State Controller

An appeals court ruled Friday that Gov. Arnold Schwarzenegger can reduce state workers' pay to the federal minimum wage when the state budget is late. The ruling, stemming from a 2008 case, came a day after the new fiscal year began without a spending plan and the governor ordered the pay of roughly 200,000 state employees cut to $7.25 an hour until a budget is passed. The state controller, who writes the checks, refused to comply. The decision from the 3rd District Court of Appeal in Sacramento is a key victory for Schwarzenegger, who for two years has been battling Controller John Chiang over pay-cut orders.

After enduring more than a year of unpaid monthly furlough days, state workers could see their pay cut to minimum wage until Sacramento strikes a budget accord this summer, according to a memo from Gov. Arnold Schwarzenegger's administration sent Wednesday. Schwarzenegger is pushing for the pay cut as yet another overdue state spending plan looms. But the man charged with writing workers' paychecks, Controller John Chiang, said he would defy the order. The new fiscal year begins July 1, but with lawmakers and Schwarzenegger all but resigned to missing that deadline, the annual wrangling has begun over which of California's bills will be paid with no budget in place.

John Chiang Party: Democratic Occupation: State controller Age: 47, born in New York City City of residence: Torrance Personal: Married Education: Bachelor's degree in finance, University of South Florida; law degree, Georgetown University Law Center Career highlights: Aide to U.S. Sen. Barbara Boxer (D-Calif.), 1992; aide to then-Controller Gray Davis, 1989-91. Elected to State Board of Equalization, 1998. Elected state controller in 2006.

The state has reached a disciplinary settlement with the accounting firm that failed to detect financial irregularities in Bell despite money problems that pushed the city to the brink of insolvency and led to a public corruption scandal. Mayer Hoffman McCann must pay a $300,000 fine and as much as $50,000 for the cost of the investigation, according to the settlement with the California Board of Accountancy. In addition, its license is suspended for six months, although that was stayed, meaning the firm can continue practicing in the state while it serves two years' probation.

At nearly twice the estimated cost and a year late, a new computer system for the state's giant public pension fund is scheduled to go live Monday, tracking the contributions, healthcare coverage and retirement benefits for 1.6 million members. Officials at the California Public Employees' Retirement System hope the complex $507-million project, dubbed My CalPERS, will work as planned, though they expect start-up problems with software. "It won't be perfect on Day 1, but we do have a solid plan for continued improvement," Karen Ruiz, the fund's project manager, told the CalPERS board last week.

Despite two losses in court and a dwindling stock of legal arguments, John Chiang has made himself the roadblock to Gov. Arnold Schwarzenegger's attempt to ratchet down the paychecks of some 200,000 state employees to minimum wage. Chiang, the state controller, has said the order is illegal. He has said it is impractical. He has said his computers can't do it. Mostly, he's just said no. Through the tussle, the unassuming 47-year-old Democrat has emerged as an unlikely counterweight to the muscle-bound Schwarzenegger.

The Nevada Senate convicted the state controller of using state equipment for her 2002 reelection campaign, but dismissed two other counts that could have led to her removal from office. Senators voted to issue a censure -- an official reprimand -- against Kathy Augustine after convicting the two-term Republican in a 14-7 vote, the minimum two-thirds majority needed.