Report I2007-1 Summary - March 2007

Investigations of Improper Activities by State Employees


July 2006 Through January 2007


State employees and departments engaged in improper activities, including the following:

Some state departments have either taken the following action or failed to act in response to previously reported investigations including:


The Bureau of State Audits (bureau), in accordance with the California Whistleblower Protection Act (Whistleblower Act) contained in the California Government Code, beginning with Section 8547, receives and investigates complaints of improper governmental activities. The Whistleblower Act defines an "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. The Whistleblower Act authorizes the state auditor to investigate allegations of improper governmental activities and to publicly report on substantiated allegations. To enable state employees and the public to report these activities, the bureau maintains the toll-free Whistleblower Hotline (hotline): (800) 952-5665 or (866) 293-8729 (TTY).

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 Whistleblower Act requires the employer or appointing authority 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 nine investigations completed by the bureau or jointly with other state agencies between July 1, 2006, and January 31, 2007, that substantiated complaints. This report also summarizes actions that state entities took as a result of investigations presented here or reported previously by the bureau. The following are examples of the substantiated improper activities and actions the agencies have taken to date.


An employee with the Department of Conservation engaged in various activities that were incompatible with his state employment and improperly used state resources to perform work for the benefit of his spouse's employer. In addition, the employee violated financial disclosure requirements of the Political Reform Act of 1974 by failing to disclose his ownership of stock issued by companies his office regulates.


An official at the California Exposition and State Fair (Cal Expo) violated state conflict of interest laws when he participated in a governmental decision that authorized Cal Expo to purchase his personal vehicle. Official A authorized Official B and Manager 1, both of whom work under his direction, to approve this purchase. By making or directing the decision for this state purchase while acting in his official capacity, we believe that Official A violated the Political Reform Act of 1974 and Section 1090 of the Government Code.


An employee with the Department of Health Services (Health Services) failed to subtract his normal round trip commute time from the total work time he claimed each day during a four month period he attended a training academy. As a result, the employee received an inappropriate credit to his leave balances of 241.5 hours of compensating time off to which he was not entitled, representing a potential overpayment of $7,453.


An employee with the Franchise Tax Board (board) made or received personal phone calls totaling 495 hours between January 1, 2003, and June 30, 2006. We estimate that the employee received $15,765 in salary for those 495 hours. Also, the board reported that for a portion of this period, from June 1, 2005, to June 30, 2006, 71 percent of the employee's phone calls were not work-related.

The board also reported that on three occasions the employee was involved in the administration of examinations in which her son participated in violation of state regulations governing state employment examinations.


An administrator at California State University, Bakersfield (CSU Bakersfield) used his university computer to view Web sites containing pornographic material. Specifically, CSU Bakersfield found that the administrator visited pornographic Web sites on his university computer on at least three days in April and May 2003. CSU Bakersfield was unable to review the administrator's complete Internet usage because he had improperly installed a computer program that erases Internet usage history.


An employee of Sonoma State University (Sonoma State) used his university issued cell phone and e mail to conduct private business in violation of state law. The employee has two private businesses in addition to his university employment. For one of the private businesses, the employee listed Sonoma State's cell phone number and e-mail address as his primary contact information. Further, the employee listed this same information online to sell a boat, thereby soliciting additional inappropriate contacts.


An employee with the Franchise Tax Board used his state issued computer, state e-mail, and state telephone to conduct business related to his outside employment. Specifically, the employee sent and received 566 e-mails that were not work related between April and June 2006, including 23 separate communications related to his outside employment. He also stored 27 documents related to his outside employment on his state-issued computer.


An employee with the Department of Parks and Recreation (Parks and Recreation) repeatedly misused state resources and failed to adequately perform his duties. The employee made more than 3,300 personal telephone calls over a 13 month period on his state issued wireless phone. In addition, the employee made hundreds of telephone calls to phone numbers that appeared to be assigned to state employees' wireless phones. However, Parks and Recreation determined that these phone numbers never were issued to state employees, raising questions about the appropriateness of these calls and about the assignment of these wireless phones.


A manager with the Bureau of Automotive Repair failed to monitor adequately the attendance of employees under her supervision, some of whom may have engaged in time and attendance abuse. The Department of Consumer Affairs (Consumer Affairs) reported that the manager was unable to monitor the attendance of her employees adequately because she was frequently out of the office for lengthy periods of time on official business. Consumer Affairs also pointed out that the manager's office was in an area removed from the employees she supervised. Consumer Affairs found that some employees who reported directly to the manager did not always account for their absences, possibly due in part to her lack of supervision.


In September 2005 we reported that Health Services' contracts and invoices related to the Genetic Disease Branch lacked specifics and cost the State almost $58,000 for services it did not receive from contract workers. Health Services reported that 51 branch staff and management involved in contract and procurement activities have completed contracts ethics training.

We also reported that the Department of Corrections and Rehabilitation (Corrections) failed to account for 10,980 hours of union leave time used by three employees from May 2003 through April 2005. Corrections reported that it implemented changes to its tracking of union leave time. In September 2006 we reported that Corrections failed to account for an additional 4,568 hours of union leave time used by these three employees from May 2005 through June 2006, for a total of 15,548 hours from May 2003 through June 2006.

Since our last report, Corrections has retroactively charged some hours of union leave for one of the three employees. However, State Controller's Office records indicate that Corrections failed to account for 15,340 hours for three of its employees who worked on union activities from May 2003 through December 2006, costing the State a total of $563,785.

In March 2006 we reported that all state departments that own employee housing may be underreporting or failing to report housing fringe benefits. Also, because departments charged employees rent at rates far below market value, the State may have failed to capture as much as $8.3 million in potential rental revenue. The Department of Personnel Administration (DPA) is the agency responsible for administering state housing regulations, and state law provides that the director of DPA shall determine the fair and reasonable value of state housing. DPA reported it became aware that some departments had attempted to contract for appraisal services, but received bids that were too costly and not in the best interest of the State. As a result, DPA issued a request for proposal in an effort to solicit bids for a statewide master agreement of licensed appraisers. DPA expects to award the contract on April 1, 2007.

The Department of Fish and Game reported that it began raising rental rates in October 2006. The California Department of Transportation reported that it performed additional analysis to determine the amount of taxable fringe benefits it should have reported in 2003. It determined that an additional $1,232 for six employees should have been reported to the tax authorities, which it did in April 2006. The Department of Mental Health reported that it updated its special order to require all four of its hospitals to determine fair market rental rates for their properties by March 2007 and to re-assess those rates annually.

We also reported that between January 2002 and May 2005, Corrections failed to exercise its management controls by allowing nine exempt employees at the Sierra Conservation Center (center) to claim holiday credits for holidays that fell on the employee's scheduled days off, resulting in the accrual of 516 hours they were not entitled to receive. In addition, the collective bargaining agreement for nine exempt employees at the center allowed them to work alternate work schedules consisting of 10 hour days, but required them to charge leave only in eight hour increments (or their fractional equivalent depending on their time base) for each full day of work missed. Overall, these two issues represented a gift of public funds of $66,258.

Since we reported this issue, we conducted additional analyses for the time period from June 2005 to December 2006 and determined that the exempt employees continued to earn holiday credits when a holiday falls on their regularly scheduled day off, resulting in an improper accrual of 268 hours of holiday credit and an additional gift of public funds of approximately $8,900. Furthermore, the center continued to allow the employees to work alternate work schedules consisting of 10 hour days, but still only required them to charge leave in less than 10 hour increments, which resulted in an additional gift of public funds of $21,161 from June 2005 to December 2006. As a result of Corrections' and the center's continued failure to exercise its management controls, these employees received a gift of public funds of $30,070, in addition to the $66,258 we previously reported.