Report I2002-2 Summary - November 2002

Investigations of Improper Activities by State Employees


March 2002 Through July 2002


State employees engaged in improper activities, including the following:


The Bureau of State Audits (bureau), in accordance with the California Whistleblower Protection Act (act) contained in the California Government Code, beginning with Section 8547, receives and investigates complaints of improper governmental activities. The act defines "improper governmental activity" as any action by a state agency or employee during the performance of official duties that violates any state or federal law or regulation; that is economically wasteful; or that involves gross misconduct, incompetence, or inefficiency. To enable state employees and the public to report these activities, the bureau maintains the toll-free Whistleblower Hotline (hotline). The hotline number is (800) 952-5665.

If the bureau finds reasonable evidence of improper governmental activity, it confidentially reports the details to the head of the employing agency or to the appropriate appointing authority. The employer or appointing authority is required to notify the bureau of any corrective action taken, including disciplinary action, no later than 30 days after transmittal of the confidential investigative report and monthly thereafter until the corrective action concludes.

This report details the results of the six investigations completed by the bureau and other state agencies on our behalf between March 1, 2002, and July 31, 2002, that involved substantiated complaints. Following are the substantiated improper activities and actions taken to date.


A manager verbally and physically abused employees. Among other incidents, the manager cursed at and pushed one subordinate and engaged in a physical altercation with another employee. The same manager filed an improper claim to pay a vendor $515 in state money for repairs to a computer that was his personal property. The California Conservation Corps took steps to fire the manager, but he retired before the termination could take effect. In addition, a supervisor received credit for questionable overtime claims she submitted to the manager after he had retired from state service and no longer was authorized to approve such claims.


California Department of Forestry and Fire Protection (CDF) officials made economically wasteful decisions when they allowed an executive to obtain a pilot's license at CDF's expense and to fly CDF aircraft. The cost to CDF for the executive's flight training was approximately $9,151. Based on the billing rate CDF charges to other entities for the use of its aircraft, the cost of the executive's nontraining flight hours was $78,116. The executive retired from state service before we completed our investigation.


The Veterans Home of California, Yountville (home), made improper billings to Medicare. The information system the home uses to bill insurers showed that one doctor saw patients 2,614 times over a two-year period, but we concluded that the doctor did not see the patient in question in 1,792 of those visits. Further, as of January 22, 2002, the home had billed Medicare $131,000 for 1,488 of these visits, but $55,000 was for 887 visits that we concluded the doctor did not make. The Department of Veterans Affairs (DVA) reports that it is actively working to upgrade its billing system and is working with its billing agent to resolve any charges billed and reimbursed incorrectly. Further, the DVA states that it will ensure it obtains the signature of the attending physician/technician to maintain proper practices and Medicare compliance.


In April 2000 we reported that poor supervision and inadequate administrative controls enabled employees in the fire and rescue branch of the Governor's Office of Emergency Services (OES) to commit various improprieties, including claiming excessive overtime and travel costs. One of the employees has continued to incur excessive amounts of overtime. During fiscal year 1999-2000, the employee received $35,743 (36 percent of his wages) for overtime, and he received $40,523 (38 percent of his wages) for overtime in fiscal year 2000-01. The employee incurred this overtime in part because OES permitted him to claim his commute as work time even though the employee lived at least two hours from his assigned work area. This issue was brought to the attention of OES in 1998 and again in 2000, but it continued to allow him to claim his commute as work time. Recently, OES reported that the employee has been reassigned to a work area where he lives. OES also reported that it has established administrative controls concerning overtime authorization and that it has counseled all branch employees that nonemergency overtime will not be incurred without prior authorization.


The director of a research center at California State University, Northridge (CSUN), opened an unauthorized bank account in connection with his administration of the center, commingled personal and university funds, and paid personal expenses from the account. Checks from the account totaling $9,520 were written directly to the director or to cash, or were used to pay for the director's personal expenses. CSUN closed the center.


Employees misused state equipment and may have abused overtime and failed to charge leave balances. All allegations could not be evaluated properly due to a lack of timely and/or specific information and a lack of documentation. The Department of General Services (DGS) took adverse action against an employee who misused state computers to access sexually suggestive Web sites and said it will take steps to improve controls over the use of state equipment. In addition, the DGS agreed to implement a formal overtime system.

This report also summarizes actions taken by state entities as a result of investigations presented here or reported previously by the bureau.

Appendix A contains statistics on the complaints received by the bureau from March 1, 2002, through July 31, 2002, and summarizes our actions on those and other complaints pending as of July 31, 2002. It also provides information on the cost of improper activities substantiated since 1993 and the corrective actions taken as a result of our investigations.

Appendix B details the laws, regulations, and policies that govern the improper activities discussed in this report.

Appendix C provides information on actual or suspected acts of fraud, theft, or other irregularities identified by other state entities. Section 20080 of the State Administrative Manual requires state agencies to notify the bureau and the Department of Finance of actual or suspected acts. It is our intention to inform the public of the State's awareness of such activities and to publicize that agencies are acting against wrongdoers and working to prevent improper activities.

See the Index for an alphabetical listing of all agencies addressed in this report.