In an audit released July 20, State Controller John Chiang found a lack of internal control policies and procedures at the California Department of Corrections and Rehabilitation (CDCR) that put millions of public dollars at risk of fraud and misappropriation.
"My auditors found the CDCR has grossly inadequate procedures in place for collecting overpayment of salaries and travel advances made through the agency's office revolving fund," Mr. Chiang said. "This is the latest in a series of agency audits conducted by my staff that point to the waste and abuse of state funds due to the lack of attention to collecting overpayments."
The audit looked at records from July 1, 2009, through July 31, 2010, and found inadequate collection efforts resulted in delays in collecting millions of dollars in overpayments for employee salary and travel advances. Of the more than $6 million in outstanding receivables related to salary and travel advances, more than $4 million (65.6 percent) were outstanding for longer than 60 days, and $465,000 (7.5 percent) had been outstanding for more than three years.
One employee who was terminated in May 2010 received a lump sum check for $14,950 from the office's revolving fund to meet the timeline for paying employees separating from state service. But the department did not take the steps necessary to offset the employee's final check, resulting in the former employee receiving both a salary advance and a full, final check. Six months later, there still was no effort to recoup the overpayment of $14,950.
In another case, an employee received a salary advance of more than $8,000 in January 2008, plus a regular payroll check. As of almost three years later, the advance still had not been collected, even though the employee still works for CDCR.
In another finding, the audit determined that CDCR used its revolving fund to spend more than the department's appropriation under the state budget. While the majority of those payments appeared to be for legitimate purposes, the department has no legal authority to make such payments without an appropriation from the Legislature. (Source: News release from State Controller John Chiang, July 20.)