In the latest hit on the State Bar of California, a new audit claims the quasi-public agency overpays its leaders and its recent financial reports “contained errors and lacked transparency.”
The review, released by State Auditor Elaine Howle on Thursday, says the top 13 executives at the bar are paid more than Gov. Jerry Brown, who takes home $182,791 a year.
Meanwhile, the agency, which is charged with financially compensating victims of attorney misconduct, reported an estimated backlog of 5,500 applications for payment and an expected shortfall of more than $16 million in a fund to settle the claims at the end of last year. The audit found that victims wait as long as five years before they receive any reimbursement.
The State Bar’s long delays in paying claims harm the people who are waiting and who may be counting on these resources to meet basic needs.
California State Auditor Elaine Howle
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“The State Bar’s long delays in paying claims harm the people who are waiting and who may be counting on these resources to meet basic needs,” the report stated.
The audit raises new questions about an agency already ensnared in controversy.
The State Bar let go of its former director, Joe Dunn, in 2014 and he subsequently sued the agency. Dunn, who is vying for a congressional seat, claimed his dismissal was a form of retaliation for whistleblowing. The State Bar fired back with an investigative report earlier this year that claimed Dunn provided misleading financial information to deceive the agency’s 19-member board.
The State Bar regulates the legal industry and acts as a trade association for the more than 200,000 attorneys in the state. Much of its funding is obtained through membership fees, which the Legislature must approve.
In addition to other problems, the audit highlighted errors and a lack of basic information on executive salary in previous financial reports from the State Bar. It also failed to explain its budget methodology to the Legislature, which hinders lawmakers’ ability to set appropriate attorney-licensing dues, according to the report.
In a response letter to the audit, the State Bar’s current executive director, Elizabeth Parker, said the final report “offers a meaningful and balanced analysis of the myriad of issues facing the State Bar from which we can benefit, going forward.”
Parker, who joined the agency in the fall, complained that the report didn’t clearly distinguish problems that stemmed from past leadership with her efforts to address “a host of long-standing organizational, operational and fiscal challenges.”
She agreed with all the state auditor’s recommendations to clean up the agency’s reports, speed up the repayment process on claims and increase oversight from the board.
Parker said some of the changes are already underway, including a study of executive salaries and benefits set to conclude in the fall. While the salaries of State Bar executives may be higher than comparable government positions, she asserted that their compensation appears in line with that of bar leaders in other states.
“As an agency committed to transparency, accountability, excellence and financial responsibility, we thank the State Auditor for its recommendations,” Parker said in an emailed statement. “We believe a close look at the audit findings shows we have made significant progress.”