State Used Antiterrorism Funds to Pay Furniture Movers

In a report released April 18, the state auditor reveals that the state used almost $100,000 from an antiterrorism fund to pay for activities such as purchasing and moving furniture.

The revelation was part of a report that found that the Department of Motor Vehicles (DMV) does not ensure that it has collected the appropriate amount of fees for special license plates, and failed to collect an estimated $12 million in fees in just a two-year period.

“Despite being required to collect annual retention fees on inactive special plates, it only collects these fees for a maximum of four years and only when plate holders notify Motor Vehicles of their intent to reuse them,” the auditor reported.

The audit found that the DMV:

  • Did not collect an estimated $12 million in revenue from special license plate fees during fiscal years 2010-11 and 2011-12.

  • Potentially undercharged some special plate owners by a total of nearly $10.2 million during fiscal years 2010-11 and 2011-12.

  • Has been inaccurate in the charges used to recover its administrative costs from special plate programs – during fiscal years 2009-10 through 2011-12 it overcharged the California Environmental License Plate Fund $2.1 million annually for personalized plates.

  • Did not recover net administrative fees of roughly $1.1 million during fiscal years 2009-10 through 2011-12 for other special plates because it continues to use the per-plate administrative cost information it developed when certain programs were established many years ago.

The auditor also identified major problems in how money has been spent from the special plate funds:

  • The California Emergency Management Agency (Cal EMA) did not monitor its $2.5 million contract with the California Fire Fighter Joint Apprenticeship Committee to ensure the training called for by the contract was delivered as specified.

  • Cal EMA spent Antiterrorism Fund money in a manner inconsistent with the purposes that state law establishes – it exceeded the 5 percent administrative cap in some years, and it used more than 10 percent of the expenditures review reviewed by the auditor for unrelated purposes. Of the nearly $914,000 in expenditures reviewed by the auditor, Cal EMA used approximately $98,000 from the antiterrorism fund to pay for activities such as purchasing and moving furniture, and for travel expenses related to training courses about how to apply for federal grants.

  • Some state agencies could not always provide adequate support for amounts they charged to special plate funds or could not support their rationale for such charges. For example, the California Department of Food and Agriculture could not provide adequate support for $896,000 in expenses.

  • The California Natural Resources Agency did not submit required annual and triennial reports to the governor and Legislature that provide information about program performance.

  • The California Victim Compensation and Government Claims Board did not identity and notify all individuals eligible for the Memorial Scholarship Program by the date required by law – ultimately, only 13 of the 43 identified eligible individuals, plus three other individuals who were not screened for eligibility, participated.

California currently has 11 special plates supporting specific programs.

The auditor said the agencies tagged in the report generally agree that financial oversight improvements are needed, and have provided plans for implementing needed changes.

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