Report I2019-1 Recommendation 5 Responses
Report I2019-1: Investigation of Improper Activities by a State Agency and Its Employees: A Director Committed Gross Misconduct When She Repeatedly Violated Merit‑Based Employment Principles and Attempted to Retaliate Against Suspected Whistleblowers (Release Date: March 2019)
Case Number I2019-1
Recommendation #5 To: California, State of
The oversight agency should collect $129,329 from the director's daughter for her fraudulent claims of time worked.
Agency Response From September 2021
In March 2021, the agency shared the SPB's decision regarding the June 2020 hearing wherein SPB affirmed the decision to order the daughter to repay wages unlawfully earned while working as an associate information systems analyst. The agency did not pursue repayment of wages earned while on her training and development assignment as we recommended, which made up the majority of the wages we initially recommended that it collect.
Ultimately, the SPB ordered the daughter to repay approximately $19,000 and the agency confirmed that the full amount was paid in July 2021.
California State Auditor's Assessment of Status: Resolved
Agency Response From September 2020
The agency reported that the SPB hearing occurred in June 2020 and it is awaiting the hearing officer's decision on the matter.
California State Auditor's Assessment of Status: Partially Implemented
Agency Response From June 2020
The agency reported that the SPB hearing was continued to June 2020; however, the director's daughter requested a continuance on the hearing.
California State Auditor's Assessment of Status: Partially Implemented
Agency Response From March 2020
The agency reported that the SPB has set an informal hearing on the matter in May 2020. It stated that the department intends to take all necessary and appropriate measures to defend the corrective actions and its notice of overpayment.
California State Auditor's Assessment of Status: Partially Implemented
Agency Response From December 2019
In December 2019, the department issued to the director's daughter an accounts receivable notice for overpayments totaling nearly $30,000.
California State Auditor's Assessment of Status: Partially Implemented
Agency Response From September 2019
The agency stated that it is working diligently to investigate, prepare, and serve corrective actions related to the daughter's appointments, which includes seeking reimbursement for all compensation resulting from her associate information systems analyst appointment, as ordered by the SPB. The agency estimated that it will file its actions no later than October 2019.
California State Auditor's Assessment of Status: Pending
Agency Response From June 2019
Initially, the agency waited to take any action until SPB finalized its review of the unlawful appointments discussed in this report. We have repeatedly explained to the agency since then that its ability to take action on this recommendation is completely independent from any assessment of whether the appointments of the director's daughter were made in good faith as the overpayments occurred as a result of the daughter's misrepresentations on her timesheets from August 2015 through August 2017. Although SPB completed its investigation and issued its findings in April 2019, the agency continues to take no action on this recommendation. SPB also stated in its report that its finding, "does not in any way diminish or negate the [State Auditor's] findings that [the daughter] filed fraudulent claims of time worked or the associated recommendation that the oversight agency collect [money] from her for those fraudulent claims."
In June 2019 the agency stated that since SPB concluded that the daughter acted in bad faith with regard to her associate information systems analyst appointment, the agency has been directed to collect all compensation resulting from the appointment. The agency stated that it would comply with SPB's directive "assuming [its] review of the evidence supports this finding." This directive, however, only covers five months (April 2017 through August 2017) of the 25 months related to this recommendation. Moreover, since the statute of limitations for collecting overpayments is three years and the agency has taken no action on this recommendation, the overpayments made for the first 11 months (August 2015 through June 2016) can no longer be collected. Although the agency has agreed to collect five months of overpayments, it still has not taken action on the remaining nine months available for collection (July 2016 through March 2017). Despite our repeated communications to the agency advising it on the consequences of delaying action on this recommendation, the agency still has made no progress on this recommendation and despite being aware that with every month that passes, additional state monies for collection become out of reach.
California State Auditor's Assessment of Status: Pending
Agency Response From March 2019
In May 2018, the agency asserted that because the overpayments are tied to the daughter's associate information systems analyst appointment, it would wait until the SPB completes its investigation into that appointment. We asserted in June 2018 that the daughter's dishonest and fraudulent timesheets could be acted upon under the department's power to collect any overpayments it makes. In addition, we reminded the agency that since collection efforts are limited to three years, it should act expeditiously to recover these funds. The agency asserted that it would wait for direction from SPB before it took any action on this recommendation. In February 2019, the agency stated that it intends to also discuss the recommendation with CalHR and other appropriate entities prior to making a final decision. In March 2019 the agency stated that it contacted CalHR and SPB and that neither of them had finalized their reviews at that time. The agency stated that SPB anticipated finalizing its review by April 2019. By delaying action, the agency has already lost the ability to collect $41,560 of overpayments because the statute of limitations has expired.