Sacramento -- Gov. Arnold Schwarzenegger this week began shutting down part of the independent agency that acts as watchdog over state prisons, despite legislative calls to beef up the investigative unit.

Employees at the Office of the Inspector General's Visalia branch were told Tuesday that the office would soon close. Visalia is one of two branches of the inspector general that does financial audits of prisons and investigates alleged wrongdoing by guards.

The announcement comes as the state's corrections system is under fire for failing to police rogue guards and for covering up problems within penitentiaries.

It also sets up a clash with lawmakers: State Sens. Jackie Speier, D- Hillsborough, and Gloria Romero, D-Los Angeles, are preparing legislation that would add funding and more powers to the Office of the Inspector General. And the Republican leader of the Senate has suggested GOP lawmakers would support that plan.

Schwarzenegger has proposed closing the office entirely during the next fiscal year and called the inspector general a "waste'' Tuesday in a session with Sacramento reporters.

But a spokesman for the governor said Wednesday the closing of the Visalia branch wasn't Schwarzenegger's doing: It had been planned by the administration of Gov. Gray Davis under a budget deal reached last year that slashed state spending on the office.

Over the past two years, the budget of the inspector general has been cut by 76 percent, and investigators have been leaving the unit in the face of potential layoffs. At one point, the Visalia office had more than 10 employees, but it was unclear Wednesday exactly how many employees remained.

"This is a previously scheduled action that is the direct result of the budget passed and approved by the previous administration,'' said Vince Sollitto, the governor's spokesman.

Two weeks ago, Schwarzenegger fired John Chen, the man who was running the agency. Though the governor replaced Chen with his own appointee, Speier and Romero were critical of the firing. Chen had been expected to testify at hearings the two senators held last week but did not attend.

The hearings revealed several examples of a so-called "culture of corruption'' within state prisons, where whistle-blowers are reprimanded for attempting to report illicit behavior by guards and staff. The hearings came on the heels of a federal report that declared the corrections department had "lost control'' of its ability to police itself.

Speier and Romero believe more oversight of prisons, not less, is needed.

"Maybe we need to deliver a videotape of the hearings to the governor,'' Romero said.

The lawmakers are concerned that investigators with the inspector general will find other jobs and be difficult to hire back if their legislation is successful.