Toxic Regulation Agency Fails to Collect $185 Million, Audit Expected

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The California agency in charge of toxic regulation announced last Thursday that it had failed to collect $185 million in repayments owed by polluters. The California Department of Toxic Substances Control (DTSC) has since come under fire from Consumer Watchdog, who has called for a comprehensive financial audit of DTSC by the California State Auditor.

The financial loss to California has been substantial, making an audit seem inevitable. But, will an audit of the DTSC actually happen?

The California State Auditor has the power to audit any state agency as they see fit. California Government Code Section 11000 defines every state department as a state agency, which brings the DTSC well within their regulatory power.

If the California State Auditor does not take action, interested groups may petition members of the Legislature to make a request to the Joint Legislative Audit Committee. California Government Code Section 8546.1 states that an audit must be performed upon the committee’s request.

Another possibility in extreme cases such as this is that the DTSC will be established as a high-risk government agency. California Government Code Section 8546.5 allows for the establishment of a high-risk audit program for state agencies if the California State Auditor identifies a substantial risk of potential waste, fraud, abuse, and mismanagement. This includes agencies where there are major challenges associated with the agency’s economy, efficiency, or effectiveness.

This may be the best outcome for improvement in the DTSC. Consumer Watchdog advocate Liza Tucker believes their actual financial loss will likely reach the billions. She said this is due to the DTSC’s inability to demand enough money up front in the form of insurance policies, bonds, and other funds for the closure of facilities.

If defined as a high-risk agency, the DTSC may be required to periodically report to the California State Auditor regarding the status of recommendations for improvement made by the auditor and oversight agencies.

Either way, if an audit takes place, the California State Auditor will have to complete the request in a timely manner, submit the report to California governing bodies, and make the report available to the public.

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