The Times reported last year that the board had ejected from at least one meeting its own state-appointed attorney, Jana Tuton, who had questioned the legality of some of its actions.
And e-mails among board members concerning board matters raised questions about whether business was being conducted in secret, in violation of California's open-meetings law.
The audit found that "board members' lack of understanding about state laws related to their responsibilities . . . resulted in some violations of state law and other inappropriate actions." The board inappropriately delegated to its staff the responsibility to approve or deny licenses, auditors said.
And the board did not ensure that staff members with decision-making authority properly disclosed potential conflicts of interest. Among 16 board and staff members serving in 2005, 2006 and 2007, eight did not complete the economic interest disclosure forms correctly, nine filed their forms late and two did not file at all, the audit found.
Ridley-Thomas called the findings "very, very troubling" and said: "If I were governor, I would not allow any commissioners to continually embarrass me in this fashion."
The audit covers the two years ending June 30, 2007. Current board Chairman Frederick Lerner said some corrective steps have been taken.
"The board began working to address many of these issues even before the audit began," Lerner said in a prepared statement. "It was the need to correct these issues that led us to seek a new direction, with a new executive officer, last summer."
Executive Officer Brian Stiger said board members have had training on open-meeting laws, and efforts to improve the handling of complaints are "well underway." Other audit recommendations will be acted on in the future, he said.
In a letter to the board Tuesday, Schwarzenegger said the audit marks progress but "additional improvement is needed" in some areas.
"The board's highest priority must be actions to achieve the highest level of consumer protection and professional education," he wrote.
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patrick.mcgreevy@latimes.com
