Auditor Reports Millions of Dollars Wasted by State Agencies

State agencies are engaging in "wasteful and improper personnel decisions, improper contracting, conflict of interest, misuse of state resources, and dishonesty," the state auditor reported October 29.

Among the findings:

  • In the Department of Education, four senior-level managers and a former executive worked together to hire a preselected person for a permanent management position, without the required interview process, and improperly approved a higher-than-justified salary.

  • The Department of State Hospitals improperly allowed its "telepsychiatrists" to receive enhanced retirement benefits intended for those exposed to a risk of physical injury. The auditor wrote that this practice "will result in millions of dollars in overpaid retirement benefits if left uncorrected."

  • The Department of Industrial Relations unlawfully preselected a candidate for a management position before others submitted applications, and provided a higher salary even though the candidate didn't meet the requirements. This resulted in approximately $41,000 in overpayments.

  • A senior executive or his designee at the California Department of Veterans Affairs improperly approved 10 emergency contracts that totaled almost $628,000 under circumstances that did not qualify as emergencies according to the law. “The most egregious example involved nearly $187,000 CalVet spent on renovations of two employee housing units for administrators,” the auditor wrote. “As a result of the improper emergency contracts, CalVet failed to solicit legally required competitive bids designed to ensure that the State receives the best value for such contracts.”

  • Two assistant chiefs at the California Department of Forestry and Fire Protection knowingly allowed a battalion chief to make a construction contract with a company in which he had a financial interest.

  • An attorney employed by one of the departments within the Business, Consumer Services and Housing Agency misused state resources to manage his personal rental properties and to conduct legal work unrelated to the department. “The attorney misused his state-paid time and his state-issued computer at various times throughout his workdays and also directed a subordinate to assist him on two occasions,” the auditor reported.

  • Several California Department of Transportation supervisors and another employee improperly used state-owned vehicles to commute to and from work. The combined cost of their misuse was about $22,000.

  • A senior legal analyst and a legal secretary at the California Department of Justice consistently arrived late, departed early, and took extended lunch breaks without accounting for their missed time. The legal analyst’s partial‑day absences totaled 181 hours and cost the state approximately $7,011.

  • A staff trainer at the Franchise Tax Board regularly arrived to work late and left early without accounting for the missed time. She reported on her timesheet nearly 159 hours that she did not actually work, resulting in a cost to the state of about $6,717. In addition, the staff trainer improperly used her state-issued computer for personal purposes.

The report does not attach a dollar amount to every incident, and does not include a total for all the instances of wrongdoing, but states: “From 1993 through 2019, our investigative work led us to identify and make recommendations to remediate a total of $579.9 million in state spending resulting from improper governmental activities such as gross inefficiency, theft of state property, conflicts of interest, and personal use of state resources.”

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