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Bond Oversight Committees need some teeth

Credit to The “Little Hoover Commission”, an independent oversight committee formed in 1962 – Report # 236, February 2017 – Titled “Borrowed Money: Opportunities for Stronger Bond Oversight”

According to a report issued in February by the Little Hoover Commission,  groups that oversee government bond spending could stand to grow some teeth. The commission suggests Gov. Jerry Brown and the Legislature “should update and overhaul” the state law that created the bond oversight groups to clarify their authority  – Since 2000, local bond measures that pay for school construction require only 55 percent local voter approval, instead of two-thirds. With that change, the formation of a citizen watchdog group which would monitor bond expenditures was established

However, the Little Hoover Commission addressed the lack of effectiveness of oversight groups.  “By and large … have proven ineffective and some committee members have told the Commission that is at least in part, by design,” wrote the Commission in their report titled “Borrowed Money: Opportunities for Stronger Bond Oversight.”     Most of the concerns revolved around bond oversight committee members who are handpicked by the Districts, lack training, have conflicts of interest, either real or perceived, and the difficulty committee members have receiving required documents from the districts.

The appointment process for bond oversight committee members was also the Commission’s concern. Currently the appointment is handled by district officials, the group that the committee supposedly oversees, thus, the Commission recommended changing the oversight committee appointment process. The report also recommends committee members play a larger role in selecting bond auditors, and that audits measure effectiveness and results, as well as compliance.

The Little Hoover panel also proposed that county treasurers review and comment on bond sales before they occur to help prevent poor debt financing decisions by local government agencies.

The Commission also believes oversight groups should receive a minimal budget to hire independent counsel when needed.

In addition, the Commission called on the state Treasurer’s office to provide online training about bond sales to elected officials, and suggested state leaders allocate one-time funding for the state’s school business advisory group, known as the Fiscal Crisis & Management Assistance Team, to put together online training for bond oversight committee members.

The Little Hoover Commission is a bipartisan and independent state agency charged with recommending ways to improve the efficiency and effectiveness of state programs.

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