Report I2012-1 Recommendations and Responses in 2013-041

Report I2012-1: Investigations of Improper Activities by State Agencies and Employees: Bribery, Conspiracy to Commit Mail Fraud, Improper Overtime Payments, Improper Use of Lease Proceeds, Improper Travel Expenses, and Other Violations of State Law

Department Number of Years Reported As Not Fully Implemented Total Recommendations to Department Not Implemented After One Year Not Implemented as of 2012-041 Response Not Implemented as of Most Recent Response
California Correctional Health Care Services 1 2 2 n/a 2
Department of Fish and Wildlife 1 3 2 n/a 1
University of California 1 5 4 n/a 4

Recommendation To: Fish and Wildlife, Department of

Fish and Game should amend the terms of its leases either to require that the lessee make lease payments to the State or to include specific improvements and repairs of comparable value that the lessee must perform in lieu of making lease payments. In either instance, Fish and Game should include a provision in the lease for payment if the lessee owes money to the State at the end of the lease period. If it decides that future leases should require a lessee to make specific improvements and repairs, Fish and Game should do the following:
Develop a system to track all pertinent information related to a lessee's cost for improvements and repairs to be credited against the lease.
Require the supervisor to reconcile payment records at least annually with each lessee to ensure that the State's records are accurate and that the State receives full benefit from leasing the state property.

Response

Fish and Wildlife created new lease templates for agricultural land use and vegetation control which have been approved by the Department of General Services. It stated that all new leases will be drafted using these new templates. The templates include provisions that require the lessee to make payments in advance to the State and prohibits improvements and repairs to be made in lieu of making lease payments.

Fish and Wildlife reported that effective November 2013, it terminated its lease of land in the wildlife area described in our report. The termination letter directed the farmer to work with Fish and Wildlife's regional manager to reconcile the payments and credits owed regarding the lease. In addition, Fish and Wildlife stated that, for the remaining existing agricultural land use and vegetation control leases, some leases were cancelled and others will be allowed to expire according to the terms of the lease agreement. Fish and Wildlife stated that it will draft any new leases for these areas using the templates described above.

  • California State Auditor's Assessment of Status: Fully Implemented
  • Completion Date: November 2013
  • Response Date: November 2013

Recommendation To: Correctional Health Care Services, California

Correctional Health Services should provide training to the manager and supervisors involved in the claim authorization process regarding the state rules applicable to claiming travel expenses.

Response

Correctional Health Services finalized its training plan and began implementing the training in June 2013. It has not yet completed providing the training to all its employees involved in the travel claim authorization process. It intends to implement the recommendation by December 2013.

  • California State Auditor's Assessment of Status: Partially Implemented
  • Estimated Completion Date: December 2013
  • Response Date: November 2013

Recommendation To: Correctional Health Care Services, California

Correctional Health Services should discontinue reimbursing employees for expenses claimed in violation of state regulations.

Response

Correctional Health Services stated that it is in the process of conducting a spot review of travel claims to ensure compliance with state regulations. It plans to implement the recommendation by December 2013 and forward the results of the review to the California State Auditor.

  • California State Auditor's Assessment of Status: Partially Implemented
  • Estimated Completion Date: December 2013
  • Response Date: November 2013

Recommendation To: University of California

To address the improper acts we identified, the university should collect $1,802 from the official for the wasteful expenses he claimed for lodging and meals during his trip to England, the expenses he incurred within the vicinity of his headquarters, and the business meal expenses.

Response

After performing an additional review with university staff of the expenses we determined to be wasteful, we concluded that $154 of the total was proper for payment, leaving $1,638 as the amount we are recommending the university collect from the official. The university collected $342 of that amount in May 2011. The university subsequently received an additional $396 from the official, but this amount was unrelated to the recommendation. Accordingly, the university still must collect $1,296 from the official to implement this recommendation fully.

However, in March 2013 the university advised us that it would not make any further effort to collect from the official the remaining $1,296 that he received in improper expense payments because the official no longer is employed by the university. In November 2013, the university reiterated its position that it would not pursue collection of the expense payments because it now views the payments to have been proper according to university policies and practices in effect at the time the payments were made. In addition, the university determined that its process for approving reimbursemts was flawed at the time the official received expense reimbursements for business meals, lodging costs, and expenses incurred within the vicinity of his headquarters.

With specific regard to the reimbursed expenses the official incurred within the vicinity of his headquarters, the university stated that it frequently grants exceptions to the rule prohibiting reimbursement for lodging expenses within the vicinity of headquarters when an employee participates in meetings or other business activities near headquarters that run late into the evening and resume early the following morning. The university concluded that these same circumstances held true regarding the official's expenses within the vicinity of his headquarters and opined that it would have been unsafe and unfair not to pay for the official's overnight lodging, as failing to do so would have required him to secure lodging at his own expense or drive up to 80 miles late at night to return to his home and then return the next morning. However, as it was the the official's choice to live 80 miles from his headquarters, accommodating that choice by providing lodging for the official in the vicinity of his headquarters was not the responsibility of the university and, therefore, constituted a waste of state resouces.

  • California State Auditor's Assessment of Status: Partially Implemented
  • Estimated Completion Date: Not Completed
  • Response Date: November 2013

Recommendation To: University of California

The university should revise the policies to allow employees to claim only actual lodging expenses up to established rates for international travel.

Response

In April 2013, the university provided us with a revised travel policy. After reviewing the revised policy, we pointed out to the university that while the revised policy restricts employees to claiming only their actual lodging costs when traveling outside the United States for 30 days or longer, it still allows employees traveling outside the United States for less than 30 days to claim a full per diem lodging rate rather than their actual lodging costs. The university responded in May 2013 that it would add language to its revised policy that allows employees traveling internationally for less than 30 days to claim only their actual lodging costs up to established rates.

In November 2013, the university provided us with the language it is intending to present to its policy committee, as an addition to its revised travel policy, to address our concern about employees being able to claim lodging expenses above their actual lodging costs for international travel of less than 30 days. However, we found this language to be inadequate to address our concern, so we have asked the university to propose different language.

  • California State Auditor's Assessment of Status: Pending
  • Estimated Completion Date: December 2013
  • Response Date: November 2013

Recommendation To: University of California

The university should clarify policies to include a distance test for expenses that employees incur within the vicinity of their headquarters.

Response

In April 2013, the university provided us with a revised travel policy establishing a distance test that prohibits reimbursement for meal and lodging expenses incurred within 40 miles of headquarters during trips lasting 24 hours or more. However, the university failed to establish a similar distance test for trips lasting less than 24 hours.

In November 2013, the university reported that it would propose to its policy committe the addition of language to its revised travel policy that would impose the same distance test for trips lasting less than 24 hours that now applies to trips lasting 24 hours or more. It stated that the updated revised policy should be issued before the end of 2013.

  • California State Auditor's Assessment of Status: Partially Implemented
  • Estimated Completion Date: December 2013
  • Response Date: November 2013

Recommendation To: University of California

The university should revise policies to establish defined maximum limits for the reimbursement of domestic lodging costs and establish controls that allow for exceptions to the limits under specific circumstances only.

Response

In April 2013, the university provided us with a revised travel policy. The revised policy contained additional language that recommended travelers submit additional documentation when seeking payment for lodging expenses exceeding 200 percent of the federal per diem lodging rate. When we informed the university that this language did not satisfy our recommendation to establish defined maximum limits for domestic lodging costs and failed to establish controls to allow exceptions to the limits only under specific circumstances, the university reported that it would not take any additional action on this recommendation.

Subsequently, in November 2013, the university stated that its travel council had reviewed our recommendation and decided not to impose a defined maximum limit for the reimbursement of domestic lodging costs because much of the university travel involves academic conferences and conventions where staying at a host hotel often is integral to the event.

Thus, the university is refusing to implement our recommendation to establish defined maximum limits for the reimbursement of domestic lodging costs and establish controls that allow exceptions to the limits only under specific circumstances.

  • California State Auditor's Assessment of Status: No Action Taken
  • Estimated Completion Date: Not Completed
  • Response Date: November 2013

Recommendation To: Fish and Wildlife, Department of

Fish and Game should provide training to those involved with the lease to ensure that it properly accounts for and reconciles future work and payments related to the leased property, that it does not pay operational and equipment expenses with proceeds derived from the lease, and that all parties understand what work Fish and Game expects as the result of the agreement.

Response

Fish and Wildlife's new lease templates prohibit improvements and repairs be made in lieu of making lease payments. As such, it is not necessary to train staff to ensure that it properly accounts for and reconciles the work and payments made for improvements against the lease. However, we still recommend that Fish and Wildlife provide training to those involved with its leasing process. For this, Fish and Wildlife reported that it issued a department bulletin regarding its policies, procedures, and processes governing land lease agreements. The bulletin includes discussions of Fish and Wildlife's expectations of its employees throughout the leasing process, including soliciting and selecting lessees, drafting lease agreements, reviewing and approving a lease, and managing the agreement once it has been executed. Fish and Wildlife stated that it would work with regional staff to ensure they are properly trained on the new process and expects training to take place prior to February 2014.

  • California State Auditor's Assessment of Status: Partially Implemented
  • Estimated Completion Date: None
  • Response Date: October 2013

Current Status of Recommendations

All Recommendations in 2013-041