COMPLIANCE REVIEW REPORT 

CALIFORNIA DEPARTMENT OF ALCOHOLIC 
BEVERAGE CONTROL 

 

 

 

 

 

 

 

Compliance Review Unit 

State Personnel Board 

July 12, 2016 

TABLE OF CONTENTS 

 
Introduction ..................................................................................................................... 1 
Executive Summary ........................................................................................................ 1 
Background ..................................................................................................................... 2 
Scope and Methodology .................................................................................................. 2 
Findings and Recommendations ..................................................................................... 4 
Examinations ............................................................................................................. 4 
Appointments ............................................................................................................. 6 
Equal Employment Opportunity ............................................................................... 10 
Personal Services Contracts .................................................................................... 11 
Mandated Training ................................................................................................... 12 
Departmental Response ................................................................................................ 13 
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 five 
areas: examinations, appointments, equal employment opportunity (EEO), personal 
services contracts (PSC’s), and mandated training 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 Department of Alcoholic Beverage 
Control (ABC) personnel practices in the areas of examinations, appointments, EEO, 
and PSC’s from June 1, 2015, through February 29, 2016, and mandated training from 
April 1, 2014, through April 1, 2016. The following table summarizes the compliance 
review findings. 

Area 

Finding 

Severity 

Examinations 

Examinations Complied with Civil Service 
Laws and Board Rules 

In Compliance 

Appointments 

Equal Employment Opportunity 
Questionnaires Were Not Separated from 
Applications 

Very Serious 

Appointments 

Applications Were Not Date Stamped and/or 
Accepted After the Final File Date 

Non-serious or 
Technical 

Area 

Finding 

Severity 

Equal Employment 
Opportunity 

Equal Employment Opportunity Program 
Complied with Civil Service Laws and Board 
Rules 

In Compliance 

Personal Services 
Contracts 

Personal Services Contract Complied with 
Procedural Requirements 

In Compliance 

Mandated Training 

Mandated Training Complied with Statutory 
Requirements 

In Compliance 

 

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 

The ABC administers the provisions of the Alcoholic Beverage Control Act, which 
governs over 87,000 licensed businesses throughout the state. The ABC currently has 
approximately 446 positions and is responsible for the licensing and regulation of 
persons and businesses that manufacture, import, distribute, and sell alcoholic 
beverages in California. The ABC supports its mission through three major 
organizational elements: administration, licensing, and law enforcement. 

The Department’s enforcement operations are divided into two divisions (northern and 
southern) which are supported by a headquarters in Sacramento. The division offices 
are located in Sacramento and Cerritos. Within each division are a number of district 
offices. There are 11 districts/branch offices in the northern division, and 13 in the 
southern division. 

The ABC headquarters consists of the Executive Office, Fiscal Management, Human 
Resources, Information Technology, Legal Division, Licensing Services, Administrative 
Services, Trade Enforcement, Professional Standards Unit, and Grant Assistance 
Program. 

SCOPE AND METHODOLOGY 

The scope of the compliance review was limited to reviewing ABC examinations, 
appointments, EEO program, and PSC’s from June 1, 2015, through February 29, 2016, 

and mandated training from April 1, 2014, through April 1, 2016. The primary objective 
of the review was to determine if ABC personnel practices, policies, and procedures 
complied with state civil service laws and board regulations, and to recommend 
corrective action for those deficiencies identified. 

A cross-section of ABC examinations and appointments were selected to ensure that 
samples of various examinations and appointment types, classifications, and levels 
were reviewed. The CRU examined the documentation that the ABC 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 ABC 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). 

ABC PSC’s were also reviewed.1 It was beyond the scope of the compliance review to 
make conclusions as to whether ABC justifications for the contracts were legally 
sufficient. The review was limited to whether ABC practices, policies, and procedures 
relative to PSC’s complied with procedural requirements. 

1 If an employee organization requests the SPB to review any personal services contract during the SPB 
compliance review period or prior to the completion of the final compliance review report, the SPB will not 
audit the contract. Instead, the SPB will review the contract pursuant to its statutory and regulatory 
process. In this instance, none of the reviewed PSC’s were challenged. 

 

In addition, the ABC’s mandated training program was reviewed to ensure all 
employees required to file statements of economic interest were provided ethics 
training, and that all supervisors were provided basic supervisory and sexual 
harassment prevention training within statutory timelines. 

On June 23, 2016, an exit conference was held with the ABC to explain and discuss the 
CRU’s initial findings and recommendations. The CRU received and carefully reviewed 
ABC’s written response on June 30, 2016, which is attached to 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 ABC conducted six examinations. The CRU 
reviewed all six of the examinations, which are listed below: 

Classification 

Exam Type 

Exam 
Components 

Final File 
Date 

No. of 
Applications 

Agent Trainee, 
Alcoholic Beverage 
Control 

Open 

Written2 

Continuous 

323 

Agent, Alcoholic 
Beverage Control 

Open 

Written 

Continuous 

321 

2 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. 

Classification 

Exam Type 

Exam 
Components 

Final File 
Date 

No. of 
Applications 

CEA A, Assistant 
Director of 
Administration 

Career 
Executive 
Assignment 
(CEA) 

State of 
Qualifications 
(SOQ)3 

7/17/2016 

22 

CEA B, Chief Counsel 

CEA 

SOQ 

4/13/2015 

4 

Deputy Division Chief, 
Alcoholic Beverage 
Control 

Departmental 
Promotional 

Qualification 
Appraisal 
Panel (QAP)4 

7/10/2016 

14 

Licensing 
Representative II, 
Alcoholic Beverage 
Control 

Departmental 
Promotional 

QAP 

8/21/2016 

18 

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 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. 

 

FINDING NO. 1 – Examinations Complied with Civil Service Laws and Board 
Rules 

 

The ABC administered two open examinations, two departmental promotional 
examinations, and two CEA examinations in order to create eligible and information lists 
from which to make appointments, respectively. For the two open examinations and two 
departmental promotional examinations, the ABC published and distributed examination 
bulletins containing the required information. Applications received by the ABC were 
accepted prior to the final filing date and were thereafter properly assessed to determine 
whether applicants met the minimum qualifications for admittance to the examination. 
The ABC notified applicants as to whether they qualified to take the examination, and 
those applicants who met the minimum qualifications were also notified about the next 
phase of the examination process. After all phases of the examination process were 
completed, the score of each competitor was computed, and a list of eligible candidates 
was established. The examination results listed the names of all successful competitors 
arranged in order of the score received by rank. Competitors were then notified of their 
final scores. 

 

For the two CEA examinations, the ABC published and distributed examination bulletins 
containing required information. Applications and SOQ’s were received by the ABC and 
were thereafter properly assessed to determine applicant ranks from one to six. 

The CRU found no deficiencies in the examinations that the ABC conducted during the 
compliance review period. Accordingly, the ABC fulfilled its responsibilities to administer 
those examinations in compliance with civil service laws and board rules. 

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.) Except as provided by law, appointments to 
vacant positions shall be made from employment lists. (Ibid.) 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 ABC made 79 appointments. The CRU 
reviewed 44 of those appointments, which are listed below: 

Classification 

Appointment 
Type 

Tenure 

Time 
Base 

No. of 
Appointments 

Administrative Assistant 
II 

Certification List 

Permanent 

Full Time 

1 

Agent Trainee 

Certification List 

Permanent 

Full Time 

4 

Agent, ABC 

Certification List 

Permanent 

Full Time 

7 

Associate Personnel 
Analyst 

Certification List 

Permanent 

Full Time 

1 

Attorney 

Certification List 

Permanent 

Full Time 

1 

Attorney 

Certification List 

Limited 
Term 

Full Time 

1 

Licensing 
Representative I, ABC 

Certification List 

Permanent 

Full Time 

3 

Licensing 
Representative II 

Certification List 

Permanent 

Full Time 

4 

Classification 

Appointment 
Type 

Tenure 

Time 
Base 

No. of 
Appointments 

Office Technician 
(Typing) 

Certification List 

Permanent 

Full Time 

2 

Program Technician II 

Certification List 

Permanent 

Full Time 

2 

Supervising Investigator, 
ABC 

Certification List 

Permanent 

Full Time 

1 

Supervising Program 
Technician I 

Certification List 

Permanent 

Full Time 

1 

Program Technician 

Demotion 

Permanent 

Full Time 

1 

Program Technician II 

Demotion 

Permanent 

Full Time 

1 

Attorney III 

Mandatory 
Reinstatement 

Permanent 

Full Time 

1 

Legal Analyst 

Mandatory 
Reinstatement 

Permanent 

Full Time 

1 

Licensing 
Representative I, ABC 

Mandatory 
Reinstatement 

Permanent 

Full Time 

2 

Program Technician II 

Permissive 
Reinstatement 

Permanent 

Full Time 

2 

Associate Governmental 
Program Analyst 

Retired 
Annuitant 

Limited 
Term 

Intermitten 
t 

1 

Data Processing 
Manager III 

Retired 
Annuitant 

Limited 
Term 

Intermitten 
t 

2 

Student Assistant 

Temporary 
Authorization 
Utilization 

Temporary 

Intermitten 
t 

1 

Program Technician II 

Transfer 

Permanent 

Full Time 

2 

Senior Legal Typist 

Transfer 

Permanent 

Full Time 

1 

Staff Services Manager 
II 

Transfer 

Permanent 

Full Time 

1 

 

FINDING NO. 2 – Equal Employment Opportunity Questionnaires Were Not 
Separated from Applications 

 

Summary: Out of 44 appointments reviewed, two appointment files included 
applications where EEO questionnaires were not separated from 
the STD 678 employment application. Specifically, five of the 870 
applications reviewed included EEO questionnaires that were not 
separated from the STD 678 employment 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, age, or sexual orientation). 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 ABC states that the removal of the EEO questionnaires was an 
oversight. 

Action: The ABC has submitted a corrective action plan for ensuring full 
compliance in meeting the requirements of Government Code 
section 19704 as part of its departmental response, therefore no 
further action is required at this time. 

FINDING NO. 3 – Applications Were Not Date Stamped and/or Accepted After 
The Final File Date 

 

Summary: The ABC accepted and processed 178 out of 870 applications that 
were not date stamped, and 166 applications that were date 
stamped after the final filing date. 

Criteria: California Code of Regulations, title 2, section 174 (Rule 174) 
requires timely filing of applications: All applications must be 
filed at the place, within the time, in the manner, and on the form 
specified in the examination announcement. 

Filing an application ‘within the time’ shall mean postmarked by 
the postal service or date stamped at one of the department’s 
offices (or appropriate office of the agency administering the 
examination) by the date specified. 

An application that is not postmarked or date stamped by the 
specified date shall be accepted, if one of the following 
conditions as detailed in Rule 174 apply: (1) the application was 
delayed due to verified error; (2) the application was submitted in 
error to the wrong state agency and is either postmarked or date 
stamped on or before the specified date; (3) the employing agency 
verifies examination announcement distribution problems that 
prevented timely notification to an employee of a promotional 
examination; or (4) the employing agency verifies that the 
applicant failed to receive timely notice of promotional 
examination. (Cal. Code Reg., tit. 2, § 174, subds. (a), (b), (c), & 
(d).) The same final filing date procedures are applied to the 
selection process used to fill a job vacancy. 

Severity: Non-serious or Technical. Final filing dates are established to 
ensure all applicants are given the same amount of time in which 
to apply for a job vacancy and to set a deadline for the 
recruitment. Therefore, although the acceptance of applications 
after the final filing date may give some applicants more time to 
prepare their application than other applicants who meet the final 
filing date, the acceptance of late applications will not impact the 
results of the job vacancy selection. 

Cause: The ABC states that the hiring managers and/or office staff were 
inconsistent in date stamping the applications received. In addition, 
if applications were received by the postmark date, the envelopes 
were discarded. The ABC also states that for applications received 
after the postmark date, the envelopes were supposed to be 
attached to the application as proof of meeting the final filing date 
deadline and if the envelopes were not attached then it was an 
oversight by the office staff. 

Action: The ABC has submitted a corrective action plan for ensuring 
compliance in meeting the filing requirements of the California 
Code of Regulations, title 2, section 174; 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 equal employment opportunity; issue 
procedures for filing, processing, and resolving discrimination complaints; issue 
procedures for providing equal upward mobility and promotional opportunities; and 
cooperate with the 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 
ABC to develop, implement, coordinate, and monitor the ABC’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 ABC’s EEO program that was in effect during the compliance 
review period. 

FINDING NO. 4 – Equal Employment Opportunity Program Complied with Civil 
Service Laws and Board Rules 

 

After reviewing the policies, procedures, and programs necessary for compliance with 
the EEO program’s role and responsibilities according to statutory and regulatory 
guidelines, the CRU determined that the ABC EEO program provided employees with 
information and guidance on the EEO process including instructions on how to file 
discrimination claims. Furthermore, the EEO program outlines the roles and 
responsibilities of the EEO Officer, as well as supervisors and managers. The EEO 
Officer, who is at a managerial level, reports directly to the Director of the ABC. In 

addition, the ABC has an established DAC that reports to the Director on issues 
affecting persons with a disability. The ABC also provided evidence of its efforts to 
promote EEO in its hiring and employment practices, to increase its hiring of persons 
with a disability, and to offer upward mobility opportunities for its entry-level staff. 

Personal Services Contracts 

A PSC includes any contract, requisition, or purchase order under which labor or 
personal services is a significant, separately identifiable element, and the business or 
person performing the services is an independent contractor that does not have status 
as an employee of the State. (Cal. Code Reg., tit. 2, § 547.59.) The California 
Constitution has an implied civil service mandate limiting the state’s authority to contract 
with private entities to perform services the state has historically or customarily 
performed. Government Code section 19130, subdivision (a), however, codifies 
exceptions to the civil service mandate where PSC’s achieve cost savings for the state. 
PSC’s that are of a type enumerated in subdivision (b) of Government Code section 
19130 are also permissible. Subdivision (b) contracts include private contracts for a new 
state function, services that are not available within state service, services that are 
incidental to a contract for the purchase or lease of real or personal property, and 
services that are of an urgent, temporary, or occasional nature. 

For cost-savings PSC’s, a state agency is required to notify SPB of its intent to execute 
such a contract. (Gov. Code, § 19131.) For subdivision (b) contracts, the SPB reviews 
the adequacy of the proposed or executed contract at the request of an employee 
organization representing state employees. (Gov. Code, § 19132.) 

During the compliance review period, the ABC had one PSC that was in effect and 
subject to the Department of General Services (DGS) approval, and thus the CRU 
procedural review. The CRU reviewed the contract, which is listed below: 

Vendor 

Services 

Contract 
Dates 

Contract 
Amount 

Justification 
Identified 

Computronix 

Annual IT 
Support Services 

7/1/14 – 
6/30/17 

$643,783.00 

Yes 

 

FINDING NO. 5 – Personal Services Contract Complied with Procedural 
Requirements 

When a state agency requests approval from the DGS for a subdivision (b) contract, the 
agency must include with its contract transmittal a written justification that includes 
specific and detailed factual information that demonstrates how the contract meets one 

or more conditions specified in Government Code section 19131, subdivision (b). (Cal. 
Code Reg., tit. 2, § 547.60.) 

It was beyond the scope of the review to make conclusions as to whether ABC 
justification for the contract was legally sufficient. The ABC provided specific and 
detailed factual information in the written justifications as to how the contract met at 
least one condition set forth in Government Code section 19131, subdivision (b). 
Accordingly, the ABC PSC complied with procedural requirements. 

Mandated Training 

Each state agency shall offer at least semiannually to each of its filers an orientation 
course on the relevant ethics statutes and regulations that govern the official conduct of 
state officials. (Gov. Code, § 11146.1) New filers must be trained within six months of 
appointment. (Gov. Code, § 11146.3) 

Each department must provide its new supervisors basic supervisory training within 
twelve months of appointment. (Gov. Code, § 19995.4, subds. (b) and (c.).) The training 
must be a minimum of 80 hours, 40 of which must be structured and given by a qualified 
instructor. The other 40 hours may be done on the job by a higher-level supervisor or 
manager. (Gov. Code, § 19995.4, subd. (b).) 

Additionally, each department must provide its supervisors two hours of sexual 
harassment prevention training every two years. New supervisors must be provided 
sexual harassment prevention training within six months of appointment. (Gov. Code, 
§ 12950.1, subd. (a).) 

The CRU reviewed the ABC mandated training program that was in effect during the 
compliance review period. 

FINDING NO. 6 – Mandated Training Complied with Statutory Requirements 

 

The ABC provided ethics training to its 58 new filers within six months of appointment 
and semiannual ethics training to its 248 existing filers during the two-year calendar 
year period commencing in 2014. The ABC also provided supervisory training to its nine 
new supervisors within 12 months of appointment. In addition, the ABC provided sexual 
harassment prevention training its nine new supervisors within six months of 
appointment and semiannual sexual harassment training to its existing 83 supervisors. 
Thus, the ABC complied with mandated training requirements within statutory timelines. 

DEPARTMENTAL RESPONSE 

The ABC’s response is attached as Attachment 1. 

SPB REPLY 

Based upon the ABC’s written response, the ABC will comply with the CRU 
recommendations and findings. The ABC submitted corrective action plans for the two 
departmental findings that were out of compliance. Therefore, no further action is 
required.