California state auditor releases report on waste and fraud

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A semi-annual audit report released Tuesday revealed instances of gross waste, fraud and shoddy management, according to California State Auditor Elaine Howle.

“Through our investigations, we found patients placed at risk and state funds wasted during the continued employment of an incompetent psychiatrist, misuse of state resources, theft of registration fees, and failure to protect the security of confidential documents,” Howle wrote to Gov. Jerry Brown on Tuesday.

The investigations were conducted as part of a whistleblower program, in which the Bureau of State Audits looks into activities of agencies or employees that “violate any state or federal law or regulation; that is economically wasteful; or that involves gross misconduct, incompetence, or inefficiency.”

During the first half of 2010, the audit bureau received 2,444 allegations of improprieties, of which 420 were opened as official cases. The audit report highlighted eight significant instances of waste or mismanagement in state agencies including:

  • By not conducting a timely investigation of a psychiatrist’s competence, the Department of Corrections and Rehabilitation wasted at least $366,656 in state funds by continuing to pay him more than $600,000 in salary throughout the investigation. While the state was conducting the investigation of the psychiatrist, he received his full salary, was granted two-merit raises, and was paid 226 hours of leave, worth $29,149, when he left.
  • The California Conservation Corps evaded competitive bidding requirements to make purchases costing $64,666 from a single vendor, by splitting the purchase into three orders. It also failed to obtain from the same vendor the required price quotes for later purchases totaling $19,812.
  • A supervisor at a state prison allowed a subordinate employee to take two-hour breaks nearly every day for three years at an estimated cost of $23,937.
  • Managers failed to take appropriate steps to prevent a claims board employee from improperly removing confidential documents from her workplace, and thus failed to promptly process $10,567 in compensation claims.
  • A manager with the Department of General Services used state vehicles for daily commutes, which cost the state an estimated $12,379 over a three-year period.
  • Caltrans paid two employees a total of $2,080 for hours they did not work, because they left their offices early to teach classes at a community college.
  • An employee in the DMV was found to have stolen $448 in vehicle registration fees. After the investigation, he was convicted of one charge of misdemeanor theft and fired.

The entire audit report findings can be accessed here.

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