Much has been reported about California’s Board of Equalization, particularly in light of the March evaluation from the Office of State Audits and Evaluations. Perhaps because we are unique as the only state tax agency with an elected board, there seems to be a misconception that the way we operate is also unique. Such is not the case.
As elected constitutional officers, board members are part of the executive branch of government. We craft the rules and policies to implement laws passed in the Legislature. We also adjudicate tax disputes.
The Board of Equalization operates much like a county, subject to the same open-meeting laws. The board is made up of four elected members, each representing a geographical district, and the state controller, who sits on the board as its fifth member. Daily agency operations are overseen by an executive director who reports to the board.
Clarifying the roles and duties of the board, the executive director and executive staff is crucial to ensure the integrity of the operation. As such, we have come together in a fully noticed public meeting to reaffirm, update and implement important polices and guidelines.
The result will improve agency performance, enhance accountability and visibility into the board’s operations, and lift the apparent veil surrounding what we do and how we operate.
Thanks to Controller Betty Yee, we have consolidated into one document critical governance rules and policies that will guide the way the board and the agency will operate. Yee, to her credit, led in a situation she could easily have chosen to ignore.
Each board member contributed thoughtfully and substantively to the discussion on how to improve our processes and disclosure. Importantly, the consolidated governance policy delineates member duties and agency responsibilities.
To date, there has been no procedure for the board to receive a much needed comprehensive performance and financial assessment to assist with oversight, similar to the California Audited Financial Report. Accordingly, we have asked the executive director to provide personnel use, projected staffing and facilities reports to the board.
We also requested an annual consolidation of audits and other financial measurement tools. That will let us assess the overall health of the agency and receive early warnings of systemic issues.
Working with civil service staff to oversee an agency requires different tools than serving in the Legislature. We think more clarity on the board-agency relationship, the need to build consensus on a small board with diverse perspectives, and the necessity of informed oversight will help unravel some of the mystery.
Diane Harkey is chairwoman of the state Board of Equalization. She can be contacted at email@example.com.