Report I2011-1 Summary - August 2011

Investigations of Improper Activities by State Agencies and Employees: Waste of State Funds, Misuse of State Resources, Falsification of Records, Inexcusable Neglect of Duty, Failure to Monitor Time Reporting, and Other Violations of State Law

HIGHLIGHTS

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

An agency wasted at least $51,244 in state funds during 2009 by employing a senior official to perform activities that did not benefit the State.
A chief psychologist misused state time and equipment by performing work for his private practice, costing the State an estimated $212,261.
A personnel specialist and an employee falsified time and attendance records to enable the employee to receive at retirement, a benefit estimated at $6,589 more than allowed.
A supervisor neglected to supervise the work of a subordinate employee, resulting in the employee receiving compensation for which the State lacked assurance that it received adequate work in return.
A manager improperly directed an employee to use a state vehicle for her commute at a cost of $8,282 and improperly reimbursed the employee $595 for lodging and meal expenses.

RESULTS IN BRIEF

The California Whistleblower Protection Act (Whistleblower Act) empowers the Bureau of State Audits (bureau) to investigate and report on improper governmental activities by agencies and employees of the State of California (State). Under the Whistleblower Act, an improper governmental activity is any action by a state agency or employee related to state government that violates a law, is economically wasteful, or involves gross misconduct, incompetence, or inefficiency.¹

This report details the results of seven particularly significant investigations completed by the bureau or undertaken jointly by the bureau and other state agencies between July 1, 2010, and March 31, 2011. This report also outlines actions taken by state agencies in response to the investigations of improper governmental activities described here and in previous reports. The following paragraphs briefly summarize the investigations and the state agencies' actions, which are discussed more fully in the individual chapters of this report.

DEPARTMENT OF MENTAL HEALTH

An executive at the Department of Mental Health (Mental Health) wasted at least $51,244 in state funds in 2009, the one-year period that we examined, by employing a longtime senior official to perform activities that either were undertaken on behalf of a nonstate organization or did not serve a state purpose. In fall 2010 the executive directed the senior official to discontinue using state-compensated time for activities that we found did not benefit the State. Soon thereafter, the executive retired from state service, and the senior official began using leave while he awaited new work assignments.

DEPARTMENT OF CORRECTIONS AND REHABILITATION

The chief psychologist at a correctional facility operated by the Department of Corrections and Rehabilitation (Corrections) used his state-compensated time and state equipment to perform work related to his private psychology practice, costing the State up to an estimated $212,261 in lost productivity over nearly five years.

CALIFORNIA ENERGY COMMISSION

An employee and a personnel specialist at the California Energy Commission falsified time and attendance records to enable the employee—at the time of her retirement—to receive a payment for unused annual leave that was higher than the amount to which she was entitled, costing the State an estimated $6,589.

DEPARTMENT OF TRANSPORTATION

For nearly three years, a transportation planning supervisor for the Department of Transportation neglected his duty to supervise the work of a subordinate transportation planner, resulting in the transportation planner receiving compensation, including overtime pay, for which the State lacked assurance that the transportation planner performed adequate work to justify the compensation.

DEPARTMENT OF FISH AND GAME

A manager at the Department of Fish and Game improperly directed an employee under his supervision to use a state vehicle for commuting between her home and work locations at a cost to the State of $8,282 over a nine-month period. In addition, the employee improperly requested—and the manager improperly approved—reimbursement for $595 in lodging and meal expenses incurred by the employee near her work headquarters.

DEPARTMENT OF INDUSTRIAL RELATIONS

An official and a supervisor at a district office of the Department of Industrial Relations failed to monitor adequately the time reporting of four subordinate employees from July 2007 through June 2009.

STATE CONTROLLER'S OFFICE

An employee with the State Controller's Office failed to report an estimated 322 hours of absences over an 18-month period. Because her supervisor, a high-level official, failed to monitor adequately her time reporting, the State paid the employee $6,591 for hours she did not work.

UPDATE ON PREVIOUSLY REPORTED INVESTIGATIONS

In addition to conveying our findings about investigations completed from July 2010 through March 2011, this report summarizes the status of certain findings described in our previous reports. Chapter 8 details the actions taken—or declined to be taken—by the respective agencies for seven previously reported investigations. The following updates have particular significance:

The Department of General Services (General Services) signed an agreement in June 2011 with a now-retired fleet division manager directing him to reimburse the State for his misuse of state vehicles for his daily commute. Our January 2011 report had revealed that the manager improperly used state vehicles for his daily commute for nine years. We estimated that the cost of the misuse for the three years for which complete records were available totaled $12,379. The terms of the agreement require the manager to repay the State the entire $12,379 at $200 a month from June 2011 through August 2016. The manager made his first installment payment in June 2011.
The California State University, Office of the Chancellor (Chancellor's Office) has implemented four of the five recommendations we made in our December 2009 report, which found that the Chancellor's Office had reimbursed a former official $152,441 for unnecessary expenses that did not further the best interests of the university or the State. The Chancellor's Office reiterated its assertion about the difficulty in implementing the remaining recommendation. This lack of action by the Chancellor's Office will permit its employees to continue an activity we identified as being wasteful and, therefore not in the State's best interests.

Table 1 on the following page summarizes the improper governmental activities appearing in this report, the financial impact of the activities, and their status.

Table 1:
The Issues, Financial Impact, and Status of Corrective Action of Cases Described in This Report
					Status of Corrective Actions
Chapter	Agency	Date of Our Initial Report	Issue	Cost to the State as of March 31, 2011*	Fully Corrected	Partially Corrected	Pending	No Action Taken
New Cases
1	Department of Mental Health	August 2011	Waste of state funds, misuse of state resources.	$51,244	X
2	Department of Corrections and Rehabilitation	August 2011	Misuse of state resources.	212,261		X
3	California Energy Commission	August 2011	Falsification of time and attendance records.	6,589			X
4	Department of Transportation	August 2011	Inexcusable neglect of duty.	NA		X
5	Department of Fish and Game	August 2011	Misuse of state vehicle, improper travel reimbursements.	8,877			X
6	Department of Industrial Relations	August 2011	Failure to monitor adequately employees' time reporting.	NA		X
7	State Controller's Office	August 2011	Failure to report absences, failure to monitor adequately an employee's time reporting.	6,591		X
Previously Reported Cases
8	Department of Corrections and Rehabilitation	September 2005	Failure to account for employees' use of union leave	$1,654,664		X
8	Department of Fish and Game, Office of Spill Prevention and Response	April 2009	Improper travel expenses	71,747		X
8	California State University, Office of the Chancellor†	December 2009	Improper and wasteful expenditures	150,538	X			X
8	Department of Corrections and Rehabilitation	January 2011	Improper overtime reporting	446				X
8	California Conservation Corps	January 2011	Failure to follow state contracting laws	84,478	X
8	Department of General Services	January 2011	Misuse of state resources	12,379	X
8	Department of Corrections and Rehabilitation	January 2011	Delay in reassigning an incompetent psychiatrist, waste of state funds	366,656		X

Source: Bureau of State Audits.

NA = Not applicable because the situation did not involve a dollar amount or because the findings did not allow us to quantify the financial impact.

* We have estimated the cost to the State as noted in individual chapters of this report.

† The California State University, Office of the Chancellor has implemented four of the five recommendations. However, it does not plan to implement the remaining recommendation.

¹ For more information about the bureau's investigations program, please refer to the Appendix.

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