Gov. Code, § 8547.4

The State Auditor shall administer this article and shall investigate and report on improper governmental activities. If, after investigating, the State Auditor finds that an employee may have engaged or participated in improper governmental activities, the State Auditor shall prepare an investigative report and send a copy of the investigative report to the employee’s appointing power. Subject to the limitations of Section 8547.5, the State Auditor may provide to the employee’s appointing power any evidence gathered during the investigation that, in the judgment of the State Auditor, is necessary to support an adverse action or an action recommended pursuant to subdivision (a) of Section 8547.7. Within 60 days after receiving a copy of the State Auditor’s investigative report, the appointing power shall either serve a notice of adverse action upon the employee who is the subject of the investigative report or set forth in writing its reasons for not taking adverse action. The appointing power shall file a copy of the notice of adverse action with the State Personnel Board in accordance with Section 19574, and shall submit a copy to the State Auditor. If the appointing power does not take adverse action within 60 days of receiving a copy of the State Auditor’s investigative report, it shall submit its written reasons for not doing so to the State Auditor and the State Personnel Board, and adverse action may be taken as provided in Section 19583.5. Any employee who is served with a notice of adverse action may appeal to the State Personnel Board in accordance with Section 19575.