Report 2010-125 Recommendation 5 Responses

Report 2010-125: State Lands Commission: Because It Has Not Managed Public Lands Effectively, the State Has Lost Millions in Revenue for the General Fund (Release Date: August 2011)

Recommendation #5 To: Lands Commission, State

The commission should establish a monitoring program to ensure that the funds generated from granted lands are expended in accordance with the public trust.

Annual Follow-Up Agency Response From October 2014

As previously reported, the Commission initiated a reorganization creating an External Affairs Division that focuses on the granted lands program. An attorney, an analyst and a Public Land Management Specialist were redirected to that Division. The Commission also developed a standardized financial reporting form (http://www.slc.ca.gov/Granted_Lands/12.26web.pdf) that grantees are annually required to complete and submit. A reminder and instructional letter is mailed to grantees each September and completed forms are available for public review on the Commission's website; http://www.slc.ca.gov/Granted_Lands/AnnualForms.html. The reports summarize each grantees revenues and expenditures in a simplified manner providing an efficient and productive method for staff and the public to use to ensure funds generated from granted lands are expended in accordance with the public trust and the terms of the applicable granting statute.

Staff monitors each grantee's yearly financial information, analyzes the revenues and expenditures for any anomalies and compares the information to the grantee's prior annual reports to identify any gross variances. Staff also reviews the types of expenditures reported to see if they are consistent with the common law Public Trust Doctrine, individual granting statutes and other applicable laws. When the expenditures appear questionable or are vague, staff contacts the grantee to request clarification and/or further information. Staff also checks each reporting form to see if grantees are maintaining separate trust accounts, as required by law. Staff works closely with the grantees to ensure information is timely and accurate and follows up to ensure there is a shared understanding of the requirements of the grant and the compliance and reporting responsibiities of the grantee.

California State Auditor's Assessment of Annual Follow-Up Status: Fully Implemented

Annual Follow-Up Agency Response From October 2013

The Commission has taken several steps to implement this recommendation. As a first step, the Commission initiated a reorganization and created an External Affairs Division that will focus on the granted lands program. An attorney, an analyst and a Public Land Management Specialist have been redirected to that Division. The Commission has also developed and approved a new standardized financial reporting form that grantees are annually required to complete and submit. This form was mailed to grantees in September and completed forms are available for public review on the Commission's website http://www.slc.ca.gov/Granted_Lands/Granted_Lands_Main.html#Finances. The form (http://www.slc.ca.gov/Granted_Lands/12.26web.pdf ) summarizes each grantees revenues and expenditures in a simplified manner and is thus a more efficient and productive method of monitoring whether the State's trustees are complying with the public trust and their granting statutes

In response to a legislative directive (Chapter 206, Statutes of 2012) the Commission has prepared a workload analysis summarizing the resources necessary for the Commission to fulfill its oversight responsibilities with respect to all granted public trust land responsibilities. This analysis was approved by the Commission at its September 20th public meeting http://archives.slc.ca.gov/Meeting_Summaries/2013_Documents/09-20-13/Items_and_Exhibits/C114.pdf and submitted to the Legislature.

The Commission will continue to build toward a robust monitoring program but will require additional staffing as indicated in the analysis to fully implement. Commission Staff will continue to work with the Legislature and others to identify and obtain funding to do so.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2012

The specific recommendation was that the “commission should establish a monitoring program to ensure that the funds from granted lands are expended in accordance with the public trust.”

As previously reported, staff requested additional positions to implement the Commission's statutory trust grant compliance program, however, that request was not approved. To improve the Commission's monitoring of the management of public trust lands and assets by the State's grantees, staff has requested summaries of the required Comprehensive Annual Financial Reports (CAFR). This is being done to encourage more detailed reporting by grantees and to streamline staff's analysis of the grantees' finances consistent with Public Resources Code §6306.

At its August 14, 2012 meeting, the Commission voted to support state legislation (AB 2620, Achadjian) requiring the Commission to prepare a workload analysis to ensure that it is fulfilling its oversight responsibilities over legislatively granted public trust lands, codifying trustee duties in connection with granted lands, and requiring the annual financial statement filed with the Commission to be accompanied by a standardized form developed by the Commission (previously submitted to BSA as Exhibit IV). On August 27, 2012, the Governor signed AB 2620 as Chapter 206, Statutes of 2012. Staff is beginning to prepare its workload analysis and develop a standardized form for the required annual financial statement pursuant to this new law. Through this workload analysis, staff will develop information to identify the Commission's specific needs for additional staff and resources for legislative and administration review. Staff is also exploring potential funding sources for its granted lands program pursuant to a request by the Senate and Assembly Budget Committees. The Executive Officer has also directed a reorganization of those currently working on granted lands issues within a new External Affairs Division (previously submitted to BSA as Exhibit V). This is intended to focus attention to this area and result in closer coordination between all divisions on granted lands issues. Through this reorganization and pursuant to the requirements of Chapter 206, staff will be able to develop a monitoring program to ensure that the funds from granted lands are expended in accordance with the public trust. However, implementation of that program is dependent on whether the Commission's request for additional staff and resources are granted. Staff continues, albeit on a limited basis given constrained resources, to improve outreach to local trustees and assist them with their waterfront revitalization programs.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

All Recommendations in 2010-125

Agency responses received after June 2013 are posted verbatim.