February 2025 bar exam: audit.

Senator Umberg, with principal coauthor Assembly Member Pacheco, advances a comprehensive reform to the State Bar’s governance by pairing an annual independent financial audit with an urgent, focused review of the February 2025 bar exam. The measures require the financial audit to be conducted by an independent national or regional public accounting firm with at least five years of government auditing experience, with the financial statements promptly certified under oath by the State Bar’s chief financial officer and a copy of the audit and financial statements due by May 31 to the board, the Chief Justice, and the Assembly and Senate Judiciary Committees. The audit must examine receipts and expenditures related to funds collected on behalf of the Conference of Delegates of California Bar Associations to ensure transfers to the successor entity, reimbursements for administrative and support services, and that no mandatory fees fund the successor entity; the board must consider continuity and independence when selecting the auditing firm.

Beyond the annual financial audit, the bill reaffirms and expands the California State Auditor’s performance-audit authority, directing that the board contract with the CSA every two years to audit the State Bar’s operations for the respective fiscal year, with a copy due within 120 days after the close of the year; the CSA may contract with a third party to perform the performance audit. The bill also codifies historical and programmatic audit expectations: it requires the 2023 CSA performance audit to cover programs and divisions funded by licensing fees and other licensee-derived revenues, assess budgeting and performance measures, review real property use and cost allocation, evaluate funding proposals, and calculate the fee revenue needed to offset costs and support proposed expenditures, with the State Bar reimbursing CSA from existing resources for these audits and maintaining a historical cadence dating to the 2000–2001 baseline.

The measure adds a new, expedited February 2025 bar exam audit by the CSA, detailing extensive review areas: procurement and contracting processes related to ProctorU/Meazure Learning and Kaplan for exam administration, including compliance with laws and evaluation criteria for vendor capability, contract changes, and potential conflicts of interest; evaluation of Kaplan’s role in administering multiple-choice questions, including oversight of question development and the rationale for providing a specific number of questions; examination administration processes to ensure fairness, differences between remote testing and pandemic-era practices, makeup-date decisions, and equipment permissions; the use of artificial intelligence to generate questions, including the decision timeline, responsible entities, evaluation criteria for question validity, and any governance weaknesses and remedies; a detailed itemization of costs associated with the February 2025 exam with a comparison to claimed savings; and other related funding considerations to fulfill the public-protection function. The audit must be submitted as soon as possible under Government Code provisions, and its costs are expressly not to be drawn from the State Audit Fund; the State Bar is to fund the CSA’s work from existing resources.

Together, these provisions broaden the State Bar’s audit framework, linking routine financial accountability with targeted oversight of high-stakes licensing processes and vendor governance. The arrangement formalizes enhanced reporting channels to the board, the judiciary, and legislative committees, while situating procurement practices and AI-assisted exam development within a structured audit regime. The urgency provision accelerates the start of the February 2025 audit, aligning oversight timelines with licensure activity and ongoing governance needs, and it clarifies funding responsibilities and budgetary implications within the bar’s existing resource envelope.