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July 2004 Through December 2004

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California State Auditor

Investigations of
Improper
Activities by
State Employees:

March 2005
I2005-1

The first five copies of each California State Auditor report are free.
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March 22, 2005

Investigative Report I2005-1

The Governor of California
President pro Tempore of the Senate
Speaker of the Assembly
State Capitol
Sacramento, California 95814
Dear Governor and Legislative Leaders:
Pursuant to the California Whistleblower Protection Act, the Bureau of State Audits presents its
investigative report summarizing investigations of improper governmental activity completed from
July 2004 through December 2004.
Respectfully submitted,

ELAINE M. HOWLE
State Auditor

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CONTENTS
Summary

1

Chapter 1
Department of Corrections: Improper Payments
to Employees

5

Chapter 2
Department of Health Services: False Claims for
Wages and Travel Expenses

9

Chapter 3
Department of Veterans Affairs: Misuse of
State Property and Resources

15

Chapter 4
Department of Finance: Improper Disclosure of
Confidential Information

19

Chapter 5
California State University, San Marcos:
Inappropriate Access of the California Law
Enforcement Telecommunications System

21

Chapter 6
University of California, Santa Barbara:
Conflict of Interest

25

Chapter 7
Department of Motor Vehicles: Time and Attendance
Abuse and Failure to Perform Duties

27

Chapter 8
Department of Corrections: Misuse of State Resources
and Time and Attendance Abuse

29

Chapter 9
Department of Corrections: Falsification of
Time Sheets and Failure to Perform Duties

31

Chapter 10
Department of Parks and Recreation: Misuse of
State Vehicle

33

Chapter 11
Department of General Services: Misuse of
State Transit Vouchers

35

Chapter 12
Update of Previously Reported Issues

37

Appendix A
Activity Report

41

Appendix B
State Laws, Regulations, and Policies

45

SUMMARY
RESULTS IN BRIEF

Investigative Highlights . . .
State employees and
departments engaged in
improper activities,
including the following:

þ Improperly paid 25 nurses
at four institutions
$238,184 in premium
pay associated with
inmate supervision.

þ Improperly received
$3,067 by submitting
false claims for wages
and travel costs.

þ Allowed employees to live
rent-free at a state facility,
resulting in a personal
benefit to the employees
of at least $10,920.

þ Improperly divulged
confidential information.

þ Violated conflict-ofinterest provisions by
hiring an employee who
also owned a company
that had a $554,000
contract with the State.

þ Purchased transit passes
for family members via a
state-subsidized program.

T

he Bureau of State Audits (bureau), in accordance with the
California Whistleblower Protection Act (Whistleblower Act)
contained in the California Government Code, beginning
with Section 8547, receives and investigates complaints of
improper governmental activities. The Whistleblower Act defines
an “improper governmental activity” as any action by a state
agency or employee during the performance of official duties that
violates any state or federal law or regulation; that is economically
wasteful; or that involves gross misconduct, incompetence, or
inefficiency. The Whistleblower Act authorizes the state auditor
to investigate allegations of improper governmental activities
and to publicly report on substantiated allegations. To enable
state employees and the public to report these activities, the
bureau maintains the toll-free Whistleblower Hotline (hotline):
(800) 952-5665 or (866) 293-8729 (TTY).
If the bureau finds reasonable evidence of improper governmental
activity, it confidentially reports the details to the head of the
employing agency or to the appropriate appointing authority.
The Whistleblower Act requires the employer or appointing
authority to notify the bureau of any corrective action taken,
including disciplinary action, no later than 30 days after
transmittal of the confidential investigative report and monthly
thereafter until the corrective action concludes.
This report details the results of the 11 investigations completed by
the bureau or with the assistance of other state agencies between
July 1, 2004, and December 31, 2004, that substantiated complaints.
This report also summarizes actions that state entities took as a
result of investigations presented here or reported previously by
the bureau. Following are examples of the substantiated improper
activities and actions the agencies have taken to date.

DEPARTMENT OF CORRECTIONS
In violation of state regulations and employee contract provisions,
the Department of Corrections (Corrections) improperly paid
25 nurses at four institutions $238,184 in premium pay associated
with inmate supervision between July 1, 2001, and June 30, 2003.
Corrections paid these nurses a premium even though they
California State Auditor Report I2005-1

1

either did not supervise inmates for the minimum number
of hours required or they lacked sufficient documentation to
support their eligibility to receive the increased pay. For 17 of
the 25 nurses, Corrections reported that it could not provide
documentation to support the pay increase it authorized because
the institutions that employed these nurses either had no
inmate supervisory hours to report, did not require nurses to
track these hours, lacked sufficient documentation to support
the hours claimed, or had destroyed all timekeeping records
relating to inmate supervision. Although Corrections provided
figures showing that the remaining eight nurses did incur
inmate supervisory hours, we found that in most instances these
nurses failed to accrue the number of supervisory hours required
to qualify them for the premium pay.

DEPARTMENT OF HEALTH SERVICES
An employee improperly received $3,067 by submitting false
claims for wages and travel costs. By misrepresenting departure
and return times on travel and attendance reports, the employee
received $1,894 for overtime and regular hours not worked.
The employee also claimed and received $1,173 for expenses
related to travel that she did not incur or was not entitled to
receive. Specifically, the employee claimed $253 for parking
expenses she did not incur, improperly claimed $151 in mileage
reimbursements by routinely overstating the distance to and
from the airport when conducting state business, received
$259 for meal expenses she was not entitled to receive, and
improperly received $510 for travel expenses she claimed on
days she did not work or that otherwise were not allowed.

DEPARTMENT OF VETERANS AFFAIRS
In violation of state law and department policy, the Department of
Veterans Affairs (Veterans Affairs) allowed at least three employees
to live at the Barstow Veterans Home (home) rent-free, resulting
in a personal benefit to the employees of at least $10,920. Despite
having previously reported to us that it adopted policies in
December 2002 establishing rental rates for employees who lodge
at the home, Veterans Affairs failed to notify the home of such
policies. As a result, the home continued to allow employees to
stay in vacant resident rooms free of charge. It was only after we
inquired about the matter in April 2004 that the home began
charging the appropriate rent to employees who lodged there.

2

California State Auditor Report I2005-1

DEPARTMENT OF FINANCE
In violation of state law governing an individual’s privacy rights,
the Department of Finance (Finance) improperly disclosed
confidential personal information when it published the names
and Social Security numbers of state employees in a procedure
manual (manual) that is distributed throughout the State and
is available on the World Wide Web. After being notified of its
breach of confidentiality, Finance revised and distributed the
manual and removed the confidential information from its own
Web site and any Web search engines that may have archived
the information. Finance also revised its procedures to prevent
violations of this nature in the future and began taking steps to
notify individuals affected by the improper disclosure.

UNIVERSITY OF CALIFORNIA, SANTA BARBARA
The University of California, Santa Barbara (university), violated
state contract law and its own policy when it hired an employee
who also owned a company under contract for services in the
amount of $554,000 with the university. Payments against
the contract totaled $161,961, of which $128,366 was paid
subsequent to the employee’s hiring. After we brought this matter
to its attention, the university terminated its contract with the
employee’s business in August 2004 and developed policies
designed to prevent such conflicts from occurring.

DEPARTMENT OF MOTOR VEHICLES
A manager at the Department of Motor Vehicles (Motor Vehicles)
engaged in time and attendance abuse and failed to perform her
duties. Motor Vehicles found that the manager routinely arrived
at work late or left early and, while at work, was seen frequently
playing card games on her personal computer or sleeping. The
manager also took advantage of her position by bringing her
child to work with her, and letting the child watch television or
play games in her office. In addition, Motor Vehicles concluded
that the manager failed to perform her supervisory duties by not
taking appropriate action to stop unsuitable behavior among staff.
Motor Vehicles demoted the manager and placed her in a position
with clear oversight and supervision over her day-to-day activities.

California State Auditor Report I2005-1

3

DEPARTMENT OF PARKS AND RECREATION
A supervisor at the Department of Parks and Recreation (Parks and
Recreation) used her state vehicle to transport her child to and
from school and to transport groceries she had purchased from
the local supermarket while on duty. Parks and Recreation also
determined that the supervisor, whose duties include responding
to emergency situations, used her state car to transport her
child to school on at least one occasion after having received a
verbal warning from her supervisor to refrain from such conduct.
Parks and Recreation reduced the supervisor’s pay by 5 percent for
two months for misuse of state property, willful disobedience,
and behavior that is of such a nature that it causes discredit to
the department.

DEPARTMENT OF GENERAL SERVICES
A Department of General Services (General Services) employee
inappropriately used a transit voucher to purchase transit passes
under a state-subsidized program for use by his family members,
who are not state employees. The employee admitted that
he had used the state-subsidized transit vouchers to purchase
youth passes for his children on two occasions. General Services
discussed with the employee the inappropriate nature of his use
of transit vouchers and told the employee he would be required
to reimburse General Services a total of $130, representing the
cost of two $65 vouchers. n

4

California State Auditor Report I2005-1

CHAPTER 1
Department of Corrections:
Improper Payments to Employees
ALLEGATION I2003-0834

T

he Department of Corrections (Corrections) improperly
granted registered nurses (nurses) an increase in pay that
they were not entitled to receive.

RESULTS AND METHOD OF INVESTIGATION
We investigated and substantiated the allegation. We found
that 25 nurses received increased pay associated with inmate
supervision even though they either did not supervise inmates for
the minimum number of hours required or they lacked sufficient
documentation to support their eligibility to receive the increased
pay. Between July 1, 2001, and June 30, 2003, Corrections paid
these nurses $238,184 more than they were entitled to receive.
To investigate the allegation, we asked Corrections to provide a
list of all nurses who worked at five designated institutions and
received the pay increase between July 1, 2001, and June 30, 2003,
along with the justification for having received the pay, including
the names and number of inmates supervised and the number
of supervisory hours provided. In determining the amount that
Corrections improperly paid these nurses, we included instances
when nurses received the pay increase even though Corrections
lacked documentation to support it. We also included those
instances when nurses reported inmate supervisory hours but
failed to provide such supervision for the required number of
hours. Finally, we reviewed state laws, regulations, and relevant
provisions of the nurses’ employment contract with the State.

BACKGROUND
The nurses discussed in this report received various types of
payments in addition to their base salary. For example, most of the
25 nurses we reviewed received three types of recruitment and
retention payments. These included a one-time payment of
$1,500, an annual payment of $2,400, and monthly payments

California State Auditor Report I2005-1

5

Department of Corrections

of up to $800 per month. In addition, most nurses were paid $446
per month for inmate supervision. This report focuses only on the
pay related to inmate supervision.
State regulations and employment contracts allow employees
to receive increased pay, provided they meet certain conditions.
Regulations related to alternate pay ranges require that,
unless otherwise authorized by the Department of Personnel
Administration (DPA), when an employee qualifies and moves
from one alternate range to another alternate range of a
classification, the employee shall receive a salary increase or
decrease equivalent to the total range differential between
the maximum salary rates of the alternate ranges. The state
contract for the nurses discussed in this report permits the
State to provide compensation by moving such employees
into an alternate pay range so long as they have regular, direct
responsibility for work supervision, on-the-job training, and
work performance evaluations of at least two inmates, wards,
or resident workers who substantially replace civil service
employees for a total of at least 173 allocated hours per pay
period. If the State determines that an overpayment has been
made to an employee, the employee shall reimburse the State,
provided the State initiates action to recoup the overpayment
within three years of the date of the overpayment.1

CORRECTIONS IMPROPERLY GRANTED NURSES
INCREASED PAY

Over a two-year period,
Corrections improperly
granted 25 nurses
$238,184 in premium
pay associated with
inmate supervision.

6

In violation of state regulations and employee contract provisions,
Corrections paid 25 nurses at four institutions $238,184 more
than they were entitled to receive between July 1, 2001, and
June 30, 2003.2 Corrections reported that it could not provide
documentation to support the pay increase it authorized for 17 of
the 25 nurses because the institutions that employed these nurses
either had no inmate supervisory hours to report, did not require
nurses to track these hours, lacked sufficient documentation to
support the hours claimed, or had destroyed all timekeeping records
relating to inmate supervision. Although Corrections provided
figures showing that the remaining eight nurses did supervise
inmates, we found that in most instances these nurses failed to
incur the required number of supervisory hours to merit the pay
1

For a more detailed description of the laws, regulations, and employee contract
discussed in this chapter, see Appendix B.

2

Corrections reported that one of the five institutions we inquired about, Ironwood State
Prison, did not grant its nurses the pay increase during the period of our review. That
institution is not included in Table 1.

California State Auditor Report I2005-1

Department of Corrections

TABLE 1
Improper Payments for Inmate Supervision Made to Corrections’ Registered Nurses
From July 1, 2001, Through June 30, 2003
Institution/Employee

Total Payments

Total Improper Payments

Percentage of Payments
That Was Improper

Avenal State Prison
Nurse 1*

$ 11,435

2,606

22.8%

Nurse 2*

7,983

7,030

88.1

Nurse 3†

10,358

10,358

100.0

Nurse 4†

12,132

12,132

100.0

†

Nurse 5

11,739

11,739

100.0

Nurse 6*

6,772

6,772

100.0

Nurse 7*

15,176

13,755

90.6

Nurse 8*

13,283

12,802

96.4

Nurse 9*

16,030

14,003

87.4

Nurse 10*

13,554

11,083

81.8

Nurse 11*

2,963

1,820

61.4

Nurse 12†

11,043

11,043

100.0

132,468

115,143

86.9

Nurse 13‡

8,505

8,505

100.0

‡

Nurse 14

11,318

11,318

100.0

Nurse 15‡

10,723

10,723

100.0

30,546

30,546

100.0

9,977

9,977

100.0

9,977

9,977

100.0

Nurse 17II

11,361

11,361

100.0

II

Nurse 18

11,695

11,695

100.0

Nurse 19II

12,548

12,548

100.0

II

Nurse 20

3,698

3,698

100.0

Nurse 21II

2,460

2,460

100.0

Nurse 22II

11,998

11,998

100.0

Institution Subtotals

$

California Institution for Women

Institution Subtotals
California State Prison, Sacramento
Nurse 16*§
Institution Subtotals
Chuckwalla Valley State Prison

II

Nurse 23

4,740

4,740

100.0

Nurse 24II

11,253

11,253

100.0

Nurse 25

12,765

12,765

100.0

82,518

82,518

100.0

$255,509

$238,184

II

Institution Subtotals
Totals

93.2%

* Corrections reported that these nurses incurred inmate supervisory hours, but we found that the hours reported did not meet the
required threshold.
†

Corrections reported that the institution destroyed all records after eliminating these positions.

‡

Corrections reported that the institution had no information available.

§

Corrections initially reported that this nurse incurred inmate supervisory hours, but documentation it provided later did not support any
of the inmate supervisory hours reported.

II

Corrections reported that the institution lacked sufficient documentation, such as employee time sheets, to justify the pay increase because
it did not require nurses to keep track of hours of inmate supervision. Corrections also reported that, effective January 5, 2004, these nurses
stopped receiving pay for inmate supervision.

California State Auditor Report I2005-1

7

Department of Corrections

increase. For example, one nurse received approximately $7,983 due
to the pay increase over a 16-month period. However, the nurse met
the inmate supervisory threshold of 173 hours per month on only
two occasions, resulting in an overpayment of $7,030. As shown in
Table 1 on the previous page, $238,184 of the $255,509 in inmate
supervisory pay received by these nurses were not justified.

Because its employees
received premium pay
they were not entitled
to receive, Corrections
may have violated state
law prohibiting gifts of
public funds.

Corrections also may have violated state law prohibiting gifts of
public funds by paying the nurses more than they were entitled
to receive. Although paying a public employee the appropriate
salary clearly serves a public purpose, when a public employee
receives an excessive salary that he or she is not entitled to, that
excess amount serves a purely private purpose and violates the
constitutional prohibition against making public funds available
for private purposes.
In addition, Corrections’ inability to provide supporting
documentation violates state law that requires each state agency to
establish and maintain a system or systems of internal accounting
and administrative controls. Internal controls are necessary to
provide public accountability and are designed to minimize fraud,
errors, abuse, and waste of government funds, according to the
Financial Integrity and State Manager’s Accountability Act of 1983
(act) contained in the California Government Code, beginning
with Section 13400. By maintaining these controls, agencies gain
reasonable assurance that measures they have adopted protect
state assets, provide accurate and reliable accounting data, promote
operational efficiency, and encourage adherence to managerial
policies. The act also states that the elements of a satisfactory
system of internal accounting and administrative control shall
include a system of authorization and record-keeping procedures
adequate to provide effective accounting control over assets,
liabilities, revenues, and expenditures. Further, it requires that,
when detected, weaknesses must be corrected promptly. Without
supporting documentation, Corrections has no way of ensuring
that the pay increases for these nurses were justified.

AGENCY RESPONSE
As of the date of this report, Corrections’ review was still ongoing.
Corrections reported that because the issues raised in our report
impacted several areas including personnel, inmate assignments,
labor relations, and business services, it assigned a team to research
the various aspects of the report findings to determine the best
approach for correcting the problems identified and to determine
the extent of the problem throughout the entire department. n
8

California State Auditor Report I2005-1

CHAPTER 2
Department of Health Services:
False Claims for Wages and
Travel Expenses
ALLEGATION I2003-1067

A

n employee of the Department of Health Services (Health
Services) submitted false travel and attendance reports in
order to receive wages and travel expenses that she was
not entitled to receive.

RESULTS AND METHOD OF INVESTIGATION
We investigated and substantiated the allegation as well as
other travel-related improprieties. The employee, whose duties
require her to travel regularly throughout the State to monitor
and provide training to retail businesses, improperly received
$3,067 by submitting false claims for wages and travel costs. We
determined that, by misrepresenting her departure and return
times on her travel and attendance reports, the employee was
paid $1,894 for overtime and regular hours she did not work.
We also found that the employee claimed and was paid $1,173
for expenses related to her travel that she either did not incur or
was not entitled to receive. Specifically, the employee claimed
$253 for parking expenses that she acknowledged to us she
did not incur. The employee also improperly claimed $151 in
mileage reimbursements by routinely overstating the distance to
and from the airport when conducting state business. Because
the employee presented false information on her travel claims,
she also received $259 for meal expenses that she was not
entitled to receive. Finally, the employee improperly received
$510 for travel expenses that she claimed on days she did not
work or that otherwise were not allowed.
To investigate the allegation, we reviewed the employee’s travel
expense claims and time sheets from October 2002 through
September 2004, as well as supporting documentation she
provided to explain her travel expenses. We also reviewed
pertinent state laws and regulations and travel rules outlined
in the employee’s bargaining unit contract. Furthermore, we
interviewed the employee and her manager, but we did not

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9

Department of Health Services

interview the employee’s supervisor, who approved the majority
of the improper claims, because the supervisor left state service
in June 2004.

THE EMPLOYEE SUBMITTED FALSE TRAVEL CLAIMS
AND ATTENDANCE REPORTS
On at least 45 occasions, the employee claimed reimbursement
for parking expenses that she later admitted she did not incur.
In addition, on at least 27 occasions the employee submitted
false claims for mileage between her residence and the airport.
Furthermore, on numerous occasions the employee adjusted her
travel claims and attendance reports by inflating the number
of hours she claimed to have worked so she could receive travel
expenses and wages, including overtime pay, that she was not
entitled to receive. Table 2 provides a breakdown of the expenses
and wages the employee improperly claimed.

TABLE 2
Improper Wages and Travel Costs Claimed by the Employee
Expense Type
False parking claims

Amounts
$ 253

Excessive mileage

151

Meals due to false departure/return times

259

Overtime associated with false time sheets

947

Wages associated with false time sheets

947

Expenses claimed on days off or otherwise not allowed

510

Total

$3,067

Improper Claims for Parking Expenses
The employee inappropriately claimed $253 for parking, most
of which reportedly occurred in remote locations, even though
she did not incur any parking-related expenses. Each travel claim
submitted and signed by the employee contains a certification as
follows: “I hereby certify that the above is a true statement of the
travel expenses incurred by me in accordance with Department
of Personnel Administration rules in the service of the State of
California.” Because the employee falsely indicated that she had
incurred the expenses when she had not, we believe she may have
committed a theft and violated California law, which provides that
any person who presents a false or fraudulent claim for payment to
10

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Department of Health Services

any state officer is punishable by imprisonment in county jail for a
period of not more than one year, by a fine not to exceed $1,000,
or by both imprisonment and a fine; or by imprisonment in state
prison, by a fine not to exceed $10,000, or by both imprisonment
and a fine.3
On numerous occasions, the employee claimed expenses of $5 or
$6 for parking in remote locations, such as retail stores in Gilroy
and Morgan Hill, where individuals typically are not required to
pay for parking. When we asked the employee about parking in
these locations, she admitted that she did not have to pay to park
but added that she claimed the expense in an effort to recover the
cost of providing treats and candy to participants in her training
classes. Regardless of her explanation, the labor agreement
between the State and the bargaining unit representing the
employee (labor agreement) allows reimbursement for actual
costs for parking and other transportation expenses that are
incurred appropriately and necessarily as a result of conducting
state business. The labor agreement also allows employees to
claim $6 per day for actual incidental expenses—an expense the
employee regularly claimed.

Excessive Mileage Claims

By routinely overstating
the distance between
her home and the
airport, the employee
received $151 in mileage
reimbursements she was
not entitled to receive.

The employee inappropriately submitted travel expense claims
for mileage between her residence and the airport. According to
the labor agreement, if travel begins or ends one hour before or
after her workday or occurs on a day off, she is allowed to claim
mileage for travel to and from her residence. Otherwise, she
is entitled to reimbursement only for the lesser of the mileage
between her headquarters and the airport (8 miles) or her home
and the airport (18 miles). In almost every instance in which the
employee claimed reimbursement for mileage for traveling to
the airport, she indicated that the distance traveled was 30 miles
each way, regardless of when her travel began or ended. The
employee told us that she always claimed the distance from her
residence to the airport because it was her practice during the
workday to travel home from her headquarters, pack for her
trip, and leave from her residence to the airport, even though
her home is in the opposite direction. However, the employee
could not explain why she indicated on her travel claims that the
distance was 30 miles even though she acknowledged that she

3

For a more detailed description of the laws, rules, and regulations discussed in this chapter,
see Appendix B.

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11

Department of Health Services

understood the distance from her residence to the airport is
less than 20 miles. As a result, she received $151 in mileage
reimbursements that she was not entitled to receive.

Improper Claims for Meals, Wages, and Overtime

On a least 22 occasions,
the employee falsely
indicated she was
working in order to
receive $1,894 in wages
and overtime.

Because of poor administrative controls and supervision, the
employee was able to falsify travel claims and attendance reports
to improperly receive $2,153 in meals and wages, including
overtime pay. Even a cursory review of the employee’s travel and
attendance reports by her supervisor would have revealed that
the employee frequently inflated her hours so she could receive
meals and pay that she was not entitled to receive. However, as
we mentioned previously, we did not interview the supervisor
who approved these claims because she retired before we began
our investigation. State regulations require that each employee
making a claim for travel expenses show the inclusive dates
for which the expenses are claimed and the times of departure
and return. Regulations also state that it is the responsibility of
the officer approving the claim to ascertain the necessity and
reasonableness of the expenses for which the reimbursement
is claimed and that state departments are required to keep
complete and accurate time and attendance records for each
employee. We identified at least 16 instances in which the
employee misrepresented her departure or return times on her
travel claims so she could improperly receive a total of $259
for meals. We also identified at least 22 instances in which
the employee falsely indicated that she was conducting state
business in order to receive a total of $1,894 in wages, including
overtime, for work she did not perform.
In one instance, the employee indicated on her travel claim that
her trip ended at 9:30 p.m., and claimed $18 for dinner. Based
on provisions in the labor agreement, this expense would be
allowable provided the trip ended at or after 7 p.m. However, the
airport parking receipt the employee submitted with her travel
claims indicated that her trip ended at 2:30 p.m.; therefore,
she returned earlier than she claimed and was not entitled to
reimbursement for dinner. The attendance reports submitted by
the employee for this date also show that her day ended at 9:30 p.m.
and that she claimed five hours of overtime, even though her
parking receipt shows that her day ended seven hours earlier.
In another example, the employee’s travel claim showed that
her trip ended at 7 p.m. and that she claimed $40 for meals and
incidental expenses. She also claimed on her attendance reports
that she worked until 7 p.m., which represented a full day’s wages

12

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Department of Health Services

plus 2.5 hours of overtime, despite submitting airport parking
receipts with her travel claim showing that her trip ended that
morning at approximately 8:15 a.m.
When we asked the employee about these and other
inconsistencies, she was unable to explain the discrepancies and
could not demonstrate that she had performed any state work to
account for the time she claimed. As we mentioned previously,
we determined that the employee improperly received $1,894
in overtime and wages in addition to $259 in unallowable meals
as a result of listing false start and end times on her travel and
attendance reports. However, because the employee did not
always provide time-stamped receipts with her travel claims, we
were unable to determine if she received unallowable wages and
meals beyond what we have identified in this report.

Excessive Reimbursements and Unallowable Expenses

The employee claimed
and received $185 for
a dinner expense even
though she was only
allowed to claim $18.

In addition to submitting false travel and attendance reports,
the employee claimed and was paid $510 for excessive
reimbursements, expenses incurred on days off, and other
unallowable expenses. In several instances the employee claimed
reimbursements for meals while traveling, despite indicating on
her travel claims a trip departure or return time that made the
expense unallowable. In many other instances, the employee
claimed reimbursements for more than she was allowed. For
example, the employee claimed and was reimbursed $185 for
a dinner expense, even though the labor agreement allows the
employee to claim only $18 for dinner. When we asked the
employee to explain this expense, she told us it was a clerical error
and that she would repay Health Services the $167 difference
between the amount allowed and the amount claimed.
The employee also claimed excessive reimbursements for airport
parking. We identified five instances in which the employee
claimed reimbursement for parking at the airport hourly lot,
which charges $24 per day, when she could have parked at a
daily lot that charges $10 per day. State regulations require that
departments determine the necessity for travel and that such
travel represents the State’s best interest. When we asked the
employee why she used the hourly parking lots, she told us that
she did so because she was in danger of missing her flights and
that the hourly lot is closer to the terminal. However, arriving at
the airport in a timely manner is the employee’s responsibility,
and it does not appear that this practice of parking in the hourly
lot is in the State’s best interest.

California State Auditor Report I2005-1

13

Department of Health Services

We also identified numerous instances in which the employee
claimed reimbursements for travel expenses on her days off.
The employee explained that in some cases she left for a trip the
night before when she needed to be at a certain location early
the next morning, or she returned home the next day because
her work ended late at night and she was too tired to travel
home. This may be an effective practice in certain situations;
however, we found several instances in which the employee
claimed reimbursement for travel expenses on her days off
but could not demonstrate a business reason for doing so. For
example, in one instance the employee rescheduled her flight
and extended her vehicle rental for an additional day, with
no apparent business reason for doing so. As a result, the State
incurred an additional $59 related to rental car and parking
expenses. The employee could not explain why she extended
her trip, and records she provided to us indicate that her state
business was concluded early the prior day.
It concerns us that Health Services lacked the necessary controls
to ensure that the employee did not receive the improper
reimbursements and wages identified in this report. State law
requires each state agency to establish and maintain a system
or systems of internal accounting and administrative controls.
Further, this act requires that, when detected, weaknesses must
be corrected promptly. As the examples in our report illustrate,
we believe most of the improper payments the employee
received could have been identified if the employee’s supervisor
or other individuals responsible for reviewing the employee’s
claims had performed an adequate review.

AGENCY RESPONSE
As of the date of this report, Health Services’ review was still
ongoing. Based on its preliminary review, Health Services
acknowledged that the employee’s supervisor should have
identified and denied many of the inappropriate charges on
the employee’s travel claims. Health Services also reported that
it will provide training to all its supervisors working in the
employee’s branch so that they can better understand their
responsibilities for reviewing travel claims and overtime requests
submitted by those under their supervision. n

14

California State Auditor Report I2005-1

CHAPTER 3
Department of Veterans Affairs:
Misuse of State Property and Resources
ALLEGATION I2004-0711

T

he Department of Veterans Affairs (Veterans Affairs) allowed
employees to lodge at the Barstow Veterans Home (home)
rent-free.

RESULTS AND METHOD OF INVESTIGATION
We asked Veterans Affairs to assist us with the investigation, and
we substantiated the allegation. In violation of state law and
Veterans Affairs policy, the home allowed at least three employees
to live at the facility rent-free, resulting in a personal benefit to the
employees of at least $10,920.4 Despite having previously reported
to us that it adopted policies in December 2002 establishing
rental rates for employees who lodge at the home, Veterans Affairs
failed to notify the home of such policies. As a result, the home
continued to allow employees to stay in vacant resident rooms free
of charge. To investigate the allegation, we asked Veterans Affairs
to provide us with information regarding employee lodging at the
home since July 1, 2003, including relevant department policies,
the dates and total number of nights employees stayed at the
home, and supporting documentation showing that the employees
listed had reimbursed the State for this benefit.

BACKGROUND
Prior to this investigation, we sent an inquiry on October 25, 2002,
asking Veterans Affairs to provide a list of employees who had
lodged at the home in the past two years, schedules showing
the housing and service rates these individuals were charged,
and departmental policies and procedures pertaining to such
arrangements. On November 25, 2002, Veterans Affairs responded
that it had not been able to fill the facility and had difficulty
recruiting personnel since opening the home. Because of these
recruitment difficulties, Veterans Affairs reported that it hired
employees who lived far away from the home, and that the
4

For a more detailed description of the laws and policies discussed in this chapter, see
Appendix B.

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15

Department of Veterans Affairs

home permitted various personnel to stay in unoccupied resident
rooms rent-free. It added that the home kept no records of these
arrangements because it did not charge its employees for the use of
these vacant rooms.
Subsequently, Veterans Affairs developed a policy effective
December 1, 2002, that allowed employees who lived long
distances from the home to lodge at the home provided the
employees paid an established rental rate and the arrangement
did not displace any of the home’s veteran patients. Specifically,
the policy set lodging rates at $300 per month or $10 per day
for management employees, and $210 per month or $7 per
day for all other employees. The policy also specified that no
veteran resident is to be displaced to provide temporary housing
to employees and that such arrangements may be terminated
for any reason after a 24-hour notice.5 This policy is designed
to avoid violating the provision of the California Constitution
that prohibits the giving of any gift of public money or thing
of any value to any individual for a private purpose, and to
avoid violating the state law that prohibits state officers and
employees from using state resources such as buildings, facilities,
or equipment for personal enjoyment or private gain.

DESPITE BEING NOTIFIED OF THE ISSUE, VETERANS
AFFAIRS FAILED TO ENSURE THAT THE HOME
COLLECTED RENT FROM THESE EMPLOYEES

The Barstow Veterans
Home allowed three
employees to live at the
home rent-free, resulting
in a personal benefit to
the employees of $10,920.

In violation of state law and department policy, and despite
our previous notification to Veterans Affairs about the matter
via our October 2002 letter, the home allowed at least three
employees to live at the facility rent-free, resulting in a personal
benefit of at least $10,920. Although one of these employees
ceased boarding at the facility after separating from Veterans
Affairs in 2003, the other two continued to live rent-free at
the home until we again brought the matter to the attention of
Veterans Affairs in April 2004. We acknowledge the difficulty the
home reportedly experienced in recruiting employees, and the
fact that Veterans Affairs may provide housing to its employees
at a rate that may be less than fair market value in order to
retain employees, but we believe that providing housing at no
cost may have constituted a gift of public funds and violated
other state laws as well as Veterans Affairs’ own policy.

5

16

Lodging rates are for the use of vacant resident rooms, which are 500 square feet or less,
share common bath and shower facilities with other rooms, and do not include regular
cooking facilities.

California State Auditor Report I2005-1

Department of Veterans Affairs

Veterans Affairs stated that the current home administrator was
unaware of existing policy, explaining that frequent turnover
within Veterans Affairs’ management and executive branches
led to its failure to disseminate and implement the policy. In
failing to implement its own policy, Veterans Affairs and the
home violated state law making each state agency responsible
for establishing and maintaining a system or systems of internal
accounting and administrative controls. Internal controls
are necessary to provide public accountability and should
be designed to minimize fraud, errors, abuse, and waste of
government funds. Further, state law declares that when an
agency detects weaknesses, it must correct them promptly, a
requirement that Veterans Affairs failed to fulfill.

AGENCY RESPONSE
Shortly after our second inquiry regarding the matter—in
April 2004—the home began charging the appropriate rent to
employees who lodged there. However, Veterans Affairs reported
that it did not attempt to collect rent from these employees
for the months before April 2004 because it apparently failed
to disseminate the policy restricting such arrangements, and
past executive and management employees may have provided
verbal approval for employees to lodge rent-free at the home. In
addition, Veterans Affairs revised its employee housing policy,
establishing a single lodging rate of $300 per month or $10 per
day for all employees. n

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17

Blank page inserted for reproduction purposes only.

18

California State Auditor Report I2005-1

CHAPTER 4
Department of Finance: Improper
Disclosure of Confidential Information
ALLEGATION I2004-1104

T

he Department of Finance (Finance) improperly disclosed
an individual’s name and Social Security number on its
Web site and in one of its publications.

RESULTS AND METHOD OF INVESTIGATION
We investigated and substantiated the allegation. We found
that Finance published the name and Social Security number
of a former state employee in a publication that is distributed
throughout the State and is available on the World Wide Web
(Web). To investigate the allegation, we used a popular Web search
engine to search for the individual’s name. The first two results
were links to Finance’s Web site, which contained multiple
references to the individual’s name and Social Security number.
We asked Finance to determine the cause and extent of the improper
disclosure and to explain how it plans to remedy the situation. As
part of its review, Finance identified two other state employees and
a state vendor whose names and Social Security numbers also had
been disclosed improperly. Finance told us that the staff members
who prepared the publication were responsible for the improper
disclosures. We believe that these disclosures by Finance violated the
individuals’ privacy rights.6

AGENCY RESPONSE
After being notified of its breach of confidentiality, Finance
quickly took action to remove the confidential information from
its own Web site and from any Web search engines that may
have archived information from the Web site before the time
it was updated. In addition, Finance provided updates, without
the confidential information, to users with hard copies of the
publication and revised its procedures to prevent violations of

6

For a more detailed description of the law discussed in this chapter, see Appendix B.

California State Auditor Report I2005-1

19

Department of Finance

this nature in the future. Finally, upon discovering that it
had disclosed other individuals’ confidential information,
Finance began taking steps to notify those individuals of the
improper disclosure. n

20

California State Auditor Report I2005-1

CHAPTER 5
California State University,
San Marcos: Inappropriate Access
of the California Law Enforcement
Telecommunications System
ALLEGATION I2004-0613

A

public safety office manager at California State
University, San Marcos (CSU San Marcos), improperly
directed his subordinates to use passwords assigned to
coworkers to access confidential law enforcement information
via the California Law Enforcement Telecommunications
System (CLETS).

RESULTS AND METHOD OF INVESTIGATION
We asked the California State University, Chancellor’s Office
(chancellor’s office) and the Department of Justice (Justice)
to assist us with the investigation, and they substantiated the
allegations. To investigate the allegations, the chancellor’s office
reviewed applicable policies and procedures, interviewed CSU
San Marcos employees and others, and reviewed the training
and CLETS access records of 18 public safety office employees.7
The chancellor’s office concluded that the manager improperly
directed his subordinates to use passwords assigned to coworkers
to access confidential law enforcement information via CLETS.
In addition, the chancellor’s office found that the employees
who borrowed the passwords had not received required training
in the use of CLETS and that CSU San Marcos failed to maintain
sufficient records to demonstrate whether it had complied with
training requirements.

7

For a more detailed description of the laws and policies discussed in this chapter, see
Appendix B.

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21

California State University, San Marcos

Improper Distribution and Use of Passwords
Many CSU San Marcos public safety employees, including police
officers and dispatchers, have access to CLETS, which is maintained
by Justice.8 CLETS is a telecommunications system that provides
access to highly sensitive information and may only be used by
designated personnel who have met specified requirements and
have had the required training. Each CLETS user is required to
have CLETS training and his or her own user identification and
unique password to access the system and is accountable for all
transactions under that identification. In addition, according to
state law it is a misdemeanor to furnish a record or information
obtained from a record to a person who is not authorized by law
to receive the record or information. Nevertheless, the chancellor’s
office found that 12 of the 18 public safety employees whose
usage it reviewed had no record of an individual CLETS user
identification, and 11 of those 12 employees accessed CLETS with
other employees’ user identifications.

One employee stated
that management
directed him to provide
his user identification
and password to another
employee and believed
this employee had never
been assigned her own
user identification and
password.

Several employees told the chancellor’s office that public safety
office management had required them to provide their CLETS user
identification and password to other employees and further stated
that this was common practice when new employees, including
dispatchers, were being trained, even though new dispatchers
should have received their own user identification and password
upon beginning employment with the public safety office. For
example, one dispatcher who was hired in March 2004 did not
receive a CLETS user identification and password until July 2004.
Although the employees interviewed did not know how long the
new employees were permitted to use their CLETS information,
one employee stated that management directed him to provide his
user identification and password to another employee in May 2002,
and believed that the other employee had never been assigned
her own user identification and password, even though she was
assigned dispatcher shifts without another dispatcher on duty.
Because the public safety office did not maintain a historical list of
user identifications with corresponding creation and termination
dates, the chancellor’s office was unable to determine which
employees used which identifications during particular periods of
time. The chancellor’s office also requested the same information
from Justice; however, Justice does not maintain a listing of user
identifications. The maintenance of CLETS user identifications is
the responsibility of the user agency.
8

22

CLETS provides computer links that allow law enforcement and others to access the
extensive database in the Criminal Justice Information System. The network includes
computer links to similar federal law enforcement information systems and the
California Department of Motor Vehicles.

California State Auditor Report I2005-1

California State University, San Marcos

The chancellor’s office interviewed several individuals who
stated that they had used the public safety office manager’s
user identification and password to access CLETS, and the
manager confirmed this fact. The manager explained that these
individuals knew how to perform basic CLETS inquiries and said
that he believed their access to this information was necessary
for officer safety purposes and was, therefore, appropriate.

Failure to Comply With Training Requirements
The chancellor’s office concluded not only that the manager
improperly directed the employees to share passwords but
that some employees who used a borrowed password to access
CLETS had not received required CLETS training and that CSU
San Marcos was not maintaining sufficient training records to
show compliance with the requirements.

The chancellor’s office
concluded that none
of its 18 public safety
employees met CLETS
certification and
recertification standards.

The chancellor’s office attempted to determine compliance with
training requirements for 18 public safety employees but found
that CSU San Marcos did not adequately document training for any
of them. In addition, using other sources of information, such as
interviews with the employees, the chancellor’s office concluded
that none of the 18 employees met current CLETS certification
and recertification standards per the CLETS policy manual. As we
mentioned previously, CLETS provides access to highly sensitive
information, including state summary criminal history records,
and persons that access this law enforcement information are to
meet stringent training requirements and be assigned a unique user
password before access is granted by the law enforcement agency.

AGENCY RESPONSE
CSU San Marcos reported that it counseled the manager to
safeguard the passwords of all CLETS users and told him that
no one is to access CLETS unless they have their own unique
password in addition to the proper access authorization. Further,
all dispatchers have completed their initial certification for
CLETS and are being scheduled to complete the two-hour
training that is required every two years. All dispatchers,
sergeants, and police officers have their own unique passwords
and CSU San Marcos has assigned a new CLETS Agency Terminal
Coordinator. The chancellor’s office provided Justice with
the results of the investigation because Justice administers
CLETS. Justice noted that the chancellor’s office investigation
confirmed that violations of policy had indeed occurred and
that furthermore, to conceal the violations, CSU San Marcos
California State Auditor Report I2005-1

23

California State University, San Marcos

police department staff was less than truthful with Justice’s
inspectors during their onsite inspections. Justice issued a letter
of censure and imposed sanctions that included placing the
CSU San Marcos Department of Public Safety on probation
for 12 months, denying all requests for additional terminals
during the probationary period, and boosting Justice’s onsite
inspections from every two years to twice a year. Justice also
suspended the manager’s access to CLETS for four months,
required the new CLETS Agency Terminal Coordinator to
personally ensure and certify each month that CSU San Marcos
is in compliance with all policies, and informed the new CLETS
coordinator that he will be asked to appear before the next
advisory committee to report on CSU San Marcos’ compliance
with CLETS policies. n

24

California State Auditor Report I2005-1

CHAPTER 6
University of California,
Santa Barbara: Conflict of Interest
ALLEGATION I2004-0657

T

he University of California, Santa Barbara (university),
violated state law and university policy by hiring an
employee to work for the university who also owned a
company that had a contractual relationship with the university
at the time of hire.

RESULTS AND METHOD OF INVESTIGATION
We asked the university to assist us with the investigation, and it
substantiated the allegation. The university confirmed that it had
hired an employee who also owned a company under contract for
services in the amount of $554,000 with the university. Payments
against the contract totaled $161,961, of which $128,366 was
paid subsequent to the employee’s hiring, thereby violating state
law and university policy intended to prohibit such practices.9
To investigate the allegation, the university reviewed applicable
accounting, personnel, contracting, and purchasing records.
It also conducted interviews with personnel from its human
resources, communications services, business services, and
administrative services departments.
University policy prohibits the university from purchasing goods
or services from any university employee or near relative of such
an employee unless the goods or services are not available from
commercial sources or the university itself. In addition, a state
law that became operational in June 2003 prohibits University
of California (UC) employees, except those with teaching or
research responsibilities, from contracting with universities
within the UC system. The university violated its own policy
when, in June 2003, it hired an individual who owned a
company that contracted with the university for $554,000
from September 2002 through September 2004. In addition, by
continuing to contract with the employee’s business after the
new state law became operational in June 2003, the university
9

For a more detailed description of the laws and policies discussed in this chapter, see
Appendix B.

California State Auditor Report I2005-1

25

University of California, Santa Barbara

was in violation of this law, which prohibits employees from
engaging in any employment, enterprise, or activity from which
the employee receives compensation or in which the employee
has a financial interest if that employment, enterprise, or activity
is sponsored or funded by the university.
The university explained that even though the employee disclosed
his contractual relationship with the university when applying
for the job, the university’s business services unit determined that
no conflict existed because the position the employee applied for
did not involve purchasing authority and was not related to the
services being provided pursuant to the contract. However, after
we brought this matter to the university’s attention, it terminated
its contract with the employee’s business in August 2004. At the
time of the contract’s termination, payments under the contract
totaled $161,961, of which $128,366 was paid subsequent to the
employee’s hiring.

AGENCY RESPONSE
The university acknowledged the problem and reported that it
discussed the nature of the problem with the employees involved
and will provide ongoing training for employees regarding
existing and new policies. Additionally, the university will
require future vendors to certify that no one with a greater than
10 percent ownership share of the vendor is a UC employee.
It will also amend its current employment application to ask
whether the applicant is an employee of or has a greater than
10 percent ownership interest in any companies contracting
with the university. n

26

California State Auditor Report I2005-1

CHAPTER 7
Department of Motor Vehicles:
Time and Attendance Abuse and
Failure to Perform Duties
ALLEGATION I2004-0682

A

manager at the Department of Motor Vehicles (Motor
Vehicles) engaged in time and attendance abuse and
failed to perform her duties.

RESULTS AND METHOD OF INVESTIGATION
We asked Motor Vehicles to assist us in conducting the
investigation, and we substantiated the allegations. To investigate
the allegations, Motor Vehicles obtained the manager’s time
sheets and interviewed 21 of the 26 field office employees,
including the manager. In addition, we reviewed criteria related
to incompatible activities and causes for discipline.
During the interviews conducted by Motor Vehicles, most of
the staff in the manager’s office said the manager routinely
arrived at work one hour or more late and left an hour or more
before the office closed. At least one employee who was an
attendance clerk in the manager’s office for two years reported
that the manager was absent from work for one to five hours
almost daily. The manager told the office timekeepers not to
record these absences on her attendance reports because she
does not take breaks or lunch. Employees also reported that,
even when the manager is at the office, she spends most of her
time in her private office playing card games on her personal
computer or sleeping. Motor Vehicles found that 70 percent of
the staff members it interviewed were experiencing workplace
tensions, the primary source of which involved the dominant
perception that the manager frequently was absent and often
was inaccessible to the office staff when she was present. State
law prohibits employees from engaging in any employment,
activity, or enterprise that is clearly inconsistent, incompatible,
in conflict with, or inimical to his or her duties as a state officer
or employee.10 One such incompatible activity is not devoting
10

For a more detailed description of the laws and regulations discussed in this chapter,
see Appendix B.

California State Auditor Report I2005-1

27

Department of Motor Vehicles

one’s full time, attention, and efforts to state employment
during hours of duty as a state employee. In addition, state
regulations require departments to keep complete and accurate
time and attendance records for each employee.

The manager was aware
of inappropriate staff
behavior but did not take
action to stop the behavior.

Motor Vehicles also found that the manager failed to perform
her duty to halt inappropriate behavior exhibited by staff
under her supervision. Specifically, Motor Vehicles found that
the manager was aware of inappropriate behavior by her staff
and did not take action to stop the behavior, thereby failing to
follow Equal Employment Opportunity policies and training.
By failing to take action to stop the inappropriate behavior,
the manager may have created a potential liability for the
State if employees offended by the behavior had decided to
file grievances or lawsuits against Motor Vehicles. In addition,
many employees had complaints about the manager, saying
she showed favoritism to a particular employee, was a poor
role model for the staff, and took advantage of her position by
bringing her child to work and letting the child watch television
or play games in her office. Although this manager was not the
only manager in this particular office, Motor Vehicles found
that “an atmosphere of serious tension clearly exists among the
staff . . .” and that “management leadership is weak, unfocused
and volatile.” State law also outlines causes for discipline of a
state employee, including inefficiency, inexcusable neglect of
duty, dishonesty, discourteous treatment of the public or other
employees, and willful disobedience.

AGENCY RESPONSE
Motor Vehicles took adverse action against the manager in the
form of a two-step demotion. The adverse action recommendation
stated that, due to the seriousness of the charges against her, the
demotion should place the manager in a role in which her day-today activities are closely supervised. n

28

California State Auditor Report I2005-1

CHAPTER 8
Department of Corrections:
Misuse of State Resources and Time
and Attendance Abuse
ALLEGATION I2004-0745

T

wo employees of the Department of Corrections
(Corrections) misused state resources to conduct personal
business and engaged in time and attendance abuse.

RESULTS AND METHOD OF INVESTIGATION
We asked Corrections to assist us in conducting the investigation
and it substantiated these and other allegations. To investigate the
allegations, Corrections examined information on the employees’
state computers, interviewed employees, including the two
subjects and their manager, and conducted surveillance of the
two employees. Corrections found that both employees used their
state computers to conduct personal business and falsified their
time sheets by indicating they were at work when surveillance
indicated they were not. As a result of their falsification of the
time sheets, the employees received approximately $3,900 in
overpayments. In addition, the employees’ manager failed to
monitor the employees adequately.
Employee A used her state computer to shop and make
reservations unrelated to her state job and visited a computer
dating service on state time. Employee B used her state computer
to shop and order tickets for community events. In addition,
Corrections found that on one occasion, Employee A claimed
she worked a full eight-hour day when surveillance agents
actually followed her to another city approximately 40 miles
away, where she conducted personal business and never reported
to work. Corrections substantiated that there were a total of at
least five instances in which Employee A falsified her time sheets,
resulting in overpayments of approximately $2,200.
Surveillance of Employee B indicated that she was not at work
during her full workday, as her time sheet reflected, on more than
one occasion. On two occasions, agents followed Employee B while
she ran errands and reported to work after 10 a.m., two hours past

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29

Department of Corrections

her scheduled start time. Corrections estimates that Employee B
received $1,700 in overpayments as a result of her falsified time
sheets. Further, Employee B was negligent in her duties because she
did not follow procedures related to her attendance and took time
off without prior notification. In addition, Employee B refused to
work with her designated supervisor and was unable to complete
tasks required for her position.

Even though he received
numerous complaints
about Employee A
and Employee B from
other staff, the employees’
manager failed to confirm
their attendance and
overtime claims.

The employees’ manager failed to implement proper procedures
to monitor employee attendance and overtime. Numerous
employees confirmed that the manager did not have processes
in place to monitor staff work hours. Further, staff had
complained to the manager on numerous occasions about the
issues with Employee A and Employee B, and he failed to address
their concerns adequately. Finally, the manager signed the time
sheets of Employee A and Employee B without confirming the
hours worked or investigating the staff’s complaints.
State law prohibits employees from engaging in any employment,
activity, or enterprise that is clearly inconsistent, incompatible, in
conflict with, or inimical to his or her duties as a state officer or
employee.11 Two such incompatible activities are using state time
or equipment for private gain or advantage, and not devoting full
time, attention, and efforts to state employment during hours of
duty as a state employee. In addition, state regulations require
departments to keep complete and accurate time and attendance
records for each employee.

AGENCY RESPONSE
Corrections has not determined its disciplinary or corrective actions. n

11

30

For a more detailed description of the laws and regulations discussed in this chapter,
see Appendix B.

California State Auditor Report I2005-1

CHAPTER 9
Department of Corrections:
Falsification of Time Sheets and
Failure to Perform Duties
ALLEGATION I2003-0915

A

n employee of the Department of Corrections
(Corrections), Parole and Community Services Division
falsified her time sheets.

RESULTS AND METHOD OF INVESTIGATION
We asked Corrections to assist us with the investigation, and it
substantiated the allegation and other improprieties. It found
that the employee provided false information on her time sheets.
The employee admitted that she flexed, or modified, her regular
work hours, took extended lunches, and sometimes took work
home without amending her time sheets or work schedules
to reflect these changes. Corrections also determined that the
employee was negligent in her duties and responsibilities to
supervise and maintain an active caseload and that she was less
than truthful during its investigation. In addition, Corrections
found that the employee’s supervisor allowed the employee to
flex her work hours regularly, to take extended lunches, and
to take work home with the informal understanding that the
employee would make up the time. However, the supervisor
failed to follow up with the employee to ensure that the
employee made up the time and modified her work schedule to
reflect any changes. To conduct its investigation, Corrections
reviewed the employee’s time sheets, work schedules, and
caseloads and interviewed staff, including the employee.
State law prohibits state employees from not devoting their
full time, attention, and efforts to their jobs during hours of
duty as state employees. It also enumerates various causes for
disciplining state civil service employees, including inefficiency,
neglect of duty, and dishonesty.12

12

For a more detailed description of the laws discussed in this chapter, see Appendix B.

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31

Department of Corrections

AGENCY RESPONSE
Corrections issued a letter of instruction, which included a
corrective action plan that directed the employee to correct
casework deficiencies within an allotted time period. Corrections
also instructed the employee to stop taking work home, to
complete her work during regular business hours, and to obtain
prior approval from her supervisor when situations dictate a
need to change her schedule. In addition, Corrections instructed
the supervisor to ensure that any modifications to pre-approved
work schedules are duly noted, to reconcile employee time
sheets to work schedules every month, and to retain copies of
employee time sheets and work schedules for a period of three
years for each employee under her supervision. n

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California State Auditor Report I2005-1

CHAPTER 10
Department of Parks and Recreation:
Misuse of State Vehicle
ALLEGATION I2003-0943

A

supervisor at the Department of Parks and Recreation
(Parks and Recreation) used her state car to transport her
child and to run personal errands.

RESULTS AND METHOD OF INVESTIGATION
We asked Parks and Recreation to assist us in investigating
the allegation, and it substantiated the allegation. Parks and
Recreation found that the supervisor, whose duties include
responding to emergency situations, used her state vehicle to
transport her child to and from school and to transport groceries
she had purchased from the local supermarket while on duty.
Parks and Recreation also determined that the supervisor used her
state car to transport her child to school on at least one occasion,
even after having received a verbal warning from her supervisor
to refrain from such conduct. To investigate the allegation, Parks
and Recreation reviewed the supervisor’s time sheets, schedules,
and radio logs and interviewed witnesses and the supervisor.
State laws generally prohibit employees from using state resources
for any outside endeavor not related to state business and allow
an employer to discipline an employee for various reasons,
including misuse of state property and neglect of duty. State law
also specifically prohibits employees from using state-owned
vehicles for matters unrelated to state business. In addition,
state regulations provide that misuse of state vehicles includes
transporting any persons other than those directly involved with
official state business, except with the approval of the employee’s
immediate supervisor for each trip.13 The supervisor not only
violated state laws and regulations when she transported her
child in a state vehicle while on duty, she also exposed Parks and
Recreation and the public to the potential risk that she would not
have been able to respond in a timely manner to emergency calls
she might have received during these times.
13

For a more detailed description of the laws and regulations discussed in this chapter,
see Appendix B.

California State Auditor Report I2005-1

33

Department of Parks and Recreation

AGENCY RESPONSE
Parks and Recreation reduced the supervisor’s pay by
5 percent for two months for misuse of state property, willful
disobedience, and behavior of such a nature that it causes
discredit to the department. n

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CHAPTER 11
Department of General Services:
Misuse of State Transit Vouchers
ALLEGATION I2003-1036

A

Department of General Services (General Services)
employee misused state-supplied transit vouchers to
purchase transit passes for his family members.

RESULTS AND METHOD OF INVESTIGATION
We asked General Services to assist us with the investigation,
and it substantiated the allegation. To investigate, General
Services reviewed relevant records and criteria pertaining to
the transit voucher program (program) and interviewed several
General Services employees who participate in the program.
A 1988 Governor’s Executive Order included a provision for a
transit subsidy to be provided to state employees to assist in
reducing commute trips.14 Subsequently, the following language
pertaining to the program was added to the State’s employee
bargaining unit contracts: “Employees working in areas served
by mass transit, including rail, bus, or other commercial
transportation licensed for public conveyance, shall be eligible
for a 75 percent discount on public transit passes sold by State
agencies up to a maximum of $65 a month. Employees who
purchase public transit passes on their own shall be eligible for a
75 percent reimbursement up to a maximum of $65 per month.”
General Services concluded that on at least two occasions, the
employee inappropriately used a transit voucher to purchase
transit passes under this state-subsidized program for use by his
family members, who are not state employees. When questioned
by General Services, the employee admitted that he had used
the state-subsidized transit vouchers to purchase several youth
passes for his children on two occasions, but that in all other
instances he used the transit vouchers to purchase passes for
his own commute to and from work. The employee indicated
that he was not aware that the transit voucher should be used
only for his personal commute and that he had never read the
14

For a more detailed description of the laws and regulations discussed in this chapter,
see Appendix B.

California State Auditor Report I2005-1

35

Department of General Services

language on the top of the Transit Voucher Log stating that in
signing for the voucher the employee is certifying that he will be
the sole recipient and user of that voucher.
During its investigation, General Services interviewed several
employees participating in the transit voucher program and
became concerned that employees did not fully understand
program requirements. Specifically, General Services said it was
apparent that some employees perceived the program to be a
monthly benefit that is available whether or not an employee
currently needs a transit pass. General Services also stated that
an underlying assumption of the commute program is that
transit vouchers should be obtained only based on current need
and not on future projected need.

AGENCY RESPONSE
General Services discussed with the employee the inappropriate
nature of his use of transit vouchers and told the employee he
would be required to reimburse General Services a total of $130,
representing the cost of two $65 vouchers. General Services also
said it would work to ensure that commute program participants
receive additional guidance on program requirements. n

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CHAPTER 12
Update of Previously Reported Issues
CHAPTER SUMMARY

T

he California Whistleblower Protection Act, formerly known
as the Reporting of Improper Governmental Activities Act,
requires an employing agency or appropriate appointing
authority to report to the Bureau of State Audits (bureau) any
corrective action, including disciplinary action, it takes in response
to an investigative report not later than 30 days after the report is
issued. If it has not completed its corrective action within 30 days,
the agency or authority must report to the bureau monthly until it
completes that action. This chapter summarizes corrective actions
taken on three cases since we last reported them.

DEPARTMENT OF TRANSPORTATION
CASE I2002-700
We reported the results of this investigation on September 17, 2003.
An employee with the Department of Transportation (Caltrans)
misappropriated $622,776 by submitting purchase requests to a
company for information technology (IT) products and verifying
that the department received the products even though the
company never sent them. The employee also violated state laws
and policies by directing the company to retain state funds from
these fictitious purchases in an account outside of the State Treasury
and by allowing it to act as a fiscal agent for the State. Without
Caltrans approval, the employee used these funds, which had been
authorized for the purchase of specific IT products, to correct errors
she had made on previous purchase requests, to purchase training for
department staff, including herself, and to pay for other IT products
for the department. In addition, because the employee allowed the
company to hold state funds outside of the State Treasury, the State
incurred $112,696 in unauthorized taxes and fees.
Caltrans reported that it made several changes to strengthen
its IT procurement process and transferred the employee to
a branch where she does not perform procurement-related
duties. Caltrans also reported that it contacted the appropriate
law enforcement agencies to investigate any criminal activities
related to the misappropriation.

California State Auditor Report I2005-1

37

Updated Information

After Caltrans served the
employee with a letter
of warning regarding
her misappropriation of
$622,776 in state funds,
the employee retired
and Caltrans recovered
$112,696 from the vendor.

At the request of Caltrans, the California Highway Patrol (CHP)
completed a criminal investigation of the employee’s activities
and submitted the case to the Sacramento District Attorney’s
Office, which determined that there was insufficient basis to
prosecute the case. The CHP did not find any evidence that
the employee personally benefited from these transactions.
Caltrans reported that although it had recovered the balance
of unspent funds and received substantial IT training benefits
from the improper procurement, it would pursue the recovery
of questionable sales taxes associated with fictitious purchase
orders generated by the employee. Caltrans served the employee
with a letter of warning, advising her that her activities were
unauthorized, inappropriate, and in violation of state laws that
carry potential penalties to the employee of up to four years in
state prison and civil penalties of up to $10,000. The employee
retired from Caltrans on October 4, 2004. Caltrans reported that
it recovered $112,696 in unauthorized taxes and fees from the
vendor on December 16, 2004.

DEPARTMENT OF HEALTH SERVICES
CASE I2003-0853
We reported the results of this investigation on September 23, 2004.
In an effort to justify a business need for the number of vehicles
leased by a Department of Health Services (Health Services) office
(office), the office manager (Manager A) allowed employees under
her supervision to use state vehicles for their personal commutes.
Nine employees, including Manager A and another manager
(Manager B), used state vehicles to commute between their homes
and the office, in violation of state laws and regulations. We
determined that office employees received a personal benefit of
$12,346 as a result of their misuse of state vehicles. Because the
employees received a personal benefit as a result of the manager’s
decision, it appears that they violated state law prohibiting the use
of state resources for personal gain.
Health Services reported that after conducting a cost/benefit
analysis of state vehicle usage, it returned four of the 12 state
vehicles the office leases from the Department of General Services.
Additionally, as of April 8, 2004, it discontinued allowing office
employees to use state vehicles for home commutes and required
that all state vehicles be parked overnight in the office parking
lot. Finally, Health Services reported that it would conduct a

38

California State Auditor Report I2005-1

detailed review of the state vehicle mileage logs with employee
time sheets to determine the actual misuse by each employee
and would propose appropriate disciplinary action.

Updated Information
Health Services reported that it served Manager A and
Manager B with adverse actions and issued formal or informal
reprimands to nine other employees for using state vehicles
for personal purposes. Specifically, Health Services stated that
the adverse action reduces Manager A’s salary by 10 percent for
one year, and directs her to reimburse the State $11,051. This
reimbursement represents her personal use of state vehicles and
the misuse of state vehicles she authorized for her subordinates.
Similarly, Manager B’s adverse action reduces her salary by
5 percent for one year, and directs her to reimburse the State
$1,466 for her personal use of state vehicles. In addition, Health
Services issued a formal reprimand to three employees and
requested that they pay the State $582 for instances when they
used state vehicles on days they did not work. Finally, Health
Services served six employees with informal counseling memos
but did not seek reimbursement from these employees because
Health Services determined their misuse of state vehicles was
under the direction of Manager A.

DEPARTMENT OF CORRECTIONS
CASE I2003-0896
We reported the results of this investigation on March 24, 2004.
The California State Prison-Los Angeles County (Los Angeles
County Prison) of the Department of Corrections (Corrections)
mismanaged $3,300 it collected from television and motion
picture production companies that filmed at the prison for
costs prison staff incurred when providing security for film
production activities. An employee responsible for coordinating
with production companies misappropriated $1,500 that the
Los Angeles County Prison received from a television show for
filming at the prison by directing money that should have been
deposited into the department’s general operating fund into the
prison’s employee association, an association used to support
activities boosting employee morale. Additionally, Los Angeles
County Prison could not demonstrate that it was reimbursed
$1,800 in costs it incurred to accommodate filming parts of two
movies at the prison.

California State Auditor Report I2005-1

39

Los Angeles County Prison also participated in an improper
plan to route $4,150 in donations it received from production
companies through an inmate religious account before
subsequently transferring the money into the employee
association so that donors could claim their donation as a
tax-deductible contribution.

Corrections rescinded
the appointment of one
employee for his role
in mismanaging funds
collected from television
and motion picture
production companies.

Corrections’ review was still ongoing but it reported that the
Los Angeles County Prison suspended the use of the employee
association funds and all activities related to the employee
association pending development of operational procedures,
bylaws, and direction from its management. The Los Angeles
County Prison is also reviewing all film records to determine
whether it billed and received payment from production
companies for monitoring costs.

Updated Information
As of February 28, 2005, Corrections reported it completed
its investigation of the employees involved in this case.
Corrections rescinded the appointment of one employee, who
held a high-level managerial position, and is pursuing action
against other employees who were involved.

We conducted this review under the authority vested in the California state auditor by
Section 8547 et seq. of the California Government Code and applicable investigative and
auditing standards. We limited our review to those areas specified in the results and method
of investigation sections of this report.
Respectfully submitted,

ELAINE M. HOWLE
State Auditor
Date:

March 22, 2005

Investigative Staff:

Ken L. Willis, Manager, CPA
Scott Denny, CPA, CFE
Cynthia A. Sanford, CPA
Mike Urso

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California State Auditor Report I2005-1

APPENDIX A
Activity Report

T

he Bureau of State Audits (bureau), headed by the state
auditor, has identified improper governmental activities
totaling $14.6 million since July 1993, when it reactivated
the Whistleblower Hotline (hotline), formerly administered
by the Office of the Auditor General. These improper activities
include theft of state property, false claims, conflicts of
interest, and personal use of state resources. The state auditor’s
investigations also have substantiated improper activities that
cannot be quantified in dollars but that have had a negative
social impact. Examples include violations of fiduciary trust,
failure to perform mandated duties, and abuse of authority.
Although the bureau investigates improper governmental
activities, it does not have enforcement powers. When it
substantiates allegations, the bureau reports the details to
the head of the state entity or to the appointing authority
responsible for taking corrective action. The California
Whistleblower Protection Act (Whistleblower Act) also
empowers the state auditor to report these activities to other
authorities, such as law enforcement agencies or other entities
with jurisdiction over the activities, when the state auditor
deems it appropriate.
The individual chapters describe the corrective actions that
agencies took on cases in this report. Table A on the following
page summarizes all the corrective actions that agencies have
taken since the bureau reactivated the hotline. In addition,
dozens of agencies have modified or reiterated their policies and
procedures to prevent future improper activities.

California State Auditor Report I2005-1

41

TABLE A
Corrective Actions
July 1993 Through December 2004
Type of Corrective Action

Instances

Referrals for criminal prosecution

76

Convictions

8

Job terminations

63

Demotions

12

Pay reductions

47

Suspensions without pay

15

Reprimands

225

New Cases Opened Between July 2004 and December 2004
From July 1, 2004, through December 31, 2004, the bureau
opened 271 new cases.
The bureau receives allegations of improper governmental
activities in several ways. Callers to the hotline at (800) 952-5665
reported 129 of our new cases in this time period.15 The bureau
also opened 134 new cases based on complaints it received in the
mail and eight based on complaints from individuals who visited
the office. Figure A.1 shows the sources of all the cases opened
from July 2004 through December 2004.

FIGURE A.1
Sources of 271 New Cases Opened
July 2004 Through December 2004
��������
�� ���

����
��� �����

15

42

�������
��� �����

In total, the bureau received 2,275 calls on the hotline from July 2004 through
December 2004. However, 1,342 (59 percent) of the calls were about issues outside the
bureau’s jurisdiction. In these cases, the bureau attempted to refer the caller to the appropriate
entity. An additional 804 calls (35 percent) were related to previously established case files.

California State Auditor Report I2005-1

Work on Investigative Cases
July 2004 Through December 2004
In addition to the 271 new cases opened during this six-month
period, 47 previous cases awaited review or assignment as of
July 1, 2004; 22 were still under investigation by this office or by
other state agencies or were awaiting completion of corrective
action. Consequently, 340 cases required some review during
this period.
After examining the information gathered from complainants
and preliminary reviews, the bureau concluded that 193 cases did
not warrant complete investigation because of lack of evidence.
The Whistleblower Act specifies that the state auditor can
request the assistance of any state entity or employee in
conducting an investigation. From July 1, 2004, through
December 31, 2004, state agencies assisted the bureau in
investigating 46 cases and substantiated allegations on nine
(30 percent) of the 30 cases completed during the period. In
addition, the bureau independently investigated 11 cases and
substantiated allegations on four of the six completed during
the period. Figure A.2 shows the disposition of the 340 cases
the bureau worked on from July 2004 through December 2004.
As of December 31, 2004, the bureau had 57 cases awaiting
review or assignment.

FIGURE A.2
Disposition of 340 Cases
July 2004 Through December 2004
���������� ����

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����� ������� ����
������������ ��
����� �������� ����

������ �����

California State Auditor Report I2005-1

43

Blank page inserted for reproduction purposes only.

44

California State Auditor Report I2005-1

APPENDIX B
State Laws, Regulations, and Policies

T

his appendix provides more detailed descriptions of the
state laws, regulations, and policies that govern employee
conduct and prohibit the types of improper governmental
activities that this report describes.

CAUSES FOR DISCIPLINING STATE EMPLOYEES
The California Government Code, Section 19572, lists the various
causes for disciplining state civil service employees. These causes
include incompetence, inefficiency, inexcusable absence without
leave or neglect of duty, insubordination, dishonesty, misuse of
state property, and other failure of good behavior, either during
or outside of duty hours, that is of such a nature that it causes
discredit to the appointing authority or the person’s employment.

CRITERIA COVERING EMPLOYEE PAY
Chapter 1 reports on improper employee payments.
Section 19826 of the California Government Code requires the
Department of Personnel Administration (DPA) to establish
and adjust salary ranges for each class of position in the
state civil service. The California Code of Regulations, Title 2,
Section 599.681, requires that unless otherwise authorized by the
director of DPA, employees who qualify under established criteria
and move from one alternate salary range to another shall receive
an increase or decrease equivalent to the total of the range
differential between the maximum salary rates of the alternate
ranges and shall retain the salary adjustment anniversary date.
DPA’s Pay Scales and Section 11.8 of the state contract for
employees belonging to Bargaining Unit 17 permit the State
to provide Alternate Range 40 compensation to incumbents in
positions approved by DPA as having regular, direct responsibility
for work supervision, on-the-job training, and work performance
evaluation of at least two inmates, wards, or resident workers
who substantially replace civil service employees for a total of
at least 173 allocated hours per pay period. If the State overpays
these employees, Section 19838 of the Government Code and
Section 5.6 of the contract permit the State to seek reimbursement
California State Auditor Report I2005-1

45

by following agreed-upon collection methods but prohibit the
State from taking this action unless it is initiated within three
years from the date of the overpayment.

GIFT OF PUBLIC FUNDS
Chapters 1 and 3 report on gifts of public funds.
The California Constitution, Section 6, Article XVI, prohibits the
giving of any gift of public money or thing of any value to any
individual for a private purpose. This constitutional prohibition
is designed to ensure that the resources of the State will be
devoted to public purposes.
The Department of Veterans Affairs Administrative Manual,
policy 01-0004, states that staff who live long distances from a
veterans home may request lodging in vacant resident rooms.
This grant of temporary housing is a privilege, not a right, and
can be terminated with 24 hours’ notice for any reason. In
addition, the employee occupying a room shall be responsible
for paying the rental rate on a timely basis.

CRITERIA GOVERNING STATE MANAGERS’
RESPONSIBILITIES
Chapters 1, 2, and 3 report on weaknesses in management
controls, and Chapters 2, 7, 8, and 9 report on department
responsibilities concerning time and attendance abuse.
The Financial Integrity and State Manager’s Accountability Act
of 1983 (act) contained in the California Government Code,
beginning with Section 13400, requires each state agency
to establish and maintain a system or systems of internal
accounting and administrative controls. Internal controls are
necessary to provide public accountability and are designed
to minimize fraud, abuse, and waste of government funds.
In addition, by maintaining these controls, agencies gain
reasonable assurance that the measures they have adopted
protect state assets, provide reliable accounting data, promote
operational efficiency, and encourage adherence to managerial
policies. The act also states that the elements of a satisfactory
system of internal accounting and administrative controls shall
include a system of authorization and record-keeping procedures
adequate to provide effective accounting control over assets,
liabilities, revenues, and expenditures. Further, the act requires
that, when detected, weaknesses must be corrected promptly.

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California State Auditor Report I2005-1

Title 2 of the California Code of Regulations, Section 599.665,
requires departments to keep complete and accurate time and
attendance records for each employee.

REGULATIONS COVERING TRAVEL EXPENSE
REIMBURSEMENTS
Chapter 2 reports improper payment of travel expenses.
The California Code of Regulations, Title 2, Section 599.615.1,
requires each state agency to determine the necessity for travel
and states that this travel shall represent the State’s best interest.
Sections 599.638(a) and (c) relate to the travel expense account
claim form and state that it is the responsibility of the officer
approving the claim to ascertain the necessity and reasonableness
of incurring expenses for which reimbursement is claimed and
that each officer and employee making a claim for travel expenses
must show the inclusive dates of each trip for which allowances
are claimed and the times of departure and return.

CRITERIA COVERING FALSE CLAIMS AND THEFT
Chapter 2 reports on false travel expense claims.
The California Penal Code, Section 72, states that every person
who, with intent to defraud, presents for payment any false
or fraudulent claim, bill, account, voucher, or writing, is
punishable by imprisonment in the county jail for a period
of not more than one year, by a fine not exceeding $1,000,
or by both imprisonment and a fine, or by imprisonment in
the state prison, by a fine not exceeding $10,000, or by both
imprisonment and a fine.
Penal Code, sections 487 and 488, discuss grand theft and petty
theft. Section 487(a) provides that grand theft occurs when the
money, labor, or real or personal property taken is of a value
exceeding $400, and according to Section 488, theft in other
cases is petty theft.

PROHIBITIONS AGAINST USING STATE RESOURCES FOR
PERSONAL GAIN
Chapters 3 and 10 report personal use of state resources.
The California Government Code, Section 8314, prohibits state
officers and employees from using state resources such as land,
equipment, travel, or time for personal enjoyment, private gain,

California State Auditor Report I2005-1

47

or personal advantage or for an outside endeavor not related to
state business. If the use of state resources is substantial enough
to result in a gain or advantage to an officer or employee for
which a monetary value may be estimated, or a loss to the State
for which a monetary value may be estimated, the officer or
employee may be liable for a civil penalty not to exceed $1,000
for each day on which a violation occurs plus three times the
value of the unlawful use of state resources.

IMPROPER DISCLOSURE OF CONFIDENTIAL
INFORMATION
Chapter 4 reports on disclosing confidential information.
Title 5, Section 552a, of the United States Code, known as the
Privacy Act of 1974, and Article 1, Section 1, of the California
Constitution address privacy rights. Section 1798 of the
California Civil Code, known as the Information Practices
Act, recognizes the increased threat to privacy rights, given
the proliferation of computers and other types of information
technology, and imposes strict limits on the maintenance
and dissemination of personal information. Section 1798.24,
contained within that act, prohibits state agencies from
disclosing any personal information in a manner that would
link the information to the individual to whom it pertains.

CRITERIA COVERING THE CALIFORNIA LAW
ENFORCEMENT TELECOMMUNICATIONS SYSTEM
Chapter 5 reports on inappropriate access to
confidential information.
Section 15150 et seq. of the California Government Code
gives the Department of Justice authority to maintain a
statewide telecommunications system, called the California Law
Enforcement Telecommunications System (CLETS), for use by
law enforcement agencies. According to the California Penal Code,
Section 11105, the Department of Justice shall maintain state
summary criminal history information, which is the master record
of information compiled by the attorney general pertaining to
the identification and criminal history of any person, such as
name, date of birth, physical description, fingerprints, photographs,
dates of arrests, arresting agencies and booking numbers, charges,
dispositions, and similar data about the person. In addition,
California Penal Code, Section 11077(d), states that the attorney
general (the head of the Department of Justice) is responsible for the
security of criminal offender record information and shall initiate a
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California State Auditor Report I2005-1

continuing education program in the proper use and control of that
information for all agencies with employees who maintain, receive,
or are eligible to maintain or receive that information.
Section 15160 of the California Government Code states that the
attorney general shall adopt and publish the CLETS operating
policies, practices and procedures, and conditions of qualification
for membership. The CLETS Policies, Practices and Procedures,
Section 1.6.7, states that each terminal operator must log on
with a unique user ID and password, and is accountable for all
transactions transmitted under that user ID and password.

CRITERIA COVERING CONFLICTS OF INTEREST
Chapter 6 reports on a conflict of interest.
Section 10516 of the Public Contract Code states that no officer
or employee of the University of California shall engage in any
employment, activity, or enterprise from which he or she receives
compensation or in which he or she has a financial interest if that
employment, activity, or enterprise is sponsored or funded by a
university contract unless the employment, activity, or enterprise
is within the course and scope of the officer’s or employee’s
regular university employment. No officer or employee in the
university shall contract on his or her own individual behalf as
an independent contractor with any university department to
provide services or goods.
In addition, University of California, Santa Barbara, Policy 5327,
states that it is university policy to separate an employee’s
university and private interests and to safeguard the university and
its employees against charges of favoritism in the purchase of goods
and services. No purchase of goods or services shall be made from
any officer or employee of the university or from a near relative
of any such officer or employee unless there has been a specific
determination that such goods or services are not available from
other commercial sources or from the university’s own facilities.

INCOMPATIBLE ACTIVITIES DEFINED
Chapters 7, 8, and 9 report incompatible activities.
Section 19990 of the California Government Code prohibits a
state employee from engaging in any employment, activity, or
enterprise that is clearly inconsistent, incompatible, in conflict
with, or inimical to his or her duties as a state officer or employee.
This law specifically identifies certain incompatible activities,
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49

including using state time, facilities, equipment, or supplies for
private gain or advantage. In addition, Section 19990 requires
state employees to devote their full time, attention, and efforts to
their state jobs during hours of duty as state employees.

CRITERIA COVERING STATE MOTOR VEHICLES
Chapter 10 reports on the improper use of a state vehicle.
The California Government Code, Section 19993.1, provides
that state-owned motor vehicles shall be used only in the
conduct of state business. Section 599.802(c) of Title 2 of
the California Code of Regulations states that misuse of a
state-owned vehicle includes carrying in the vehicle any
persons other than those directly involved with official state
business, except with the approval of the employee’s immediate
supervisor for each trip.

CRITERIA COVERING TRANSIT VOUCHERS
Chapter 11 reports on the improper use of transit vouchers.
Governor’s Executive Order D-73-88, in an effort to have
California state government take leadership in resolving traffic
congestion through the efficient use of the transportation
system, includes a provision for a transit subsidy to be provided
to state employees to assist in reducing commute trips.
In addition, according to state bargaining unit contracts,
employees working in areas served by mass transit, including
rail, bus, or other commercial transportation licensed for public
conveyance, shall be eligible for a 75 percent discount on public
transit passes sold by state agencies up to a maximum of $65 a
month. Employees who purchase public transit passes on their
own shall be eligible for a 75 percent reimbursement up to a
maximum of $65 per month.

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California State Auditor Report I2005-1

INDEX
Department/Agency
California State University, San Marcos
Caltrans

Allegation
Number
I2004-0613
I2002-700

Allegation

Page Number

Inappropriate access of confidential
information

21

Update on misappropriation

37

Corrections

I2003-0834

Improper payments to employees

Corrections

I2003-0896

Update on misappropriation

39

Corrections

I2003-0915

Falsification of time sheets, failure to
perform duties

31

Corrections

I2004-0745

Misuse of state resources, time and
attendance abuse

29

Finance

I2004-1104

Improper disclosure of confidential
information

19

General Services

I2003-1036

Misuse of state transit vouchers

35

Health Services

I2003-0853

Update on misuse of state vehicles

38

Health Services

I2003-1067

False claims for wages and travel expenses

Motor Vehicles

I2004-0682

Time and attendance abuse, failure to
perform duties

27

Parks and Recreation

I2003-0943

Misuse of state vehicle

33

University of California, Santa Barbara

I2004-0657

Conflict of interest

25

Veterans Affairs

I2004-0711

Misuse of state property and resources

15

California State Auditor Report I2005-1

5

9

51

cc:

52

Members of the Legislature
Office of the Lieutenant Governor
Milton Marks Commission on California State
Government Organization and Economy
Department of Finance
Attorney General
State Controller
State Treasurer
Legislative Analyst
Senate Office of Research
California Research Bureau
Capitol Press

California State Auditor Report I2005-1