COMPLIANCE REVIEW REPORT 

STATE COMPENSATION INSURANCE FUND 

 

 

 

 

 

 

 

Compliance Review Unit 

State Personnel Board 

June 28, 2016 

 

TABLE OF CONTENTS 

 
Introduction ..................................................................................................................... 1 
Executive Summary ........................................................................................................ 1 
Background ..................................................................................................................... 2 
Scope and Methodology .................................................................................................. 2 
Findings and Recommendations ..................................................................................... 3 
Examinations ............................................................................................................. 3 
Appointments ............................................................................................................. 6 
Equal Employment Opportunity ............................................................................... 10 
Departmental Response ................................................................................................ 12 
SPB Reply ..................................................................................................................... 13 

INTRODUCTION 

Established by the California Constitution, the State Personnel Board (the SPB or 
Board) is charged with enforcing and administering the civil service statutes, prescribing 
probationary periods and classifications, adopting regulations, and reviewing 
disciplinary actions and merit-related appeals. The SPB oversees the merit-based 
recruitment and selection process for the hiring of over 200,000 state employees. These 
employees provide critical services to the people of California, including but not limited 
to, protecting life and property, managing emergency operations, providing education, 
promoting the public health, and preserving the environment. The SPB provides 
direction to departments through the Board’s decisions, rules, policies, and consultation. 

Pursuant to Government Code section 18661, the SPB’s Compliance Review Unit 
(CRU) conducts compliance reviews of appointing authority’s personnel practices in four 
areas: examinations, appointments, equal employment opportunity (EEO), and personal 
services contracts (PSC’s) to ensure compliance with civil service laws and board 
regulations. The purpose of these reviews is to ensure state agencies are in compliance 
with merit related laws, rules, and policies and to identify and share best practices 
identified during the reviews. The SPB conducts these reviews on a three-year cycle. 

The CRU may also conduct special investigations in response to a specific request or 
when the SPB obtains information suggesting a potential merit-related violation. 

EXECUTIVE SUMMARY 

The CRU conducted a routine compliance review of State Compensation Insurance 
Fund (SCIF) personnel practices in the areas of examinations, appointments, EEO, and 
PSC’s from July 7, 2013, through September 31, 2014. The following table summarizes 
the compliance review findings. 

Area 

Finding 

Severity 

Examinations 

Equal Employment Opportunity 
Questionnaires Were Not Separated from 
Applications 

Very Serious 

Appointments 

Probationary Evaluations Were Not Provided 
for All Appointments Reviewed 

Serious 

Equal Employment 
Opportunity 

Equal Employment Opportunity Officer Did 
Not Monitor the Composition of Oral Panels 
in Departmental Exams 

Very Serious 

 

A color-coded system is used to identify the severity of the violations as follows: 

. Red = Very Serious 
. Orange = Serious 
. Yellow = Non-serious or Technical 
. Green = In Compliance 

BACKGROUND 

Established in 1914 by the state legislature, the SCIF has operated for over 100 years, 
is California’s largest provider of workers’ compensation insurance, and is a vital asset 
to California businesses. The SCIF supports California’s entrepreneurial spirit and plays 
a stabilizing role in the economy by providing fairly priced workers’ compensation 
insurance, making California’s workplaces safe, and restoring injured workers. 

The SCIF offers diverse and comprehensive products and services that provide a strong 
and stable option for employers and injured employees with fast, reliable claims service, 
and medical and indemnity benefits. SCIF accident prevention services and return to 
work programs - provided to policyholders at no additional cost - ultimately help save 
businesses money. 

With approximately 130,000 policyholders, more than $1.2 billion in premiums, and 
nearly $20 billion in assets, Californians rely on the security and certainty offered by the 
SCIF to the state’s employers; particularly the small businesses and new ventures that 
are key to California’s economic recovery. To provide services to our clients, the SCIF 
has offices throughout California and a workforce of over 4,200 employees. 

SCOPE AND METHODOLOGY 

The scope of the compliance review was limited to reviewing SCIF examinations, 
appointments, and EEO program from July 7, 2013, through September 31, 2014. The 
primary objective of the review was to determine if SCIF personnel practices, policies, 
and procedures complied with state civil service laws and board regulations, and to 
recommend corrective action where deficiencies were identified. 

A cross-section of SCIF examinations and appointments were selected for review to 
ensure that samples of various examinations and appointment types, classifications, 
and levels were reviewed. The CRU examined the documentation that the SCIF 
provided, which included examination plans, examination bulletins, job analyses, 
511b’s, scoring results, notice of personnel action forms, vacancy postings, application 

screening criteria, hiring interview rating criteria, certification lists, transfer movement 
worksheets, employment history records, correspondence, and probation reports. 

The review of the SCIF EEO program included examining written EEO policies and 
procedures; the EEO Officer’s role, duties, and reporting relationship; the internal 
discrimination complaint process; the upward mobility program; the reasonable 
accommodation program; the discrimination complaint process; and the Disability 
Advisory Committee (DAC). The CRU also interviewed appropriate SCIF staff. 

On May 24, 2016, an exit conference was held with the SCIF to explain and discuss the 
CRU’s initial findings and recommendations. The CRU received and carefully reviewed 
the SCIF written response on June 15, 2016, which is included in this final compliance 
report. 

FINDINGS AND RECOMMENDATIONS 

Examinations 

Examinations to establish an eligible list must be competitive and of such character as 
fairly to test and determine the qualifications, fitness, and ability of competitors to 
perform the duties of the class of position for which he or she seeks appointment. (Gov. 
Code, § 18930.) Examinations may be assembled or unassembled, written or oral, or in 
the form of a demonstration of skills, or any combination of those tests. (Ibid.) The 
Board establishes minimum qualifications for determining the fitness and qualifications 
of employees for each class of position and for applicants for examinations. (Gov. Code, 
§ 18931.) Within a reasonable time before the scheduled date for the examination, the 
designated appointing power shall announce or advertise the examination for the 
establishment of eligible lists. (Gov. Code, § 18933, subd. (a).) the advertisement shall 
contain such information as the date and place of the examination and the nature of the 
minimum qualifications. (Ibid.) Every applicant for examination shall file an application in 
the office of the department or a designated appointing power as directed by the 
examination announcement. (Gov. Code, § 18934.) Generally, the final earned rating of 
each person competing in any examination is to be determined by the weighted average 
of the earned ratings on all phases of the examination. (Gov. Code, § 18936.) Each 
competitor shall be notified in writing of the results of the examination when the 
employment list resulting from the examination is established. (Gov. Code, § 18938.5.) 

During the period under review, the SCIF conducted 18 examinations. The CRU 
reviewed all of those examinations, which are listed below: 

Classification 

Exam Type 

Exam 
Components 

Final File 
Date 

No. of 
Applications 

Associate Management 
Auditor 

Open-Spot 

Supplemental 
Application1 (SA) 
& Qualification 
Appraisal Panel2 
(QAP) 

9/6/2013 

35 

Career Executive 
Assignment (CEA) C, 
Deputy Chief Counsel, 
State Compensation 
Insurance Fund 

CEA 

Statement of 
Qualifications3 
(SOQ) 

1/29/2014 

18 

CEA C, Senior Vice 
President of Business 
Support 

CEA 

SOQ 

6/2/2014 

 5 

CEA 3 Senior Vice 
President of Information 
Technology Core 
Operations 

CEA 

SOQ 

9/4/2013 

4 

Custodian Supervisor II 

Departmental 
Promotional 

Written4 

11/22/2013 

8 

Instructional Designer 
(Technology POST) 

CEA 

QAP & Written 

9/13/2013 

17 

Lead Custodian 

Departmental 
Promotional 

Written 

11/22/2013 

7 

Legal Support 
Supervisor I 

Promotional 

QAP & Written 

7/11/2014 

23 

Personnel Supervisor I 

Departmental 
Promotional-
Spot 

Training & 
Experience5 
(T&E) 

1/27/2014 

4 

1 In a supplemental application (SA) examination, applicants are not required to present themselves in 
person at a predetermined time and place. Supplemental applications are in addition to the regular 
application and must be completed in order to remain in the examination. Supplemental applications are 
also known as "rated" applications. 

2 The qualification appraisal panel (QAP) interview is the oral component of an examination whereby 
competitors appear before a panel of two or more evaluators. Candidates are rated and ranked against 
one another based on an assessment of their ability to perform in a job classification. 

3 In a statement of qualifications (SOQ’s) examination, applicants submit a written summary of their 
qualifications and experience related to a published list of desired qualifications. Raters, typically subject 
matter experts, evaluate the responses according to a predetermined rating scale designed to assess 
their ability to perform in a job classification, assign scores and rank the competitors in a list. 

4 A written examination is a testing procedure in which candidates’ job-related knowledge and skills are 
assessed through the use of a variety of item formats. Written examinations are either objectively scored 
or subjectively scored. 

5 The training and experience (T&E) examination is administered either online or in writing, and asks the 
applicant to answer multiple-choice questions about his or her level of training and/or experience 

Classification 

Exam Type 

Exam 
Components 

Final File 
Date 

No. of 
Applications 

Senior Personnel 
Specialist 

Departmental 
Promotional 

T&E 

1/27/2014 

8 

Senior Workers’ 
Compensation Payroll 
Auditor 

Departmental 
Promotional 

QAP 

6/24/2014 

44 

Stationary Engineer 

Departmental 
Promotional-
Spot 

Education & 
Experience6 
(E&E) 

9/6/2013 

6 

Stationary Engineer 

Departmental 
Promotional-
Spot 

E&E 

12/17/2013 

4 

Staff Management 
Auditor 

Open-Spot 

QAP & SA 

9/6/2013 

38 

Staff Services 
Management Auditor 

Departmental 
Open 

Written 

9/6/2013 

45 

Supervising Program 
Technician I 

Departmental 
Promotional 

Written 

7/26/2013 

102 

Workers’ Compensation 
Claims Adjuster 

Departmental 
Open 

Written 

8/16/2013 

178 

Workers’ Compensation 
Insurance 
Representative 

Departmental 
Open 

Written 

8/16/2013 

175 

performing certain tasks typically performed by those in this classification. Responses yield point values, 
which are totaled by the online system or a department exam analyst, and then assigned a percentage 
score. 

6 In an education and experience (E&E) examination, one or more raters reviews the applicants’ Standard 
678 application forms, and scores and ranks them according to a predetermined rating scale that may 
include years of relevant higher education, professional licenses or certifications, and/or years of relevant 
work experience. 

FINDING NO. 1 – Equal Employment Opportunity Questionnaires Were Not 
Separated from Applications 

 

Summary: Out of 18 examinations reviewed, 16 exams included applications 
where EEO questionnaires were not separated from the STD 678 
examination applications. Specifically, 698 of the 716 applications 
received included EEO questionnaires that were not separated 
from the STD 678 examination application. 

Criteria: Government Code section 19704 makes it unlawful for a hiring 
department to require or permit any notation or entry to be made on 
any application indicating or in any way suggesting or pertaining to 

any protected category listed in Government Code section 12940, 
subdivision (a) (e.g., a person's race, religious creed, color, national 
origin, ancestry, physical disability, mental disability, medical 
condition, genetic information, marital status, sex, gender, gender 
identity, gender expression, age, sexual orientation, of military and 
veteran status). Applicants for employment in state civil service are 
asked to provide voluntarily ethnic data about themselves where 
such data is determined by the California Department of Human 
Resources (CalHR) to be necessary to an assessment of the ethnic 
and sex fairness of the selection process and to the planning and 
monitoring of affirmative action efforts. (Gov. Code, § 19705.) The 
EEO questionnaire of the state application form (STD 678) states, 
“This questionnaire will be separated from the application prior to 
the examination and will not be used in any employment decisions.” 

Severity: Very Serious. The applicants’ protected classes were visible, 
subjecting the agency to potential liability. 

Cause: The SCIF states that their Human Resources Applicant 
Management System (HRAMS) project development team 
understood that the online system would be in compliance since the 
EEO questionnaires are separated from the applications prior to the 
hiring process. 

Action: It is recommended that within 60 days of the Executive Officer’s 
approval of these findings and recommendations, the SCIF submit 
to the CRU a written corrective action plan that the department will 
implement to ensure that all EEO questionnaires are separated 
from all applications. Copies of all relevant documentation should 
be included with the plan. 

Appointments 

In all cases not excepted or exempted by Article VII of the California Constitution, the 
appointing power must fill positions by appointment, including cases of transfers, 
reinstatements, promotions, and demotions in strict accordance with the Civil Service 
Act and Board rules. (Gov. Code, § 19050.) Appointments made from eligible lists, by 
way of transfer, or by way of reinstatement, must be made on the basis of merit and 
fitness, which requires consideration of each individual’s job-related qualifications for a 

position, including his or her knowledge, skills, abilities, experience, and physical and 
mental fitness. (Cal. Code Regs., tit. 2, § 250, subd. (a).) 

During the compliance review period, the SCIF made 682 appointments. The CRU 
reviewed 91 of those appointments, which are listed below: 

Classification 

Appointment 
Type 

Tenure 

Time Base 

No. of 
Appointments 

Assistant Chief Counsel 

Certification 
List 

Permanent 

Full Time 

5 

Associate Administrative 
Analyst (Accounting 
Systems) 

Certification 
List 

Permanent 

Full Time 

1 

Associate Governmental 
Program Analyst 

Certification 
List 

Limited 
Term 

Full Time 

1 

Associate Governmental 
Program Analyst 

Certification 
List 

Permanent 

Full Time 

7 

Associate Real Estate 
Officer 

Certification 
List 

Permanent 

Full Time 

1 

Attorney 

Certification 
List 

Limited 
Term 

Full Time 

4 

Attorney 

Certification 
List 

Permanent 

Full Time 

8 

Legal Support Supervisor I 

Certification 
List 

Permanent 

Full Time 

4 

Senior Workers’ 
Compensation Insurance 
Representative 

Certification 
List 

Permanent 

Full Time 

7 

Senior Workers’ 
Compensation Payroll 
Auditor 

Certification 
List 

Permanent 

Full Time 

4 

Staff Services Analyst 

Certification 
List 

Permanent 

Full Time 

1 

Staff Services Management 
Auditor 

Certification 
List 

Permanent 

Full Time 

6 

Supervising Program 
Technician I 

Certification 
List 

Limited 
Term 

Full Time 

3 

Supervising Program 
Technician I 

Certification 
List 

Permanent 

Full Time 

3 

Workers’ Compensation 
Insurance Representative 

Certification 
List 

Limited 
Term 

Full Time 

1 

Workers’ Compensation 
Insurance Representative 

Certification 
List 

Permanent 

Full Time 

6 

Workers’ Compensation 
Insurance Technician 

Certification 
List 

Permanent 

Full Time 

1 

Classification 

Appointment 
Type 

Tenure 

Time Base 

No. of 
Appointments 

Workers’ Compensation 
Payroll Auditor 

Certification 
List 

Permanent 

Full Time 

1 

CEA, Deputy Chief Counsel 

Information List 

Permanent 

Full Time 

2 

CEA, Deputy Chief 
Counsel, State 
Compensation Insurance 
Fund 

Information List 

Permanent 

Full Time 

2 

CEA, Senior Vice President 
of Information Technology 
Core Operations 

Information List 

Permanent 

Full Time 

1 

Staff Services Analyst 

Reinstatement 

Permanent 

Full Time 

1 

Staff Service Manager I 
(Supervisor) 

Reinstatement 

Limited 
Term 

Full Time 

1 

Associate Information 
Systems Analyst 
(Specialist) 

Retired 
Annuitant 

Temporary 

Intermittent 

1 

Senior Personnel Specialist 

Retired 
Annuitant 

Temporary 

Intermittent 

1 

Television Specialist 

Temporary 
Authorization 
Utilization 

Temporary 

Intermittent 

1 

Associate Information 
Systems Analyst 
(Supervisor) 

Transfer 

Permanent 

Full Time 

1 

Program Technician 

Transfer 

Permanent 

Full Time 

7 

Senior Personnel Specialist 

Transfer 

Permanent 

Full Time 

1 

Staff Services Analyst 

Transfer 

Permanent 

Full Time 

4 

Staff Services Manager II 
(Supervisor) 

Transfer 

Permanent 

Full Time 

4 

 

FINDING NO. 2 – Probationary Evaluations Were Not Provided for All 
Appointments Reviewed 

 

Summary: The SCIF did not prepare, complete, and/or retain required 
probationary appraisals of performance for 31 of the 91 
appointments reviewed by the CRU. 

Classification 

Appointment 
Type 

No. of 
Appointments 

No. of 
Uncompleted 
Probation 
Reports 

Assistant Chief Counsel 

Certification List 

2 

3 

Associate Governmental 
Program Analyst 

Certification List 

4 

12 

Senior Workers’ Compensation 
Insurance Representative 

Certification List 

4 

10 

Senior Workers’ Compensation 
Payroll Auditor 

Certification List 

1 

1 

Associate Real Estate Officer 

Certification List 

1 

2 

Workers’ Compensation 
Insurance Representative 

Certification List 

2 

2 

Associate Administrative 
Analysis (Accounting Systems) 

Certification List 

1 

3 

Staff Services Management 
Auditor 

Certification List 

2 

3 

Workers’ Compensation 
Insurance Technician 

Certification List 

1 

1 

Staff Services Analyst 

Reinstatement 

1 

2 

Staff Services Manager II 
(Supervisor) 

Transfer 

3 

4 

Program Technician 

Transfer 

6 

14 

Staff Services Analyst 

Transfer 

2 

2 

Associate Information Systems 
Analyst (Supervisor) 

Transfer 

1 

2 

TOTAL 

31 

61 

 

Criteria: A new probationary period is not required when an employee is 
appointed by reinstatement with a right of return. (Cal. Code Regs., 
tit. 2, § 322, subd. (d)(2).) However, the service of a probationary 
period is required when an employee enters state civil service by 
permanent appointment from an employment list. (Cal. Code Regs., 
tit. 2, § 322, subd. (a).) In addition, unless waived by the appointing 
power, a new probationary period is required when an employee is 
appointed to a position under the following circumstances: (1) 
without a break in service in the same class in which the employee 
has completed the probationary period, but under a different 
appointing power; and (2) without a break in service to a class with 
substantially the same or lower level of duties and responsibilities 
and salary range as a class in which the employee has completed 

the probationary period. (Cal. Code Regs., tit. 2, § 322, subd. (c)(1) 
& (2).) 

During the probationary period, the appointing power is required to 
evaluate the work and efficiency of a probationer at sufficiently 
frequent intervals to keep the employee adequately informed of 
progress on the job. (Gov. Code, § 19172; Cal. Code Regs., tit. 2, § 
599.795.) The appointing power must prepare a written appraisal of 
performance each one-third of the probationary period. (Cal. Code 
Regs., tit. 2, § 599.795.) 

Severity: Serious. The probationary period is the final step in the selection 
process to ensure that the individual selected can successfully 
perform the full scope of their job duties. Failing to use the 
probationary period to assist an employee in improving his or her 
performance or terminating the appointment upon determination 
that the appointment is not a good job/person match is unfair to the 
employee and serves to erode the quality of state government. 

Cause: The SCIF states that Human Resources made good faith efforts to 
provide clarity on the probationary evaluation requirements to all 
management within SCIF, including providing dates the 
probationary evaluations are due. However, SCIF management did 
not comply in all instances. 

Action: The SCIF has submitted a corrective action plan for ensuring 
compliance in meeting the probationary requirements of 
Government Code section 19172; therefore, no further action is 
required at this time. 

Equal Employment Opportunity 

Each state agency is responsible for an effective EEO program. (Gov. Code, § 19790.) 
The appointing power for each state agency has the major responsibility for monitoring 
the effectiveness of its EEO program. (Gov. Code, § 19794.) To that end, the appointing 
power must issue a policy statement committed to EEO; issue procedures for filing, 
processing, and resolving discrimination complaints; issue procedures for providing 
equal upward mobility and promotional opportunities; and cooperate with CalHR by 
providing access to all required files, documents and data. (Ibid.) In addition, the 

appointing power must appoint, at the managerial level, an EEO Officer, who shall 
report directly to, and be under the supervision of, the director of the department to 
develop, implement, coordinate, and monitor the department’s EEO program. (Gov. 
Code, § 19795.) 

Because the EEO Officer investigates and ensures proper handling of discrimination, 
sexual harassment and other employee complaints, the position requires separation 
from the regular chain of command, as well as regular and unencumbered access to the 
head of the organization. 

Each state agency must establish a separate committee of employees who are 
individuals with a disability, or who have an interest in disability issues, to advise the 
head of the agency on issues of concern to employees with disabilities. (Gov. Code, § 
19795, subd. (b)(1).) The department must invite all employees to serve on the 
committee and take appropriate steps to ensure that the final committee is comprised of 
members who have disabilities or who have an interest in disability issues. (Gov. Code, 
§ 19795, subd. (b)(2).) 

The CRU reviewed the SCIF EEO program that was in effect during the compliance 
review period. 

FINDING NO. 3 – Equal Employment Opportunity Officer Did Not Monitor the 
Composition of Oral Panels in Departmental Exams 

 

Summary: The SCIF EEO Officer did not monitor the composition of the oral 
panels for departmental exams. 

Criteria: The EEO Officer at each department must monitor the composition 
of oral panels in departmental examinations (Gov. Code, section 
19795, subd. (a). 

Severity: Very Serious. Requiring the EEO Officer to monitor oral panels is 
intended to ensure protection against discrimination in the hiring 
process. 

Cause: The SCIF states that previously they did not have a 
process/procedure in place wherein the EEO Officer monitored the 
composition of oral panels in departmental examinations. 

Action: The SCIF has submitted a corrective action plan for ensuring 
compliance in meeting the requirements of Government Code 
section 19795; therefore, no further action is required at this time. 

DEPARTMENTAL RESPONSE 

Finding No. 1 

The SCIF has an online examination/certification system (HRAMS) whereby all 
examination applications are submitted and stored online. As part of that system, 
applicants create a profile, complete, and submit an application which populates their 
personal information. The SCIF does not use applications submitted for civil service 
examinations for the hiring processes. There is a separate application that is submitted 
for job vacancies which does not include the EEO questionnaire. The application is 
stored and the data is available for the purpose of determining minimum qualifications to 
participate in the examination, to generate the bottom line hiring report (which is 
captured electronically via the EEO Questionnaire), and to retain all applications for the 
required five-year time period. 

During the development of HRAMS in 2006, the project team determined that SCIF was 
in compliance with the government codes based on the aforementioned process. The 
SCIF HRAMS project team is currently working on a Business Requirement Document 
that will address the above finding. The estimated delivery of said enhancement is end 
of July 2016. 

Finding No. 2 

When an employee is serving a probationary period, the assigned Personnel Specialist 
communicates the length of the probationary period, as well as the dates reports are 
due, to the supervisor for the employee. Although the dates are provided, it is 
incumbent upon the supervisor to not only provide the reports on a timely basis to the 
employees, but also to ensure the original signed report is forwarded to the Personnel 
Specialist for placement into the employees official personnel file. Human Resources 
has made good faith efforts to provide clarity on the probationary period to all 
management within SCIF, which had been a manual system. Probationary reports are 
automatically sent to all supervisors/managers and the step-by-step process/procedure 
for ensuring compliance for this finding SCIF has developed and implemented is 
attached. 

The SCIF is committed to being the employer of choice and as such our CEO supports 
the timely delivery of performance evaluations. A monthly report is generated and 
provided to our CEO for any performance evaluations that have not been completed 
timely. 

Finding No. 3 

Previously, SCIF did not have a process/procedure wherein the EEO Officer monitored 
the composition of the oral panels in departmental exams. However SCIF has now 
developed and implemented the attached process/procedure. 

SPB REPLY 

Based upon the SCIF’s written response, the SCIF will comply with the CRU 
recommendations and findings, and provide the CRU with a corrective action plan for 
Finding No. 1. The SCIF submitted a corrective action plan with supporting 
documentation for Findings Nos. 2 and 3; therefore no further action is required for 
those findings. 

It is further recommended that the SCIF continue to comply with the afore-stated 
recommendations and submit to the CRU a written report of compliance within 60 days 
of the Executive Officer’s approval of this report.