The state auditor this week blew the whistle on a significant amount of waste in state government.
A report released February 16 states: "We estimate that auditees could have realized roughly $1.4 billion of monetary value during the period January 1, 2002 through December 31, 2009, if they implemented our recommendations and/or addressed the improper governmental activities we substantiated during our investigations. … Many of the monetary values we have identified are not only one-time benefits, but could be realized each year for many years to come."
Among the waste identified in past audits:
· The Department of Corrections and Rehabilitation and the Department of General Services wasted $580,000 in state funds by continuing to lease 5,900 square feet of office space that was left unoccupied for more than four years.
· A high-level official formerly with Department of Fish and Game's Office of Spill Prevention and Response was paid $71,747 in travel expenses she was not entitled to receive.
· An employee of the State Compensation Insurance Fund failed to report 427 hours of absences. Consequently, the agency did not charge the employee's leave balance for these absences, and paid her $8,314 for hours she did not work.
· The California Highway Patrol purchased 51 vans – at a cost of $881,565 – that were not used for intended purposes.
· The Department of Corrections leased 29 parking spaces at a private parking facility, at a cost of $50,000, but did not use them.
· Medi-Cal was overbilled by equipment providers. The auditor estimated that the Department of Health Care Services overpaid providers by approximately $13 million from October 2006 through September 2007.
· The Department of Fish and Game allowed several state employees and volunteers to reside in state-owned homes without charging them rent – an illegal gift of public funds. A subsequent housing review conducted by the Department of Personnel Administration demonstrated that all 13 state departments that own employee housing may be underreporting or failing to report housing fringe benefits. The auditor said the state could increase revenue as much as $8.3 million by charging fair-market rents.
· The Department of Health Services would have achieved $4.6 million in savings in fiscal year 2002-03 had it paid only the amount specifically authorized by law for the Medical Therapy Program.
· The Department of Corrections could save as much as $290,000 annually by using staff other than peace officers to fill its employment relations officer positions.
· In violation of state regulations and employee contract provisions, the Department of Corrections paid 25 nurses at four institutions nearly $238,200 more than they were entitled to receive between July 1, 2001, and June 30, 2003. The auditor recommended that the department recover past overpayments and also save $119,000 annually by discontinuing this practice.
· The auditor said the Legislature should clarify what school bus safety activities are reimbursable. In 2002, the Legislature passed legislation that specifies that costs associated with implementation of transportation plans are not reimbursable claims. Costs for a six-year period ending June 3, 2002, were $235.9 million, and the ongoing costs are $44.3 million per year.
· The auditor recommended that the California State University set limits on travel expenses. An official in the Chancellor's Office received $152,441 "in improper expense reimbursements over a 37-month period," according to the report. Included were $43,288 in expenses due to his commute between his home in Northern California and the Chancellor's Office in Long Beach. His expenses also included stays in pricey hotels around the world and meals costing $167 per head. In response, CSU said it would be "impractical to establish travel expense limits." The auditor pointed out the State Department of Personnel Administration sets limits, and so does the U.S. State Department.
· At the Department of Justice, a manager and four subordinates did not account for 727 hours of leave, and earned $17,974 they were not entitled to receive. Instead of trying to recoup the money, the department decided to "counsel the manager and four subordinates about the importance of following policies about proper time reporting," the auditor said. The manager left the Department of Justice in 2008, and one of the four subordinates was appointed to replace him. In contrast, when a State Compensation Insurance Fund employee failed to report 427 hours of absence, the fund reported the problem and dismissed the employee in July 2009.
· In a 2008 audit, the auditor found that five state agencies discarded e-waste improperly. The Department of Motor Vehicles and Employment Development Department reported discarding 26 electronic devices in the trash. The CHP, Caltrans and the Attorney General's Office indicated that their practices included placing more than 350 of these items in the trash. Four of the five agencies have implemented the auditor's recommendation to develop an e-waste disposition process, but the Attorney General's Office stated that it is in the process of revising its property control manual, and said other priorities and staff storages have delayed completion.
There are a great many other findings and recommendations in the auditor's 292-page report.
Cal-TaxReports, February 22, 2010
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