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Investigations of Improper Activities by State Agencies and Employees
Wasteful and Improper Personnel Decisions, Improper Contracting, Conflict of Interest, Misuse of State Resources, and Dishonesty

Report Number: I2020-2


Investigative Highlights . . .

State employees and agencies engaged in numerous improper activities including the following:

Results in Brief

Under the authority of the California Whistleblower Protection Act, the California State Auditor conducted investigative work from January 2020 through June 2020 on hundreds of allegations of improper governmental activity. These investigations substantiated numerous improper activities, including wasteful and improper personnel decisions, improper contracting, a conflict of interest, misuse of state resources, and dishonesty. Within this report, we provide information on a selection of these cases.

Department of State Hospitals

In 2016 the Department of State Hospitals (State Hospitals) began a telepsychiatry program and allowed its new telepsychiatrists to receive State Safety (safety) retirement benefits, which are enhanced benefits that the State provides to its employees who have certain public protection responsibilities and are exposed to a risk of physical injury, such as regular and substantial contact with incarcerated patients. However, telepsychiatrists do not meet the requirements for these benefits because they do not have regular, substantial, in‑person contact with patients. State Hospitals failed to obtain approval from the California Department of Human Resources when it implemented the program and decided that its 17 telepsychiatrists qualified for safety retirement benefits. We estimate that State Hospitals’ failure to perform its due diligence will result in millions of dollars in overpaid retirement benefits if left uncorrected.

California Department of Education

Senior‑level managers and a former executive at the California Department of Education worked together to quickly hire a former contractor whom they preselected for a management position. They also improperly approved an inflated salary for the former contractor.

Department of Industrial Relations

Officials at the Department of Industrial Relations (Industrial Relations) unlawfully preselected a candidate for a management position before other candidates had submitted their applications. The officials also provided this candidate with a higher‑than‑minimum salary even though she did not meet the requirements for it, resulting in about $41,000 in overpayments to her during a four‑year period. Furthermore, a manager at Industrial Relations incorrectly certified that another manager met the minimum qualifications for a higher‑level position, leading to an improper promotion.

California Department of Veterans Affairs

A senior executive or his designee at the California Department of Veterans Affairs (CalVet) improperly approved 10 emergency contracts that totaled almost $628,000 under circumstances that did not qualify as emergencies according to the law. The most egregious example involved nearly $187,000 CalVet spent on renovations of two employee housing units for administrators. As a result of the improper emergency contracts, CalVet failed to solicit legally required competitive bids designed to ensure that the State receives the best value for such contracts.

California Department of Forestry and Fire Protection

Two assistant chiefs at the California Department of Forestry and Fire Protection (CAL FIRE) knowingly allowed a battalion chief to make a contract with a company in which he had a financial interest. Specifically, the construction company that CAL FIRE used to remodel a unit office was owned by the battalion chief’s wife’s family and employed his wife. In addition, the assistant chiefs failed to follow the State’s contracting requirements with respect to public works contracts.

Business, Consumer Services and Housing Agency

An attorney employed by one of the state departments within the Business, Consumer Services and Housing Agency misused state resources to manage his personal rental properties and to conduct legal work unrelated to the department. The attorney misused his state‑paid time and his state‑issued computer at various times throughout his workdays and also directed a subordinate to assist him on two occasions.

California Department of Transportation

Several California Department of Transportation supervisors and another employee improperly used state‑owned vehicles to commute to and from work. The combined cost of their misuse was about $22,000.

California Department of Justice

A senior legal analyst and a legal secretary at the California Department of Justice consistently arrived late, departed early, and took extended lunch breaks without accounting for their missed time. The legal analyst’s partial‑day absences totaled 181 hours and cost the State approximately $7,011.

Franchise Tax Board

A staff trainer at the Franchise Tax Board regularly arrived to work late and left early without accounting for the missed time. She reported on her timesheet nearly 159 hours that she did not actually work, resulting in a cost to the State of about $6,717. In addition, the staff trainer improperly used her state‑issued computer for personal purposes.

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