|Budget Issue:||Augmentation for DOJ legal services|
|Program:||Department of Corrections and Rehabilitation|
|Finding or Recommendation:||Reduce April Finance Letter request to augment CDCR for DOJ legal services from $11.5 million to $6.4 million on a one-year basis. Further require CDCR to report on what factors are driving its need for legal services and what steps it has or could take to better contain these costs.|
Background. The Department of Justice (DOJ) provides various legal services to the California Department of Corrections and Rehabilitation (CDCR). For example, DOJ attorneys represent CDCR in inmate litigation and employment law cases. Under current law, DOJ bills CDCR for the services it provides on an hourly basis. In 2011-12 for example, DOJ billed CDCR about $52 million for the provision of 314,000 hours of legal service.
Prior to 2011-12, DOJ did not bill CDCR for these services. Instead, funds for these services—as well as the services provided to other state departments—were generally included in DOJ’s budget.
Governor's April Finance Letter Proposal. The administration is proposing to augment CDCR’s budget by $11.5 million General Fund to support the department’s DOJ legal costs beginning in 2013-14. This would increase its total budget for DOJ legal services to $50.8 million in 2013-14.
CDCR Has Exceeded Legal Services Budget in Recent Years. In switching to a billable hours model for financing DOJ legal service, the Legislature hoped that CDCR would be more efficient in its use of these services than it had been in prior years. For this reason, the Legislature reduced CDCR’s budget for legal services by about $15 million when establishing the billable hours model of service. However, CDCR has not fully achieved the efficiencies hoped for by the Legislature. For example, CDCR is on track to exceed its 2012-13 DOJ legal services budget by about $10.4 million. According to CDCR, the measures that have put in place to date—such delegating settlement authority to DOJ, settling cases when defense of the department is not cost-effective, and utilizing CDCR employed attorneys in lieu of DOJ attorneys—need additional time before they will yield their full benefit.
According to CDCR, the shortfall in the budget for DOJ legal services in 2012-13 will be addressed by redirecting unused savings in the budget of CDCR’s Office of Legal Affairs and other sources in CDCR’s headquarters. (Similar steps were taken to cover the shortfall in 2011-12 according to CDCR.) The department reports that these resources are largely tied to vacancies in these budgets.
LAO Recommendation. We recommend that the Legislature only approve—on a one-year limited-term basis—a $6.4 million augmentation for DOJ legal services—about $5 million less than the amount requested. We recommend approving $5 million less than proposed for two reasons. First, more recent data indicate that CDCR is on track to spend about $1 million less than what the administration is proposing for 2013-14. Second, the reduction would reflect the Legislature’s goal that CDCR achieve additional efficiencies in its use of DOJ legal services. We note that, to the extent CDCR is unable to achieve such efficiencies, it could continue to redirect funding associated with vacancies.
We also recommend that the Legislature direct CDCR to report on what factors are driving its need for legal services and what steps is has or could take to better contain these costs. This information will allow the Legislature to better assess CDCR’s need for DOJ legal services when the limited-term funding we recommend expires next year.