FIONA MA, CPA
STATE BOARD OF EQUALIZATION
BOARD MEMBER, DISTRICT TWO

April 27th, 2017

Senator Richard D. Roth
State Capitol, Room 4034
Sacramento, CA 95814

RE:

Working Together to Implement Necessary Reforms at SBOE to Restore Public Trust

Dear Senator Roth:
Since 1988, I have worked in the field of public accounting. I have a Bachelor’s Degree in Accounting, a Masters
in Taxation and a Masters in Finance. Two years ago, when I was first elected to the State Board of Equalization
(SBOE), I looked forward to utilizing my experience and expertise to bring much needed change to an agency that
has been lacking transparency and accountability.
For the two years since I was elected, I have consistently pushed the SBOE to adopt reforms that would impose
appropriate checks and balances, greater accountability and increased transparency. I've led my own internal
investigations, called for external audits and asked the Legislature to address issues of both substance and
appearance at the SBOE. Unfortunately, my efforts have been met with a culture that is resistant to these
important and critical reforms.
Given the resistance I personally have faced in imposing an appropriate reform agenda, I appreciate your efforts
to conduct oversight of the SBOE as well as your request your assistance in crafting and implementing the
structural reforms necessary to evolve into a modern SBOE that provides Californians with "taxation with
representation" in a fair, efficient and honest manner.
The State Board of Equalization was created by voter initiative in 1879 to "equalize" property taxes in our 58
counties. We have approximately 5,000 dedicated employees who collect, administer and audit close to 40
tax/fee programs totaling $60 billion dollars. Our agency is still performing its core functions. However, parts of
our agency have veered off mission and are clearly working outside the public trust.
Accordingly, I respectfully present the following recommendations that outline the role of SBOE Board Members
and adjustments to structural operations that will provide fiscal transparency and enhance the function and
efficiency of the SBOE that the taxpayers deserve.

 ROLE OF SBOE BOARD MEMBERS:
In pursuing the necessary and appropriate reforms, it is important that these efforts work to preserve the key
taxpayer protections the BOE members themselves provide the people of California, including: (1) the right to
petition elected SBOE Members; (2) the right to have the SBOE adjudicate their tax disputes with the State of
California; (3) if the SBOE holds in a taxpayer’s favor, that the decision be final; (4) the SBOE continued role in
promulgating sales tax, business tax, and property tax regulations; (5) the SBOE’s duty to investigate agency
abuse of taxpayers is not abridged; (6) the SBOE continues to provide published and verbal guidance to
taxpayers; and (7) preservation of the SBOE’s current “check and balance” function in property tax
administration. I am writing to indicate my strong support of these core BOE functions, which provide important
taxpayer safeguards under current law:

1) The right of taxpayers to petition their elected officials. It is imperative that taxpayers be able to
communicate directly with their elected BOE Members to seek redress. This includes so called “ex
parte” communication between taxpayers and SBOE Members.
2) Independent adjudication of taxpayer appeals by elected officials. This provides a vital check against
audit and collection abuses suffered by taxpayers. It is a key feature of California’s tax system and
should be preserved.
3) Finality of SBOE decisions. Given the grueling nature of the current audit and protest processes, which
can span several years, it is essential that if a taxpayer wins an appeal before the SBOE, that decision be
final.
4) Promulgation of sales tax, business tax, and property tax regulations. Simply put, these regulations
should approved by elected officials who are accountable to the voters, not bureaucrats who are
isolated from public review.
5) Internal investigations of reported abuses of taxpayers. When wrongdoing is alleged by a taxpayer, the
elected Board must be empowered to investigate the bureaucracy being accused of misconduct.
6) Taxpayer guidance and advocacy. The current SBOE provides publications, guidance, and legal counsel
opinions, as well as a “hotline” providing live advice to the taxpaying public. These important functions
must be preserved.
7) Checks and Balances. The SBOE has a number of key “Check and Balance” functions, such as the County
Assessment Practice Surveys and Audit Program, which also promote uniformity and consistency in
statewide property tax administration. The BOE’s publication of property tax guidance, such as
Assessors’ Handbooks and Letters to Assessors also advances these goals by providing needed guidance
to counties.
The elected Board Members serve a similar function as the elected State Legislators, representing a district where
they are in tune with specific interests and problems. BOE Board Members’ primary role is to serve their
constituents while carrying out the mission of the SBOE through fair, effective, and efficient tax administration.
Additionally, taxpayers may not agree with the concept of “taxation without representation.” Allowing taxpayers
the opportunity to meet with Board Members provides assistance to taxpayers by helping them navigate through
California’s complex tax laws while also educating Board Members so they can make informed decisions.

 PROPOSED ADJUSTMENTS TO STRUCTURAL OPERATIONS:
APPEALS PROCESS: We should consider modeling New York in their Tribunal Tax Appeal Committee where
the committee reviews the records of appeals hearing and any arguments, oral or by brief, by taxpayers who
request to appear before the Board. The Tribunal Committee then issues a written decision affirming, reversing or
modifying the determination which then directs the BOE Appeals Division of next steps based on their decision to
either move forward with additional proceedings before the Board or denying it. Each decision must be rendered
within six months from the date of notice to the Tribunal that exception is being taken to the determination of the
Appeals Division. This period is extended if oral or written argument is made before the Tribunal Committee.
This process will streamline the appeals process and relieve the current back log; it also creates a clear separation
of the administration of taxes from the adjudication of disputes between taxpayers and the BOE.
CHIEF LEGAL COUNSEL: SBOE has been without Chief Counsel for almost a year now. Current legal staff
authored the legal opinions that authorized Board Members to participate in outreach programs such as VITA and
Connecting Women to Power with little nexus to SBOE as mentioned in the OSAE audit. This reflects the lack of
priority and urgency to protect the Agency and Board Members from liability and encouraged the misuse of
taxpayer dollars. I request that the Legislature ask the Attorney General to immediately appoint an acting General
Counsel to the SBOE who has experience in HR/ Personnel, FPPC, and Government Operations as the SBOE is
currently in a nationwide search for new General Counsel.
HUMAN RESOURCES:
EEO: Equal Employment Opportunity (EEO) complaints are currently filed with the Taxpayers’ Rights
Advocate (TRA) department of the BOE. The Taxpayers' Rights Advocate Office’s mission is to help taxpayers
when they are unable to resolve a matter through normal channels, when they want information regarding
procedures relating to a particular set of circumstances, or when there are apparent rights violations in the audit,
compliance, or property tax areas. Some taxpayers call to communicate their frustration with aspects of the
business or property taxation system or seeking confirmation that they have been treated lawfully and fairly by a
county or state office.
TRA’s mission does not include the investigation of EEO complaints or resolution of any HR related issues. I
recommend that EEO be placed under the Human Resource Division at the SBOE under the supervision of the
Chief of HR to properly address sensitive HR issues. Additionally, a hotline should be established for the public
and SBOE employees to report HR related complaints directly to CalHR.
CEA RAISE POLICY: In July 2015, there were substantial salary increases, well over 5%, given to some of the
top level executives in our Agency without Board Member knowledge or approval. Implementation of a CEA
Raise Policy should be applied where all salary adjustments provided to CEA/Exempts should be consistent by
implementing a more structured and uniform CEA Pay Program that incorporates performance based decisions.
NEPOTISM: In July, 2016, I received an anonymous letter about nepotism at the Agency which I immediately
brought to our Chief of HR’s attention which was confirmed soon after. The Chief of HR then drafted a
Nepotism policy which has already been fully vetted and approved by the Executive Director (ED), Chief Deputy
Director (CDD) and Acting Legal Counsel but has yet to be implemented. I recommend the immediate
implementation of a Nepotism policy, sent out to all employees of the BOE as mandated by the CA State
Personnel Board.
FISCAL TRANSPARENCY:
AUDIT/FINANCE COMMITTEE: In light of recent audit findings, it may be prudent to establish an
Audit/Finance Committee at the SBOE that works directly with auditing agencies to correct audit findings and
ensure compliance.
TRANSPARENT SOLUTION PROGRAM: Currently, California cities, municipalities and states across the
country implement a transparency solution platform to budget more effectively, make data-driven decisions, and
achieve greater transparency by communicating to the taxpayers. Adopting such a platform will allow all SBOE
expenditures to be posted online on the SBOE website.

 FIELD OPERATIONS:
Over 90% of SBOE employees are engaged in daily work outside of the seven core functions listed above. These
civil servants are occupied in the critical activities of auditing, collecting, and allocating sales and use and other
business taxes.
Currently, Field Operations Division (FOD) is managed by one FOD CEA Deputy Director (DD), who is
responsible for half of the agency. The Deputy Director has 36 direct reports including the four Assistant Chief of
Fields who manages one of the four SBOE Districts. These Assistant Chief of Fields are the same level as the
District Administrators therefore making it almost impossible for the DD to know what is occurring in each
district office.
Field Operations should be decentralized so that District Offices operate autonomously through the Assistant
Chief of Fields to manage daily operations and budget more effectively and efficiently based on needs.
Giving District Offices more flexibility to work together to resolve cases will efficiently reduce caseload and
provide better customer service. Employee morale would improve as they would not be bogged down with cases
they could not get to and promotes a teamwork focused atmosphere. Field operations will be able to grow,
motivate employees, reduce case load, and provide opportunities for staff. With control over their work load and
offices, will come ownership and accountability. With leaders in place to help guide staff, FOD can only excel in
the service we provide to our customers.
WORKING TOGETHER TO REFORM SBOE
You have rightly opened an urgent discussion on the proper structure of the SBOE. As someone who has been
working since my election to bring transparency and appropriate reforms to the SBOE, I welcome legislative
oversight and the opportunity to work together to restore accountability and public trust to this agency. I look
forward to partnering with you and legislative leaders to ensure that taxpayer rights are maintained and trust is
restored.

In Peace & Friendship,

Fiona Ma, CPA
Board Member- District Two
California State Board of Equalization

455 GOLDEN GATE AVENUE, SUITE 10500, SAN FRANCISCO, CA 94102 • TEL: 1-415-557-3000 • FAX: 1-415-557-0287
1201 K STREET, SUITE 710, SACRAMENTO, CA 95814 • TEL: 1-916-445-4081 • FAX: 1-916-324-2087
EMAIL: Fiona.Ma@boe.ca.gov
WEBSITE: www.boe.ca.gov/Ma