Department of General Services
Custodial Staff Ran an Illegal Payroll Scheme, Defrauding the State of an Estimated $185,000


To remedy the effects of the improper governmental activities that this investigation identified and to prevent those activities from recurring, DGS should take the following actions:

  • Report the supervisor’s and custodian’s conduct to appropriate law enforcement officials within 30 days.
  • Within 60 days, either make a request to the State Personnel Board to take disciplinary action against the supervisor or attempt to work with the supervisor’s current state employer to take disciplinary action.
  • Consider placing a notice of this investigation in the official personnel files of the custodian and building manager within 60 days because these employees are no longer employed by the State but could seek to return in the future.
  • Consult with the California Public Employees’ Retirement System regarding the implications of our investigation’s findings for the health benefits the custodian received during the four‑year period of our review and for both the custodian’s and the supervisor’s retirement benefits.
  • Within 90 days, take corrective or disciplinary actions against the office technician for her time abuse.
  • Determine whether any overpayments should be recouped from the supervisor and office technician for their time abuse. If warranted, DGS should attempt to recover overpayments made or adjust their leave balances within 60 days to account for their missed work time.

Summary of Agency Response

DGS reported in May 2022 that it takes allegations of defrauding the State and abusing its resources seriously. It stated that it agrees with all of our recommendations and will move swiftly to implement them, including contacting and working with both law enforcement and other concerned state entities. Regarding our recommendation that it take disciplinary action against the supervisor within 60 days, DGS replied that, within 30 days, it would request that the State Personnel Board take disciplinary action. DGS added that the alleged behavior is a violation of its values and it will review its policies and procedures to prevent these activities from recurring.

Respectfully submitted,

Acting California State Auditor

July 28, 2022