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Gross Mismanagement Led to the Misuse of State Resources
and Multiple Violations of State Laws

California Department of Food and Agriculture and a District Agricultural Association

Report Number: I2019-4

August 20, 2019
Investigative Report I2019-4

The Governor of California
President pro Tempore of the Senate
Speaker of the Assembly
State Capitol
Sacramento, California 95814

Dear Governor and Legislative Leaders:

In addition to the financial, performance, and high risk audits that my office performs, we administer the statutory provisions of the California Whistleblower Protection Act. We receive, review, and investigate allegations of state employees committing improper governmental activities. When an investigation substantiates improper governmental activities, my office may issue public reports summarizing our investigative work, but we do so only after carefully weighing the interests of the State and our obligation to keep confidential the identities of the whistleblowers and the employees involved. This report details the results of an investigation of one district agricultural association (association), which operates under the fiscal and policy oversight of the California Department of Food and Agriculture (CDFA).

We found that the association's chief executive officer and maintenance supervisor grossly mismanaged state resources and neglected their duties to ensure that employees comply with state laws governing supervision and time and attendance reporting. Examples of the improper acts we found include employees taking home state property and misusing state resources, drinking alcohol on state grounds, a lack of critical internal controls to prevent inappropriate and excessive travel-related purchases, unnecessary charges for interest and late fees, and a waste of state funds. The association's board of directors further exacerbated this gross mismanagement by failing to fulfill its legal responsibilities—to ensure that the association followed state requirements, protected its accumulated assets, properly managed its current income, and made good purchasing decisions. CDFA also failed to adequately exercise its oversight responsibilities: it did not perform biannual compliance audits of the association, which could have discovered and addressed many of these improper governmental activities.

When we issue investigative findings to state agencies, they must respond to us within 60 days and thereafter report monthly any corrective or disciplinary actions they are taking to address our recommendations. We received initial responses from CDFA and the association in June 2019 and have summarized them in this report.

Respectfully submitted,

California State Auditor