Elizabeth Rindskopf Parker
Elizabeth Rindskopf Parker

Despite enduring a year of withering criticism from California lawmakers, the state bar still isn’t doing enough to track and rein in spending, according to a state audit released Tuesday.

State Auditor Elaine Howle said that while the lawyer-regulating agency has made some promising changes to the agency’s expense policies, “it still lacks effective controls to verify that its expenses are reasonable and appropriate.”

State law requires the bar to undergo a “performance review” every two years. Among the findings in the latest 54-page report:

â–º The bar lacks appropriate control of the purchasing cards it issues to nearly four in 10 employees. Bar leaders don’t document why they distribute so many cards or justify why credit limits are so high, in some cases to $75,000, the report said.

In a response to the report, bar executive director Elizabeth Rindskopf Parker said the agency has “significant” internal controls over purchasing cards, including approvals from department heads and scrutiny of receipts.

â–º The bar has stopped buying alcohol—the agency and its sections spent $156,900 on booze between January 2015 and September 2016. But it still pays a higher reimbursement rate for catering than the executive branch and other state departments. Parker said the “state bar agrees to further advance work in this area.”

â–º The bar does not require the sections to justify their spending at off-site locations. The report found the trusts and estates section, for example, spent $33,000 on a four-day gathering near Yosemite National Park in April 2016. The event included a $4,700 dinner, $1,800 in gifts to attendees, $1,300 for a disc jockey and pianist and $1,775 for a bus tour.

While the sections pay for off-site programming with voluntary membership fees, they are still required to comply with bar policies on travel and catering.

The bar agreed that some of the trust and estates section’s Yosemite expenses were “not appropriate,” according to the report. In her report, however, Parker noted that pending legislation would separate the sections from the bar.

“In the bar management’s judgment, the bar’s limited staff resources are better spent helping the sections successfully depart the bar for a private, nonprofit than in further refining oversight of expenditures which will soon come to an end,” Parker wrote.

â–º The bar does not justify its spending on two legislative lobbyists, which totaled $768,000 from 2014 to 2016—significantly more than companies such as Apple Inc. and Hewlett Packard Enterprise Co. spent on state lobbying in California during the same time period.

The bar doesn’t require the lobbyists to document what specific work they performed or why they billed the agency the maximum amount allowed by the contract, even in months when the Legislature was not in session.

Parker said the bar hasn’t finalized new contracts with the lobbyists and will consider the auditor’s recommendations for better oversight.

The report also questioned why most bar employees are paid more and work a shorter workday hours than workers at other public agencies. Bar leaders are working on introducing job classification and salary changes based on a private consultant’s findings in an April 2017 report, the report said.

In her response, Parker characterized the report as documenting “the important and continuing progress of reform which new state bar leadership has made in slightly less than two years.

“The state bar itself is acting to bring about needed reform; audit reports are helpful but they cannot substitute for such agency leadership,” Parker wrote.

The report was delivered as the Assembly prepares to consider the bar’s annual dues-authorization bill, legislation that stalled last year in an inter-house fight over proposed reforms to the agency.

“The latest audit of the state bar shows that—despite some progress towards focusing more closely on its regulatory duties—once again, the bar continues to hinder itself in carrying out its mission of public protection with poor internal accounting procedures,” said Assembly Judiciary chairman Mark Stone, D-Scotts Valley, in a prepared statement.