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California State Auditor Report Number : I2015-1

Investigations of Improper Activities by State Agencies and Employees
Violations of State Law Including Failure to Seek Competitive Bids, Increase Rental Rates, Properly Dispose of Surplus Property, and Adequately Supervise
July 2014 Through June 2015

Figure 1

Figure 1 shows that the subcontractor charged the contractor $13.8 million for the electrical goods and services. The contractor marked up the goods and services by $3.2 million. Subsequently, Correctional Health Care paid the contractor a total of $17 million for the electrical goods and services.

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Figure 2

Figure 2 shows an approved invoice from the contractor to Correctional Health Care dated September 2012 that totaled $559,990.72. The invoice contains one lump-sum amount without any additional detail. The invoice was approved for payment in December 2012 by an individual whose signature has been redacted.

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Figure 3

Figure 3 is a map of the San Francisco Bay Area that shows the location of the 59 license agreements with undercharged rent. Five license agreements are located in the southern part of Marin County along Highway 101. Four agreements are located within the eastern portion of the County of San Francisco, along Highway 101 and Interstate 280. San Mateo County, with 19, has the most license agreements. Santa Clara County has 12 licenses agreements that are dispersed throughout the county along its state highways and interstates.

Alameda County has 14 license agreements. Most of them are within the City of Oakland. Contra Costa County has the remaining five license agreements. Two are near the Richmond-San Rafael Bridge and three are near the Caldecott Tunnel that connects Alameda and Contra Costa Counties.

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Figure 4

Figure 4 is a flow chart that describes the process the California Department of Water Resources (Water Resources) and the California Department of General Services (General Services) employs to dispose of surplus property owned by the state. The process begins with the Water Resources’ field division identifying the surplus property and the reporting the identified surplus property to the Water Resources’ Facilities and Property Branch (property branch). The property branch then determines whether the property can first be reutilized within Water Resources. If it cannot reutilize the surplus property, the property branch reports the surplus property to General Services along with a proposed disposal method which includes recycling. General Services reviews the report and if it agrees with the recommended disposal method, it informs the property branch that it can move forward with the proposed disposal method. The property branch then informs the field division that it can dispose the surplus method according to the proposed disposal method. If the proposed disposal method is to recycle the surplus property, the field division would then acquire a recycler to dispose of the surplus property.

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Figure 5

Figure 5 shows two pictures showing approximately 50 spools of wires placed on wood pallets outside that the civil maintenance branch chief (maintenance manager) subsequently recycled.

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Figure 6

Figure 6 shows how we estimated the fair market value of the recycled copper wire. We first estimated the weight of the wire to be about 2,189 pounds. We then multiplied this weight by the copper price of $2.55 per pound. Using the sum of these two figures, we then applied the 40 percent copper recovery rate which gave us an estimated recycling value of $2,233 for the recycled wire.

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Figure 7

Figure 7 is a color photograph from the Chula Vista Veterans Home showing a blue Genie boom lift parked in the home’s parking lot.

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