CIRM Faces State Performance Audit

The California stem cell agency is facing a new and tougher official examination of its performance.

That is the result of approval of a request by Sen. Deborah Ortiz and 10 other legislators for a review of CIRM by the California auditor general. The audit should be significantly more rigorous than the ones authorized by state law involving the state controller's office.

Ortiz' office released the following statement:

"In presenting the audit request, Sen. Ortiz said the audit will review the administrative expenditures as well as the policies and procedures to ensure they are consistent with the intent of the initiative and with best practices for research organizations and public agencies – critical steps to ensure that up to $7 billion in public money is being spent appropriately.

"'I believe the audit will help ensure that the program is on sound footing as it moves into its grant-making phase next year,' she said.

"In her testimony, Sen. Ortiz noted CIRM and ICOC will have spent close to $8 million in administrative funds by the end of the year and approved $40 million in training grants in September 2005, which they hope to finance through loans from philanthropic organizations since the public bonds authorized by voters in approving Proposition 71 are held up by litigation.

"As some of you know, the program has stumbled in its first year of existence,' Ortiz said. 'It has struggled with implementation of open meeting procedures as well as policies to guard against conflicts of interest on the part of its working group members. In addition, it has issued contracts for some questionable things, including a $27,000 per month contract for public relations work, a $300,000 contract for private legal counsel and a $10,000 per month contract for lobbying.'

"State Auditor Elaine M. Howle said the audit would evaluate the CIRM’s and ICOC’s strategic plans, including determining whether they are clearly defined. Her office also will determine whether CIRM and ICOC are properly identifying and avoiding conflicts of interest, establishing realistic timetables realistic, have in place effective management controls to ensure they are complying with state laws and whether they are protecting the state’s interest. She said her office also would evaluate the development of policies and procedures, including contracting for facilities, hiring practices and the procurement of goods and services.

"Howle estimated the length of the audit will be six months. She did not say when the audit would begin."

The legislature's joint audit committee approved the audit today by a 9-0 vote. Reporter Steve Johnson of the San Jose Mercury News wrote a story on the decision. You can read it here.