Special Funds Review Finds No Further Deception

Gov. Jerry Brown called for the review after it was revealed that state parks officials had deceived lawmakers by underreporting nearly $54 million in two special funds

By Jason Kandel
|  Friday, Aug 3, 2012  |  Updated 9:47 PM PDT
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Gov. Jerry Brown announced Friday that beyond the state parks department, there is no more hidden cash. The investigation was prompted by the discovery a nearly $54 million in two special funds in the state parks department. That money will now be used to keep the parks around the state open. Conan Nolan reports for the NBC4 News at 5 p.m. on August 3, 2012.

Conan Nolan

Gov. Jerry Brown announced Friday that beyond the state parks department, there is no more hidden cash. The investigation was prompted by the discovery a nearly $54 million in two special funds in the state parks department. That money will now be used to keep the parks around the state open. Conan Nolan reports for the NBC4 News at 5 p.m. on August 3, 2012.

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A report released Friday found hundreds of millions of dollars in accounting discrepancies but no instances beyond the state parks department in which government officials purposely underreported the amount of money.

The review of more than 500 state special funds by the governor's finance department found discrepancies in the amount reported to it and the state controller's office but attributed those to differences in accounting methods, timing and human error.

Gov. Jerry Brown called for the review after it was revealed that state parks officials had deceived lawmakers and the governor's administration for more than a decade by underreporting nearly $54 million in two special funds.

"The bottom line of this review is that there are no such other circumstances in state government based on what we found," Finance Director Ana Matosantos said during a news conference.

The review is important because the finance department's numbers are used to develop the state's general fund budget each year and because lawmakers take millions of dollars in loans from the special funds to close budget deficits.

The budget irregularities in the nation's largest state parks system -- with 279 park sites -- date to at least 2000.

A preliminary investigation into the department's finances has revealed that for at least 12 years officials underreported tens of millions of dollars to the state Department of Finance.

As a result, the Department of Finance was not aware that the State Parks and Recreation Fund and the Off-Highway Vehicle Fund held $20.4 million and $33.5 million, respectively, above the department’s official, most recently reported balances.

In recent years, state budget problems have threatened the future closure of 70 state parks. The Legislature found a way to prevent closure for those parks, but not until after months of hand-ringing, campaigning and private fundraising by parks advocates.

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