Legislature OKs Revival of Auditor General’s Office : Government: A 64-7 vote by the Assembly sends bill restoring watchdog agency to Wilson. Voters had refused to exempt the agency from spending limits.

The Legislature on Monday gave final approval to resurrect a government watchdog agency that shut down in November.

On a 64-7 vote, the Assembly approved and sent to Gov. Pete Wilson for his expected signature a bill re-creating the independent legislative auditor general as the “state auditor.”

The $5-million restoration bill was carried by Senate Republican leader Ken Maddy of Fresno and Assembly Speaker Willie Brown (D-San Francisco), who usually find themselves on opposing sides of most issues.

In its new form, the agency would retain virtually all of its “good government” functions of ferreting out government waste, monitoring expenditures of taxpayer money and critiquing the performance of bureaucrats. Advocates claim it has saved taxpayers more than $500 million in the last decade alone.

But instead of finding itself under the familiar roof of the Legislature, the agency would be housed in the independent Little Hoover Commission, a venerable research organization whose members are appointed by the governor and Legislature.

The auditor general, which had been operated by the Legislature since 1955, went out of business Nov. 4, one day after voters defeated Proposition 159, which would have made it a separate constitutional entity and provided funding. Pink slips were handed to the 95 members of the staff, the doors were locked and its whistle-blower hot line was unplugged.

The auditor general’s office found itself in this predicament when it became stuck in the middle of a political fight between the Legislature and advocates of term limits.

In 1990, former Los Angeles County Supervisor Pete Schabarum proposed and California voters enacted Proposition 140, which limited legislative terms and imposed a 38% cut in the Legislature’s budget. Further, it ordered restrictions on future spending by lawmakers.

In response, the Legislature cut back its own office and committee staffs substantially and also cut those of its independent advisers as well--the legislative analyst and the auditor general.

The Legislature placed Proposition 159 and a companion proposal on the 1992 ballot, and asked voters to exempt the two agencies from legislative spending limitations. The measures were defeated. (The analyst’s office has limped along on existing funds but now appears to be in line for a permanent budget.)

For the past six months, Maddy and Brown have quietly lobbied their colleagues to resuscitate the auditor’s office.

“The selling point was that the auditor has been a money-saving operation,” said Maddy. “It was agreed that it is cheaper to have a full-time staff of state auditors rather than contract work out to private auditors at twice or three times the cost.”

During Assembly debate Monday, one freshman Republican, Assemblyman Ray Haynes of Murrieta, complained that the restoration bill represented a “direct circumvention” of the voters’ will on both Proposition 140 and Proposition 159.

But veteran Republican Assemblyman Stan Statham of Oak Run urged its passage. “This is a bureau of government that saves money and there are not very many of those around,” he said.

Times staff writer Jerry Gillam contributed to this report.