Calif. Failed to Collect $20.8 Million

Data provided by the California State Auditor shows money was lost to waste, fraud and other problems.

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    TK
    California failed to recover $20.8 million lost to waste, fraud and other problems, according to data provided by the California State Auditor.

    The state may have failed to recover up to $20.8 million lost to waste, fraud and other problems, according to data provided by the California State Auditor.

    The money represents a tiny fraction of California’s projected $91.3 billion deficit. But given the state’s financial straits, government watchdogs say officials should do more to collect the funds.

    “Any dollar that has been wasted should be recovered,” said Bob Stern, former president for the Center for Governmental Studies in Los Angeles.

    “Somebody should do more, whether it’s the attorney general, the state controller, the state Franchise Tax Board, the Board of Equalization, or maybe we should give the California State Auditor more authority,” Stern said.

    State agencies have recouped about $209.7 million of the $230.5 million – or about 91 percent of the money – lost to waste, fraud and other issues from 2004 through 2011, according to an analysis performed by the auditor's office at the request of The Bay Citizen.

    The amount of money remaining may be less than $20.8 million, because state agencies may have already collected some of those funds. Agencies do not always tell the auditor how much they have recouped. 

    But getting all of the money back may not be possible. Over the past eight years, some state laws have changed in such a way as to prevent agencies from collecting funds once deemed recoverable. 

    The $230.5 million may not represent all of the taxpayer dollars California lost to waste, fraud and other issues. It's only the money the auditor's office uncovered during its performance audits and investigations from 2004 through 2011. 

    The auditor's office does not audit or investigate every state agency. Some audits are initiated by state lawmakers; others are required by state law. Investigations typically stem from whistle-blowers' tips and field observations from staff.

    And the state auditor lacks enforcement power. The agencies that it audits are responsible for recovering money lost to waste or fraud.

    “It is not something on us. It is up to the departments where we’ve identified waste to track down that money,” said Margarita Fernandez, chief of public affairs for the California State Auditor. “We make recommendations to the agencies, but we can’t force them to do something.”

    For example, in June 2010, the state auditor found that an inspector at the Division of Occupational Safety and Health received $70,105 in inappropriate payments for working at another job during state work hours. The inspector, who resigned in February 2009 while she was under investigation, has reimbursed the state for about $10,000 so far. In May, a San Diego Superior Court ordered her to repay an additional $57,926.

    But the agency is trying to figure out how to collect that money, said Dean Fryer, a spokesman for the state Department of Industrial Relations, which oversees the agency.

    “There are many avenues we could use to go after the money,” Fryer said. “We could hire a collections agency or hire an attorney to go after that money. This is a significant amount of money.”

    This story was produced by Bay Citizen, a nonprofit, investigative news source in the Bay Area and a part of the Center for Investigative Reporting.