and verifying expenditures for the entire period of 2009-10 through 2013-14,” the audit report said.

Download the entire audit report here: http://www.dof.ca.gov/Programs/OSAE/Audit_Memos/documents/WEBFinalReport-AgriculturalLaborRelationsBoardPerformanceAudit.pdf

Update: The State of California occasionally changes the URLs of public documents. We have updated the links to reflect the change with the audit document location. In the event the URL changes again, PickJustice.com downloaded a copy of the audit, for access through our site: WEBFinalReport-AgriculturalLaborRelationsBoardPerformanceAudit

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