Investigations of Improper
Activities by State Employees:
July 2008 Through December 2008
April 2009 Report I2009‑1

CALIFORNIA
S TAT E A U D I T O R

The first five copies of each California State Auditor report are free. Additional copies are $3 each, payable by
check or money order. You can obtain reports by contacting the Bureau of State Audits at the following address:
California State Auditor
Bureau of State Audits
555 Capitol Mall, Suite 300
Sacramento, California 95814
916.445.0255 or TTY 916.445.0033
OR
This report is also available on the World Wide Web http://www.bsa.ca.gov
The California State Auditor is pleased to announce the availability of an on‑line subscription service. For
information on how to subscribe, please contact the Information Technology Unit at 916.445.0255, ext. 456,
or visit our Web site at www.bsa.ca.gov.
Alternate format reports available upon request.
Permission is granted to reproduce reports.
For questions regarding the contents of this report,
please contact Margarita Fernández, Chief of Public Affairs, at 916.445.0255.

Elaine M. Howle
State Auditor

CALIFORNIA STATE AUDITOR

Doug Cordiner
Chief Deputy

Bureau of State Audits

555 Capitol Mall, Suite 300

S a c r a m e n t o, C A 9 5 8 1 4

April 28, 2009	

916.445.0255

916.327.0019 fax

w w w. b s a . c a . g o v

Investigative Report I2009‑1

The Governor of California
President pro Tempore of the Senate
Speaker of the Assembly
State Capitol
Sacramento, California  95814
Dear Governor and Legislative Leaders:
Pursuant to the California Whistleblower Protection Act, the Bureau of State Audits presents its
investigative report summarizing investigations of improper governmental activity completed
from July through December 2008.
This report details nine substantiated allegations in several state departments. Through
our  investigative methods, we found waste of state funds, improper payments, improper
contracting, and misuse of state resources. For example, the Department of Corrections and
Rehabilitation (Corrections) and the Department of General Services wasted $580,000 in state
funds by leasing office space left unoccupied for more than four years.
In addition, this report provides an update on previously reported issues and describes any
additional actions taken by state departments to correct the problems we previously identified.
For example, Corrections reported that it established accounts receivable totaling $11,400 after
we reported it paid nine office technicians $16,530 more than they should have received.
However, because Corrections used the incorrect period for overpayment recovery when it
initiated its collection efforts, it failed to collect $3,230 to which the State was entitled.
Respectfully submitted,

ELAINE M. HOWLE, CPA
State Auditor

Investigations of Improper
Activities by State Employees:
July 2008 Through December 2008
April 2009 Report I2009‑1

California State Auditor Report I2009-1

April 2009

Contents
Summary	

1

Chapter 1	
Department of Corrections and Rehabilitation and Department of
General Services: Waste of State Funds	

7

Chapter 2	
Department of Fish and Game, Office of Spill Prevention and Response:
Improper Travel Expenses	

19

Chapter 3	
State Compensation Insurance Fund: Time and Attendance Abuse,
Lax Supervision	

27

Chapter 4	
Department of Social Services: Improper Hiring	

31

Chapter 5	
Department of Parks and Recreation: Failure to Solicit Competitive Price
Quotes for Its Purchase of Goods	

39

Chapter 6	
Department of General Services: Waste of State Funds	

41

Chapter 7	
Department of Justice: Failure to Accurately Report Time Worked,
Absences, and Travel Expenses; Management’s Failure to Ensure Proper
Time and Travel Expense Reporting	

45

Chapter 8	
Employment Development Department: Misuse of State Equipment
and Resources, Incompatible Activities, Management’s Failure to Take
Appropriate Action	

51

Chapter 9	
Department of Finance: Improper Saving of a Vacant Position	

55

Chapter 10	
Update of Previously Reported Issues	
Department of Corrections and Rehabilitation	

59

Department of Fish and Game	

61

Department of Parks and Recreation	

64

California State Polytechnic University, Pomona	

65

vii

viii

California State Auditor Report I2009-1

April 2009

Department of Consumer Affairs, Contractors State License Board	

66

Department of Corrections and Rehabilitation	

67

California Environmental Protection Agency	

68

California Prison Health Care Services	

69

Appendix	
The Investigations Program	

73

Index	

77

California State Auditor Report I2009-1

April 2009

Summary
Results in Brief

Investigative Highlights . . .

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. Under the Whistleblower Act,
an improper governmental activity is 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.

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

This report details the results of nine investigations completed by
the bureau or undertaken jointly by the bureau and other state
agencies between July 1, 2008, and December 31, 2008. This report
also outlines the actions taken by state agencies in response to the
investigations into improper governmental activities described here
and in previous reports. The following paragraphs briefly summarize
these investigations and the state agencies’ actions, which the report’s
individual chapters discuss more fully. For more information about the
bureau’s investigations program, please refer to the Appendix.

»» Failed to report 427 hours of missed work,
for which the employee was paid $8,314.

Department of Corrections and Rehabilitation and Department of
General Services
The Department of Corrections and Rehabilitation (Corrections)
and the Department of General Services (General Services) wasted
a total of $580,000 in state funds by leasing office space that
Corrections had left unoccupied for more than four years.
Department of Fish and Game, Office of Spill Prevention and Response
A high‑level official formerly with the Department of Fish and Game,
Office of Spill Prevention and Response, incurred $71,747 in improper
travel expenses she was not entitled to receive. These included
reimbursements for the cost of commuting between her Sacramento
headquarters and her Southern California residence and for lodging
and meal expenses incurred near her headquarters and residence.

»» Wasted $580,000 by leasing office space
left vacant for more than four years.
»» Incurred $71,747 in improper commute,
lodging, and meal expenses.

»» Circumvented state civil service rules
by arranging for the selection of a
subordinate employee to a vacant
position and paying the employee
$6,444 for duties that she did
not perform.
»» Paid at least $1,253 more than necessary
on a $4,987 purchase without obtaining
competitive price quotes.
»» Wasted $3,000 by paying for private
consultant services that another state
agency could have provided at no cost.
»» Paid an employee $1,145 for unearned
compensation and travel expenses
not incurred.
»» Sent inappropriate e‑mail messages to
other state employees. Management then
failed to take corrective action despite
noting similar behavior in the past.
»» Circumvented state law by protecting a
vacant position and preventing it from
being abolished.

State Compensation Insurance Fund
continued on next page . . .

An employee of the State Compensation Insurance Fund (State
Fund) failed to report 427 hours of absences. As a result, State Fund
did not charge the employee’s leave balances, and she received
$8,314 for hours that she did not work.

1

2

California State Auditor Report I2009-1

April 2009

In response to previously reported
investigations, state departments and
agencies have either acted or failed to act in
the following ways:
»» The Department of Corrections and
Rehabilitation (Corrections) failed
to collect $1.3 million for hours
three employees spent working on
union activities.
»» Corrections initiated recovery efforts
for improper payments made to
employees for inmate supervision
when the employees did not fulfill
requirements. However, its recovery
efforts did not encompass some of the
improper payments.
»» The California Environmental Protection
Agency continued to take corrective
action regarding an employee who failed
to promptly submit time sheets that
accurately accounted for her time.

Department of Social Services
A high‑ranking official with the Department of Social Services
(Social Services) circumvented state civil service laws by arranging
for the selection of a specific individual for a vacant position.
Social Services also violated civil service laws by appointing the
employee to an analyst position even though she performed
the duties of a lower‑level position. As a result, Social Services
paid the employee $6,444 more than the amount permitted by the
State for the lower‑level duties.
Department of Parks and Recreation
A Department of Parks and Recreation supervisor did not solicit
competitive price quotes for a purchase. Consequently, he failed to
pay a fair and reasonable price—and he overpaid by at least $1,253—
for goods costing $4,987.
Department of General Services
General Services wasted $3,000 by paying for consultant services
from a private vendor even though another state agency could have
provided comparable services at no cost.
Department of Justice
A Department of Justice employee failed to properly report her
time worked and leave taken, and claimed reimbursement for travel
expenses that she did not incur. Further, the employee’s manager
failed to ensure that her time‑reporting and expense claims were
accurate. As a result, the employee received $1,145 for unearned
compensation and travel expenses not incurred.
Employment Development Department
An employee of the Employment Development Department
(Employment Development) misused his state computer and his
e‑mail account to send personal messages. The misuse included
sending inappropriate messages to other state employees. Further,
even though management at Employment Development had noted
similar conduct by this employee for several years, it failed to take
appropriate action to correct the employee’s behavior.

California State Auditor Report I2009-1

April 2009

Department of Finance
The Department of Finance circumvented state law when it protected
a vacant position by preventing that position from being abolished.
Update on Previously Reported Issues
In September 2005 we reported that Corrections did not track the
total number of hours available in a rank‑and‑file release time bank
(time bank) composed of personal leave hours donated by members
of the California Correctional Peace Officers Association (union)
for union representatives to use when conducting union business.
Our investigation identified 10,980 hours that three union
representatives used but that Corrections failed to charge against
the time bank from May 2003 through April 2005. Instead,
evidence indicated the State paid for those hours through its
regular payroll at a cost of $395,256. Moreover, Corrections has not
attempted to obtain reimbursements for the hours the three union
representatives spent conducting union activities from April 2005
through January 2006. This failure resulted in an additional
cost to the State of $185,546. As a result, the State unnecessarily
paid a total of $580,802 for union leave hours from May 2003
through January 2006.
Records from the State Controller’s Office indicated that
Corrections began to charge union leave for the hours the three
union representatives spent working on union activities beginning
in February 2006. However, union leave hours, unlike time‑bank
hours, must be reimbursed to the State and must include both
salary and benefit costs. In January 2009 Corrections reported that
it had submitted invoices to the union totaling $753,460 for the
union representatives’ work on union activities from February 2006
through December 2008; however, as of the end of December 2008,
Corrections had not received payments on any of these invoices.
Therefore, Corrections has either failed to account for or to recover
any reimbursements for hours that the three representatives
used to conduct union activities from May 2003 through
December 2008. These unrecovered reimbursements cost the State
a total of $1,334,262.
In October 2008 we reported that Corrections improperly
granted nine office technicians increased pay to supervise
inmates at its R. J. Donovan Correctional Facility. The office
technicians were not entitled to receive the increase because they
did not supervise the required number of inmates or because
they did not supervise inmates who worked the minimum
number of hours required for the employees to receive the
increased pay. Consequently, Corrections paid these office

3

4

California State Auditor Report I2009-1

April 2009

technicians $16,530 more than they should have received. In
March 2009 Corrections reported that it had set up accounts
receivable to collect $11,400 from the employees. However, when
it initiated efforts to recover the overpayments from the office
technicians, Corrections used the incorrect period for overpayment
recovery and thus failed to collect $3,230 to which the State
was entitled.
We also reported in October 2008 that an employee at the
California Environmental Protection Agency (Cal/EPA) failed
to punctually submit time sheets that recorded her absences
accurately. In addition, the officials responsible for managing
her daily activities did not ensure that the employee reported her
absences accurately and that staff properly charged the absences to
the employee’s leave balances. At the time of our report, Cal/EPA
reported that it had recalculated, updated, and corrected the
employee’s leave balances to reflect her actual absences and
overtime worked. In addition, it planned to establish an account
receivable of $616 covering 24 hours of absences for which the
employee’s pay should have been docked. In March 2009 Cal/EPA
informed us that in December 2008 it began deductions from the
employee’s pay and that it will continue the deductions until it
collects the full amount owed to the State.
Table 1 displays the issues and the financial impact of the cases in
this report, the months in which we initially reported on the cases,
and the status of any corrective actions taken.

California State Auditor Report I2009-1

5

April 2009

Table 1
The Issues, Financial Impact, and Status of Corrective Actions for Cases Described in This Report

Previously Reported Issues

New Cases

CHAPTER

AGENCY

DATE OF
OUR REPORT

ISSUE

1

Department of Corrections and
Rehabilitation and Department of
General Services

April 2009

Waste of state funds.

2

Department of Fish and Game, Office
of Spill Prevention and Response

April 2009

Improper travel expenses.

3

State Compensation Insurance Fund

April 2009

4

Department of Social Services

5

Cost to the State as
of December 31, 2008

$580,000

STATUS OF
CORRECTIVE
ACTIONS

Partial

71,747

Pending

Time and attendance abuse,
lax supervision.

8,314

Pending

April 2009

Improper hiring.

6,444

Pending

Department of Parks and Recreation

April 2009

Failure to solicit competitive price quotes
for its purchase of goods.

1,253

Pending

6

Department of General Services

April 2009

Waste of state funds.

3,000

Complete

7

Department of Justice

April 2009

Failure to accurately report time
worked, absences, and travel expenses;
management’s failure to ensure proper
time and travel expense reporting.

1,145

Pending

8

Employment Development Department

April 2009

Misuse of state equipment and resources,
incompatible activities, management’s
failure to take appropriate action.

9

Department of Finance

April 2009

Improper saving of a vacant position.

10

Department of Corrections
and Rehabilitation

September 2005 Failure to account for employees’ use of
union leave.

10

Multiple state agencies*

March 2006

Inappropriate gifts of state resources
and mismanagement.

10

Department of Parks and Recreation

March 2007

Misuse of state resources and failure to
perform duties adequately.

10

California State Polytechnic University,
Pomona

10

Department of Consumer Affairs,
Contractors State License Board

October 2008

Misuse of state resources, dishonesty.

10

Department of Corrections
and Rehabilitation

October 2008

10

California Environmental
Protection Agency

10

California Prison Health Care Services

September 2007 Viewing of inappropriate Internet sites and
misuse of state equipment.

NA

Complete

NA

Pending

1,334,262

Partial

8,313,600

Partial

NA

Partial

NA

Partial

1,896

Partial

Improper payments for
inmate supervision.

16,530

Partial

October 2008

Failure to accurately report absences and
inadequate supervision.

23,320

Complete

January 2009

Improper contracting decisions and poor
internal controls.

26,718,465†

Partial

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.
*	 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.
†	 California Prison Health Care Services spent $26,718,465 when it improperly acquired goods and services without competitive bidding. Lacking any
documentation of any competition, we are unable to calculate the amount the State may have saved.

6

California State Auditor Report I2009-1

April 2009

Blank page inserted for reproduction purposes only.

California State Auditor Report I2009-1

April 2009
Department of Corrections and Rehabilitation and Department of General Services

Chapter 1
Department of Corrections and Rehabilitation
and Department of General Services: Waste of
State Funds
Case I2007‑0891
Results in Brief
The Department of Corrections and Rehabilitation (Corrections) and
the Department of General Services (General Services) have wasted
$580,000 in state funds by continuing to lease 5,900 square feet of
office space that Corrections has not occupied for more than four years.
Background
Corrections operates numerous facilities and offices throughout
the State. One of its offices, the Office of Correctional Safety
(correctional safety) conducts major criminal investigations and
pursues the apprehension of prison escapees and parolees wanted
for serious and violent felonies. To perform its mission, correctional
safety maintains regional units throughout the State. One of its
regional units operates in leased office space located in a privately
owned building in Southern California. As the entity that serves as
the business manager for the State of California, General Services
procures and manages the building space that state agencies need to
perform their functions.
Like other state agencies, both Corrections and General Services
have a duty to perform their responsibilities in a manner that is not
economically wasteful. In particular, the California Government
Code, Section 8547.2, states that an improper governmental
activity occurs when state agencies or employees of state agencies
engage in conduct that is either economically wasteful or grossly
inefficient. When we received information that Corrections and
General Services were wasting state funds by leasing unused office
space, we launched an investigation.
Facts and Analysis
Because of delays and inefficient conduct by both Corrections
and General Services, the two agencies have wasted $580,000 in
state funds for leased office space that remained unoccupied over
a four‑year period from December 2004 through December 2008,
the end of our reporting period. Figure 1 on the following page
illustrates the history of the lease activities and the delays and
inefficient conduct that produced this waste of state funds.

7

2005

August
General Services learns that
Corrections requires significant
reconstruction to accommodate its
current needs.

General Services determines that no
suitable space is available in a
state-owned building and approves
Corrections’ request to amend the
existing lease.

July

April
General Services obtains a
credit for $18,600 in unused utilities and
services. Corrections continues to pay more
than $13,800 per month on unused space.

September 2005 through June 2007
Lease negotiations take place over 22 months.
The lessor repeatedly questions the terms of
the standard lease agreement.

2006

The old lease term is extended to December 2007 because
no new lease was executed for the vacant space.

June

2007

For more than four months, Corrections
fails to submit formal waiver responses.

October 2007 through February 2008

October
May
Corrections decides informally to waive certain Americans
The floor plan for the
with Disabilities Act (ADA) compliance deficiencies.
reconfigured space is
substantially complete.
July
The lessor informally agrees to the terms of the new
lease for the reconfigured space, and it fulfills remaining
state requirements. The lessor also obtains a contractor
and determines the costs of construction.

After the Bureau of State Audits begins an investigation, General
Services successfully locates available state-owned space and
informs Corrections of the nearby vacant space.

November

February
Corrections provides to General Services its formal
waiver of ADA compliance deficiencies and justification
for declining state-owned space.

2008
June through September 2008
The lessor again questions the terms of
the new lease previously resolved in
July 2007, requests official notice of
Corrections’ responsibility for certain
ADA compliance deficiencies, and obtains
updated construction costs.

June
General Services sends to the lessor the lease proposal
negotiated in July 2007 and an amendment to the old lease to
cease rent while the unused space undergoes construction.

September
The lessor informally agrees to cease rent on the vacant space.

October
General Services executes a lease amendment to the old lease that stops rent on the
unused space and questions the lessor’s updated construction costs. Corrections
provides another ADA waiver because General Services rejected its prior response.

Sources:  Documentation and information from General Services and Corrections and from Bureau of State Audits’ interviews with General Services’ employees.

November 2004 through mid-June 2005
No activity occurs for seven months.

2004

June
Department of General
Services (General Services)
begins searching for
state-owned space to fulfill
Corrections’ needs.

December
Corrections vacates 5,900 of
the 8,000 square-foot space
it leases.

November
Department of Corrections and
Rehabilitation (Corrections) submits a
request to amend its existing lease.

December
The new lease proposal for the 5,900-square-foot vacant space is not executed. Construction
has not started. The lessor continues to question the language of the new lease and postpones
lease commencement until May 2009.

Figure 1
Time Line Illustrating the Activities and Delays That Occurred Over the Four Years That the Leased Office Space Has Been Vacant

8
California State Auditor Report I2009-1

April 2009

Department of Corrections and Rehabilitation and Department of General Services

California State Auditor Report I2009-1

April 2009
Department of Corrections and Rehabilitation and Department of General Services

Corrections signed a lease originally scheduled to end in June 2007
for 8,000 square feet of office space in a privately owned building
in San Diego. The regional units for two of its offices—correctional
safety and its institutions’ administrative southern office (regional
administration unit)—shared this space. In December 2004
Corrections relocated the regional administration unit, which
occupied the larger portion of the office space, to its headquarters
in Sacramento. Before the relocation, Corrections had submitted a
request stating that correctional safety required only 3,800 square
feet of space in the San Diego building and asking General Services
to extend the lease through December 2010.
Although General Services apparently received Corrections’ request
near the end of 2004, it did not act on the request until late
June 2005, seven months later. General Services could not explain
why it took so long to begin processing the request when initiating
the process normally occurs soon after an agency submits its space
request. To fulfill a requirement in its leasing process, General
Services searched for an available, alternative space already owned
by the State that could house correctional safety, but this effort was
unsuccessful. In July 2005 General Services approved Corrections’
request to remain in the privately owned space that it
currently occupied.
In August 2005 General Services’ personnel
conducted a routine on‑site visit to survey the
leased office space and confirm the portion of space
that Corrections would relinquish. During this
visit, General Services learned that correctional
safety, which occupied only about 2,100 square
feet, was actually interested in moving into the
larger vacant space. Given correctional safety’s
program requirements, the vacant space needed
to be altered significantly to include, among other
things, a specially constructed armory and evidence
rooms with separate security zones, custom storage
lockers, and enhanced security areas. Because
of correctional safety’s drastically changed space
needs, General Services realized that Corrections
needed a new lease. Using the State’s standard
lease agreement (outlined in the text box), General
Services proceeded to design a new floor plan to
satisfy Corrections’ revised space needs.

Provisions of the State’s Standard
Lease Agreement
The Department of General Services (General Services)
established the State’s standard lease agreement for state
agencies that lease privately owned space. The agreement
includes the following:
•	 Time length of the lease.
•	 Monthly rent amount.
•	 Conditions for use of the property, such as availability
of parking spaces, payment of utilities, and handling of
repairs and maintenance.
•	 A detailed drawing of the leased space’s floor plan.
•	 A list of requirements applicable to the building owner
regarding compliance with state requirements for
building code provisions and the accessibility standards
of the Americans with Disabilities Act.
Source:  General Services’ Web site.

Further, General Services needed to negotiate an
amendment to the existing lease for the space that
correctional safety currently occupied. General Services had the
option to terminate the existing lease by providing at least 90 days’
written notice to the building owner (lessor) that it intended to

9

10

California State Auditor Report I2009-1

April 2009
Department of Corrections and Rehabilitation and Department of General Services

terminate its lease and attempt to acquire space necessary for
correctional safety’s needs. Instead, General Services decided to
amend the existing lease to extend the lease term and negotiate
a reduced rent. In addition, General Services obtained a credit,
based on the terms of the existing lease, that Corrections was
entitled to receive because it had not used utilities and services in
the vacant space since January 2005. General Services began these
efforts to adjust the lease in September 2005. At the same time, it
initiated lease negotiations with the lessor on a new lease for the
5,900‑square‑foot vacant portion of the space that the lessor would
modify to meet correctional safety’s needs.
Even after the lessor applied
a service credit in May 2006,
Corrections still continued to pay
more than $13,800 a month on
unused leased space.

The lessor delayed progress throughout 2006; it disputed the terms
of the language used in the State’s standard lease agreement. For
example, the lessor challenged its obligation to repaint the leased
space and the State’s right to make or have the lessor perform
desired changes and alterations. In April 2006 General Services
obtained an amendment to the existing lease for a decrease in rent
of $1,172 per month because of unused utilities and services at the
vacant space, and the lessor applied to Corrections’ May 2006
rent an $18,607 service credit for the unused utilities and services
retroactive to January 2005. However, Corrections still continued
to pay more than $13,800 per month on the unused leased space. In
May 2006 General Services substantially completed the floor plan
to reconfigure the vacant space.
As Figure 1 shows, the negotiation process dragged on through
most of 2007. Unable to reach a formal agreement on a new lease
for the 5,900‑square‑foot space, in June 2007 General Services and
the lessor extended the existing lease term until December 2007.
The lessor informally agreed to the terms of the new lease in
July 2007—22 months after negotiations started—but failed to
memorialize the terms in an officially executed lease agreement.
However, the lessor completed the required Americans with
Disabilities Act (ADA) survey and structural survey requirements,
and it determined the costs for construction of the planned
alterations. Although the survey identified deficiencies in the
building’s compliance with the ADA that the lessor was obligated
to correct, Corrections determined that certain accessibility
deficiencies would not impede its operations. General Services
required Corrections to formally accept responsibility for these
deficiencies; Corrections agreed to do so in October 2007 but failed
to generate a formal response.
In November 2007 we began our investigation and confirmed
with General Services that correctional safety was still unable
to occupy the vacant space. General Services decided to delay
pursuit of Corrections’ original request for the privately owned
space while it searched again for available state‑owned space;

California State Auditor Report I2009-1

April 2009
Department of Corrections and Rehabilitation and Department of General Services

however, it could have worked on both activities at the same time. It
successfully located available state‑owned space in a building near
correctional safety’s current location and informed Corrections.
In February 2008 Corrections sought a waiver from occupying
the space in the state‑owned building, citing the space’s failure
to meet correctional safety’s program needs. Instead of requiring
Corrections to use the state‑owned space, General Services
approved the waiver and resumed efforts to modify the privately
owned space to fulfill Corrections’ needs.
Also in February 2008 Corrections finally submitted to General
Services its formal written response accepting responsibility for
certain ADA compliance deficiencies. General Services then
spent four months confirming with Corrections the floor plan and
specifications for the new lease proposal for the 5,900‑square‑foot
vacant space.
In June 2008 General Services sent the lessor the tentative new
lease agreement containing terms and conditions informally
acceptable to both parties in July 2007. General Services
simultaneously sent the lessor a lease amendment to the old lease
so that Corrections could cease paying rent on the unoccupied
office space. The lessor questioned the same lease language
that had been resolved nearly one year earlier, brought up new
concerns, obtained updated construction prices because its
previous costs were outdated, and requested official notification
that Corrections had formally accepted responsibility for certain
ADA compliance deficiencies.
In September 2008, with increased lessor participation, General
Services negotiated to agree informally to cease rent on the
unoccupied space. In October 2008 General Services executed
an amendment to the old lease that stopped rent retroactively to
June 30, 2008, on the unoccupied space, which the lessor officially
agreed to relinquish. However, General Services questioned
the lessor’s updated construction costs, which required further
clarification before the new lease agreement could be executed.
In addition, Corrections gave General Services its revised formal
response accepting responsibility for certain ADA compliance
deficiencies because its previous response was inadequate.
As of the end of our reporting period in December 2008,
correctional safety was still unable to occupy the 5,900‑square‑foot
vacant space because General Services had not been able to finalize
a new lease agreement. Correctional safety is not able to adequately
function in its small office space. Staff members must conduct some
of their responsibilities off‑site at other law enforcement facilities.
In addition, the limited space has created inconveniences in
correctional safety’s ability to maintain efficient program operations.

Despite successfully locating
available state‑owned space in a
building near correctional safety’s
current location, General Services
approved in February 2008 a waiver
from Corrections having to occupy
the space.

11

12

California State Auditor Report I2009-1

April 2009
Department of Corrections and Rehabilitation and Department of General Services

Because of multiple delays and
inefficient conduct, Corrections
wasted $580,000 in state funds from
January 2005 through June 2008,
and General Services has taken
more than four years to complete
Corrections’ request for office space.

For example, it currently has no space to accommodate its evidence
and weapons storage, so it stores these items at a distant correctional
safety location or at a local law enforcement agency’s facilities.
Furthermore, the lessor continued to question the same language in
the new lease that the parties had previously resolved, and the lessor
delayed starting the new lease until May 2009.
Because of multiple delays and inefficient conduct, Corrections
wasted $580,000 in state funds from January 2005 through
June 2008. Moreover, General Services wasted more than four years
in trying to complete Corrections’ request for office space.
Corrections Failed to Adequately Describe Its Need for Space and to
Promptly Fulfill Its Responsibilities in the Leasing Process
Over the four‑year period that it was seeking space for correctional
safety, Corrections failed to give General Services an accurate
description of its space needs and to promptly provide required
information and approvals that were necessary to facilitate the
lease process. Its failures contributed to General Services’ delays in
meeting Corrections’ space needs and caused Corrections to waste
state funds.
Corrections Failed to Accurately Describe Its Space Needs in Its Request for
Office Space

Corrections was aware that correctional safety intended to
occupy the larger space previously vacated by the regional
administration unit. However, its request for a space modification
in November 2004 failed to provide General Services with a
complete, accurate description of correctional safety’s requirements
so that General Services could properly plan the time and resources
needed to fulfill the request. As this report previously explained,
the request indicated only that correctional safety was interested
in amending its existing lease to reduce its leased space from
8,000 square feet to 3,800 square feet even though it needed 5,900
square feet of space as well as specially constructed rooms and
enhanced security areas. Because Corrections failed initially to
communicate clearly to General Services its actual space needs,
General Services based its approval and its estimated time for
planning and leasing tasks on incorrect program information. Thus,
Corrections’ failure to accurately describe its space needs when
it submitted its space request affected General Services’ ability to
deliver its services promptly and appropriately.

California State Auditor Report I2009-1

April 2009
Department of Corrections and Rehabilitation and Department of General Services

Corrections Failed to Respond Promptly to General Services’
Information Requests

During the leasing process, Corrections delayed providing needed
responses to General Services for two components. To proceed
in securing a new lease agreement, General Services required
Corrections to formally acknowledge its responsibility for certain
ADA compliance deficiencies. However, Corrections took at least
three months—from November 2007 to February 2008—to provide
the acknowledgement, causing further delays in completing the
new lease. More importantly, a timely response could have resulted
in an executed new lease agreement that would have allowed
reconfiguration of the vacant space. Thus, correctional safety may
have been able to move into the new space by early 2008.
When General Services proceeded to fulfill Corrections’ space request
with state‑owned space in November 2007 because the new lease
for privately owned space had not been executed, Corrections failed
to respond in a timely manner a second time. Corrections took until
mid‑February 2008, nearly three months, to inform General Services
about its decision to waive the state‑owned space. During this time,
General Services postponed pursuing an agreement for the privately
owned space that would meet Corrections’ space needs. Thus,
Corrections’ stalled response contributed further to the delays in
meeting correctional safety’s space and operational needs and caused
the waste of more state funds.
General Services Failed to Properly Exercise Its Project
Management Responsibilities
General Services was slow to act on Corrections’ request for a
reduction of its leased space, and it allowed the negotiation of a new
lease to drag on for an unreasonable amount of time while the State
continued to pay for unused space. Furthermore, its leasing actions
failed to ensure that Corrections’ request was efficiently processed
without wasting state funds and time.
General Services Failed to Process Corrections’ Space Request for
Several Months

General Services delayed processing the space request that
Corrections submitted in November 2004. It initially took no
action on the request until late June 2005, seven months later.
In addition, it did not confirm correctional safety’s space needs
until August 2005, nine months after Corrections submitted its
request. These failures caused the first delays in the lengthy process
of relinquishing the unused leased space.

Corrections took at least
three months to acknowledge
formally its responsibility for
certain ADA deficiencies, and
it failed to respond in a timely
manner to inform General Services
about its decision to waive the
state‑owned space.

13

14

California State Auditor Report I2009-1

April 2009
Department of Corrections and Rehabilitation and Department of General Services

General Services’ Lease Negotiations Were Excessively Time Consuming

After General Services learned of Corrections’ actual program
requirements and leasing needs, it spent about 22 months—from
September 2005 to June 2007—in initial negotiations with the
lessor. Although during this time General Services acted to modify
the existing lease—for example, through an amendment to the
existing lease, General Services negotiated a rent reduction because
of unused utilities and services at the vacant space—it was unable
to finalize a new lease agreement.
Furthermore, General Services’ actions did not result in a
substantial cost savings for Corrections because Corrections was
obligated to continue paying almost full rent on the vacant space
through June 2008. When General Services realized correctional
safety’s actual space needs in August 2005, it could have worked
to terminate the old lease by providing 90 days’ written notice
to the lessor and negotiate an agreement for the space that
correctional safety occupied. Instead, General Services decided
to amend the existing lease to extend the term and slightly reduce
the rent on the entire 8,000‑square‑foot space without executing a
lease amendment limiting Corrections’ obligation to the space that
correctional safety occupied.
General Services significantly
delayed the process for leasing
the vacant office space because
it did not cease or strengthen
negotiations at any time during
the 22 months it took in initial
negotiations with the lessor.

In addition, General Services chose to continue negotiations with
the lessor when it repeatedly encountered problems. It allowed the
lessor to dispute each issue of the new lease proposal individually
and successively. It could have ceased or strengthened negotiations
at any time during the 22 months. Furthermore, despite its
contentious initial negotiations with the lessor, General Services
engaged in a second round of negotiations. For another six months,
from June through December 2008, the lessor disputed the same
standard language of the new lease and brought up new concerns
that prohibited the lease from being finalized. Because General
Services did not cease or strengthen its negotiations at any time
during the prolonged process, it significantly delayed the process
for leasing the vacant office space.
General Services Inefficiently Conducted Its Leasing Responsibilities
Throughout Its Prolonged Processing of Corrections’ Lease

General Services failed to adequately conduct activities connected
with Corrections’ lease to ensure that it accomplished the process
in a cost‑efficient manner. Over the four years that General Services
processed the lease, it failed to firmly assert leasing actions that would
result in the execution of a new lease within a reasonable period and
without wasting state funds. Allowing the lessor to inhibit progress
of the new lease by disputing the lease language was inefficient.

California State Auditor Report I2009-1

April 2009
Department of Corrections and Rehabilitation and Department of General Services

Moreover, General Services lacks adequate controls to ensure that
it makes cost‑effective decisions throughout the leasing process
to prevent Corrections or any other state entity from wasting
state funds on unoccupied space. For example, General Services
overlooked the accumulated cost of state funds spent on the unused
space because it had no mechanism to assess the viability of the
lease and the costs associated in securing leased space.
Finally, over the four years General Services spent trying to fulfill
Corrections’ space needs, correctional safety’s operations continued
to suffer functional inefficiencies. General Services’ prolonged
leasing activities contributed to Corrections’ waste of state funds,
and its actions adversely affected correctional safety’s operations
while it remained in inadequate office space.
Recommendations
To ensure that Corrections effectively performs its facility planning
and management in a manner that is not economically wasteful, it
should take the following actions:
•	 Create a procedure to require its employees to confirm
leasing needs before submitting a lease request to General
Services to ensure that accurate space and leasing information
is communicated.
•	 Establish a policy that requires employees to promptly review
and approve required lease information to ensure that decisions
can be made quickly and effectively to facilitate the lease process.
•	 Obtain training from General Services about its leasing process
and about its expectations for Corrections’ designated staff in
charge of requesting leasing services.
To ensure that General Services minimizes waste and inefficiency in
its leasing services, it should do the following:
•	 Establish reasonable completion timelines for new leases,
lease amendments, lease renewals, lease extensions,
and lease reconfigurations of existing space or for any
combination of these leasing activities.
•	 Strengthen its oversight role to prevent state agencies from
unnecessarily using leased space when state‑owned space
is available.

15

16

California State Auditor Report I2009-1

April 2009
Department of Corrections and Rehabilitation and Department of General Services

•	 Establish reasonable time frames, such as 30 days, for its
employees to initiate processing state agency space requests
and to confirm with the agency its space needs and program
requirements before approval of the request.
•	 Create guidelines for General Services’ leasing representatives
when they encounter uncooperative lessors.
•	 Develop a procedure to evaluate all costs incurred in the
processing of a request, including any rent paid on unoccupied
space, to ensure that it makes cost‑effective decisions when
considering the feasibility of a space request.
Agency Response
Corrections acknowledged its lack of monitoring and tracking of
this lease project, and its untimely responses to General Services’
information requests. Corrections informed us that in
February 2008 it initiated a formal notification process for its
divisions and programs when requesting leasing services to ensure
program information and lease space requirements are obtained.
Corrections reported that it has begun to informally track its lease
projects to ensure outstanding leasing issues are resolved in a timely
manner. It also plans to develop a formal project tracking system to
capture all standard lease information, any space alterations, and
lease negotiation status to provide management with up‑to‑date
information concerning any Corrections’ property. Finally,
Corrections stated that the majority of staff in its leasing and
property management section have attended training conducted by
General Services regarding the leasing tasks and activities involved
when Corrections requests office space.
General Services reported that it executed the new lease in
January 2009 to be effective in May 2009; however, correctional
safety still remains in the smaller office space. It further reported
that it would implement a series of actions to minimize waste and
inefficiency in its leasing services. In particular, to improve the
efficiency of processing lease requests, General Services stated that
it added 15 new staff for space‑planning activities. It further stated
that it established timelines for completing its lease projects with
specific estimates for project phases such as project evaluation, site
selection, planning, lease negotiation and execution, construction,
and occupancy. General Services also indicated its guidelines
consider that routine leasing projects will be completed within
six months, while more difficult projects with extensive tenant
improvements may take up to 24 months. Although General
Services has established a time frame of no more than 24 months to
complete its lease projects, we consider the 24‑month time period

California State Auditor Report I2009-1

April 2009
Department of Corrections and Rehabilitation and Department of General Services

lengthy and arbitrary. While we understand and appreciate that
some leasing projects involve extensive efforts by General Services,
we nevertheless believe that 24 months—or two years—is not
sufficiently justified when it impacts the ability of state agencies to
conduct their work adequately and efficiently.
In consideration of the available leasing options to accomplish
Corrections’ space request, General Services stated that even if
it pursed terminating the old lease and relinquishing the unused
space, it was not entirely feasible because Corrections required
access to space designated for its information technology and
storage area housed in nearly 700 of the 5,900 square‑foot vacant
space. However, General Services did not disclose this information
to us in our earlier attempts to confirm the portion of used and
unused space. Moreover, the amount of space that we were able to
confirm did not clearly establish this additional area as space that
correctional safety used. In fact, the lease amendment obtained in
April 2006 indicated that the portion of unoccupied space was not
less than 5,900 square feet. Although General Services contended
that our calculation of the wasteful amount is overstated by the
cost of the nearly 700‑square‑foot area, we nevertheless consider
the use of state funds to pay rent on office space that essentially
remained vacant during the four years it took General Services to
process Corrections’ space request significantly wasteful.
To strengthen its enforcement over using state‑owned space,
General Services indicated that it established policies and practices
requiring its asset management branch chief in real estate services
to address conflicts with state agencies regarding the use of available
state‑owned space. It further commented that the California
Government Code, Section 14682, which grants General Services
the final determination of the use of existing state‑owned space
under its jurisdiction, was not in effect at the time Corrections’
space request was initiated. However, the statute became effective
on January 1, 2006, during the time that General Services was
processing Corrections’ space request. Thus, General Services could
have exercised its enforcement authority when it located available
state‑owned space for Corrections in November 2007.
In establishing reasonable time frames for its employees to initiate
processing space requests, General Services informed us that it
established a time frame of 18 days to approve the space request
that includes a protocol to expedite confirming the space needs and
program requirements of the agency prior to approving the request.
In addition, General Services stated that it established guidelines
for negotiating with lessors. It further stated that it provides
ongoing training on negotiating strategies to its real estate staff

17

18

California State Auditor Report I2009-1

April 2009
Department of Corrections and Rehabilitation and Department of General Services

and discusses these strategies at monthly meetings. Any significant
issues involving uncooperative lessors are escalated to its real estate
leasing and planning executive management.
Finally, although General Services asserted that it already had an
established procedure to evaluate all costs when it considers the
feasibility of its space projects, it stated that its alternatives did not
yield a cost‑effective solution for the State, when measured against
its 24‑month time frame. Regardless of its established timeline, we
are concerned that General Services does not consider it wasteful
to spend state funds on vacant space over a four‑year period.

California State Auditor Report I2009-1

April 2009
Department of Fish and Game, Office of Spill Prevention and Response

Chapter 2
Department of Fish and Game, Office of
Spill Prevention and Response: Improper
Travel Expenses
Case I2006‑1125
Results in Brief
A high‑level official formerly with the Office of Spill Prevention
and Response (spill office) of the Department of Fish and Game
(Fish and Game), received reimbursements that she was not
entitled to receive for commute expenses between her Sacramento
headquarters and her Southern California residence. In addition,
in violation of state travel regulations, Fish and Game reimbursed
the official for lodging and meal expenses incurred near her
headquarters and her residence. Thus, from October 2003 through
March 2008, the official incurred $71,747 in improper expenses.
Background
State law enacted in 1990 by the Legislature led to the 1991 creation
of the spill office as part of Fish and Game. The spill office’s mission
is to provide the best achievable protection of California’s natural
resources by preventing, preparing for, and responding to oil
spills and through restoring and enhancing affected resources. As
a prevention and response organization, the spill office executes
Fish and Game’s public trustee and custodial responsibilities for
protecting, managing, and restoring the State’s fish, wildlife, and
plants. Like all other state employees, spill office staff must follow
an array of laws and regulations intended to ensure that they
properly report travel expenses and the use of state vehicles. These
laws and regulations also mandate that the spill office and Fish and
Game maintain adequate administrative controls to safeguard the
propriety of that reporting.
Specifically, Title 2 of the California Code of Regulations
provides the travel rules that apply to all state employees when
conducting state business. In particular, Section 599.615.1(a)
requires that each state agency determine the necessity for travel
by its employees and that such travel represent the best interests
of the State. In addition, the section requires that the signature of
the approving officer certify that the travel was authorized, that the
employees incurred the expenses to conduct state business, and
that the expenses incurred are appropriate and within the State’s
travel rules. Section 599.616.1(a) generally defines headquarters as

19

20

California State Auditor Report I2009-1

April 2009
Department of Fish and Game, Office of Spill Prevention and Response

the place where an official or employee spends the largest portion
of his or her regular workdays or working time, or where the official
or employee returns upon completion of special assignments.
This section also specifies that employees may not claim per diem
expenses for costs incurred at any location within 50 miles of an
employee’s headquarters as determined by the normal commute
distance. Further, Section 599.616.1(a) prohibits reimbursement for
per diem or other expenses incurred at an employee’s residence. In
a previous investigation, a Department of Personnel Administration
(Personnel Administration) representative informed us that this
prohibition, although not expressly stated in the regulation, also
extends to any per diem expenses incurred within 50 miles of an
employee’s residence.
In addition, Section 599.626.1(b) stipulates that reimbursement for
travel expenses be made only for the method of transportation that
is in the State’s best interest. This section also disallows—regardless
of the employee’s normal mode of transportation—expenses that
arise from travel between an employee’s home and headquarters.
Section 599.638.1(d) requires officials or employees to state
the purpose of each trip for which they claim reimbursement.
Section 599.638.1(e) further requires officials and employees to
include their headquarters and residence addresses on each travel
claim submitted for payment. Moreover, Section 599.807(a) requires
each state agency to maintain a travel log for each state vehicle
under its control. This log should document the daily mileage, date
and time of travel, itinerary, and identity of the vehicle’s driver.
Finally, to minimize fraud, abuse, and waste of government funds,
the California Government Code, Section 13401, mandates that
all levels of management at a state agency must be involved in
assessing and strengthening the agency’s administrative controls.
When we were informed that a high‑level official with Fish
and Game had incurred improper travel expenses, we initiated
an investigation.
Facts and Analysis
Our investigation revealed that from October 2003 through
March 2008, a high‑level official, Official A, improperly claimed
$71,747 for commute and other expenses incurred near her home
and headquarters. In addition, despite lacking the necessary
authority, current and former officials for the spill office
allowed Official A to informally claim that her residence was
her headquarters.

California State Auditor Report I2009-1

April 2009
Department of Fish and Game, Office of Spill Prevention and Response

Official A Routinely Claimed Expenses to Which She Was Not Entitled
For more than four years, Official A improperly claimed expenses
associated with commuting between her residence and her
headquarters, in violation of state regulations that disallow such
expenses. Throughout the period we investigated, Official A resided
in Southern California. Documents from Official A’s personnel
files and records from the State Controller’s Office indicate that
her official headquarters was in Sacramento. In addition, Official A
was assigned office space in Sacramento and a state‑issued cell
phone with a Sacramento area code, and she regularly worked in
the Sacramento spill office. However, Official A also claimed she
worked from her residence—a practice that spill office officials
apparently allowed—in an effort to legitimize expenses that
otherwise she was not entitled to incur at the State’s expense.
Despite her claims, we found no legitimate business reason that
required Official A to work from her home. Table 2 summarizes
the improper expenses that Official A claimed from October 2003
through March 2008.
Table 2
Improper Travel Expenses Official A Claimed From
October 2003 Through March 2008
Type of Improper Expense

Commute expenses for trips between residence
and headquarters
Commute‑related parking and other expenses
Lodging within 50 miles of headquarters
Meals and incidentals incurred within 50 miles
of headquarters

Amount

$45,233
7,608
10,286
6,970

Lodging within 50 miles of residence

486

Meals and incidentals incurred within 50 miles
of residence

236

Other improper expenses
Total

928
$71,747

Source:  Bureau of State Audits’ analysis of Official A’s travel expense claims, vehicle logs, and
flight records.

We determined that Official A improperly claimed $52,841 for
expenses related to traveling between her home and headquarters
(commute expenses). These expenses consisted of $45,233 for
flights between Sacramento and Southern California, $6,922 in
parking expenses, and $686 for other commute‑related expenses.1
1	

Other commute‑related expenses include a rental car charge, airport shuttle charges, and costs
of mileage for Official A’s use of her personal car between her residence and various airports.

Official A improperly claimed
expenses associated with
commuting between her residence
and headquarters for more than
four years.

21

22

California State Auditor Report I2009-1

April 2009
Department of Fish and Game, Office of Spill Prevention and Response

State travel regulations allow employees to seek reimbursement for
parking expenses when going on travel assignments as part of their
state duties; however, the trips we identified were part of Official A’s
commute. In addition, violating prohibitions in a state regulation,
Official A improperly claimed $17,978 in lodging and meal expenses
incurred within 50 miles of her home or headquarters. Furthermore,
for 21 months during the period we reviewed, Official A improperly
claimed $928 for Internet services at her residence.
Through the course of our investigation, we discovered that to
commute between her home and headquarters, Official A used
separate state vehicles in Northern and Southern California when
she drove to airports to take commercial airline transportation
paid for by the State. Official A incurred a total of $6,026 in airport
parking expenses associated with her commute during the period
we reviewed. Because the parking receipts submitted by Official A
often lacked detail, and because she did not adequately maintain
her state vehicle logs or provide sufficient detail for the purpose
of her trips on her travel claims, the State apparently paid on
several occasions for Official A’s parking of state vehicles at separate
airports on the same day. Moreover, we found several instances in
which Official A incurred airport parking expenses for weekend
days on which she apparently conducted no state business. For
example, Official A improperly claimed $329 for parking expenses
related to her commute in December 2006. For eight occasions
during this month, Official A claimed parking expenses at
separate airports on the same day. She also claimed airport
parking expenses for six weekend days on which she appeared to
have conducted no state work. Similarly, in June 2007 Official A
claimed $178 in commute‑related airport parking expenses. These
expenses included parking at separate airports on the same day for
four different occasions and parking at an airport on eight weekend
days. Because Official A incurred parking expenses at separate
airports on the same day and parked at airports on weekends with
no apparent business reason to do so, her practice of using separate
state vehicles to drive to airports in Northern and Southern
California is wasteful and not in the State’s best interest.
Other Spill Office Officials Allowed Official A to Receive Reimbursements
for Travel Expenses That Violated State Regulations
Official A contended that as a
condition of her employment,
a former high‑level official with
the spill office allowed her to work
from her home, identify it as her
headquarters, and claim expenses
when traveling to Sacramento.

Official A contended that as a condition of her employment, a
former high‑level official with the spill office, Official B, allowed
her to work from her home, identify it as her headquarters, and
claim expenses when traveling to Sacramento. She therefore
asserted that she was allowed to use state vehicles or state‑funded
flights for commutes between her Southern California home
and her Sacramento headquarters. In addition, Official A stated

California State Auditor Report I2009-1

April 2009
Department of Fish and Game, Office of Spill Prevention and Response

that she was allowed to claim lodging and per diem expenses in
Sacramento, her official headquarters location. After Official B
left state employment in 2003, other spill office officials, including
officials C and D, approved Official A’s travel claims. Officials C
and D also allowed her to continue to commute at the State’s
expense and to receive reimbursements for expenses incurred near
her official headquarters.
When we spoke with officials C and D, they indicated that they
were aware that officials A and B had some form of informal
agreement that allowed Official A to receive reimbursements for
expenses incurred near her Sacramento headquarters. However, it
appears that officials A and B never documented this arrangement.
Even if the agreement had been formally documented, these
actions violated state regulations, which do not allow state
employees to receive payments for travel expenses incurred near
their headquarters or for their commute between home and
headquarters. We were unable to contact Official B to confirm his
arrangement with Official A, but we believe that such an informal
agreement likely existed. Nevertheless, Official B lacked the
authority to make such an arrangement.
Official A also contended that a former Fish and Game official was
aware that she worked from her residence in Southern California
and that she claimed commute expenses and expenses incurred
in Sacramento while in her most recent position. However, when
we questioned two current high‑ranking officials at Fish and
Game, officials E and F, they told us that they believed Official A
was headquartered in Sacramento. Furthermore, Official E stated
that he could think of no legitimate business reason for Official A
to claim her residence as her headquarters. Our analysis of the
three positions held by Official A from October 2003 through
March 2008, leads us to agree that Official A had no business
reason to designate her residence as her headquarters.
Fish and Game Should Have Been Aware That Official A’s Travel Expenses
Were Improper
Our investigation determined that Fish and Game should have
been aware that Official A’s travel expenses did not adhere to state
regulations and were therefore improper. After Official A’s travel
claims were reviewed and approved by other high‑ranking spill office
officials, the spill office routed the travel claims to Fish and Game’s
accounting department for processing and reimbursement. For the
vast majority of the travel expense claims that Official A submitted
for reimbursement for the period we reviewed, Official A listed
on the claim forms her residential address and wrote “same” for
her headquarters address. However, Fish and Game accounting

Fish and Game staff never
questioned the official about
the actual location of her
headquarters even though for
the vast majority of the travel
expense claims submitted, the
official listed her residential
address and wrote “same” for her
headquarters address.

23

24

California State Auditor Report I2009-1

April 2009
Department of Fish and Game, Office of Spill Prevention and Response

staff never questioned Official A about the actual location of her
headquarters. Nevertheless, we found eight examples among
Official A’s travel claims on which Fish and Game accounting
employees asked Official A either to clarify the purpose of her
trips or to provide other information. Although Fish and Game
accounting staff did not question Official A specifically about
the location of her headquarters, she responded at least twice
to them that she had an office in Southern California and one in
Sacramento. Because state regulations define headquarters as a
single location, accounting staff should have elevated this issue to
Fish and Game management to ensure that Official A’s travel claims
were appropriate.
We spoke with a Fish and Game employee who reviewed a large
number of the travel expense claims that Official A submitted.
The employee acknowledged that she should have questioned
Official A’s expenses or brought the expenses to the attention of her
supervisor. The employee stated that she failed to do so because
at the time her workload was too large. In addition, she stated that
in the past, some reviewers of travel expense claims had received
admonitions when they questioned or reduced the claim amounts
of high‑level officials. Regardless, Fish and Game accounting
staff should have recognized that Official A’s headquarters was
in Sacramento, and they should have questioned or denied
reimbursement for her travel claims. Had they done so, Fish and
Game could have avoided reimbursing Official A for her improper
travel expenses.
Recommendations
Fish and Game should seek to recover the amount it reimbursed
Official A for her improper travel expenses. If it is unable to recover
any or all of the reimbursement, Fish and Game should explain and
document its reasons for not seeking recovery.
To improve Fish and Game’s review process for travel claims
submitted to its accounting office, it should do the following:
•	 Require all employees to list clearly on all travel expense claims
their headquarters address and the business purpose of each trip.
•	 Ensure that the headquarters address listed on travel expense
claims matches the headquarters location assigned to the
employee’s position.
•	 For instances in which the listed headquarters location differs
from the location assigned to the employee’s position, require a
Fish and Game official at the deputy director level or above to

California State Auditor Report I2009-1

April 2009
Department of Fish and Game, Office of Spill Prevention and Response

provide a written explanation justifying the business need to alter
the headquarters location. This justification must also include a
cost‑benefit analysis comparing the two locations and should be
forwarded to Personnel Administration for approval.
Agency Response
Fish and Game responded that it is investigating the activities
related to this case and determining the appropriate legal and
administrative actions warranted, including taking necessary
corrective measures or disciplinary actions. In addition, after we
provided it with a draft copy of this report in April 2009, Fish and
Game produced a document signed by Official B in 2002 that
requested Official A’s position to be moved from Sacramento to a
regional spill office location in Southern California. Fish and Game
personnel approved this request; however, it appears this document
was not forwarded to Personnel Administration for approval. Thus,
the position change was never properly formalized. Further, as we
previously stated, Official B lacked the authority to allow Official A
to receive payments for travel expenses incurred near her official
headquarters in Sacramento or for her commute between home
and headquarters.

25

26

California State Auditor Report I2009-1

April 2009

Blank page inserted for reproduction purposes only.

California State Auditor Report I2009-1

April 2009
State Compensation Insurance Fund

Chapter 3
State Compensation Insurance Fund: Time and
Attendance Abuse, Lax Supervision
Case I2007‑0909
Results in Brief
An employee of the State Compensation Insurance Fund (State
Fund) failed to report 427 hours of absences. Consequently,
State Fund did not charge the employee’s leave balances for these
absences, and it paid her $8,314 for hours that she did not work.
Background
State Fund is a state agency that provides workers’ compensation
insurance to California employers and has offices throughout
California. Although State Fund operates as a self‑supporting,
nonprofit enterprise, its employees are subject to state laws
governing appropriate timekeeping and incompatible activities.
Specifically, in accordance with the California Code of Regulations,
Title 2, Section 599.665, all state agencies have the responsibility
to keep complete and accurate time and attendance records for
each employee. In addition, the California Government Code,
Section 19990, prohibits every state employee from engaging in
any employment, activity, or enterprise that is clearly inconsistent,
incompatible, in conflict with, or inimical to his or her duties as
a state officer or employee. Further, Section 19990(g) lists as an
incompatible activity an employee’s failure to devote his or her
full time, attention, and efforts to state employment during hours
of duty.
To comply with this mandate, State Fund requires each of its
employees to complete an attendance report at the end of
every month and to submit the report to his or her supervisor.
Supervisors must review and approve the monthly attendance
reports to verify their accuracy. Once the attendance reports are
approved, State Fund uses them to enter the employees’ absences
into a leave accounting system that charges the employees’ leave
balances for any absences.
Upon receiving an allegation that an employee at State Fund failed
to report her absences, we asked State Fund to assist us with
the investigation.

27

28

California State Auditor Report I2009-1

April 2009
State Compensation Insurance Fund

Facts and Analysis
As illustrated in Table 3, the investigation revealed that the
employee failed to report at least 427 hours of absences from
January through December 2007. As a result, State Fund paid the
employee $8,314 for 427 hours that she did not work and had not
charged against her leave balances.
Table 3
Cost of the Employee’s Time and Attendance Abuse From January 2007
Through December 2007
Type of Absence

Hours

Cost

Whole‑day absence

270

$5,239

Late arrival

118

2,310

39

765

427

$8,314

Partial‑day absence
Totals

Sources:  Bureau of State Audits’ and State Fund’s analyses.

During the 12‑month period we reviewed, the employee submitted
only eight monthly attendance reports instead of 12, and none of
those reports were accurate. By comparing what the employee
stated on the reports with other information about her actual
attendance—including building access logs, telephone records, and
computer activity records—we determined that the employee was
absent for full or partial days on which the employee reported that
she was present. These absences occurred in February through
June, and in August, September, and December 2007. Moreover,
by not submitting attendance reports for January, July, October,
and November 2007, she received credit for perfect attendance for
two months even though the State Fund records described above
show that the employee was absent. For the remaining two months,
the same records indicate that the hours charged against the
employee’s leave balances were not sufficient to cover her absences.
In addition to substantiating the employee’s improper time and
attendance reporting, the investigation determined that the
employee’s supervisor had lax or nonexistent oversight over her
attendance reporting, which raises concerns about the attendance
reporting of other employees in the unit. Furthermore, when
the supervisor discovered in March 2008 that the employee had
not submitted an attendance report for November 2007, the
supervisor attempted to resolve the matter by submitting a report
for processing. However, when she did so, the supervisor added
to the inaccurate reporting because the document stated that the
employee was at work on two days that other records indicate she

California State Auditor Report I2009-1

April 2009
State Compensation Insurance Fund

was absent. Further, the supervisor failed to capture eight hours
of absences resulting from the employee’s arriving late or leaving
early during the month. By not ensuring that employees accurately
report their time and attendance and that supervisors hold those
they supervise accountable for accurate reporting, State Fund
risks employees’ engaging in time and attendance abuses that
go undetected.
Recommendations
To address the time and attendance abuse by the employee
and potential abuse by other employees, State Fund should do
the following:
•	 Fully account for the employee’s time by charging her
leave balances for the hours she did not work or by seeking
reimbursement from the employee for the wages she did
not earn.
•	 Take appropriate disciplinary action for the employee’s time and
attendance abuse and the lax oversight by her supervisor.
•	 Provide training to the employee and her supervisor on proper
time reporting and supervisory requirements.
•	 Examine the accuracy of the time and attendance reporting by
other employees who report to the same supervisor.
•	 Establish a process for increased scrutiny of the time and
attendance reporting by all members of the employee’s unit to
ensure that State Fund resolves the reporting abuses discovered
during this investigation.
Agency Response
State Fund reported that it interviewed the employee in
February 2009 and that it is in the process of determining the
appropriate level of action to take.

29

30

California State Auditor Report I2009-1

April 2009

Blank page inserted for reproduction purposes only.

California State Auditor Report I2009-1

April 2009
Department of Social Services

Chapter 4
Department of Social Services: Improper Hiring
Case I2007‑0962
Results in Brief
The Department of Social Services (Social Services) failed to
follow the requirements imposed by state civil service laws when
a high‑ranking official arranged for the selection of a subordinate
employee to fill a field analyst position. Social Services further
violated state civil service laws by appointing the employee to a field
analyst position even though she continued to perform the duties of
a lower‑level analyst. As a result, Social Services paid the employee
$6,444 more than what is permitted by the State for the duties
she performed.
Background
Social Services manages a variety of statewide programs aimed at
providing aid, services, and protection to needy children and adults.
To ensure that it hires employees in a fair manner and classifies them
appropriately, Social Services is required in its hiring and classification
of employees to comply with the same laws and regulations as other
state agencies.
Specifically, the California Government Code, Section 18500(c),
declares that the State’s comprehensive personnel system is
designed to ensure that civil service appointments are based on
merit and fitness determined by a competitive process and that
applicants and employees are treated in an equitable manner. To
that end, the California Code of Regulations, Title 2, Section 250,
declares that all phases of the State’s hiring process must provide for
the fair and equitable treatment of applicants and employees.
To implement this legal mandate, Social Services has adopted
specific policies to govern its recruiting and hiring process. One of
these policies is that no part of the selection process should be
tailored to ensure that a specific individual is the successful candidate.
To ensure that Social Service selects the most qualified candidate,
its policy states that the interview panel should make a final
recommendation after completing all interviews, reviewing personnel
files, and making reference checks. Social Services should make this
final selection based on a compilation of the data gathered so that it
should be clear to an objective third party that the candidate selected
was the most qualified. In addition, Social Services has a policy that

31

32

California State Auditor Report I2009-1

April 2009
Department of Social Services

requires its managers to make a good‑faith effort whenever they
recruit for a position to avoid establishing any artificial barriers for
applicants and candidates.
The California Government Code, Section 19051, prohibits the
appointment of any person to a class that is not appropriate for
the duties to be performed. In addition, Section 19818.8 states that
a person must not be assigned to perform the duties of any class
other than that to which his or her position is allocated, except
under certain specific conditions.
Furthermore, the California Code of Regulations, Title 2, Section 8,
states that for civil service appointments to be valid, they must
be made and accepted in “good faith.” For an appointment to be
made in good faith, the appointing power must comply with
specified requirements, including assuring that the position is
properly classified; intending to employ the appointee in the class,
tenure, and location to which he or she is appointed and under
the conditions reflected by the appointment document; and acting
in a manner that does not improperly diminish the rights and
privileges of other persons affected by the appointment, including
other eligible individuals. This same section provides that to
accept an appointment in good faith, the employee must intend
to serve in the class to which he or she is being appointed under
the tenure, location, and other elements of the appointment as
reflected by the appointment document. If either the appointing
power or the employee lacks good faith, the executive officer
of the State Personnel Board (Personnel Board) may cancel the
improper appointment.
When we received information that a high‑level official at Social
Services had promoted an assistant to a higher‑level position than
her duties merited, we initiated an investigation.
Facts and Analysis
Our investigation revealed that Social Services violated state
hiring laws when the high‑ranking official did not adhere to
Social Services’ competitive selection process when she arranged
for her assistant to be selected for a field analyst position.
Social Services also violated state hiring laws when the official
directed the appointment of the assistant to the field analyst
position while assigning the assistant primarily the same duties that
she had been performing before the appointment, which were those
of a lower‑level analyst.

California State Auditor Report I2009-1

April 2009
Department of Social Services

The Official’s Actions to Reserve a Field Analyst Position for Her Assistant
Were Improper
Both the official and her assistant were headquartered in
Sacramento. In 2005 the official decided that she wanted to
promote her assistant to a higher‑paying position. The official stated
that the assistant had acquired needed expertise in performing
duties as her assistant, and she therefore did not want to lose
the assistant to some competing employment opportunity that
might pay more. The official therefore made inquiries at several
of Social Services’ field offices throughout the State to find an
unoccupied promotional position that she could fill with her
assistant. The official located an unoccupied field analyst position
in the San Jose field office she felt would be suitable. She then
contacted the regional manager at that field office and advised
the regional manager that she wanted to reserve the position for
her assistant in Sacramento but that she would have another field
analyst position transferred to the San Jose office soon to make up
for the position she was reserving.
Apparently, Social Services had already begun the recruiting
process for the unoccupied field analyst position in San Jose when
the official contacted the regional manager and reserved the
position. The interview panel assigned to select the candidate who
would fill the unoccupied position consisted of the San Jose regional
manager and a program manager. After the official contacted the
regional manager, both panelists understood that the position had
already been reserved for the official’s assistant.
Subsequently, the official’s assistant participated in an interview
for the field analyst position. Although we found no indication
that the assistant did not perform adequately during the interview,
panel members informed us that they did not interview anyone
else for that position. They also informed us that they subsequently
included the other applicants for the position in the pool of
candidates for a different field analyst position to be filled at a later
date. The panelists selected the assistant to fill the first position, and
then presumably they selected the candidate they considered the
best of the other candidates to fill the later position.
By reserving the field analyst position for her assistant, the
official violated several of Social Services’ policies intended to
ensure that applicants and potential applicants for positions with
the department are treated in an equitable manner as required
by Section 18500 of the California Government Code and by
Section 250 of Title 2 of the California Code of Regulations.

Even though Social Services had
begun the recruiting process
to select a candidate to fill an
unoccupied field analyst position,
the interview panelists understood
that the position had already been
reserved for an official’s assistant.

33

34

California State Auditor Report I2009-1

April 2009
Department of Social Services

Most importantly, the official violated the policy that prohibits
any tailoring of the selection process to ensure that a particular
candidate is the successful candidate for a position. Additionally,
she violated the policy that requires the final selection of any
candidate be based on a compilation of the data gathered during the
hiring process such that it would be clear to an objective third party
that the selected candidate is the most qualified. Finally, by
reserving a San Jose position for work that would be performed in
Sacramento, the official established an artificial barrier to potential
candidates in the Sacramento area applying for the position, as
potential Sacramento applicants were led to believe that the job was
in San Jose rather than Sacramento.
The Official’s Appointment of Her Assistant to a Field Analyst Position,
When She Did Not Intend for the Assistant to Perform the Duties of That
Position, Was Also Improper
After the assistant was selected for
the field analyst position, the official
directed her formal appointment to
the higher‑paying position without
changing any of her duties as a
lower‑level analyst.

After the assistant was selected for the field analyst position, the
official directed her formal appointment to this higher‑paying
position. The documentation for the appointment reflected
that the assistant would be serving as a field analyst in San Jose.
However, after the appointment, the official did not change the
assistant’s assigned duties but instead directed her to continue
performing the same duties that she had performed previously.
Moreover, after the appointment, the assistant continued working
in Sacramento even though her assigned position number and
Social Services’ organizational charts indicated that she was now
headquartered in San Jose.
After we inquired about the employee’s duties, Social Services
reported to us in February 2008 that it had determined the
employee was not performing the essential duties of a field
analyst as described in the duty statement for the position, such
as performing inspections in the field. As a result, Social Services
took steps to develop a revised duty statement for the assistant to
reflect the duties she was actually performing. Social Services then
directed its personnel office to perform a desk audit to verify that
the assistant was performing the duties outlined in the revised
duty statement and determine the appropriate classification for her
based on her actual duties. In May 2008 Social Services reported to
us that the assistant was performing duties associated with an office
analyst position, a lower‑level position. Social Services then offered
the assistant the option of either remaining as a field analyst and
performing the duties of that position or transferring into an office
analyst position and continuing to perform primarily the same
duties she had been assigned as the official’s assistant.

California State Auditor Report I2009-1

April 2009
Department of Social Services

In June 2008 the employee chose to maintain her current duties
and transfer into the office analyst position. The transfer became
effective retroactive to May 2008. Regarding the assistant having
been assigned a San Jose position number even though she was
performing her work in Sacramento, Social Services reported that
this resulted from a “poor administrative practice.”
By appointing her assistant to the field analyst position, the official
appointed her to a class that was not appropriate for the duties
she intended her to perform, in violation of Section 19051 of the
California Government Code. Similarly, by continuing to assign
the assistant to perform the duties of a lower‑level analyst after
appointing her to a field analyst position, the official violated
Section 19818.8.
Moreover, when the official directed the appointment of her assistant
to the field analyst position knowing that the assistant would not
be performing the duties of this job classification and would not be
working at the location specified in the appointment documents,
the official failed to make a good‑faith appointment, as required
by the California Code of Regulations, Title 2, Section 8. Similarly,
when the assistant accepted the appointment to the field analyst
position knowing that she would not be performing the duties of this
job classification and would not be working at the location specified
in the appointment documents, she did not accept the appointment
in good faith, as required by the same code. The appointment was
therefore improper and voidable by the Personnel Board.
From November 2005 through April 2008, Social Services paid
the official’s assistant $4,404 more than it should have paid her
because of this improper appointment to an incorrect classification.
In addition, from May through September 2008, after transferring
the assistant into an office analyst position, Social Services paid her
an additional $2,040 more than it should have paid her because it
improperly granted her a 5 percent salary increase above the salary
she had been paid as a field analyst.2 In total, Social Services paid
the assistant $6,444 more than it should have paid her.

2	

In November 2008 Social Services informed us that it had mistakenly granted the 5 percent salary
increase to the assistant. It also informed us that it was working to correct that mistake and other
errors made in the assistant’s payment history.

The official failed to make a
good‑faith appointment and
her assistant did not accept the
appointment in good faith either, as
required by a state regulation.

35

36

California State Auditor Report I2009-1

April 2009
Department of Social Services

Recommendations
To address the improper acts identified and to prevent similar acts
from occurring, Social Services should take the following actions:
•	 Seek retroactive cancellation of the assistant’s appointment to the
field analyst position.
•	 Seek from the assistant repayment of the $6,444 that it
improperly paid to her.
•	 Take corrective action against the official for her
improper actions.
•	 Provide training to management, including the official and other
key staff, regarding the laws, regulations, and policies governing
the hiring process. The training should be designed to ensure
that management and key staff do the following:
•	 Make sure that job vacancies are posted with accurate
information, including the job location.
•	 Adhere to policies that prevent the preselection of candidates
for employment.
•	 Adhere to policies that require the selection process to be
competitive, fair, and equitable.
•	 Take steps to ensure that employees are performing the duties
described in the duty statements for their respective positions.
•	 Take steps to ensure that its position numbers and organizational
charts accurately reflect where employees are headquartered.
Agency Response
Social Services provided its comments in April 2009. Regarding our
recommendations to seek retroactive cancellation of the assistant’s
appointment and repayment of $6,444, Social Services stated that
it believed the employee accepted the appointment in good faith.
Social Services also reported that it consulted with the Personnel
Board about this appointment. According to Social Services, the
Personnel Board determined that the appointment should not be
rescinded and the overpayment should not be collected because
the employee accepted the appointment in good faith more than
one year prior to discovery.

California State Auditor Report I2009-1

April 2009
Department of Social Services

Although we appreciate Social Services’ efforts to seek guidance
from the Personnel Board, we still conclude that neither
the employee nor Social Services acted in good faith in the
appointment. As we stated, the employee never intended to
relocate to San Jose or to perform the primary duties associated
with the field analyst position. Moreover, when offered the option
of performing field analyst duties or office analyst duties, she
elected to continue performing her office analyst duties and to be
transferred into the lower‑level classification, indicating that she
never intended to perform the primary duties of a field analyst.
Further, even if the employee accepted the appointment in good
faith, Social Services did not. In fact, Social Services acknowledged
that the appointment was illegal. This fact alone allows the
Personnel Board to consider canceling the appointment.
As part of the employee’s incorrect classification, however,
Social Services stated that it had erred in its salary determination
when the employee was appointed as an office analyst in
May 2008. Social Services indicated that it would work with
the Personnel Board to collect $1,516 in overpayments made
to the employee.
In response to our recommendation to take corrective action
against the official for her improper actions, Social Services stated
that the official has since retired but still works at its headquarters
as a retired annuitant. Social Services indicated that it would
inform us by June 2009 of any action it takes against the official
concerning her improper acts.
For the remaining recommendations, Social Services stated
that it would review and update its hiring and selection policies
and procedures, and it would provide them to its supervisors
and managers. In addition, Social Services stated that specific
elements of the hiring process would be appropriately addressed
in its supervisor training classes. Moreover, it noted that special
emphasis would be made to inform supervisors and managers that
they are responsible to ensure that employees perform the duties
described in their duty statements and of the possible consequences
of improper duty statements. Finally, Social Services stated that
its policies and procedures would emphasize the importance
of supervisors and managers ensuring that position numbers
and organization charts accurately reflect where employees
actually work.

37

38

California State Auditor Report I2009-1

April 2009

Blank page inserted for reproduction purposes only.

California State Auditor Report I2009-1

April 2009
Department of Parks and Recreation

Chapter 5
Department of Parks and Recreation: Failure to
Solicit Competitive Price Quotes for Its Purchase
of Goods
Case I2008‑0606
Results in Brief
A Department of Parks and Recreation (Parks and Recreation)
supervisor did not solicit competitive price quotes from suppliers of
goods, and it failed to pay a fair and reasonable price for goods that
cost a total of $4,987. Consequently, Parks and Recreation overpaid
for the items by at least $1,253.
Background
Parks and Recreation preserves the State’s biological diversity,
protects natural and cultural resources, and creates opportunities
for outdoor recreation. It operates through 23 districts in the
State. Within its state park system, Parks and Recreation manages
recreation areas, beaches, wildlife reserves, and historic homes.
Like all other state agencies, Parks and Recreation must follow state
laws and policies about the purchasing and procurement of goods.
Specifically, the California Government Code, Section 14838.5(c),
requires that if the estimated cost of goods is less than $5,000, a state
agency should obtain at least two price quotes from responsible
suppliers whenever there is reason to believe a response from a
single source is not fair and reasonable. In addition, Volume 2,
Chapter 4 of the State Contracting Manual (contracting manual)
identifies and describes five techniques to use to determine if a
supplier’s price is fair and reasonable. The five techniques are price
comparison, catalog or market pricing, controlled pricing, historical
pricing, and cost‑benefit analysis. Each of these techniques requires
documentation of other recent price quotes or actual costs.
Upon receiving an allegation that the supervisor failed to pay a
reasonable price for goods purchased, we opened an investigation.
Facts and Analysis
Our investigation revealed that a supervisor at Parks and Recreation
failed to ensure that he paid a fair and reasonable price for goods
costing $4,987, in violation of state law. The supervisor purchased
a storage container in December 2007 to store supplies for

39

40

California State Auditor Report I2009-1

April 2009
Department of Parks and Recreation

several parks that he oversaw at the time. However, the supervisor
did not obtain two price quotes using any of the five techniques
described in the contracting manual to ensure that the cost of the
storage container was fair and reasonable. When we interviewed
the supervisor, he recalled that he contacted other suppliers but
apparently did not document the price quotes he obtained. He
admitted to us that he had not obtained the “best possible price” for
the storage container. As proof that the supervisor did not obtain a
fair and reasonable price, just three weeks later another Parks and
Recreation employee who worked for him obtained a price quote
of $3,734 for a similar storage container. Thus, if the supervisor
had obtained and documented fair and reasonable price quotes,
Parks and Recreation could have avoided spending an additional
$1,253 for the storage container.
The supervisor provided various reasons why he did not document
other price quotes. According to the supervisor, he did not have
sufficient staff and was overwhelmed by his workload. In addition,
he stated that he had not received sufficient training at the time
of the purchase. Parks and Recreation promoted the supervisor in
January 2007. However, he indicated that he did not complete his
three weeks of supervisor training until June 2008, six months after
the purchase of the container.
Recommendations
To ensure that its employees use a purchasing process that conforms
with state law, Parks and Recreation should do the following:
•	 Require its employees to adequately document their efforts
to obtain price quotes to ensure that they obtain a fair and
reasonable price for the purchase of goods under $5,000.
•	 Provide timely training for new supervisors.
Agency Response
Parks and Recreation reported that it will take appropriate action,
although it did not specify the action to be taken.

California State Auditor Report I2009-1

April 2009
Department of General Services

Chapter 6
Department of General Services: Waste of
State Funds
Case I2006‑1118
Results in Brief
The Department of General Services (General Services) paid $3,000
to a private vendor for consulting services that another state agency
offered at no charge.
Background
Among its responsibilities, General Services provides custodial
service, window washing, and building maintenance service to
state buildings throughout the State. One of its critical objectives
is to maintain a building environment that protects the health and
welfare of state employees and members of the public. To meet
this objective, General Services also provides emergency plans and
emergency preparedness training to employees in its buildings.
The California Government Code, Section 13401, mandates
that all levels of management at a state agency must be involved
in assessing and strengthening the agency’s administrative
controls to minimize waste of government funds. Section 8547.2
defines “economically wasteful conduct” as an improper
governmental activity.
When we received an allegation that General Services wasted state
funds for emergency preparedness training, we asked General
Services to assist us in investigating this matter. We also conducted
inquiries to determine whether emergency preparedness training
was available at a lower cost from another state agency.
Facts and Analysis
The investigation revealed that General Services wasted $3,000
when it contracted with and paid a private vendor to provide
emergency preparedness training in a state building in Los Angeles
in October 2005 even though the California Highway Patrol (CHP)
could have provided the same services at no cost. The services for
which General Services contracted included several emergency
preparedness training sessions for employees in the building.

41

42

California State Auditor Report I2009-1

April 2009
Department of General Services

In response to our inquiry, the CHP reported that it provided
General Services with various safety‑training classes from 2005
through 2007. In addition, we were told that the CHP provided
similar training sessions before 2005.
When we asked why it contracted with a private vendor, General
Services responded that state agencies are not required to use the
CHP’s emergency preparedness services. It also commented that
the building manager, who is a General Services’ employee, has sole
discretion to use these services and may take into account specific
issues in determining the appropriate entity to provide the services.
In this instance, General Services stated that only one employee had
full knowledge of the decision‑making process for this contract, but
the employee left General Services in October 2006. Apparently, no
one other than this employee reviewed and approved the decision
to enter into the contract. Thus, General Services asserted that
it was unable to sufficiently determine if the contract with the
vendor was appropriate.
Although we agree that General Services was not required to use
the CHP’s services, we believe that engaging the CHP to provide the
services would have been fiscally prudent. Moreover, we are
concerned that General Services would place full contracting
authority with only one employee without any further review by
the employee’s supervisor or manager. Consequently, given that
General Services was unable to sufficiently answer why it paid
for services when comparable services were available at no cost,
we must conclude that its decision to enter into a contract with a
private vendor constitutes a waste of state funds.
Recommendations
To ensure that contracting decisions by state employees result
in a prudent use of public funds, General Services should do
the following:
•	 Ensure that it documents all information related to the decisions
made for its contracts.
•	 Ensure at least one level of review and approval for all contracts,
including those under $5,000.
•	 Communicate to building managers the availability of emergency
preparedness training through the CHP.

California State Auditor Report I2009-1

April 2009
Department of General Services

Agency Response
General Services reported in January 2009 that the process used
with this vendor complied with its existing contracting policies. In
addition, General Services stated that it does not believe its contract
with the vendor was a waste of state funds. Nevertheless, it stated
that it recognizes the need for additional coordination with the
CHP. Consequently, General Services issued a directive in July 2008
to address building managers’ responsibilities for coordinating the
procurement of emergency preparedness and evacuation training
and drills with the CHP. Further, the directive requires that these
services cannot be procured from an outside vendor unless the
CHP submits written notification that it is unable to provide
the services.

43

44

California State Auditor Report I2009-1

April 2009

Blank page inserted for reproduction purposes only.

California State Auditor Report I2009-1

April 2009
Department of Justice

Chapter 7
Department of Justice: Failure to Accurately
Report Time Worked, Absences, and Travel
Expenses; Management’s Failure to Ensure Proper
Time and Travel Expense Reporting
Case I2007‑1024
Results in Brief
A Department of Justice (Justice) employee failed to properly report
her time worked and leave taken from June through August 2007.
In addition, she claimed travel expenses that she did not incur
during the same period. Further, the employee’s manager did
not ensure that the employee accurately reported her time and
travel expenses. Consequently, Justice paid the employee $648 in
unearned compensation and reimbursed her for $497 for expenses
not incurred.
Background
Among its responsibilities, Justice provides legal services to state
agencies and officials, and ensures that state laws are uniformly and
adequately enforced. It operates several regional offices throughout
the State. Like all other state agencies, Justice is subject to laws
and regulations governing the accurate reporting of time and
attendance and of claims for reimbursement of business expenses.
In addition, Justice policies reinforce the reporting requirements of
its employees.
Specifically, in accordance with the California Code of Regulations
(regulations), Title 2, Section 599.665, all agencies are responsible
for keeping complete and accurate time and attendance
records for each employee. To comply with this mandate, Justice
policy requires its employees to submit monthly time sheets to
document their attendance, absences, and overtime worked.
Employees and their supervisors are required to sign the monthly
time sheets to certify their accuracy. After a supervisor approves
the time sheets, a Justice attendance coordinator verifies them
to ensure that time is posted according to the employee’s work
schedule and that sufficient leave credits are available for time
used. Justice then uses the time sheets to post each employee’s
absences and earned benefits, such as compensating time off, into
the State’s leave accounting system that charges employees’ leave
balances accordingly.

45

46

California State Auditor Report I2009-1

April 2009
Department of Justice

The collective bargaining agreement between the State and the
Justice employee’s bargaining unit (Unit 1) affirms that employees
are eligible for compensation of overtime worked in a manner
specified by Section 599.702 of the regulations. It further states
that overtime is earned at the rate of one and one‑half times the
employee’s hourly rate for all hours worked in excess of 40 hours
in a regular work week. Section 599.702 states that overtime must
be approved in advance and confirmed in writing. Justice policy
further requires its employees to use a standard state form to
authorize overtime, with dates of when overtime will be worked,
the total overtime hours authorized, the method of compensation,
and the reason for extra hours. Once overtime is completed, an
employee records the time worked and certifies it by signing the
form and obtaining supervisory approval. Justice then processes
the overtime form for use as support for the overtime posted on the
employee’s time sheet.
On a weekly basis, Justice also requires its legal support staff to
enter all time in a separate legal timekeeping system that provides
more detailed descriptions of time reported for purposes of
tracking specific tasks associated with legal and nonlegal activities,
as well as absences.
In instances where an employee incurs transportation expenses
by using his or her personal vehicle while traveling on official
business, Section 599.626 of the regulations requires that when the
trip starts or ends at the employee’s home, the distance traveled is
computed from either the employee’s headquarters or residence,
whichever is the lesser distance. By signing the State’s travel
expense claim to seek reimbursement for use of a personal vehicle,
employees certify that expenses claimed were actually incurred. In
addition, Section 599.638 of the regulations provides that it is the
responsibility of the officer approving the travel claim to ascertain
the reasonableness of the employee’s travel expenses incurred.
Finally, the California Government Code, Section 13401, mandates
that all levels of management at state agencies must be involved in
assessing and strengthening administrative controls to minimize
fraud, errors, abuse, and waste of government funds. Section 13403
further states that the elements of a satisfactory system of
administrative controls include a system of authorization and
record‑keeping procedures adequate to provide effective accounting
control over assets, liabilities, revenues, and expenditures.
When we received the allegation that an employee at one of Justice’s
regional offices failed to charge her leave balances when she was
absent, we began an investigation.

California State Auditor Report I2009-1

April 2009
Department of Justice

Facts and Analysis
The employee is part of a unit of legal support staff in one of
Justice’s regional offices. Four managers oversee this unit.
Manager 1 directly supervises the employee. The employee’s
workload includes providing support for other legal professional
staff and the remaining three managers. Generally, any of the
four managers could approve unit employees’ monthly time sheets,
even for employees they do not directly supervise.3
Our investigation determined that from June through August 2007,
the employee failed to account for all time worked and absences
taken, and she claimed reimbursement for travel expenses that she
did not incur. Moreover, we substantiated that Manager 1 allowed
her to disregard time‑reporting requirements prescribed in state
regulations and Justice policies. Furthermore, managers at the
regional office engaged in administrative practices that failed to
effectively ensure the accuracy of her time sheets, in violation of
state laws and regulations, and Manager 1 failed to scrutinize the
appropriateness of claims made for her travel claim reimbursements.
The Employee Failed to Properly Account for Overtime Worked and
Absences Taken
The employee failed to properly account for 77 hours of overtime
she worked in June and July 2007. In addition, she failed to properly
account for 136 hours of absences she took in July and August 2007
for the overtime she previously worked. With the approval of
Manager 1, the employee obtained authorization from Manager 2,
another manager for the employee’s unit, to work overtime
in June and early July 2007 with the majority of her casework
conducted at an off‑site location. However, the overtime was not
documented or authorized using Justice’s overtime request form.
When the employee completed her overtime, she documented in a
memorandum to Manager 2 the number of hours and the dates she
worked overtime and indicated that she was going to take informal
time off at a later date in lieu of compensation. Had the employee
properly accounted for the 77 hours of overtime on her time
sheet, she would have earned 116 hours of compensated time off.
However, the employee’s time sheets for June and July 2007 did not
reflect these additional hours worked.

3	

After we conducted interviews, the managers in the employee’s unit modified their procedures
in July 2008 to require that each employee submit time sheets for approval directly to that
employee’s assigned manager.

47

48

California State Auditor Report I2009-1

April 2009
Department of Justice

An employee’s time sheets did
not reflect overtime worked. She
was later absent from work for
136 hours— or 17 days—again not
reflected on her time sheets.

Furthermore, the employee’s time sheets for July and August 2007
did not reflect the 136 hours—or 17 days—she was absent from
work. The employee acknowledged that she was absent on
the 17 days and that she did not charge her leave balances for the
absences because she used the informal time off to account
for the uncompensated overtime she worked in June and early
July 2007. However, the employee’s 136 hours of absences exceeded
the 116 hours of uncompensated overtime by 20 hours. We estimate
that Justice paid the employee $648 in compensation that she did
not earn.
The Employee Claimed Travel Expenses That She Did Not Incur
At the same time the employee worked unrecorded overtime in
June and early July 2007, she claimed reimbursement for travel
expenses she incurred when she traveled to the off‑site location to
conduct her work. However, she claimed reimbursement for more
expenses than she actually incurred. Specifically, the employee
overstated the amount of miles she drove her personal vehicle by
improperly claiming that she drove from her headquarters to the
off‑site location for 19 days. Instead, she drove from her home to
the off‑site location, a 62‑mile shorter round‑trip distance, on each
of the 19 days. Because the employee claimed the longer distance
in violation of state regulations, Justice overpaid her $497 for travel
expenses she did not incur.
Justice’s Management Failed to Ensure That the Employee Properly
Reported Her Time, Attendance, and Travel Expenses
Justice’s management in the regional office did not ensure that the
employee properly reported the time she worked and the absences
she took, and it similarly failed to ensure that the employee properly
reported her travel expenses. In particular, when the employee
worked overtime in June and early July 2007, Manager 1 never
required her to use Justice’s time sheet to report the overtime
worked. In fact, Manager 1 admitted that employees in this unit
neither use time sheets to report overtime hours worked and
compensating time off nor request overtime using Justice’s overtime
request form as specified in Justice policy. Instead, Manager 1 only
requires his employees to tell him informally of overtime requests,
such as in person or through e‑mail communications. However,
Manager 1’s failure to require his employees to use time sheets to
report overtime worked violates state regulations and, in the case
we investigated, failed to ensure that the leave taken by one of his
employees was commensurate with the overtime.

California State Auditor Report I2009-1

April 2009
Department of Justice

More importantly, Manager 1 ineffectively monitored the
employee’s overtime and informal time off. He stated that he
never compared the employee’s overtime hours documented in
the memorandum sent to Manager 2 to the hours of informal time
off reported in the legal timekeeping system to ensure that the
employee did not take more time off than she earned in overtime.
Instead, Manager 1 stated that the employee was responsible for
monitoring and keeping track of her individual overtime worked
and informal time off taken.4 However, this process violates state
laws and Justice policies. When we asked Manager 1 if he used
other procedures to track the employee’s overtime hours to ensure
the employee was not overcompensated in informal time off, he
stated he did not.
Finally, Manager 1 was careless in authorizing the employee’s June
and July 2007 travel claims for reimbursement of mileage expenses.
By approving the claims, Manager 1 certified that the employee
incurred mileage expenses for a greater distance than she actually
drove. Manager 1 admitted that he never verified the number of
miles the employee claimed she drove. The employee claimed
the greater distance from headquarters, and state regulations
provide that the shorter distance between the employee’s residence
and headquarters should be used when travel commences at the
employee’s home. Consequently, Manager 1’s failure to scrutinize
the employee’s travel claims for conformity with state regulations
contributed to Justice’s overpayment of $497 for mileage expenses
she never incurred.
Recommendations
To ensure that the employee’s leave balances properly reflect her
time worked and absences taken, and that the overpayment for
travel claim reimbursements are corrected, Justice should do
the following:
•	 Modify the employee’s leave balances to reflect the 116 hours of
overtime that she earned in June and July 2007.
•	 Charge to the employee’s leave balances 136 hours for her
absences on 17 days in July and August 2007.
•	 Seek reimbursement from the employee for the travel expenses
that she did not incur in June and July 2007.

4	

Manager 1 estimated that each of the other support staff in the unit worked no more than
25 hours of overtime a year.

49

50

California State Auditor Report I2009-1

April 2009
Department of Justice

To ensure that its regional office employees and managers follow
time‑reporting and travel expense requirements in accordance with
appropriate state laws, regulations, the bargaining unit agreement,
and its own policies, Justice should do the following:
•	 Prohibit regional office staff and managers from engaging in
informal timekeeping arrangements, require staff and managers
to use time sheets to document all time worked and leave
taken to ensure employees’ leave balances are accurate, and
require the use of Justice’s overtime request form to authorize
and document employees’ overtime.
•	 Provide training to unit staff and managers regarding proper
time‑reporting requirements, including the use of overtime, and
travel claim requirements.
Agency Response
Justice reported that it will direct the employee to revise her time
sheets for June and July 2007 to reflect the time the employee
worked. This will result in the employee accruing 116 hours of
compensated time off for the 77 hours of overtime she worked.
In addition, the employee will revise her time sheets for July and
August 2007 to reflect the 136 hours of absences. Further, Justice
reported that it will inform the employee of the $497 overpayment
in travel expenses and seek reimbursement.
Justice also reported that it will remind regional office staff to follow
policies and procedures regarding leave use and time reporting,
including using the appropriate forms to account for overtime
hours worked and leave used. Finally, Justice stated that it will
provide training to staff and managers regarding policies covering
travel expense claims, leave use, and time reporting.

California State Auditor Report I2009-1

April 2009
Employment Development Department

Chapter 8
Employment Development Department: Misuse
of State Equipment and Resources, Incompatible
Activities, Management’s Failure to Take
Appropriate Action
Case I2008‑0699
Results in Brief
An employee of the Employment Development Department
(Employment Development) misused his state computer and
state e‑mail account for personal purposes, including sending
inappropriate messages to other state employees. In addition,
he engaged in incompatible activities by failing to devote his
time, attention, and efforts to his job when he was at work.
Furthermore, management at Employment Development failed to
take appropriate action concerning the employee’s inappropriate
activities despite their noting similar behavior for several years.
Background
Employment Development has employees at numerous locations
throughout the State. It connects job seekers and employers
through its employment services; provides information on
unemployment insurance, disability insurance, or paid family
leave claims; and provides labor market tools to the public. Its
employees are subject to state civil service laws regarding the use of
state equipment and resources and prohibitions from engaging in
incompatible activities during work hours. They are also subject to
disciplinary action for violation of these laws.
Specifically, the California Government Code, Section 8314,
prohibits state employees from using public resources for personal
purposes, except for minimal and incidental use. In addition,
Section 19990 prohibits each state employee from engaging in any
employment, activity, or enterprise that is clearly inconsistent,
incompatible, in conflict with, or inimical to his or her duties as
a state officer or employee. In particular, Section 19990(g) lists
as an incompatible activity an employee’s failing to devote his or
her full time, attention, and efforts to state employment during
hours of duty. Further, Section 19572 provides that state employees
engaging in incompatible activities, misuse of state property, and
discourteous treatment of the public or other state employees are
subject to discipline.

51

52

California State Auditor Report I2009-1

April 2009
Employment Development Department

Upon receiving an allegation that an Employment Development
employee misused his state equipment, we asked it to assist us in
conducting an investigation.
Facts and Analysis
The investigation revealed that the employee misused his state
computer and e‑mail account for personal and inappropriate
purposes. In addition, the employee engaged in discourteous
behavior by using his state e‑mail account to send inappropriate
messages to other state employees. Further, the employee engaged
in incompatible activities by failing to devote his full time and
attention to his job during his work hours. Moreover, management
failed to take appropriate action concerning the employee’s
activities even though it had identified this employee as having
engaged in similar activities for several years.
The Employee Misused State Resources for Personal Purposes and
Engaged in Activities That Were Incompatible With His Job

In an eight‑day sampling of e‑mail
messages over a two‑month period,
our investigation revealed that an
employee sent 256 e‑mails that were
personal and some of which were
inappropriate in nature.

The employee misused his state computer and e‑mail account for
activities unrelated to his work at Employment Development. As
part of the duties of his job, the employee is to ensure that claims
are promptly paid, routed, or reissued. His duties require him to
use a state computer and Employment Development data systems.
However, in an eight‑day sampling of e‑mail messages taken
between February 15, 2008, and April 16, 2008, the investigation
revealed that the employee sent 256 e‑mails that were personal,
some of which were inappropriate in nature. An analysis of the
e‑mails on these days indicated that the employee spent periods
from nearly one hour to eight hours sending e‑mails that were
unrelated to his duties. For example, on one day in April 2008
during a roughly seven‑hour period, the employee sent 75 e‑mails,
all of which were personal and thus not related to his work. In
addition, during an interview, the employee admitted that he sent
multiple e‑mail messages to an employee in another department
that contained vulgar language. He also admitted that he kept
three e‑mails with sexually explicit photos on his state computer.
The investigation also found that the employee misused his
state computer in other ways. He regularly accessed the Internet
beyond minimal and incidental use. For example, on three days
in April 2008, he spent from one to two hours each day browsing
the Internet even though his duties do not require such access.
In addition, he used his state computer to send and receive
e‑mails about his external employment during his work hours
at Employment Development. Further, on two occasions the

California State Auditor Report I2009-1

April 2009
Employment Development Department

employee got into an Employment Development database without
authorization to assist external business associates with claims.
Finally, besides using his state computer for these personal
purposes, the employee engaged in discourteous behavior when he
used his computer and e‑mail account to send several inappropriate
messages to Employment Development and other state employees.
As a result of all of these actions, the employee engaged in
incompatible activities when he failed to devote his full time and
attention to his state employment during his work hours.
Management Failed to Take Appropriate Action Despite Their Noting
Years of Similar Behavior
The employee’s inappropriate uses of his state computer and
e‑mail account were just the latest installment in a series of his
improprieties. Since 2001 the employee has repeatedly misused
his state time, telephone, and computers to engage in personal
business during his workdays. In addition, he inappropriately
used his state computer for personal e‑mails and to access the
Internet. Moreover, the employee had unexcused absences and
attendance problems.
Despite the employee’s long history of disciplinary problems,
Employment Development did not adequately resolve these
problems. From January 2001 through November 2007,
Employment Development issued 10 written notifications to the
employee—and held several formal discussions with him—about
his unacceptable behavior. The notifications consistently cited the
employee’s excessive use of his state telephone, computer, and
e‑mail account for personal purposes. In addition, on one occasion
Employment Development ordered the employee to “cease
and desist” contact with another state employee through his
state telephone and computer. In at least eight of the 10 written
documents the employee received since January 2001, Employment
Development specifically stated that the incidents discussed in the
respective notifications could form the basis of an adverse action.
Even with these written notices and formal discussions spanning
several years, Employment Development did not escalate either its
corrective or disciplinary actions against the employee. The State
Personnel Board has repeatedly ruled that agencies have the right
to proceed with progressive disciplinary actions against employees
where it is well documented and when lesser sanctions—such
as written reprimands and memos—fail to positively influence
the employee. Repeated incidents by the employee over a period
of several years demonstrate a measured level of sustained
inappropriate behavior. Furthermore, the employee’s ongoing
misuses demonstrate that his behavior did not change as a

Since 2001 the employee has
repeatedly misused state resources
to engage in personal business
during his workdays.

53

54

California State Auditor Report I2009-1

April 2009
Employment Development Department

result of Employment Development’s written notifications and
discussions. Thus, Employment Development should have
sought a more appropriate level of discipline for the employee’s
inappropriate actions.
After the completion of the investigation, Employment
Development informed us in December 2008 that it suspended the
employee for 30 days.
Recommendations
To ensure that the employee devotes his full time, attention, and
efforts to his work, Employment Development should continue to
monitor his use of state telephones, computers, and e‑mail account
when he returns to work after the 30‑day suspension.
To make certain that it responds with consistent corrective action to
repeated misuses of state resources, Employment Development
should conduct training at regular intervals for its management and
branch staff on methods of progressive discipline.
Agency Response
Employment Development responded that it will continue to
monitor the employee’s use of state equipment to ensure he only
conducts state business while on duty. Employment Development
added that all of its new managers and supervisors are required to
attend a two‑week course that covers managerial and supervisory
roles and responsibilities, including the proper administration of
the progressive discipline process. Further, refresher training is also
provided on the progressive discipline process for managers and
supervisors when labor contract changes are made resulting from a
new collective bargaining agreement.

California State Auditor Report I2009-1

April 2009
Department of Finance

Chapter 9
Department of Finance: Improper Saving of a
Vacant Position
Case I2008‑0633
Results in Brief
The Department of Finance (Finance) circumvented state law and
improperly prevented a vacant position from being abolished.
Background
Finance serves as the governor’s chief fiscal policy advisor and
promotes resource allocation through the State’s annual financial
plan. Like other agencies throughout the State, Finance is subject
to state law governing the abolishment of vacant positions. The
California Government Code, Section 12439, requires that any
state employee position that remains vacant for six consecutive
monthly pay periods must be abolished on the following July 1.
This section also mandates that agencies must not perform any
personnel transactions to circumvent this law. Section 12439 also
identifies various circumstances under which agencies can retain
vacant positions or reestablish positions previously abolished with
approval from the Finance director.
In March 2002 the Bureau of State Audits issued its report, Vacant
Positions: Departments Have Circumvented the Abolishment of
Vacant Positions, and the State Needs to Continue Its Efforts to
Control Vacancies, Report 2001‑110. At that time, we reported that
some departments misused personnel transactions to circumvent
the abolishment of vacant positions.
Upon receiving an allegation that Finance circumvented state law
to keep a vacant position from being abolished, we asked that it
explain the circumstances surrounding the filling of the position
and conducted an investigation.
Facts and Analysis
Our investigation revealed a sequence of events indicating that
Finance improperly kept a vacant position from elimination;
thus, it circumvented a state law intended to abolish long‑vacant
positions. During the seven‑month period from June 2006 through
January 2007, three Finance employees occupied one position at
various times, as Figure 2 on the following page shows.

55

56

California State Auditor Report I2009-1

April 2009
Department of Finance

Figure 2
Three Employees Occupied One Position From June 2006 Through
January 2007
Employee A*

Employee B Employee C

2006

2007

Position Vacant

Sources:  State Controller’s Office employment records and Department of Finance.
*	 Employee A had filled the position since September 2002.

This position was not filled by anyone for a full five‑month period
from July through November 2006. Had the position remained
unfilled through December 31, 2006, it would have been deemed
vacant according to Section 12439 and therefore would have
been abolished. However, based on our review of employment
records from the State Controller’s Office (Controller), Finance
manually keyed Employee B’s transfer into this position on
December 21, 2006, and made it effective December 1, 2006.
Finance then transferred Employee B to another unit on
January 17, 2007. Employee B informed us that he requested the
transfer to another unit in January 2007, but he was not aware he
had been transferred to the vacant position in December 2006.
Finance appointed another employee, Employee C, to the vacant
position on January 18, 2007. When Finance manually keyed in
Employee B’s transfer into this position effective December 1, 2006,
for a period of 49 days, it prevented the position from being
abolished by the Controller. As a result, Finance circumvented state
law governing the abolishment of vacant positions.
Finance asserted that it did not intend to circumvent state law. It
stated that it had selected Employee D to fill the vacant position
in December 2006 but delayed Employee D’s appointment until
January 1, 2007, so that Employee D could receive a wage increase.
Thus, we concluded that because Employee D could not fill the
position until after it had been vacant for six consecutive months,
Finance shifted Employee B into the position to save it from
abolishment. However, Finance stated that it was not aware of
Employee B’s intent to transfer to another unit when it transferred
him into the position in December 2006. Nevertheless, because
Finance improperly protected the position from being abolished, it
circumvented the state law designed to thwart such actions.

California State Auditor Report I2009-1

April 2009
Department of Finance

Recommendation
To ensure the laws governing vacant positions are followed, Finance
should transfer employees from one position to another only when
there is a justified business need.
Agency Response
Finance reported that it will issue a letter of instruction within
30 days to the appropriate staff. In addition, Finance will issue
memos to its executive management and its chief of human
resources to stress the importance of following Section 12439
and to require that any circumvention of this law be reported to
upper management.

57

58

California State Auditor Report I2009-1

April 2009

Blank page inserted for reproduction purposes only.

California State Auditor Report I2009-1

April 2009
Update of Previously Reported Issues

Chapter 10
Update of Previously Reported Issues
Chapter Summary
The California Whistleblower Protection Act requires an employing
agency or appropriate appointing authority for the State of
California (State) to report to the Bureau of State Audits (bureau)
any corrective action, including disciplinary action, that it takes
in response to an investigative report no later than 30 days after
the bureau issues the report. If it has not completed its corrective
action within 30 days, the agency or authority must report to
the bureau monthly until it completes that action. This chapter
summarizes corrective actions taken on eight cases described in
previous investigative reports.
Department of Corrections and Rehabilitation 
Cases I2004‑0649, I2004‑0681, and I2004‑0789
We reported the results of this investigation on September 21, 2005.
The Department of Corrections and Rehabilitation (Corrections)
did not track the total number of hours available in a rank‑and‑file
release time bank (time bank) composed of personal leave hours
donated by members of the California Correctional Peace Officers
Association (union) for union representatives to cover union
business. As a result, Corrections released employees to work
on union‑related activities without knowing whether the time
bank had sufficient balances to cover the releases. In addition, the
management reports from the system that Corrections used to
track time‑bank charges and donations did not capture a significant
number of leave hours used by union members. Corrections charged
nearly 56,000 hours against the time bank for hours union members
spent conducting union‑related activities between May 2003 and
April 2005. However, we identified 10,980 additional hours that
three union representatives used but that Corrections failed to
charge against the time bank. Thus, it appears that these hours were
paid through regular payroll at a cost to the State of $395,256.
Although Corrections asserted that it had reconciled its time bank
balances, records from the State Controller’s Office (Controller)
did not show that Corrections had charged the 10,980 hours to the
time bank through the State’s leave‑accounting system. Similarly,
Corrections has not attempted to obtain any reimbursements for

59

60

California State Auditor Report I2009-1

April 2009
Update of Previously Reported Issues

hours the three representatives spent conducting union activities
from May 2005 through January 2006, resulting in an additional
cost to the State of $185,546.
Corrections also provided documents indicating that it had
conducted reviews of union leave used by employees from
February 2006 through June 2008. The reviews included the
three representatives. However, union leave hours, unlike
time‑bank hours, must be reimbursed to the State by the union
and must include both salary and benefit costs.
Corrections had issued invoices
totaling $546,979 for the
representatives’ union leave;
however, the union had not made
any payments for these invoices.

As a result, Corrections issued invoices to the union requesting
reimbursements totaling $546,979 for the three representatives’
union leave. However, as of July 2008, Corrections had not
received any payments to reimburse the State for the costs of the
three representatives performing union‑related activities.
Updated Information
Corrections reported in April 2009 that due to inadequacies in its
retention of records, it is unable to reconstruct an accurate leave
history for the three union representatives prior to July 2005. Thus, it
plans to direct its efforts for the time period subsequent to that date.
Accordingly, Corrections noted that it is currently reconciling the
cost of union work hours charged by the employees but not billed
to union leave for July 2005 through September 2007. However, this
appears to contradict information Corrections previously reported
to us, which indicated it had completed its review for union leave
used by its employees from February 2006 through June 2008.
Nonetheless, Corrections added that it intends to issue invoices to the
union upon completion of its reconciliation. Thus, while Corrections
indicates it is pursuing an accurate accounting of the three employees’
union leave hours since July 2005, it has not invoiced the union for
any of the hours the three representatives spent working on union
activities from May 2003 through January 2006, which represents a
cost to the State of $580,802. In contrast, Controller’s records indicate
that from July through December 2008, Corrections has largely
accounted for two of the three employees’ union leave hours and
that as of January 2008, the third employee is no longer on full‑time
union paid leave. Instead, he returned to his full‑time assignment at a
correctional institution.
Finally, Corrections reported that it has issued additional invoices
to the union totaling $206,481 for union work performed by
the two representatives from July through December 2008.
However, as of December 2008, Corrections had not received any
payments so that it could reimburse the State for the costs of the
three representatives performing union‑related activities. As a result,

California State Auditor Report I2009-1

April 2009
Update of Previously Reported Issues

as of the end of our reporting period, Corrections has failed to collect
$1,334,262 for union activities conducted by the three representatives
from May 2003 through December 2008. Table 4 summarizes
the reimbursements Corrections has failed to collect.
Table 4
Union Leave Costs Not Billed or Reimbursed From May 2003 Through
December 2008
Time Period

Cost of union work hours for which the Department of
Corrections and Rehabilitation (Corrections) has failed to
seek reimbursement from May 2003 through January 2006

Cost

$580,802

Cost of union work hours billed but not reimbursed to the
State from February 2006 through June 2008

546,979

Cost of union work hours billed but not reimbursed to the
State from July through December 2008

206,481

Total

$1,334,262

Sources:  Bureau of State Audits’ analysis, State Controller’s Office records, and invoices provided
by Corrections.
Note:  The figure for the cost of union work hours for which Corrections failed to seek reimbursement
represents the three union members’ salaries. The figure for the cost of union work hours billed but
not reimbursed includes the union members’ salaries plus benefit costs as proscribed in the collective
bargaining agreement with the union.

Department of Fish and Game
Case I2004‑1057
We reported the results of this investigation on March 22, 2006.
Between January 1984 and December 2005, the Department of
Fish and Game (Fish and Game) allowed several state employees
and volunteers to reside in state‑owned homes without charging
them rent. Consequently, Fish and Game violated the state law
prohibiting state officials from providing gifts of public funds.
Additionally, Fish and Game deprived tax authorities of as much as
$1.3 million in revenue for tax years 2002 through 2005 because it
did not report to the Controller the taxable fringe benefits that
its employees received when they lived in state‑owned housing at
rates below fair‑market value.
Although Fish and Game was the focus of this investigation, we also
discovered that all state agencies that own employee housing may
be underreporting or failing to report to the Controller housing
fringe benefits totaling as much as $7.7 million annually. Moreover,
because these agencies charged employees rents at rates far below
market value, the State may have failed to capture as much as
$8.3 million in potential rental revenue in 2003.

61

62

California State Auditor Report I2009-1

April 2009
Update of Previously Reported Issues

In previous updates for this investigation, the Department of
Food and Agriculture, the Department of Veterans Affairs, and
the Santa Monica Mountains Conservancy completed their
corrective action.
When we updated this issue on October 2, 2008, state agencies
reported the following:
The Department of Personnel Administration (Personnel
Administration) stated that it had updated and distributed to
agencies with state‑owned housing its annual State‑Owned
Housing Survey spreadsheet. In addition, Personnel Administration
developed an instructional guidebook to assist agencies in capturing
information—such as tenant names, rents, and utility rates—for
the survey.

Fish and Game informed us that
in an October 2007 meeting with
representatives from the union and
Personnel Administration, it agreed
to put on hold any rental rate
increases until all appraisals of its
state‑owned units are complete and
will then negotiate rate increases.

Fish and Game reported that appraisals had been completed for
housing at one of its wildlife areas. Fish and Game also stated
that it anticipated receiving appraisals on its remaining properties
by October 2008. Further, Fish and Game informed us that in an
October 2007 meeting with representatives from the union and
from Personnel Administration, it agreed to put on hold any
rental rate increases until all appraisals are complete. The parties
will then resume negotiations on increasing rental rates for
state‑owned housing.
The Department of Parks and Recreation (Parks and Recreation)
notified us that it planned to increase rents in January 2009. It also
reported that it had improved its record‑keeping and reporting
procedures for state‑owned housing.
Corrections reported that in following an executive order, it had
temporarily suspended the appraisal contract for its state‑owned
housing program. The executive order prohibited agencies from
contracting for services—unless those services were deemed
critical—until a fiscal year 2008–09 budget was adopted and until
the Department of Finance director confirmed that an adequate
cash balance exists to meet the State’s fiscal obligations.
The Department of Developmental Services (Developmental
Services) informed us that it had received updated appraisals for
all of its state‑owned housing and had raised rental rates at all but
one of its facilities, which was in the final months of operation
before closure. We therefore consider Developmental Services’
corrective action complete.
The Department of Forestry and Fire Protection (Forestry) stated
that due to increased vacancies in its state‑owned housing, its rental
revenue had decreased. Forestry also reported that it had recently

California State Auditor Report I2009-1

April 2009
Update of Previously Reported Issues

obtained new appraisals for 35 of its 40 occupied state‑owned
homes and that it was in the process of issuing rent increase notices
to reflect the newly appraised values. It planned to obtain appraisals
for the five remaining homes in late 2008 or in 2009.
The Department of Mental Health (Mental Health) notified us
that it had updated its guidelines for state‑owned housing, which
include requirements for performing fair‑market‑value appraisals
and timely reporting of housing fringe benefits. In addition,
Mental Health stated that it thoroughly reviews housing appraisals
every year. We therefore consider Mental Health’s corrective
action complete.
The California Department of Transportation (Caltrans) told us
that it had no additional information to report.
The California Highway Patrol (CHP) reported that its employees
reside in state‑owned housing as a condition of employment; thus
it complies with Internal Revenue Service regulations. As a result,
the CHP stated that the difference between the fair‑market rent
and the amount that it charges its employees is not considered a
taxable fringe benefit. In addition, the CHP stated that it received
appraisals for housing at two of its locations and that it annually
reviews rents at its state‑owned housing. We therefore consider the
CHP’s corrective action complete.
The California Conservation Corps (Conservation Corps) informed
us that it contracts to receive appraisals for its state‑owned housing
and that it reports all taxable fringe benefits to the Controller
monthly. We therefore consider the Conservation Corps’ corrective
action complete.
Updated Information
Personnel Administration reported in February 2009 that
it was reviewing survey reports submitted by agencies as of
November 2008.
Fish and Game informed us in March 2009 that it had received
appraisals for all of its state‑owned units by January 2009 and that it
has notified employees living in the units about the related taxable
fringe benefit that Fish and Game must report to the Controller’s
Office. Fish and Game told us previously that it would negotiate
increased rental rates once it had obtained appraisals for all of its
state‑owned units, but it did not indicate whether it has done so in
its March 2009 update.

In a March 2009 update, Fish and
Game did not indicate whether it
had negotiated increased rental
rates after obtaining appraisals for
all of its state‑owned units.

63

64

California State Auditor Report I2009-1

April 2009
Update of Previously Reported Issues

Parks and Recreation reported in March 2009 that it had
established a residence category justification form in accordance
with Internal Revenue Service regulations for taxable fringe
benefits. It stated that it had also developed and distributed an
additional chapter for its operations manual to provide clear,
consistent policy for the administration of its state‑owned housing.
Further, Parks and Recreation reported that it had intended to
raise rental rates by 25 percent effective in January 2009. It stated,
however, that through a tentative agreement with Personnel
Administration and nine collective bargaining units, current rental
rates would remain in effect from February 2009 through June 2010,
the duration of the State’s furlough program. We consider Parks and
Recreation’s corrective action complete.
Corrections stated in February 2009 that it had initiated rent
increases for its state‑owned housing at Folsom State Prison to
be effective in April 2009. In addition, Corrections indicated that
it was processing rental‑adjustment notices for its state‑owned
housing at San Quentin State Prison. Corrections reported in
April 2009 that it had received appraisal reports for its housing
at the California Training Facility, Deuel Vocational Institution,
and Preston Youth Correctional Facility, and is in the process of
completing monthly rent increase notices for those state‑owned
homes. Finally, Corrections indicated that it has contracted for
appraisal reviews at additional institutions, which should be
completed by May 2009.
Forestry reported in February 2009 that it had not obtained
appraisals for the five remaining homes as it had intended. Forestry
noted the homes have been vacated for septic repairs, and due to
fiscal constraints they will remain vacant. We consider Forestry’s
corrective action complete.
Caltrans reported in January 2009 that it has raised rents to
fair‑market values for all of its properties except where collective
bargaining agreements have alternative requirements. We consider
Caltrans’ corrective action complete.
Department of Parks and Recreation
Case I2005‑1035
We reported the results of this investigation on March 22, 2007.
An employee with Parks and Recreation repeatedly misused state
resources and failed to adequately perform his duties. Over a
13‑month period, the employee made more than 3,300 personal
telephone calls on his state‑issued cellular telephone. In addition,
the employee made hundreds of telephone calls to phone numbers

California State Auditor Report I2009-1

April 2009
Update of Previously Reported Issues

that appeared to be assigned to other state employees’ cellular
telephones. However, Parks and Recreation determined that the
State had never issued these phone numbers to state employees,
raising questions about the appropriateness of the employee’s calls
and about the assignment of the wireless phones.
At the time of our report, Parks and Recreation stated that it
had conducted and documented a corrective interview with
the employee, and it had submitted a draft departmental notice
updating its policy about the use of personal communications
devices by its staff. In August 2008 Parks and Recreation informed
us that its draft policy contained some information that it could
more appropriately present in a Parks and Recreation handbook
for its employees. It stated that it planned to incorporate the
procedures and instructions about personal communication devices
in the handbook, which it intended to publish by February 2009. It
intended to finalize its policy for personal communications devices
after its handbook was published.
Updated Information
In February 2009 Parks and Recreation informed us that it had
drafted its handbook for personal communications devices and had
updated its policy; however, after more than two years Parks and
Recreation has finalized neither the handbook nor the policy.
California State Polytechnic University, Pomona
Case I2007‑0671
We reported the results of this investigation on September 20, 2007.
An official at California State Polytechnic University, Pomona
(Pomona), repeatedly used university computers to view Web sites
containing pornographic material. Pomona found that the
official viewed approximately 1,400 pornographic images on
two university computers during several weeks in 2006 and from
February to May 2007.
When we issued our report, Pomona indicated that the official no
longer worked on campus. Pomona stated that it had negotiated a
resignation that permitted the official to exhaust all earned leave
credits and other paid leave before resigning. We later confirmed
the official’s separation from Pomona. Pomona also indicated at the
time that it had drafted an Appropriate Use Policy for Information
Technology. However, Pomona did not indicate whether it had
implemented any new controls or software filters to prevent any
future access to pornographic Web sites by its employees.

Parks and Recreation determined
that the State had never issued
certain phone numbers to state
employees, raising questions
about the appropriateness of
an employee’s numerous calls
and about the assignment of the
wireless phones.

65

66

California State Auditor Report I2009-1

April 2009
Update of Previously Reported Issues

In January 2008 Pomona stated that its academic senate approved
an Interim Appropriate Use Policy (interim policy), which states
that administrators, faculty, and staff must not use computers for
personal purposes. The policy further states that inappropriate
use of computers includes using computing facilities for purposes
other than those for which they were intended or authorized.
Pomona reported that to become official, the interim policy must
go through a meet‑and‑confer process with the unions for staff
and faculty. Pomona reported subsequently that it met with the
two employee unions in July 2008 to start the meet‑and‑confer
process. Pomona stated that the unions requested changes to the
interim policy and that all parties must agree to the changes before
the policy becomes official.
Updated Information
Pomona reported in March 2009 that it believes the interim policy
will be finalized in April 2009. We are concerned about the length
of time Pomona has taken to institute the policy.
Department of Consumer Affairs, Contractors State License Board
Case I2007‑1046
We reported the results of this investigation on October 2, 2008.
An employee with the Contractors State License Board (board)
used a state vehicle for personal reasons and falsified records to
hide her actual activities when she was supposed to be performing
field inspections for the board. The State incurred an estimated
$1,896 loss due to her personal use of a state vehicle from April to
August 2007.5
At the time of our report, the board informed us that it gave the
employee a counseling memorandum and a copy of the current
departmental policy pertaining to incompatible work activities.
The board also informed us that it intended to seek reimbursement
from the employee for the unauthorized miles that she drove her
state vehicle when she was on medical leave.
After the board informed the
employee that she owed the State
$1,896, the employee filed an
appeal of the board’s attempt to
collect the funds.

Updated Information
In October 2008, the board informed the employee that she owed
the State $1,896. It also advised the employee that she was obligated
to pay the amount owed in full or arrange for an accounts receivable
5	

Board records used in this investigation were not available for June 2007.

California State Auditor Report I2009-1

April 2009
Update of Previously Reported Issues

with the Department of Consumer Affairs (Consumer Affairs).
The employee appealed the board’s attempt to collect $1,896,
particularly as it relates to the allegation regarding her inappropriate
use of a state vehicle while on medical leave.
In February 2009 the employee submitted a letter to Consumer
Affairs disputing the board’s position that the employee received
an overpayment. In March 2009 Consumer Affairs met with the
employee and concluded that $92 of the $1,896 owed to the State
for misuse of her state vehicle was in fact appropriate. Therefore,
Consumer Affairs determined that the employee must reimburse
the State $1,804 for her personal use of a state vehicle from April to
August 2007.
Department of Corrections and Rehabilitation
Case I2006‑0826
We reported the results of this investigation on October 2, 2008.
Between January 1, 2005, and February 29, 2008, Corrections
improperly paid nine office technicians a total of $16,530 for
supervising inmates when the technicians did not qualify to
receive the money. Corrections also failed to maintain adequate
accounting and administrative controls that would prevent such
improper payments.
Updated Information
Shortly after we issued our report, Corrections informed us that
it had notified the office technicians who received the improper
payments in September 2008 that it intended to recover the
overpayments. Subsequently, Corrections notified us that it
could recover only $5,130 of the $16,530 we identified. When we
questioned Corrections, it responded that it could only recoup
overpayments made within two years of the date on which it
initiated recovery. We reminded Corrections that state law allows
an agency to recover overpayments going back three years from
the date on which it initiates recovery. In March 2009 Corrections
reported that it had set up accounts receivable totaling $11,400 for
the employees. However, because Corrections used the incorrect
period for overpayment recovery when it initiated its efforts in
September 2008, it failed to collect $3,230 to which the State was
entitled for improper payments made from September through
December 2005. Table 5 on the following page shows the improper
payments we identified and Corrections’ recovery efforts.

Corrections failed to collect $3,230
to which the State was entitled for
improper payments made from
September through December 2005.

67

68

California State Auditor Report I2009-1

April 2009
Update of Previously Reported Issues

Table 5
Department of Corrections and Rehabilitation’s Improper Payments and
Collection Efforts

Employee

Total Improper
Payments
For Inmate
Supervision

Improper
Payments
corrections
Should Have
Recovered

Improper
Payments
Corrections
is Attempting
to Recover

Improper
Payments
Corrections
Failed
to Pursue

Employee A

$2,090

$2,090

$1,900

$190

Employee B

2,280

2,280

1,900

380

Employee C

1,330

1,330

760

570

Employee D

2,280

1,710

1,520

190

Employee E

1,520

1,520

1,330

190

Employee F

3,230

2,850

2,090

760

Employee G

1,140

Employee H

760

Employee I
Totals

1,900
$16,530

760*

760

190

190

1,900
$14,630†

950

950

$11,400

$3,230

Sources:  Bureau of State Audits’ analysis of inmates’ time sheets and account.
*	 After we completed our investigation, Employee G provided copies of inmate time sheets
showing she met the criteria for two months and was entitled to $380 of the original amount we
identified as improper.
†	 The Department of Corrections and Rehabilitation was unable to recoup $1,900 of the amount
we identified because the overpayments occurred more than three years before it initiated its
recovery efforts.

Corrections reported in January 2009 that it has drafted procedures
detailing the proper method of requesting and monitoring
inmate supervision pay. It also stated that it plans to inform those
who supervise inmates of the requirements and responsibilities
associated with receiving the pay. Finally, Corrections reported in
April 2009 that the office technicians filed a grievance and it has
given the office technicians until May 2009 to produce documents
to prove their inmate supervision pay was legitimate.
California Environmental Protection Agency
Case I2008‑0678
We reported the results of this investigation on October 2, 2008.
An employee of the California Environmental Protection Agency
(Cal/EPA) failed to promptly submit time sheets that accurately
reported her absences from work and her overtime from August 2006
through June 2008. In addition, the officials responsible for managing
her daily activities and for monitoring her time and attendance did
not ensure that the employee documented her absences correctly

California State Auditor Report I2009-1

April 2009
Update of Previously Reported Issues

and that Cal/EPA charged the absences against her leave balances.
Consequently, Cal/EPA paid her $23,320 for 768 hours that she was
absent from work.
At the time of our report, Cal/EPA indicated that it had
recalculated, updated, and corrected the employee’s leave balances
to reflect her actual absences and overtime worked through
August 2008. In addition, Cal/EPA stated that it planned to
establish an accounts receivable for 24 hours the employee’s pay
should have been docked in September 2006. It also informed us
that management issued two counseling memorandums to the
employee—one that discussed the employee’s failure to promptly
submit time sheets that accurately accounted for her absences
and another that described the implementation of administrative
controls to ensure that the employee correctly accounted for
her absences and promptly completed her time sheets and other
time‑reporting documents. Furthermore, Cal/EPA reported that
it planned to transfer the employee to another position with a
different assignment that did not require significant overtime. It
stated that the new assignment would allow a different supervisor
to monitor the employee more closely.
Updated Information
In October 2008 Cal/EPA reported that it had transferred the
employee to another program within Cal/EPA where she is more
closely monitored by a different supervisor. The employee’s new
position does not require frequent overtime. In December 2008
Cal/EPA informed us that it had established an accounts receivable
to collect $616 from the employee for pay for which she should have
been docked in September 2006. In March 2009 Cal/EPA notified
us that it began deductions in December 2008 and stated that it will
continue the deductions until it collects the full amount owed to
the State.
California Prison Health Care Services
Case I2008‑0805
We reported the results of this investigation on January 22, 2009.
Staff at California Prison Health Care Services (Prison Health
Services), which manages the State’s prison medical health care
delivery system, ignored state contracting laws and alternative
contracting processes established by a federal court when it
acquired $26.7 million in information technology (IT) goods
and services in a noncompetitive manner from November 2007

69

70

California State Auditor Report I2009-1

April 2009
Update of Previously Reported Issues

through April 2008. Specifically, Prison Health Services used
49 purchase orders to acquire $23.8 million worth of IT goods
from a single vendor when it should have sought competitive bids.
It also contracted with the same vendor to provide $2.9 million
in IT services, again without using a competitive process. Further,
staff at Corrections helped to execute the purchase orders for
Prison Health Services after initially questioning the propriety of
the process used.
At the time of our investigation, Prison Health Services stated
that it had obtained approval from the Department of General
Services to use a noncompetitively bid contract to continue to
use the vendor that was the subject of the report. It also informed
us that it had adopted a formal policy governing the use of the
federal court’s waiver of state contracting laws. Corrections
reported that its managers must continue to review contract
documentation and abort any transactions that violate applicable
contracting requirements.
Updated Information
Prison Health Services reported in March 2009 that employees in
its IT acquisitions unit have attended training and that it intends to
provide training for all remaining staff within the next six months.
Prison Health Services also stated that it distributed its policy on
the use of the federal waiver. It also indicated its intent to complete
development of the procedures for procuring IT goods and services
under existing state processes within 90 days, which will include
specifying who has authority to sign contracts and purchase orders
under state and alternative contracting processes. Finally, Prison
Health Services reported that it is routing all IT procurements to
its procurement office to ensure the purchasing method used is
appropriate. Prison Health Services stated that it has given that
office the authority to halt any procurement that does not meet
state laws and regulations.

California State Auditor Report I2009-1

April 2009

We conducted this review under the authority vested in the California State Auditor by Section 8547
et seq. of the California Government Code and pursuant to applicable investigative standards.
Respectfully submitted,

ELAINE M. HOWLE, CPA
State Auditor
Date:			

April 28, 2009

Legal Counsel:		

Steven Benito Russo, JD, Chief of Investigations

Investigative Staff:	
			
			
			
			
			
			

Russ Hayden, CGFM
Siu‑Henh Canimo, CFE
Gene Castillo
Lane Hendricks, CFE
Justin McDaid, CFE
Kerri Spano, CPA
Michael A. Urso, CFE

For questions regarding the contents of this report, please contact
Margarita Fernández, Chief of Public Affairs, at 916.445.0255.

71

72

California State Auditor Report I2009-1

April 2009

Blank page inserted for reproduction purposes only.

California State Auditor Report I2009-1

April 2009
Appendix

Appendix
The Investigations Program
The California Whistleblower Protection Act (Whistleblower
Act) contained in the California Government Code, beginning
with Section 8547, authorizes the Bureau of State Audits (bureau),
headed by the state auditor, to investigate allegations of improper
governmental activities by agencies and employees of the State
of California. 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.
To enable state employees and the public to report suspected
improper governmental activities, the bureau maintains a toll‑free
Whistleblower Hotline (hotline): (800) 952‑5665 or (866) 293‑8729
(TTY). The bureau also accepts reports of improper governmental
activities by mail and over the Internet at www.bsa.ca.gov.
The bureau has identified improper governmental activities totaling
$29.1 million since July 1993, when it reactivated the hotline. These
improper activities include theft of state property, conflicts of
interest, and personal use of state resources. The investigations have
also substantiated improper activities that cannot be quantified but
have had negative social impacts. Examples include violations of
fiduciary trust, failure to perform mandated duties, and abuse
of authority.
Although the bureau conducts investigations, it does not
have enforcement powers. When it substantiates an improper
governmental activity, the bureau reports confidentially the details
to the head of the state agency or to the appointing authority
responsible for taking corrective action. The Whistleblower Act
requires the agency 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.
The Whistleblower Act authorizes the state auditor to report
publicly on substantiated allegations of improper governmental
activities as necessary to serve the State’s interests. The state
auditor may also report improper governmental activities to other
authorities, such as law enforcement agencies, when appropriate.

73

74

California State Auditor Report I2009-1

April 2009
Appendix

Corrective Actions Taken in Response to Investigations
The chapters of this report describe the corrective actions that
departments implemented on individual cases. Table A summarizes
all of the corrective actions that departments took between the
time that the bureau reactivated the hotline in 1993 until June 2002.
Table A also summarizes departments’ corrective actions since
July 2002, when the law changed to require all state departments
to notify their employees annually about the bureau’s hotline. In
addition, dozens of departments have modified or reiterated their
policies and procedures to prevent future improper activities.
Table A
Corrective Actions
July 1993 Through December 2008

Type of Corrective Action

Number of
Incidents From
July 1993 Through
June 2002

Number of
Incidents From
July 2002 Through
December 2008

Totals

Convictions

7

2

9

Demotions

8

8

16

Job terminations

46

30

76

Pay reductions

10

42

52

Referrals for criminal prosecution
Reprimands
Suspensions without pay
Totals

73

5

78

135

137

272

12

12

24

291

236

527

Source:  Bureau of State Audits.

New Cases Opened From July 2008 Through December 2008
The bureau receives allegations of improper governmental activities
in several ways. From July 1, 2008, through December 31, 2008, the
bureau received 2,163 calls or inquiries. Of these, 1,844 came from
the hotline, 207 arrived in the mail, 111 were reported through the
bureau’s Web site, and one came from individuals who visited the
office. Of these 2,163 calls or inquiries, the bureau opened 338 cases,
as shown in Figure A.1. After careful review, the bureau determined
that the remaining 1,825 allegations were outside its jurisdiction.
When possible, we referred those remaining complaints to the
appropriate federal, state, or local agencies.

California State Auditor Report I2009-1

April 2009
Appendix

Figure A.1
Disposition of 2,163 Allegations Received From July 2008 Through
December 2008

Allegations within the bureau’s
jurisdiction—338 (16%)

Cases referred to state agencies
for action—18 (5%)
Cases investigated by the bureau
or other state agency—20 (6%)
Cases pending assignment—26 (8%)

Cases opened
Cases closed—274 (81%)
Allegations outside the bureau’s
jurisdiction—1,825 (84%)

Source:  Bureau of State Audits.

Work on Investigative Cases From July 2008 Through December 2008
In addition to the 338 new cases opened during this six‑month
period, 73 previous cases needed review or assignment during
the period. Another 44 cases were still under investigation by this
office or by other state agencies, or they were awaiting completion
of corrective action. Consequently, 455 cases required some review
during this period.
After conducting a preliminary review of these cases, which
includes analyzing evidence and other corroborating information
and calling witnesses, the bureau determined that 337 cases
lacked sufficient information for an investigation. Figure A.2 on
the following page shows the disposition of the 455 cases that the
bureau worked on from July 2008 through December 2008.
The Whistleblower Act specifies that the state auditor can
request the assistance of any state entity or employee in conducting
an investigation. From July 1, 2008, through December 31, 2008,
the bureau independently investigated 20 cases and substantiated
allegations on five of the seven investigations completed during the
period. In addition, the bureau conducted investigative analyses
of 51 cases that state agencies investigated under the bureau’s
direction, and we substantiated allegations in four of the 14 cases
completed during the period. After a state agency completes its

75

76

California State Auditor Report I2009-1

April 2009
Appendix

Figure A.2
Disposition of 455 Cases Worked on From July 2008 Through December 2008
Independently investigated by state auditor—20 (4%)
Referred to another state agency
for action—19 (4%)
Investigated with assistance from another
state agency—51 (11%)

Unassigned—65 (15%)
Closed—300 (66%)

Source:  Bureau of State Audits.

investigation and reports its results to the bureau, the bureau
analyzes the agency’s investigative report and supporting evidence
and determines whether it agrees with the agency’s conclusions or
whether additional work must take place. The bureau confirmed the
results of the four investigations that state agencies substantiated.
The results of those investigations appear in this summary report.

California State Auditor Report I2009-1

April 2009
Index

Index
CASE NUMBER

ALLEGATION

PAGE
NUMBER

California Environmental Protection Agency

I2008‑0678

Failure to accurately report absences and inadequate supervision

68

California Prison Health Care Services

I2008‑0805

Improper contracting decisions and poor internal controls

69

California State Polytechnic University, Pomona

I2007‑0671

Viewing of inappropriate Internet sites and misuse of
state equipment

65

Contractors State License Board

I2007‑1046

Private employment on state time, misuse of state resources,
and dishonesty

66

Corrections and Rehabilitation, Department of

I2004‑0649,
I2004‑0681,
I2004‑0789

Failure to account for employees’ use of union leave

59

Corrections and Rehabilitation, Department of

I2006‑0826

Improper payments for inmate supervision

67

Corrections and Rehabilitation, Department of
and General Services, Department of

I2007‑0891

Waste of state funds

Employment Development Department

I2008‑0699

Misuse of state equipment and resources, management’s failure
to take appropriate action

51

Finance, Department of

I2008‑0633

Improper saving of a vacant position

55

Fish and Game, Department of

I2004‑1057

Inappropriate gifts of state resources and mismanagement

61

Fish and Game, Department of,
Office of Spill Prevention and Response

I2006‑1125

Improper travel expenses

19

General Services, Department of

I2008‑1118

Waste of state funds

41

Justice, Department of

I2007‑1024

Failure to accurately report time worked, absences, and travel
expenses; management’s failure to ensure proper time and travel
expense reporting

45

Parks and Recreation, Department of

I2005‑1035

Misuse of state resources and failure to perform
duties adequately

64

Parks and Recreation, Department of

I2008‑0606

Failure to solicit competitive price quotes for its purchase
of goods

39

Social Services, Department of

I2007‑0962

Improper hiring

31

State Compensation Insurance Fund

I2007‑0909

Time and attendance abuse, lax supervision

27

DEPARTMENT/AGENCY

7

77

78

California State Auditor Report I2009-1

April 2009

cc:	
	
	
	
	
	
	
	
	
	
	
	

Members of the Legislature
Office of the Lieutenant Governor
Milton Marks Commission on California State
Government Organization and Economy
Department of Finance
Attorney General
State Controller
State Treasurer
Legislative Analyst
Senate Office of Research
California Research Bureau
Capitol Press