Waste, Fraud, & Mismanagement

California’s taxpayer-funded agencies are spending heavily to address homelessness, but have not followed a coordinated plan and do not base the spending on effectiveness, the state auditor reported February 11. The report, issued while the Legislature is considering a proposed $2.4 billion-per-year tax increase on California employers and consumers to generate funds for homelessness programs (with no sunset date), stated: “With more than 151,000 Californians who experienced homelessness in 2019, the State has the largest homeless population in the nation,…

The Employment Development Department (EDD) this week acknowledged that 9.7 percent of the 19.5 million unemployment insurance claims it has paid since March were fraudulent, and said an additional 17 percent are under investigation for possible fraud. That works out to $11.4 billion in confirmed fraud and an additional $20 billion in possible fraud. Julie Su, secretary of the California Labor and Workforce Development Agency – which oversees the EDD – said during a conference call with reporters: “There is…

California lawmakers have approved an emergency audit of the Employment Development Department after people in several parts of the state reported receiving tens to hundreds of letters – and unrequested debit cards – from the EDD. In a letter sent to the Joint Legislative Audit Committee, Chair Rudy Salas Jr., a Democratic Assembly member from Bakersfield, said the audit will look at “EDD’s efforts to deliver unemployment insurance benefits to Californians, including a review of backlogs and efforts to improve…

The state spends heavily on mental health care programs under the Lanterman-Petris-Short Act, but state officials lack sufficient information about how the money is spent, the state auditor reported July 28. “The treatment that individuals receive through the LPS Act is only one part of a much larger, county-based mental health system in which California invests billions of dollars each year,” the auditor wrote. “Despite the magnitude of that investment, policymakers and other stakeholders do not have the information they…

Executive at the Board of Registered Nursing (BRN) “violated state law when they falsified data to deceive the State Auditor’s Office,” the auditor reported June 30. Acting on a whistleblower complaint alleging that BRN executives intentionally manipulated the data used to create a report, the auditor investigated and found that three executives conceived and carried out a plan in late 2018 to manipulate data and provide a deliberately misleading report to the auditor. The report falsely showed that BRN had…

San Diego’s Sweetwater Union High School District is back in the news, again for mismanagement of tax dollars. Superintendent Karen Janney was placed on paid administrative leave this week and School Board President Frank Tarantino resigned after an audit alleged that the district mismanaged money and engaged in fraud. The audit by the San Diego County Fiscal Crisis and Management Assistance Team (FCMAT), released June 22 by the district, found the district relied on incomplete financial information before authorizing a…

Earlier this year, the city of San Jose spent more than $1.3 million repairing state-owned trailers for homeless residents, but the San Jose Mercury News reports that the city “is dismantling the temporary shelter site – just one month after people moved in.” “Citing poor living conditions for elderly residents and constant maintenance burdens for the city, officials over the weekend transferred more than 30 homeless residents from the trailer site on a city-owned parking lot near Happy Hollow Park…

More than three years after the city of San Diego spent $30 million for a project designed to collect traffic data, “the project is failing to live up to its hype and members of the public trying to work with the data are encountering problems that throw the project’s early promotional claims into question,” Voice of San Diego reported. “San Diego’s smart streetlights were supposed to collect and produce anonymized data that planning professionals and app-makers could then use to…

State Wasted $500,000 on Unused Custom-Built Boat, Auditor Finds. The California Department of Fish and Wildlife “wasted more than a half million dollars of state and federal funds when it purchased a custom-built boat in June 2017 that it cannot use for research surveys as it intended,” the state auditor wrote in a new report on the misuse of tax dollars by various state agencies. “Weaknesses in Fish and Wildlife’s procurement process enabled this wasteful purchase,” the auditor stated. “In…

The California Department of Food and Agriculture (CDFA) is mismanaging the “Pet Lover’s” specialized license plate program so badly that the program is at risk of failure, the state auditor reported March 26. Sales of the license plates generate funds for subsidizing free or low-cost animal sterilization services through grants to eligible entities. From 2013 to 2017, the Veterinary Medical Board was responsible for managing the program, but the Legislature and governor transferred oversight responsibility to the CDFA beginning January…