Audit Finds California Wasting Millions

SACRAMENTO (CN) - California's prison health care operator did not seek competitive bids and wasted $3.2 million of tax money to pay a contractor to shuffle paperwork, the state auditor says.

California Correctional Health Care Services has paid $17 million to upgrade electrical systems in state prisons since 2011, but the work was unlawfully done by a contractor under an existing agreement instead of being put out to bid, the audit states.

The agency "paid the contractor $3.2 million to do nothing more than process invoices of the subcontractor, who performed all of the work," according to State Auditor Elaine Howle's annual report .

The state also paid for goods and services that were not delivered for nearly a year, violating a prohibition of advance payments. Nor did CCHCS take necessary steps to ensure that the contractor delivered or performed on the agreement, the audit says.

Correctional Health Care did not immediately respond to a request for comment Thursday.

The audit details nine other substantiated allegations from whistleblowers, involving several state departments. In total, the report identified more than $4.2 million in wasted tax money, improper payments and misuse of state time.

It claims that CalTrans allowed an engineer to play golf on 55 days during work hours, on the taxpayers' dime. The engineer's supervisor did not manage the now-retired employee or ensure that his time sheets were accurate from August 2012 to March 2014, the audit states.

No one in CalTrans could account for how much work the engineer did in May 2014 because it was unclear who was supposed to be supervising him, the audit found.

CalTrans told the state that it tightened its policy on time sheets in July and has already seen improvements.

State Sen. John Moorlach, R-Costa Mesa, said the results of the audit show that reform is needed at the "troubled agency."

"How can we ask Californians to pay more for road repair without fixing Caltrans? We have no confidence that Caltrans is spending money properly. None. When you're overstaffed by 3,300 employees, I guess the only thing you can do is play golf," Moorlach said.

The audit also found that the agency did not increase rents to reflect the fair market value of state land rented by telecommunications companies in the San Francisco Bay Area, costing the state nearly $883,000 from July 2012 through September 2014.

It found that an office services supervisor in the Department of Industrial Relations ran a side business on his state computer, selling copied DVDs and duplicated CDs during work hours. The supervisor kept a catalog of movies he had for sale in a binder at work for customers to look through.

The audit found that the same employee sent and received sexually suggestive emails during work hours and used department resources to print materials for a co-worker's fitness studio.

He resigned after he was questioned, and Industrial Relations agreed not to put anything in his file about the investigation. Two months later, he was appointed as a supervisor in another state department.

An accounting officer at the Employment Development Department typed and printed more than 700 pages of personal letters to one person, sent 30 to 97 personal emails on a daily basis, and used her position to assist friends and family who had pending unemployment and disability claims with the state, the audit found.

The auditor also found that the Department of Corrections and Rehabilitation and the prison system's medical branch, Correctional Health Care, paid three salaried chief psychologists a total of $96,000 in extra pay and leave credits for being on call or for returning to work after their shifts ended.

Despite being told that these employees were not entitled to extra compensation under the state's labor agreement, officials continued the overpayments, according to the audit.

The report also found that field division staff at the Department of Water Resources improperly disposed of surplus state property that would cost at least $5,300 to replace, and that the Chula Vista Veterans Home wasted money when it bought a piece of equipment for nearly $50,000 that it has rarely used for five years.

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