The Governor of California
President pro Tempore of the Senate
Speaker of the Assembly
State Capitol
Sacramento, California 95814
Dear Governor and Legislative Leaders:
As requested by the Joint Legislative Audit Committee, the California State Auditor presents this audit report concerning the California Department of Resources Recycling and Recovery’s (CalRecycle) oversight of California’s mattress recycling program (mattress program) as administered by the Mattress Recycling Council (Mattress Council)—a nonprofit entity founded by a mattress industry association and based in Virginia. The State enacted the Used Mattress Recovery and Recycling Act (recycling act) to reduce illegal dumping and increase recycling of mattresses and box springs (mattresses), and to substantially reduce public agency costs for the end-of-use management of mattresses.
This report concludes that CalRecycle has not provided the necessary oversight to ensure the mattress program fulfills its purpose. CalRecycle has missed an opportunity to ensure that the mattress program aligns with legislative intent because it has not established goals in three critical program areas: increasing consumer convenience, reducing illegal dumping, and ensuring consistency with the State’s overall approach to waste management. Further, when it established goals for mattress recycling, CalRecycle was faced with poor quality data and thus set its goals based only on the recycling activity of the Mattress Council’s contracted recyclers. As a result, the goals do not reflect all mattress waste management statewide. Further, CalRecycle has not taken adequate action to ensure mattress retailers comply with the requirements of the recycling act. CalRecycle identified violations in 74 percent of the 285 retailer, renovator, and manufacturer inspections for which it made compliance determinations during the period we reviewed, however it has not levied penalties against any violators. For five retailer inspection cases we reviewed, we determined CalRecycle could have pursued combined penalties as high as $2.8 million if it pursued the maximum penalty for intentional, knowing, or reckless violations.
The Mattress Council has amassed excessive reserve funding. As of December 2017, the Mattress Council had over $42 million in unrestricted net assets. State law intends that the Mattress Council operate the program over a multiyear period in a prudent and responsible manner. However, we determined that the amount of reserve funding the Mattress Council has accumulated is significantly higher than necessary to meet its stated reasons for needing a reserve. Further, the Mattress Council has opportunities to increase consumer convenience and should establish measures of success in the areas of consumer awareness and research into new technologies. Without such measures, the Mattress Council cannot show that its spending in those areas has been effective and sufficient.
Respectfully submitted,
ELAINE M. HOWLE, CPA
California State Auditor
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