(CN) – California has lost millions in revenue because it has not managed its public lands effectively, according to the Bureau of State Audits.
The scathing report says the State Lands Commission, which manages more than 4,000 state leases, “has missed opportunities to generate millions of dollars in revenues.” Some tenants stayed on public lands for years without paying rent.
Of the 10 delinquent leases reviewed, the audit found that almost half were past due for more than 17 years, and the state lost $1.6 million as a result.
The report also found the three-member State Lands Commission did not perform rent reviews in a timely manner and did not regularly appraise properties.
“According to the chief of the Lands Commission’s Administrative and Information Services Division, part of the reason that the commission does not consistently take action against delinquent lessees is because actions such as eviction require litigation, which is costly and staff intensive,” the report says.
The audit bureau was skeptical of the commission’s explanation.
“We expected that the commission would have conducted a cost-benefit analysis to determine when it would be beneficial to either seek a court judgment through the attorney general or pursue the case in another manner, such as using a collection agency,” the report says, adding that the commission’s chief counsel never performed such an analysis.
The auditor recommended that the commission should conduct such analyses in the future to collect money from delinquent tenants, and should “develop and adhere to policies and procedures” to track the status of late accounts.
The auditor also said the commission should establish a time standard to conduct rent reviews and should prioritize leases that generate the highest amounts of revenue for the state.
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