Law bans interfering with state audit, aiming at UC

Anyone who knowingly interferes with the duties of California’s independent state auditor will be fined up to $5,000 under a bill signed into law Monday by Gov. Jerry Brown.

Under the law, which will take effect on Jan. 1, people who obstruct a state audit “with intent to deceive or defraud” will have to pay the fine.

Assemblyman Al Muratsuchi, D-Torrance (Los Angeles County), and two other Democratic lawmakers wrote AB 562 after state Auditor Elaine Howle said in April that she had to discard part of her audit of the University of California president’s office because administrators there interfered with the probe. The president’s office runs the 10-campus system.

“I am very disturbed by the findings of interference,” Muratsuchi said. “This law will give the state auditor additional enforcement authority to fine those who intentionally obstruct their audits.”

Howle’s audit revealed that the office of UC President Janet Napolitano had amassed $175 million in reserve funds it hadn’t disclosed in its budget to the Board of Regents. As part of the audit, Howle had sent a confidential survey to the campuses to learn if services provided by the president’s office were necessary.

She tossed the survey results after learning that Napolitano’s staff required campus officials to share their responses with them — a level of tampering that the auditor said made it impossible to rely on the results.

“I’ve never had a situation like that in my 17 years as state auditor,” Howle told state lawmakers at a May hearing on the audit findings.

Administrators at three campuses changed their responses to reflect more favorably on Napolitano’s office after her staff directed them to make the changes, The Chronicle learned in its reporting.

In June, the regents hired former state Supreme Court Justice Carlos Moreno to investigate the alleged tampering. No findings have been released, and the president’s office did not respond to a request for an update. Nor did the office respond to a request for comment about the new law.

Assemblyman Phil Ting, D-San Francisco — a coauthor with Muratsuchi and Assemblyman Kevin McCarty, D-Sacramento — called the law “extraordinarily important.”

“What we saw in UC’s example is that anybody could tamper with an audit and have no consequences,” Ting said. “And the state could really do nothing about it, and the auditor would have to do another audit. We think this sends the right message.”