Report I2008-1 Summary - April 2008
Investigations of Improper Activities by State Employees:
July 2007 Through December 2007
State employees and departments engaged in improper activities, including the following:
- Creating inefficiency by entering into a series of side letters that were negotiated directly with a bargaining unit, rather than using the formal approval and ratification process; thus absorbing the salaries and benefits of four employees who were released from work full-time at various times for 12 years to participate in union-related activities at a cost of $2.4 million.
- Wasting more than $14,700 in state and federal funds by paying unnecessary overhead charges imposed in seven conference-planning service contracts.
- Wasting nearly $11,300 in state funds by leasing unneeded parking spaces and misusing state resources by allowing five employees to use them at no charge for their privately owned vehicles.
- Wasting over $590 in state funds by allowing a manager to purchase an expensive meal for herself and five other employees.
- Allowing a manager and four subordinate employees to take an estimated 727 hours of leave without charging the time against their leave balances and receiving compensation amounting to almost $18,000.
State departments have either taken the following action or failed to act in response to previously reported investigations:
- The departments of Public Health and Health Care Services took adverse action against five employees for questionable and improper contract payments.
- The California Highway Patrol placed into service 51 vans it purchased in 2004 and 2005 for special purposes, but had left virtually unused for years.
- The Department of Mental Health transferred two police interceptor vehicles that had been used for non-law enforcement purposes at Coalinga State Hospital to another state hospital to be used as intended.
- The Department of Public Health failed to document an employee's misuse of state time and resources in his personnel file.
RESULTS IN BRIEF
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 seven investigations completed by the bureau or jointly with other state agencies between July 1, 2007, and December 31,that substantiated complaints. This report also summarizes actions that state entities took or failed to take as a result of investigations presented here or reported previously by the bureau. Following are examples of the substantiated improper activities and actions the agencies have taken to date.
DEPARTMENT OF JUSTICE
The Department of Justice (Justice) created inefficiency when it entered into a series of side letters negotiated directly with a bargaining unit. These side letters were not submitted to the Department of Personnel Administration, nor were they ratified by the Legislature. As a result, Justice absorbed the salaries and benefits of four employees who were released from work full-time over a 12-year span to participate in union-related activities at a cost of $2.4 million. However, Justice is unlikely to recover these costs because the bargaining unit relied on the side letters.
DEPARTMENT OF SOCIAL SERVICES
The Department of Social Services (Social Services) entered into seven contracts for conference-planning services since 2004 that contained improper overhead charges in violation of a state policy. As a result, Social Services wasted state and federal funds when it paid more than $14,700 for these overhead costs. Such contracting practices are inconsistent with the intent of state law that denounces waste and inefficiency.
DEPARTMENT OF CORRECTIONS AND REHABILITATION
The Department of Corrections and Rehabilitation wasted nearly $11,300 in state funds when it leased parking spaces it did not need from a private facility and allowed state employees to park their personal vehicles for free in those spaces.
CALIFORNIA STATE UNIVERSITY
The California State University, Chancellor's Office (university), wasted over $590 in state funds by allowing a manager to purchase an expensive meal for herself and five other university employees in violation of the university's internal procedures governing reimbursement for travel expenses and meal allowances.
DEPARTMENT OF JUSTICE
A manager and four subordinates at one of Justice's regional offices failed to properly report on their time sheets an estimated 727 hours of leave taken from April through December 2006, amounting to almost $18,000 in compensation that was potentially unearned. In addition, the manager failed to adequately monitor his subordinates' absences or time worked.
CALIFORNIA DEPARTMENT OF EDUCATION, CALIFORNIA SCHOOL FOR THE BLIND
The California School for the Blind (school), part of the California Department of Education, failed to adequately monitor and approve overtime use and made wasteful decisions, which resulted in almost $34,800 in excessive and unnecessary overtime pay for two school employees.
EMPLOYMENT DEVELOPMENT DEPARTMENT
An employee of the Employment Development Department drank alcoholic beverages during work hours and his drinking impeded his ability to safely perform his duties. Further, his supervisors had been aware of the situation for years.
UPDATE ON PREVIOUSLY REPORTED ISSUES
In September 2005 we reported that contracts and related invoices of the Genetic Disease Branch of the Department of Health Services (Health Services) lacked specifics, leading to questionable and improper payments for holiday pay and equipment costing the State nearly $98,500. As a result of a reorganization effective in July 2007, four of the five employees responsible for contract and procurement activities were assigned to the Department of Public Health (Public Health); the remaining employee was assigned to the Department of Health Care Services (Health Care Services). Public Health and Health Care Services reported in October 2007 that adverse actions had been served on these employees.
In September 2007 we reported that the California Highway Patrol (CHP) bought 51 vans for its motor carrier program, surveillance, and mail delivery. However, as of June 30, 2007, 30 vans purchased in October 2004 and 21 vans purchased in August 2005 at a combined cost of approximately $881,600 had not been used for the special purposes for which they had been purchased. In addition, the CHP left all but five of the 51 vans virtually unused since it purchased them. Further, because the CHP did not postpone its purchases of the vans until it needed them, the State lost interest earnings of nearly $90,400. As of November 2007 the CHP reported that all 51 vans have been assigned to various commands throughout the State.
We also reported that Coalinga State Hospital (hospital) within the Department of Mental Health (Mental Health) misused state funds when it assigned two 2005 Ford Crown Victoria Police Interceptors (police interceptors) first to its general motor pool and later to three hospital officials who used them for non-law enforcement purposes, including commuting, in violation of state law. As of January 2008 Mental Health reported that it had transferred the two police interceptors to another state hospital to be used for their intended purpose. It also reported that two of the hospital officials have retired and that due to performance issues, the third hospital official now occupies a lower-level position at a different state hospital.
Finally, we reported that from July 2006 through October 2006, a Health Services' employee accessed inappropriate Internet sites. Internet-monitoring reports showed that the employee visited modeling Web sites and internet-based e-mail sites during his regular weekday work schedule and on six nonbusiness days, such as weekends and holidays. In addition, the employee did not have permission to enter the building on any of the six nonbusiness days. In September 2007 Public Health, which took over the employee's division at Health Services, told us that it was pursuing adverse action against the employee but it appears the status of the adverse action was inaccurate. Specifically, in December 2007 Public Health reported to us that the employee left in April 2007 before it completed its adverse action against him and that it did not document in his personnel file the specific circumstances or events leading to its investigation of the employee's misuse of state time and resources. The employee is now employed at another state department. As a result, we are concerned that the other department is unaware of the employee's previous misuse of state time and resources.
Table 1 displays the issues and the financial impact of the cases in this report, the dates we initially reported on them, and the current status of any corrective actions taken.
|Chapter||Department||Date Initially Reported||Issue||Amount as of December 31, 2007||Status of Corrective Action|
|New Cases||1||Department of Justice||March 2008||Created inefficiency by entering into side letters with a bargaining unit without Department of Personnel Administration oversight or ratification by the Legislature||$2,370,839*||Pending|
|2||Department of Social Services||March 2008||Waste of state and federal funds||14,714||Partial|
|3||Department of Corrections and Rehabilitation||March 2008||Mismanagement and misuse of state resources, waste of state funds||11,277||Pending|
|4||California State University, Chancellor's Office||March 2008||Improper meal expenses, waste of state funds||592||Complete|
|5||Department of Justice||March 2008||Employees' disregard for time-reporting requirements, management's failure to ensure employees properly reported absences||17,974†||Partial|
|6||California Department of Education, California School for the Blind||March 2008||Wasteful decisions involving overtime||34,776||Complete|
|7||Employment Development Department||March 2008||Management failed to take appropriate action about an employee who drank alcoholic beverages while on duty||NA||Partial|
|Previously Reported Issues||8||Department of Corrections and Rehabilitation||March 2005||Improper pay||238,184||Complete|||
|8||Department of Corrections and Rehabilitation||September 2005||Failure to account for employees' use of union leave||543,918||Partial|
|8||Department of Health Services/|
Health Care Services‡
|September 2005||Improper contracting practices||96,486||Complete|
|8||Multiple state departments§||March 2006||Gift of state resources and mismanagement||8,313,600||Partial|
|8||Department of Forestry and Fire Protection||March 2006||Improper overtime payments||77,961||Partial|
|8||Department of Forestry and Fire Protection||September 2006||False claims for wages||17,904||Complete|||
|8||Department of Parks and Recreation||March 2007||Misuse of state resources and failure to perform duties adequately||NA||Partial|
|8||Department of Conservation||March 2007||Misuse of state resources, incompatible activities, and behavior causing discredit to the State||NA||Complete|
|8||California Highway Patrol||September 2007||Misuse of state funds|
Purchase price of unused vehicles
Lost interest earnings to the State
|8||Department of Mental Health||September 2007||Improper use of state vehicles, waste of state funds, and failure to maintain vehicle mileage logs||18,682 to 19,640||Complete|
|8||California State Polytechnic University, Pomona||September 2007||Viewing inappropriate internet sites and misuse of state equipment||NA||Partial|
|8||Department of Health Services/Public Health‡||September 2007||Misuse of state equipment and resources||NA||Complete|||
|8||Sonoma State University||September 2007||Improper closure of offices and failure to charge employee leave balances||NA||Complete|||
Source: Bureau of State Audits.
NA = Not applicable because there was no dollar amount involved or it was not feasible to quantify.
* In this case, the expenditure of $2,370,839 was not improper. Instead, as we report in Chapter 1, the Department of Justice's failure to disclose to the Department of Personnel Administration the side letters that resulted in the expenditure created an inefficiency in the State bargaining process.
† As we discuss in Chapter 5, this amount represents compensation that may not have been earned.
‡ The Department of Health Services reorganized effective July 1, 2007, into the Department of Public Health and the Department of Health Care Services. We originally reported on these issues under the Department of Health Services and refer to it here for consistency.
§ This case focused on the Department of Fish and Game but also involved the California Highway Patrol, the California Conservation Corps, the Department of Corrections and Rehabilitation, the Department of Developmental Services, the Department of Food and Agriculture, the Department of Forestry and Fire Protection, the Department of Mental Health, the Department of Parks and Recreation, the Department of Personnel Administration, the Department of Transportation, the Department of Veterans Affairs, and the Santa Monica Mountains Conservancy.
|| We have designated the status of corrective action as complete because it is unlikely that further action can or will be taken. However, if the agency had taken a more proactive approach it could have more fully rectified the improper governmental activity we reported.