Calif. audit: Whistleblowers ID thousands in waste

California auditor says whistleblowers identify thousands of dollars wasted by state employees

Associated Press

SACRAMENTO, Calif. (AP) -- State employees engaged in bribery, conspiracy to commit mail fraud, received improper overtime payments and were wrongly reimbursed for thousands of dollars in travel expenses, including one scheme that cost two state agencies more than $227,000 in lost payments, California's state auditor reported Tuesday.

In her annual whistleblower report, state Auditor Elaine Howle said her office received 7,238 reports of improper activity from April 2011 through the end of June 2012 and has opened investigations into nearly 1,500 cases from that time and before. The state's whistleblower act authorizes her office to investigate improper and illegal government activity that is wasteful or involves gross misconduct, incompetence or inefficiency.

In the biggest case cited this year, Los Angeles employees of the Franchise Tax Board and secretary of state's office collected thousands of dollars in payments from a courier in exchange for supplying him with hundreds of official state letters for his clients without charging the $15 to $20 per letter fees, the report said. All three were convicted of bribery and ordered by the Los Angeles County Superior Court to pay more than $227,000 in restitution for the ruse that occurred from at least 2007 to 2009.

The report said at least one other employee knew about the scheme and lied to investigators, while another quit.

One staffer was sentenced to seven days in county jail, 400 hours of community service and four years of probation, and a second to three years' probation and 400 hours of community service. The courier was sentenced to 14 days in custody, six years' probation and 200 hours of community service.

The auditor's report also found that a "high-level official" in the University of California president's office was wastefully reimbursed for $6,100 in travel expenses from July 2008 through July 2011, including for a five-day trip to England, even after she highlighted wasteful reimbursements to the man totaling more than $152,400 when he worked at the California State University chancellor's office.

The auditor also found:

— A Department of Education employee "misused state time and equipment when he posted nearly 4,900 comments on The Sacramento Bee's news website during state time" — 195 of the 208 days he was at work during the span reviewed, according to the report. He also used state time and resources for his second job as a contractor. The report said the man's supervisor knew that he was not doing much worked and was on the Internet excessively but repeatedly failed to supervise him or report the infractions so he could be punished.

The report does not say that the employee was fired, and a spokesman for the state Department of Education, Paul Hefner, did not immediately return a call Tuesday seeking information about whether the employee is still on the payroll.

— A former Employment Development Department staffer falsified documents for a bankrupt company to allow two of her friends to receive unemployment benefits by claiming they were laid off from a company where they never worked. The accounting technician and the recipients were later convicted of conspiracy to commit mail fraud for receiving nearly $93,000 in unemployment payments. The employee and one of her friends were sentenced to federal prison, and another was sentenced to probation. They were also ordered to repay the money.

— The California State Athletic Commission overpaid nearly $120,000 to 18 of its athletic inspectors by paying them an hourly overtime rate rather than straight-time pay for the jobs they did voluntarily in addition to their regular state jobs.

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