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lauranchick.jpgGov.-elect Jerry Brown has decided to eliminate the state's federal stimulus fund watchdog, the office of Inspector General Laura N. Chick announced today.

Calling the news an "unfortunate turn," Chick wrote in a letter released by the office that she has been informed by Brown's transition team that her position will be eliminated as of Jan. 1.

"The Governor-elect faces an extremely difficult job in grappling with the severity of the state budget crisis. He received an overwhelming mandate by the voters to make tough decisions, and I wish him the very best during the months ahead," Chick wrote.

Chick praised Gov. Arnold Schwarzenegger for creating the office in 2009. At the time, it California was the first state to dedicate an agency to tracking and overseeing the spending of American Recovery and Reinvestment Act funds.

"His creation of the Inspector General's Office to scrutinize the state's spending of stimulus dollars was unprecedented in the nation. With this singular move he put California in the lead in its oversight of these taxpayer dollars," she wrote. "Creating this office sent a potent message: We are watching."

The office has issued 27 reports that cited 100 issues in its capacity overseeing the spending of more than $50 billion in stimulus funds, Chick wrote.

Chick also penned a letter to Schwarzenegger and Brown including her observations about changes needed for more effective use of the funds, including the need for more coordination and cooperation between offices and clearer communication about requirements for applying for, receiving and reporting funding.

A member of Brown's transition team said in a statement that abolishing the inspector general's office, which is part of the governor's budget, at the beginning of the year will save the general fund $700,000, though Chick's office said some of that would be eligible for reimbursement from the federal government.

"In response to the state's multi-billion dollar budget deficit, Governor-elect Jerry Brown will be streamlining operations and eliminating redundancies in the Governor's Office and throughout state government," Jim Humes, a member of Brown's transition team said in a statement.

Brown's office also released a statement from State Auditor Elaine Howle, in which Howle called the inspector general operation an "unnecessary and wasteful duplication of functions my office is already charged with conducting."

"I strongly believe there is no need for additional oversight by an Inspector General," she said in a statement.

But some criticized the decision. California Republican Party Chairman Ron Nehring said cutting the office "sends a signal to those who would abuse taxpayer funds that the state will not be overly concerned watching over how taxpayer money is spent going forward."

"While certainly there's a serious need to pare back a state bureaucracy that has become much larger and more expensive than taxpayers can afford, it's penny wise and pound foolish to eliminate one office that is specifically charged with discovering and detering (sic) waste and frivolous use of taxpayer money," he said in a statement.

The office is relatively small: Its budget for the current fiscal year was $2.8 million, of which $1.7 million is from the state's beleaguered general fund, according to the Department of Finance. It employs 11 staff including Chick, seven of whom are on loan from other state agencies and offices.

The statement from Brown's team said six outstanding audits under the inspector general's office will be finished by other state auditing offices.

Read the full letter announcing the position elimination after the jump.

Editor's note: This post was updated at 3:30 p.m. with a statement from Brown's office.

PHOTO CREDIT: Laura Chick, the California's inspector general, poses in her office on May 7, 2009, in Washington, DC. (Olivier Douliery/ MCT).

December 20, 2010

Dear Friends:

The journey of life occasionally encounters unexpected twists and turns, and I recently received word of one such unfortunate turn from Governor-elect Brown's transition team. The incoming administration will eliminate the Office of the Inspector General, which oversees the state's spending of the Recovery Act funds, as of January 1, 2011.

The Governor-elect faces an extremely difficult job in grappling with the severity of the state budget crisis. He received an overwhelming mandate by the voters to make tough decisions, and I wish him the very best during the months ahead.

I want to thank Governor Arnold Schwarzenegger for his commitment to opening up government operations to the light of day. His creation of the Inspector General's Office to scrutinize the state's spending of stimulus dollars was unprecedented in the nation. With this singular move he put California in the lead in its oversight of these taxpayer dollars.

Creating this office sent a potent message: We are watching. Working with the four U.S. Attorneys, Federal Inspectors General, U.S. Attorney General, district attorneys and local officials, we formed a highly connected and coordinated oversight team to discourage waste and fraud before it occurs.

Most importantly I want to acknowledge my tiny powerhouse team. Their drive, determination and commitment more than compensated for their small numbers, pushing government to do things smarter and better.

From High Speed Rail to county social service programs, from Redding to San Bernardino, we unearthed problems and made commonsense recommendations for improvement. In less than a year since my office attained a strike team of auditors, we have released 27 reports uncovering 100 issues and making 48 recommendations for change.

However, there is much more work to be done. The Recovery Act was passed into law nearly two years ago, but half the money coming to California has yet to be spent. At this half-way point I have written Governor Schwarzenegger and Governor-elect Brown with my observations of the Recovery Act. You can read my letter on my website at www.inspectorgeneral.ca.gov.

It has been an honor to serve the people of California the last 20 months and, of course, to serve the people of Los Angeles for 16 years in elective office. I don't know precisely where my journey goes from here, but I am ready and eager to see what's next.

I wish you and yours a wonderful holiday season and a healthy and joyous 2011.

All my best,

LAURA



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