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California State Auditor Report Number : I2016-2

Investigations of Improper Activities by State Agencies and Employees
Conflict of Interest, Violation of Post-Employment Ethics Restrictions, Waste of State Funds, Misuse of State Resources, and Incompatible Activities



Summary

INVESTIGATIVE HIGHLIGHTS

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


Results in Brief

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

This report details the results of seven significant investigations that the State Auditor either completed or directed other state agencies to complete on its behalf between January 1, 2016, and June 30, 2016. The following paragraphs summarize the investigations, which we discuss more fully in the individual chapters of this report.


State Water Resources Control Board

A district engineer for the State Water Resources Control Board (State Water Board) violated state conflict‑of‑interest law by repeatedly recommending that the State’s drinking water program enter into funding agreements with an engineering firm that employed the district engineer's spouse and by approving the engineering firm’s claims for payment. Specifically, between 2010 and 2015, the engineer first worked at the California Department of Public Health (Public Health) and then at the State Water Board. In these positions at both agencies, the engineer participated in a total of 59 decisions that involved the engineering firm, including approving claims for payment that resulted in the engineering firm receiving a total of $3.9 million. In addition, even though the district engineer’s supervisors were aware of the spouse’s employment, they failed to identify the participation in the decisions involving the engineering firm as a conflict of interest.


Department of Health Care Services

A former section chief at the Department of Health Care Services (Health Care Services) violated the post‑employment restrictions of the Political Reform Act of 1974 by frequently contacting Health Care Services in attempts to influence decisions on behalf of his paying clients within one year of his leaving state employment.


California Department of Public Health

Public Health wasted state funds when it failed to enforce proper policies or procedures to ensure that it made travel reimbursements in accordance with the applicable state laws. Specifically, from July 2012 through March 2016, Public Health inappropriately reimbursed the commuting expenses of an official from the official’s home in Sonoma County to the official’s headquarters in Sacramento. In total, Public Health reimbursed the official $74,200 in state funds for lodging, meals, incidentals, mileage, and parking during this period. As of June 2016, Public Health continued to improperly reimburse the official for commuting to Sacramento.


California Department of Transportation

The California Department of Transportation (Caltrans) failed to properly manage a San Joaquin Valley mobile home park that it purchased in late 2010. As a result, the tenants of the mobile home park collectively owed the State almost $315,000 as of December 31, 2015. Specifically, they owed $57,000 in overdue rent and late fees and nearly $258,000 in unpaid utility charges. Caltrans had not billed the tenants for most of the utility charges because it had not taken the steps necessary to determine how much each tenant owed. In addition, Caltrans failed to evict two individuals who illegally occupied mobile homes in the park for more than a year. Further, until recently Caltrans had failed to annually review the mobile home park’s monthly rental rate, despite the fact that Caltrans policy requires such annual reviews. We found that Caltrans right‑of‑way agents and their supervisors played significant roles in the agency’s five‑year failure to properly manage the mobile home park.


Department of Parks and Recreation

A peace officer supervisor (officer) employed by the Department of Parks and Recreation (State Parks) improperly accepted a gift of 24 pairs of designer sunglasses valued at $4,800 from a vendor that did business with the State. The officer’s acceptance of the sunglasses constituted an activity incompatible with his state employment. The officer’s supervisor also engaged in an incompatible activity when—after learning of the gift—he failed to direct the officer to follow State Parks' policy and in fact bought a pair of the sunglasses from the officer.


Department of State Hospitals

Napa State Hospital wasted $2,970 from October 2015 through February 2016 when it paid overtime wages to an employee based on the rate of pay in her job classification even though she was performing duties typically associated with a different, lower‑paying job classification.


Department of Parks and Recreation

A supervisor at a State Parks communications center misused a state resource from June 2015 through January 2016 when she used her state‑issued cell phone to promote and sell beauty products and to communicate with relatives who resided out of the State.


Table 1 summarizes the improper governmental activities appearing in this report, the financial impact of those activities, and their statuses.

Table 1
Issues, Financial Impact, and Status of Recommendations for Cases Described in This Report

CHAPTER DEPARTMENT ISSUE COST TO THE STATE AS OF JUNE 30, 2016* STATUS OF RECOMMENDATIONS
FULLY IMPLEMENTED PARTIALLY IMPLEMENTED PENDING NO ACTION TAKEN
1 State Water Resources Control Board Violation of conflict‑of‑interest law NA      
2 Department of
Health Care Services
Violation of post‑employment ethics restrictions NA      
3 California Department of Public Health Waste of state funds $74,224      
4 California Department of Transportation Waste of state funds 314,977      
5 Department of Parks and Recreation Incompatible activities 4,800      
6 Department of State Hospitals Waste of state funds 2,970      
7 Department of Parks and Recreation Misuse of state resources 185      

Source: California State Auditor's analysis.

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

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




Footnote

1 For more information about the State Auditor’s investigations program, please refer to the Appendix. Go back to text



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