investigations of improper activities by state employees

8/8/2019 Investigations of Improper Activities by State Employees

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Investigations of ImproperActivities by State EmployeesDelay in Reassigning an Incompetent Psychiatrist, Misuseo State Resources, Failure to Protect the Security o

Confdential Documents, Thet o Registration Fees, andOther Violations o State Law

January 2 Report I2-2

IndependentTRANSPARENT Accountability

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CALIFORNIA STATE AUDITORB u r e a u o f S t a t e A u d i t s

Doug Cordiner

Chief Deputy

Elaine M. Howle

State Auditor

555 C a pit o l Ma l l , Su i t e 300 Sa c ra m ent o , C A 95814 9 1 6 . 4 4 5 . 0 5 5 9 1 6 . 3 7 . 0 0 1 9 a x www.bs a .c a .go v

January 18, 2011 Investigative Report I2010-2

e Governor of CaliforniaPresident pro empore of the SenateSpeaker of the AssemblyState CapitolSacramento, California 95814

Dear Governor and Legislative Leaders:

Pursuant to the California Whistleblower Protection Act, the Bureau of State Audits presentsits investigative report summarizing investigations completed between January and June 2010concerning allegations of improper governmental activities.

is report details eight substantiated allegations involving several state departments. roughour investigations, we found patients placed at risk and state funds wasted during the continuedemployment of an incompetent psychiatrist, misuse of state resources, theft of registration fees,and failure to protect the security of condential documents. As an example, we found thatthe Department of Corrections and Rehabilitation failed to promptly investigate allegationsof a psychiatrists incompetence, and in doing so, placed patients at risk and wasted nearly$367,000 in state funds as it continued to pay the psychiatrist more than $600,000 in salarywhile he was under investigation for nearly three years.

In addition, this report provides an update on previously reported investigations and describesadditional actions taken by state departments to correct the problems we previously identied.For example, the Department of Industrial Relations led a civil lawsuit against a formerinspector in an eort to obtain reimbursement for $70,105 in improper payments she receivedand formally reprimanded the inspectors immediate supervisor for his failure to monitor theinspectors time and attendance.

Respectfully submitted,

ELAINE M. HOWLE, CPAState Auditor


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California State Auditor Report I2010-2

January 2011

Contents

Summary 1

Chapter 1DepartmentofCorrectionsandRehabilitation:Delayin

ReassigninganIncompetentPsychiatrist,

WasteofStateFunds 7

Chapter 2CaliforniaConservationCorps:FailuretoFollowState

ContractingLaws 15

Chapter 3DepartmentofCorrectionsandRehabilitation:Misuseof

StateResources,FailuretoAppropriatelyManageEmployees 19

Chapter 4VictimCompensationandGovernmentClaimsBoard:Failure

toProtecttheSecurityofCondentialDocuments 23

Chapter 5Depar tmentofGeneralServices:MisuseofState Resources 29

Chapter 6CaliforniaDepartmentofTransportation:FailuretoAdheretoEstablished

WorkSchedule,Failureto MonitorEmployeesAttendance 33

Chapter 7Depar tmentofMotorVehicles:TheftofRegistrationFees 37

Chapter 8DepartmentofCorrectionsandRehabilitation:Improper

OvertimeReporting 41

Chapter 9UpdateofPreviouslyReportedIssues

DepartmentofCorrectionsandRehabilitation 45

DepartmentofParksandRecreation 47


DepartmentofFishandGame,

OceofSpillPreventionandResponse 48


CaliforniaStateUniversity,OceoftheChancellor 52


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DepartmentofJustice 53

DepartmentofWaterResources 54

DepartmentofMotorVehicles 55


DepartmentofIndustrialRelations 56

DepartmentofConsumerAairs,

CaliforniaArchitectsBoard 57

Appendix

TheInvestigationsProgram 61

Index 65


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January 2011

Summary

Results in Brief

Te California Whistleblower Protection Act (WhistleblowerAct) empowers the Bureau of State Audits (bureau) to investigateand report on improper governmental activities by agenciesand employees of the State of California (State). Under theWhistleblower Act, an improper governmental activity is anyaction by a state agency or employee during the performance ofocial duties that violates any state or federal law or regulation;that is economically wasteful; or that involves gross misconduct,incompetence, or ineciency.

Between January 1, 2010, and June 30, 2010, the bureau received2,444 allegations of improper governmental activities, whichrequired it to determine whether the allegations involvedimproprieties by state agencies or employees. In response to theallegations, the bureau opened 420 cases, and it reviewed orcontinued to work on 327 cases it opened previously. For thesecases, the bureau completed a preliminary review process anddetermined which cases lacked sucient information for aninvestigation. Te bureau also referred cases to other state agenciesfor action andeither independently or with assistance from otherstate agenciesconducted investigations of cases.

Tis report details the results of eight particularly signicantinvestigations completed by the bureau or undertaken jointlyby the bureau and other state agencies between January 1, 2010,and June 30, 2010. Tis report also outlines the actions taken bystate agencies in response to the investigations into impropergovernmental activities described in this report and in priorreports. Te following paragraphs briey summarize theseinvestigations and the state agencies actions, which individualchapters discuss more fully. For more information about thebureaus investigations program, please refer to the Appendix.

Department of Corrections and Rehabilitation

Te Department of Corrections and Rehabilitation (Corrections)placed patients at risk by not relieving a psychiatrist of his duty totreat patients until four months after it learned of allegations of hisincompetence. In addition, Corrections took 35 months to completeits investigation. By not promptly conducting an investigation,Corrections wasted at least $366,656 in state funds by continuingto pay the psychiatrist more than $600,000 in salary throughout

Investigative Highlights . . .

State employees and agencies engaged in

improper activities, including the following:

By not conducting a timely investigation

of a psychiatrists competence, the

Department of Corrections and

Rehabilitation wasted at least $366,656

in state funds by continuing to pay him

more than $600,000 in salary throughout

the investigation.

Evading competitive bidding

requirements to make purchases costing

$64,666 from a single vendor, and failing

to obtain from the same vendor the

required price quotes for later purchases

totaling $19,812.

Allowing a subordinate employee to

take two-hour breaks nearly every

day for three years at an estimated cost

of $23,937.

Failing to take appropriate steps to

prevent an employee from improperly

removing condential documents

from her workplace, and thus failing

to promptly process $10,567 in

compensation claims.

Improperly using state vehicles for

daily commutes, which cost the

State an estimated $12,379 over a

three-year period.

Paying two employees a total of $2,080

for hours they did not work.

Stealing $448 in vehicle registration fees.


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2

the investigation. Tis included two merit-based salary increases aswell as an additional $29,149 in accrued leave that Corrections paid

to him upon his termination.

California Conservation Corps

Te California Conservation Corps evaded competitive biddingrequirements by splitting contracts to purchase uniforms costing$64,666 from a single vendor. It also did not obtain required pricequotations for two later uniform purchases totaling $19,812 fromthe same vendor.


A supervisor at Kern Valley State Prison allowed an employee totake two-hour breaks nearly every day for more than three years.Te State paid the employee an estimated $23,937 for 1,160 hoursduring which he was not performing his job duties.

Victim Compensation and Government Claims Board

An employee of the Victim Compensation and Government ClaimsBoard (claims board) improperly removed condential documentsfrom her workplace, and the claims board failed to take appropriatesteps to prevent these actions. Consequently, the security ofpersonal information of victims of violent crimes was compromisedand the claims board failed to promptly process $10,567 incompensation claims from these victims.

Department of General Services

A manager with the Department of General Services improperlyused state vehicles for his daily commute for nine years. Te misuse

that occurred from July 2006 through July 2009the three yearsfor which complete records are availablecost the State anestimated $12,379.

California Department of Transportation

wo electrical engineers at the California Department ofransportation (Caltrans) each missed 24 hours of work, costing theState $2,080, when they repeatedly left work early over a six-weekperiod to teach classes at a local community college. Teir supervisorfailed to monitor their attendance even though Caltrans had

reprimanded them previously for similar actions.


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January 2011

Department of Motor Vehicles

An employee of the Department of Motor Vehicles (MotorVehicles) stole at least $448 in registration fees fromMotor Vehicles. After completion of our investigation, theemployee was convicted of one count of misdemeanor theft. MotorVehicles subsequently terminated the employee.


Corrections improperly compensated an employee $446 inovertime pay for responding to building alarm activationsthat never occurred. After discovering the misconduct,

Corrections failed to establish controls, discipline the employee,or seek repayment.

Update on Previously Reported Issues

In addition to conveying our ndings about investigationscompleted from January through June 2010, this reportsummarizes the status of issues described in our prior reports.Chapter 9 details the actions taken by the respective agencies for12 previously reported issues. Te following paragraphs brieysummarize two of these prior issues and the status of correctiveaction taken by the agencies.

In September 2005 we reported that Corrections did not track thetotal number of hours available in a release time bank (time bank)composed of leave hours donated by members of the CaliforniaCorrectional Peace Ocers Association (union) so that unionrepresentatives could cover union business. Our investigationrevealed 10,980 hours that three union representatives used fromMay 2003 through April 2005 but that Corrections failed to chargeagainst the time bank, costing the State $395,256. Following ourreport, Corrections did not attempt to obtain reimbursements

for the time that the three employees spent on union activitiesin May and June 2005, resulting in an additional cost to the Stateof $39,151. Corrections later informed us that it was unable toreconstruct an accurate leave history for any period before July 2005for the three union representatives. Consequently, Corrections willnot seek reimbursements totaling $434,407. Instead, Correctionsbilled the union but was not reimbursed $1,078,193 for union workperformed by the employees from July 2005 through June 2010. InJanuary 2010 the State formally demanded that the union reimburseit for the compensation paid to these and other employees who

1 One of the three employees returned to full-time work at a correctional facility in January 00.


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performed full-time union work. In June 2010 Corrections reportedthat it had initiated litigation against the union for the cost of all

unreimbursed union work since July 2005.

In June 2010 we reported that an inspector for the Department ofIndustrial Relations (Industrial Relations), Division of OccupationalSafety and Health (Cal/OSHA), misused state resources andimproperly engaged in dual employment during her state workhours, during which she received a total of $70,105 in inappropriatepayments. In addition, we reported that Cal/OSHA managementfailed to implement controls that would have prevented theimproper acts. Subsequently, Industrial Relations informed usthat the inspector had resigned from state service. It also stated thatit conducted its own investigation of the inspectors improper

activities, and in August 2010 it led a civil lawsuit against theformer inspector in an eort to obtain reimbursement from her.In addition, through a comprehensive survey of its employees,Industrial Relations determined that the former inspectors improperconduct was an aberration. Further, Industrial Relations reportedthat it gave a formal reprimand to the inspectors direct supervisorin October 2010. Finally, it stated that it retrained Cal/OSHAsupervisors in October 2010 to ensure that they understood andcomplied with the policies and rules for accurate time reporting,and it reiterated proper controls to ensure that employees do notdetermine their own work hours and make up time informally.

able 1 displays the issues and the nancial impact of the cases inthis report, the months in which we initially reported on the cases,and the status of any corrective actions taken.

Table 1

The Issues, Financial Impact, and Status of Corrective Actions for Cases Described in This Report

STATUS OF CORRECTIVE ACTIONS

CHAPTER AGENCY

DATE OF OUR

INITIAL REPORT ISSUE

COST TO THE

STATE AS OF

JUNE 30, 2010

FULLY

CORRECTED

PARTIALLY

CORRECTED PENDING

NO

ACTION

TAKEN

New Cases1 Department of Corrections

and Rehabilitation January 211

Delay in reassigning an

incompetent psychiatrist, waste

of state funds

$366,656

2 Cali fornia Conservation CorpsJanuary 211

Failure to follow state

contracting laws84,478

3 Department of Corrections

and Rehabilitation January 211

Misuse of state resources,

failure to appropriately

manage employees

23,937

4 Vic tim Compens ation and

Government Claims BoardJanuary 211

Failure to protect the security of

condential documentsNA

5 Department of

General ServicesJanuary 211

Misuse of state resources12,379


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January 2011

STATUS OF CORRECTIVE ACTIONS

CHAPTER AGENCY

DATE OF OUR

INITIAL REPORT ISSUE

COST TO THE

STATE AS OF

JUNE 30, 2010

FULLY

CORRECTED

PARTIALLY

CORRECTED PENDING

NO

ACTIO

TAKE

6 Department of Transportation

January 211

Failure to adhere to established

work schedule, failure to monitor

employees attendance

2,8

7 Department of Motor Vehicles January 211 Theft of registration fees 448

8 Depar tment of Correct ions

and RehabilitationJanuary 211

Improper overtime reporting446

Previously Reported Cases


and RehabilitationSeptember 25

Failure to account for employees

use of union leave1,512,6

9 Department of Parks

and RecreationMarch 27

Misuse of state resources, failure

to perform duties adequatelyNA


and Rehabilitation October 28Improper payments for

inmate supervision 16,53

9 Department of Fish and

Game, Oce of Spill

Prevention and Response

April 29

Improper travel expenses

71,747


and RehabilitationNovember 29

Improper payments for

inmate supervision34,512

9 Cali fornia State Univers ity,

Oce of the Chancellor*December 29

Improper and

wasteful expenditures152,441

9 Department of

Industrial RelationsJune 21

Misuse of state time and

resources, incompatible

activities, inadequate

administrative controls

7,15


and Rehabilitation June 21

Misuse of state employees time,

waste of state funds 11,797

9 Department of

Consumer Aairs,

California Architects Board

June 21

Fictitious claim, improper gifts,

incompatible activities 392

9 Department of Justice

June 21

Failure to report absences

accurately, inadequate

administrative controls

2,65

9 Department of

Water ResourcesJune 21

Improper gifts1,84

9 Department of Motor Vehicles June 21 Failure to follow personnel rules NA

Source: Bureau of State Audits.

NA = Not applicable because the situation did not involve a dollar amount or because the ndings did not allow us to quantify the nancial impact.

* The California State University, Oce of the Chancellor, has completed corrective action on two of the ve recommendations. However, it has takenno action on the three remaining recommendations.


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6

Blank page inserted for reproduction purposes only.


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January 2011

Chapter 1

DEPARTMENT OF CORRECTIONS AND REHABILITATION:DELAY IN REASSIGNING AN INCOMPETENT PSYCHIATRIST,WASTE OF STATE FUNDSCase I20090607

Results in Brief

Te Department of Corrections and Rehabilitation (Corrections)placed parolees at risk by allowing a psychiatrist to continueto treat them for four months after it received allegations ofhis incompetence. In addition, Corrections wasted at least

$366,656 in state funds by not conducting a timely investigationof the allegations. Because it identied the investigation as lowpriority, Corrections took 35 months to complete it, resultingin the psychiatrist performing only administrative duties for31 months before being discharged. Nonetheless, during the35-month investigation, he received over $600,000 in salary,including two separate merit-based salary increases of $1,027 and$818 per month, and he also accrued 226 hours of leave for whichCorrections paid him an additional $29,149 upon his termination.

Background

Te mission of Corrections is to enhance public safety throughthe safe and secure incarceration of oenders, eective parolesupervision, and rehabilitative strategies that help oenderssuccessfully reintegrate into communities upon their release.Corrections employs physicians, including psychiatrists, to ensurethat inmates and parolees receive adequate health care.

When Corrections becomes aware of alleged misconduct by anemployee, it assesses the alleged misconduct and, if warranted,conducts an investigation of the matter based on procedures

found in its operations manual. A complaint of misconductgenerally starts at the department level and from there may besent to Corrections Oce of Internal Aairs (Internal Aairs).Internal Aairs reviews the complaint and determines if it shouldinvestigate. If it decides to investigate, it assigns an investigator tothe case. Te investigator, along with Internal Aairs management,sets a date for the completion of eldwork and issuance ofthe investigators nal report. If the investigation substantiates theemployees misconduct, the initiating department and Correctionslegal unit proceed with a disciplinary action against the employee.



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8

California Code of Regulations, title 15, section 3360, subdivision (a),mandates that Corrections is responsible for providing necessary

mental health services to persons on parole. Numerous courtdecisions, includingHoptowit v. Ray (1982) 682 F.2d 1237, havefound that Corrections has a duty to ensure that the care it providesis competent. Further, section 8547.2 of the Government Coderequires that Corrections avoid being wasteful or inecient whenproviding care.

When we received a complaint that Corrections had continuedpaying a psychiatrist his full salary even though it had prohibitedhim from treating patients due to concerns about his competency,we initiated an investigation.

Facts and Analysis

Corrections investigation of the serious misconduct of one ofits sta psychiatrists took 35 months. As a result of its delays,Corrections placed patients at risk and wasted state funds.In June 2006 it became aware of issues regarding the workperformance of the psychiatrist in question. Corrections sent anallegation to its Internal Aairs in June 2006 that the psychiatristhad falsied records and was unt for duty. In September 2006Internal Aairs assigned an investigator to the matter andset February 8, 2007, as the expected date for completingthe investigation. In early October 2006 Corrections relieved thepsychiatrist of his duty to treat patients and gave him alternateadministrative duties after Internal Aairs determined that he hadnegligently failed to prescribe, overprescribed, and inappropriatelyprescribed medications to patients, thereby placing them at risk ofphysical harm. After repeated delays, Internal Aairs completedits investigation in October 2008 and referred the matter for legalreview and disciplinary action against the psychiatrist. Correctionsnally terminated the psychiatrist in May 2009. Figure 1 provides atimeline of the events in the case.

At the time the investigation began, Corrections was paying thepsychiatrist a salary of $20,247 per month. Over the ensuing35-month period, while it was investigating his competency andtaking actions to terminate his employment, Corrections notonly continued to pay the psychiatrist this monthly salary, butincreased it by giving him two merit-based salary increases of$1,027 and $818 per month, respectively. In total, Corrections paidthe psychiatrist over $600,000 in salary, as well as an additional$29,149 upon his termination for 226 hours of accrued leave duringthe period.

Because Corrections took 35 months

to complete its investigation,

it placed patients at risk of

physical harm.



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Figure 1

Timeline of the Department of Corrections and Rehabilitations Investigation

June 6Department of Corrections andRehabilitation (Corrections) isnotified of the improper behavior.

May 12Corrections terminates

the psychiatrist.

October 4Corrections prohibits thepsychiatrist from treating patients.

July 5Internal Affairs management reviewsthe initial case analysis and concurswith the recommendation.

September 8Internal Affairs assigns aninvestigator to the case.

October 1Internal Affairs completes itsinvestigation and refers thematter for legal review anddisciplinary action.

June 29Internal Affairs completes an initial caseanalysis that recommends a full investigation.

June 15Internal Affairs receives the allegation from theparole division administrator.

2006 2007 2008 2009

Source: Bureau of State Audits review of Corrections investigation report and casemanagement system.

Corrections Placed Parolees at Risk by Allowing the Psychiatrist

to Treat Patients for Four Months After Learning of Allegations of

His Incompetence

By allowing the psychiatrist to continue to treat patients forfour months after learning of circumstances suggesting he wasunt for duty, Corrections unnecessarily placed parolees at risk. Asdiscussed previously, Internal Aairs management decided afterthree weeks that an investigation was necessary, and then tooknine weeks to assign the matter to an investigator.

According to Corrections, the nature of the case caused the generaldelays that plagued the investigation. It stated that the case wascomplex because it involved issues of dishonesty, inexcusable

neglect of duty, and other failures of good behavior. It also explainedthat Internal Aairs had been required to consult with bothCorrections Employment Advocacy and Prosecution eam andthe Inspector Generals Bureau of Independent Review throughoutall phases of the investigation because these two entities weremonitoring the case. According to Corrections, this signicantlyincreased the time needed to complete the investigation.

Te long period that elapsed before Corrections took actionto protect patients from the dangers of incompetent treatmentindicates that Corrections either lacks an ecient process for



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10

responding in a timely manner to allegations of incompetency orthat it does not prioritize these cases appropriately in light of the

associated risk.

CorrectionsWasted State Funds by Assigning a Low Priority to an

Investigation Involving a HighSalaried Employee

Because Internal Aairs assigned a lower priority to theinvestigation into the psychiatrists competency than it did to othermatters, it extended its date for completing the investigation severaltimes. As a result, the psychiatrist remained in his position for atleast 20 months longer than he might have had Internal Aairsstuck to its original timeline. Between October 2006 and May 2009

he received full salary despite performing only administrativetasks that sta at a much lower pay scale could have performed.According to our calculations, the amount of salary Correctionspaid the psychiatrist during this period exceeded the value of theadministrative duties he performed by $366,656.

When asked about the delays, an Internal Aairs ocial explainedthat Internal Aairs had assigned a higher priority to other cases,including criminal investigations, investigations involving swornpeace ocers, and investigations involving high-level but notnecessarily high-salaried employees. Te ocial also informedus that when Corrections removes an employee from his or herregular duties and assigns them alternate duties, investigatorstend to accelerate their investigation of the employee. However,in this case, Internal Aairs was aware that Corrections relievedthe psychiatrist of his duty to treat patients in October 2006 butdid not take steps to accelerate the investigation in response.According to time entries in Corrections case management system,investigators, supervisors, and other sta (excluding legal counsel)spent 516 hours working on the case from July 2006 throughOctober 2008. As shown in Figure 2, these hours ranged fromnone to 88 hours per month, and averaged only 18.5 hours permonth. For 7 of the 28 months, sta did not spend even an hour on

the case.

Although Internal Aairs could have saved $366,656 in statefunds by completing its investigation of the psychiatrist within theeight months it originally allotted, it could have saved additionalstate funds had it initiated and completed the investigation evenmore expeditiously. Further, if Corrections had terminated thepsychiatrist more promptly after Internal Aairs completed its

2 We obtained all entries made by legal counsel in Corrections case management system; however,they had not recorded their time spent on the case. According to a Corrections attorney, theprevious version of the case management system did not require its legal counsel to enter time

worked on specic tasks.

For 7 of the 28 months from

July 2006 through October 2008,

Corrections sta did not spend

even an hour on the case.



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January 2011

investigation, rather than taking almost seven and a half monthsto do so, its savings would have been even greater. In short, a more

timely response to the psychiatrists alleged incompetence wouldhave resulted in increased safety to patients and signicant savingsto the State.

Figure 2

Hours Internal Aairs Spent on the Investigation

July 2006 Through October 2008

July2006

August2006

September2006

October2006

November2006

December2006

January2007

February2007

March2007

April2007

May2007

June2007

July2007

August2007

September2007

October2007

November2007

December2007

January2008

February2008

March2008

April2008

May2008

June2008

July2008

August2008

September2008

* * * * * * *0

10

20

30

40

50

60

70

80

90

100

Hours

Months

June 29Internal Affairs completes itsinitial case analysis.

October 4Department of Correctionsand Rehabilitiation prohibitsthe psychiatrist fromtreating patients.

February 8Internal Affairs misses itsoriginal self-establisheddue date to completethe investigation.

OctobeInternal Affairs comple

its investigative rep

Source: Department of Corrections and Rehabilitations case management system.

* Month in which investigators, supervisors, and other sta (excluding legal counsel) spent less than one hour on the case.

Recommendations

Corrections should take the following actions to ensure that itprovides inmates and parolees with competent health care and thatit minimizes the waste of state funds:

Establish a protocol to ensure that upon receiving credibleinformation that a medical professional may not be capableof treating patients competently, it promptly relieves that

professional from treating patients, pending an investigation.



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January 2011

12

Increase the priority Internal Aairs assigns to the investigationof high-salaried employees.

Develop procedures to ensure that Internal Aairs assigns ahigher priority for completion of investigations into employeemisconduct involving employees who have been assignedalternate duties.

Agency Response

In December 2010 Corrections reported that it recognized theneed to review its policies and procedures to ensure that patientsare treated by competent professionals and that state funds are

not wasted. Nevertheless, it disagreed with the ndings of ourinvestigation. Corrections asserted that patients safety wasnot jeopardized when it waited four months after receiving theallegations to remove the psychiatrist from duties that involvedtreating patients. It stated that it must substantiate the facts ofan allegation and receive enough proof before taking action.Corrections also stated that once it reviewed the ndings, it tookimmediate action to remove the psychiatrist from his regular duties,pending the nal personnel outcome. However, as we point outin our report, Corrections removed the psychiatrist from treatingpatients well before its investigation was completed but fourmonths after it received the allegations. We contend that whenCorrections receives from a credible source serious allegations ofbehavior that could jeopardize the safety of patients or others, itshould not postpone reassigning the employee to alternate duties,even if only temporarily. Tus, its failure in this case to respondpromptly to serious and credible accusations put the safety of thepsychiatrists patients at risk.

In addition, contrary to our ndings, Corrections stated that itsinvestigation was timely and consistent with its policies and statelaw. It cited Government Code section 19635, which provides thatan adverse action against a state employee is valid if it is served

to the employee within three years after the cause for disciplinerst arose. Although Corrections served the psychiatrist withadverse action within the three-year limit imposed by state law,no law or regulation prevented it from assigning a higher priorityto the case and completing it sooner. Had Corrections completedthe investigation and subsequently terminated the psychiatristpromptly, it would have saved signicant state funds that it paidto the psychiatrist while he performed administrative duties oflittle value.



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January 2011

Even though Corrections disagreed with our ndings, it reportedthat it would take some steps to implement our recommendations.

Corrections stated that it was discussing our recommendation toestablish a protocol for promptly relieving medical professionalsfrom treating patients upon receiving credible information that aprofessional may not be capable of treating patients competently.However, it did not indicate whether it planned to implement therecommendation. In addition, Corrections stated that InternalAairs would communicate with the proper authorities todetermine whether an employee under investigation has beenremoved from primary duties and would consider expediting thecompletion of investigations involving high-salaried sta assignedalternate duties in order to reduce the scal impact on the State.Finally, Corrections included in a training presentation a discussion

of the need for sta involved in the disciplinary process to consultwith Internal Aairs when employees are placed on administrativeleave or removed from their primary duties.



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Chapter 2

CALIFORNIA CONSERVATION CORPS: FAILURE TOFOLLOW STATE CONTRACTING LAWSCase I20081021

Results in Brief

Te California Conservation Corps (Conservation Corps) evadedcompetitive bidding requirements by splitting contracts to purchaseuniforms costing $64,666 from a single vendor. In addition,the Conservation Corps did not properly obtain required pricequotations when approving two other uniform purchases totaling

$19,812 from the same vendor.

Background

State law created the Conservation Corps in 1976 as a workforcedevelopment program for young men and women it callscorpsmembers. Te corpsmembers respond to natural disastersand provide environmental conservation services to the State. TeConservation Corps hires approximately 3,300 young men andwomen each year to accomplish its mission.

When purchasing uniforms for its corpsmembers, the ConservationCorps must abide by the purchasing provisions in state law. PublicContract Code section 10302 requires competitive bidding forthe purchase of goods in excess of $25,000, and section 10301requires that all contracts for the acquisition of goods amounting to$25,000 or more be entered into with the lowest responsible bidder.In addition, section 10329 states that it is unlawful to willfullysplit a single transaction into a series of transactions to evadecompetitive bidding requirements. Notwithstanding these sections,Government Code section 14838.5 allows state agencies to forgocompetitive bidding requirements when procuring goods with an

estimated value between $5,000 and $100,000

from a certiedsmall business or a disabled veteran business enterprise as long asthe agencies obtain price quotations from two or more certiedsmall businesses or disabled veteran business enterprises.

When we received information that the Conservation Corpsviolated state contracting laws when it purchased uniforms from asmall business, we initiated an investigation.

3 The law changed eective January , 00, to increase the upper limit of the estimated value to0,000. However, during the relevant period for the transactions investigated, the estimatedvalue could not exceed 00,000.



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Facts and Analysis

Our investigation revealed that when purchasing uniforms forits corspmembers, the Conservation Corps evaded competitivebidding requirements and did not properly obtain price quotationsas required by state law. Specically, the Conservation Corpscontracted with a certied small business by issuing three purchaseorders dated July 1, 2007, for a total of $110,400 worth of clothingand boots. If the Conservation Corps had used a single purchaseorder for the full amount of $110,400, it would have exceededthe small business exception to competitive bidding authorizedby Government Code section 14838.5. Conservation Corps staimproperly split the contract into three purchase orders, two for$50,000 and the third for $10,400, and proceeded to purchase

its uniforms without engaging in competitive bidding. able 2shows the date and amount of the purchase orders as well as theamounts the Conservation Corps eventually paid for purchasesassociated with each purchase order.

Table 2

Improper Purchase Orders in July 2007

DATE OF

PURCHASE ORDER

AMOUNT OF

PURCHASE ORDER

AMOUNT OF

PURCHASE ORDER

PAID TO VENDOR

July 1, 27 $5, $46,2

July 1, 27 5, 18,289

July 1, 27 1,4 375

Totals $110,400 $64,666

Source: California Conservation Corps accounting records.

Our review of the Conservation Corps accounting recordsindicated that it paid the vendor $64,666 for the uniforms itpurchased, using the improper purchase orders when recordingthe purchases. Moreover, we determined that the Conservation

Corps failed to use consistent accounting practices in recording thepurchases. Tus, the $64,666 may not encompass all expendituresrelated to the three purchase orders. Because the Conservation

4 The purchase order amounts represent the amounts set aside to pay for future purchases. Theamounts paid represent the actual costs of the purchases.

5 Some sta members failed to include the purchase order numbers in the appropriate data eldwhen entering transaction data into the accounting system. We found one instance in whichaccounting sta did not properly record a , purchase related to the July 00 purchaseorders. We are uncertain as to whether other such errors exist.



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January 2011

Corps originally estimated the total value of the goods at $110,400,it violated state law by splitting the purchases into a series of

contracts, regardless of the nal amount paid.

In two more instances nearly a year later, we found that theConservation Corps did not properly obtain price quotations fromtwo or more small businesses prior to making other purchasestotaling $19,812 from the same vendor that it used in July 2007.Te procurement les for the purchase orders contained pricequotations from three vendors, including the selected vendor.However, the two alternate vendors were not certied smallbusinesses as required by Government Code section 14838.5. Inaddition, the price quotations from all of the vendors for one of thepurchase orders were dated nearly two months after the purchase

orders date. Tus, the Conservation Corps could not have usedthese price quotations as the basis for the purchase order.

Our investigation determined that the improper purchase ordersresulted from failures at several levels within the ConservationCorps. Specically, the manager who approved the three purchaseorders totaling $110,400 told us that she believed a formeremployee, who prepared the purchase orders, received inadequatetraining and created the purchase orders to set aside funds forfuture uniform purchases in the Conservation Corps accountingsystem. Te manager acknowledged that she should not haveapproved the purchase orders and expressed regret for her actions.A second manager told us that he did not believe that the employeeand the approving manager intended to circumvent the properprotocols but simply wanted to expedite the purchase of uniforms,which generally is a time-sensitive task. Another employeeapparently failed to obtain the required quotes from two certiedsmall businesses for each of the two additional purchaseorders totaling $19,812. Te Conservation Corps headquarterssta members who were responsible for processing all of thepurchase orders discussed in this report did not detect any ofthese violations.

Recommendations

o address the improper acts we identied and prevent similaracts in the future, the Conservation Corps should take thefollowing actions:

ake appropriate corrective action against the employeesresponsible for the improper purchases.

The improper purchase orders were

the result of failures at several levels

within the Conservation Corps.



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Implement controls to ensure that sta do not split contracts toevade competitive bidding requirements and that sta obtain

and document in the procurement le the appropriate numberof price quotations from certied small businesses prior topurchasing goods.

Provide adequate training to sta responsible for preparing andapproving purchases.

Correct inconsistent accounting practices and require sta toassociate expenditures directly with the purchase orders thatauthorized the expenditures.

Agency Response

Te Conservation Corps reported in December 2010 that ithad issued a corrective action memorandum to each employeeresponsible for the improper purchases. In addition, theConservation Corps reported that to strengthen its controls, it haddeveloped a process in October 2008 to ensure that sta followthe proper procedures regarding bidding documents and pricequotations, but it did not elaborate on what the process entails.Te Conservation Corps also told us that it had audited purchaseorders from 2007 through the current scal year, but it did notindicate the results of the audit. In addition, it stated that it holdsquarterly meetings with its business services ocers to discussprocurement matters, including new policies and procedures.Further, the Conservation Corps stated that it had providedprocurement training to its sta in 2007, 2008, and 2009. It alsostated that it planned to oer additional training in March 2011,focusing on proper bidding procedures and other procurementactivities. Finally, to correct inconsistent accounting practices, theConservation Corps reported that it planned to provide additionaltraining to supervisors who authorize purchasing documents toensure consistency in basic accounting principles.



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Chapter 3

DEPARTMENT OF CORRECTIONS AND REHABILITATION:MISUSE OF STATE RESOURCES, FAILURE TOAPPROPRIATELY MANAGE EMPLOYEESCase I20080820

Results in Brief

A supervisor at Kern Valley State Prison within the Department ofCorrections and Rehabilitation (Corrections) allowed an employeeto take two-hour breaks at the end of his shifts from June 2006through August 2009. We estimate that as a result, the State paid

the employee $23,937 for 1,160 hours during which he was notperforming his job duties.

Background

Te mission of Corrections is to enhance public safety throughsafe and secure incarceration of oenders, eective parolesupervision, and rehabilitative strategies that help oenderssuccessfully reintegrate into communities upon their release.

Corrections employees are required to comply with lawsregarding misuse of state resources. California GovernmentCode section 11813 declares that waste and ineciency instate government undermine Californians condence in theirgovernment. Further, section 13401 of the Government Codedeclares that all levels of management within state agenciesmust be involved in assessing and strengthening the systems ofadministrative control to minimize fraud, errors, abuse, and wasteof government funds.

When we received an allegation that a Corrections employeeregularly took two-hour breaks at the end of his shifts, we

contacted Corrections and requested its assistance in conductingan investigation.

Facts and Analysis

Te investigation revealed that for more than three years theemployee, with full knowledge of his supervisor, had frequentlytaken two-hour breaks at the end of his shifts. Te employeesduties included delivering goods from a warehouse to other areasof the facility. When interviewed, the employee acknowledgedthat he usually stopped work approximately two hours before



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his shift ended and went to a prison receiving area to sit out theremainder of the time. He explained that because of shift changes

and potential trac within the facility, he was unable to makedeliveries after 2 p.m. Other employees stated that they witnessedthe employee sitting in the receiving area for these two-hourperiods almost daily or approximately three to four times aweek. wo witnesses indicated that they sometimes observed theemployee sitting with his eyes closed, apparently sleeping. However,the employee denied sleeping in the receiving area.

Te supervisor, who acknowledged being aware that the employeewas not working during these breaks, failed to manage theemployee in a manner consistent with the ecient use of stateresources. During the investigation, the employees supervisor

stated that he did not believe the employees two-hour daily breakswere improper. Te employee conrmed that his supervisor wasaware that he did not make deliveries for the last two hours of hisshift and stated that if his supervisor had assigned him additionalduties to perform, he would have complied. By permitting theemployee to regularly take two-hour breaks, the supervisor allowedthe employee to waste state time. Te supervisors managerdenied knowing about the afternoon breaks. However, witnessesinterviewed during the investigation contradicted that assertion.Te supervisors manager also failed to take action when notied ofthe hours of state time wasted nearly every day.

Trough their inaction, the supervisor and manager failed to fullltheir responsibilities to manage employees appropriately andminimize the waste of state resources. Because of the supervisorsand managers failure to take appropriate action, we estimated thatthe employee wasted 1,160 hours of state time from June 2006through August 2009 at a cost to the State of $23,937.

Recommendations

o address the supervisors and managers waste of state resources

and failure to manage the employee appropriately, Correctionsshould do the following:

ake appropriate disciplinary action against the supervisorand manager.

Evaluate the employees position, duties, and workload todetermine how best to avoid the waste of state time in the future.For example, an earlier start time might allow the employee tomake deliveries throughout his entire shift. Other options mightinclude converting the position to part-time or assigning othertasks to the employee for the last two hours of his shift.

The employee admitted that

he usually stopped working

approximately two hours before hisshift ended.



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Agency Response

In November 2010 Corrections reported that the facilitys businessmanager reiterated to sta the expectation that employees shouldreport to a supervisor when they have completed tasks or dutiesto receive new assignments. In addition, Corrections stated thatit had revised the employees duty statement to include additionalduties consistent with State Personnel Board guidelines and thatit had changed the employees work schedule to an earlier starttime. Corrections reported in December 2010 that, based on itsreview of the ndings, it did not nd any misconduct on the partof the supervisor or the manager. Terefore, it declined to take anydisciplinary action against them. Instead, Corrections provided tothese and other employees on-the-job training relevant to the issues

in the investigation. Nevertheless, Corrections did not provideus any information or evidence that would call into question theaccuracy of our ndings.



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Chapter 4

VICTIM COMPENSATION AND GOVERNMENT CLAIMSBOARD: FAILURE TO PROTECT THE SECURITY OFCONFIDENTIAL DOCUMENTSCase I20081229

Results in Brief

An employee at the Victim Compensation and Government ClaimsBoard (claims board) improperly removed hundreds of condentialdocuments from her workplace. Despite a history of misconduct onthe employees part, the claims board failed to take appropriate steps

to monitor her actions and protect the security of the documents.Her removal of the documents compromised the security ofvictims personal information and resulted in the claims boardfailing to promptly process $10,567 in compensation claims fromvictims of violent crimes.

Background

Te claims board provides compensation for eligible services toCalifornians who have been victims of violent crimes, includingdomestic violence, child abuse, sexual and physical assault,homicide, robbery, and vehicular manslaughter. Te claims boardreimburses victims who have been injured or threatened withinjury for the costs associated with medical and dental care, mentalhealth services, income loss, funeral expenses, rehabilitation,and relocation. In the course of receiving and processing claimsfor reimbursement, sta at the claims board regularly handledocuments containing victims condential and personalinformation, including medical and mental health reports, crimereports, and medical and mental health bills.

Employees at the claims board are required to follow state laws

governing the storage and protection of state records. Specically,Government Code section 6200, subdivision (a), prohibitsany employee from willfully stealing, removing, or secreting anydocument led with his or her oce. In addition, Civil Codesection 1798.3, which is a part of Californias Information PracticesAct, requires each state agency to establish appropriate andreasonable administrative, technical, and physical safeguardsto ensure the security and condentiality of records, and toprotect against anticipated threats or hazards to their security orintegrity. Pursuant to that mandate, the claims board has adoptedexplicit policies stating that all materials in victims claim les arecondential, employees must protect the condentiality of the



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information contained in the claim les, and employees may notdisclose the information in the claim les unless authorized to do so

by law.

When we received an allegation that an employee at the claimsboard had removed condential documents from the claims boardsoces and left those documents at an unsecured location, we askedthe claims board to assist us with an investigation.

Facts and Analysis

Te investigation revealed that during a three-year period from2004 through 2007, a claims board employee removed hundreds of

condential documents from the claims boards oces and storedthe documents at her residence. During this period, managementat the claims board became aware of documents disappearing, wasalerted that the employee had an alcohol abuse problem, and evenfound the employee hiding documents in her desk. Yet, the claimsboard failed to monitor the employees work activities in a mannerthat would have revealed the extent of her improper conduct.

The Employee Improperly Removed Condential Documents

From the Workplace

Te investigation found that the employee had stored hundreds ofdocuments related to victims compensation claims in the garageof what had been her residence for many years. An inventory ofthe stored items identied 468 condential documents related tovictims compensation claims. Te documents included the namesof 348 victims and the Social Security numbers of 160 victims.Although the claims board did not uncover any incidents of identitytheft or other improper use of the victims personal informationduring the investigation, claims board sta alerted the victimsto this possibility so they would remain vigilant. Te claimsboard determined that because the employee had removed these

documents from its oces, it had not processed 23 applications forcompensation within the time period prescribed. In addition, it hadfailed to pay 27 invoices for medical or mental health services in atimely manner. Tese 27 invoices totaled $10,567.

When questioned during the investigation, the employee deniedtaking any documents home and asserted that her formerspouse had taken them from her work location when he visitedher. However, the investigation found no evidence to support

6 At the time of our investigation, the employee had moved out of the house.

The employee removed hundreds

of condential documents from the

claims boards oces and stored

the documents at her residence.



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this assertion. Te employees spouse lacked the opportunity toremove so many condential documents covering such a broad

time period. Te employees supervisor told us he believed theemployee may have removed the documents from the workplace toavoid doing work associated with them.

By removing claim documents from the workplace, the employeeviolated Government Code section 6200, subdivision (a), governingthe custody of documents submitted to a state agency.Further, she compromised the security of victims personalinformation, including their names, Social Security numbers,and health information, by failing to protect the condentialityof that information as required by claims board policies enactedpursuant to the Californias Information Practices Act.

The Claims Board Failed to Monitor the Employees Actions Properly

Despite Her History of Misconduct

During the period when the employee was removing documentsfrom the workplace, management at the claims board had ampleevidence suggesting the need to more closely monitor her actions.A review of the employees work history revealed that in 2006 and2007, the employee was involved in six separate incidents at workthat appeared to have been related to the abuse of alcohol, includingthree incidents in which the employee was found sleeping in arestroom. More signicantly, claims board management discoveredin June 2006 that the employee had hidden 788 pieces of unopenedmail in her desk. Te employees supervisor stated that whenhe confronted the employee about the discovery, the employeetold him that she had forgotten about the documents. However,the documents found in the employees desk were dated fromApril 2005 to June 2006, indicating that the problem was ongoingand not due to a single incident of forgetfulness.

During the investigation, the employees supervisor admitted that itwas common for documents to be missing from victims case les,

but he stated that this occurred so regularly that it did not causehim to suspect the employee might be taking documents home.Te claims board referred the employee to the states EmployeeAssistance Program for help with alcohol abuse, but did not takeany action to watch for or prevent the employeeor any otherclaims board employeefrom improperly storing work-relateddocuments. Instead, the employees supervisor merely sent ane-mail to all of his subordinates informing them that the claimsboard had a legal right to look in their desk drawers and that theyshould lock up their personal possessions. Given the employeeshistory of misconduct, the employees supervisor should haveimplemented controls, including checking the employees desk

The employee may have removed

the documents from the workplace

to avoid doing work associatedwith them.



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drawers, that would have alerted him that the employee was hidingdocuments and removing them from the workplace, but he did not

do so.

At the conclusion of the investigation, the claims board dismissedthe employee.

Recommendations

o ensure that it eectively protects condential documentsrelated to victims claims, the claims board should take thefollowing actions:

Provide training to its employees, emphasizing the need toprotect condential information from misuse and reiteratingthat employees are prohibited from hiding documents or storingthem at home.

Implement a protocol that requires management and sta tosearch for and locate missing claim les and le documentsimmediately after the discovery of them missing.

ake appropriate disciplinary action against the employeessupervisor for failing to monitor the employees actionsafter becoming aware that the employee had hidden claimsboard documents.

Agency Response

Te claims board reported in December 2010 that it providestraining to its employees emphasizing the need to protectcondential information when it annually reviews with sta itspolicies related to the protection of condential information. It alsoreported that it has incorporated the importance of maintainingthe condentiality of claims board information and documents as

a regular part of its new sta training. In addition, the claims boardstated that it regularly discusses information security issues atmanager and all-sta meetings.

In response to our recommendation that it locate missing claimles and le documents immediately after they are discoveredmissing, the claims board reported that in 2008 it implementedan automated claims processing system. In this system, claimsboard sta in its scan unit scan all documents into the system andelectronically transmit them as les are assigned to individualsfor processing. Te claims board also stated that it maintains hardcopies of the les in a secure room separate from claims processing



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sta. Further, it stated that its scan and intake units maintain andreport daily statistics about mail received and processed. Tus,

the claims board indicated that it identies, investigates, and takesappropriate action for any uctuations. Consequently, the claimsboard stated that, under its automated processing system, anemployee would neither have access to nor be able to accumulatemail as the employee in this investigation did.

Finally, the claims board responded that it takes a proactiveapproach in addressing personnel issues, including disciplinarymatters, through risk management meetings. It also stated thatit holds its managers accountable for their actions or lack ofaction. Despite these statements, the claims board failed to takeany disciplinary action against the supervisor for his inadequate

monitoring of the employee after he learned that she had hiddencondential claims board documents.



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Chapter 5

DEPARTMENT OF GENERAL SERVICES: MISUSE OFSTATE RESOURCESCASE I20081024

Results in Brief

A manager with the Department of General Services (GeneralServices) improperly used state vehicles for his daily commute fornine years. Te cost of the misuse from July 2006 through July 2009,the three years for which complete records are available, totaled anestimated $12,379. Because the records were not retained, we were

not able to accurately estimate the cost to the State for the remainingsix years.

Background

General Services provides a variety of services to other stateagencies, including administering the States vehicles. Its Oce ofFleet and Asset Management owns about 6,000 vehicles that it leasesto other state agencies for use by state employees while conductingocial state business. As part of its administration of these vehicles,General Services operates ve garages statewide that maintain andservice the vehicles.

General Services employees are required to comply with lawsthat govern proper use of state resources, including state vehicles.Specically, section 8314 of the Government Code prohibits stateemployees from using public resources, including state vehicles, forpersonal purposes. Section 19993.1 of the same code mandates thatemployees may use state-owned vehicles only when conducting statebusiness. California Code of Regulations, title 2, section 599.802,further claries that using a state vehicle to travel to or from anemployees home is a misuse of state resources unless specic

requirements are met. A related regulation, section 599.803, statesthat an employee is liable to the State for the actual costs attributableto misuse of a state-owned vehicle.

Upon receiving an allegation that a General Services managerhad used state vehicles for personal purposes, we initiatedan investigation.



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Facts and Analysis

Our investigation revealed that the General Services managerimproperly used various state vehicles to commute to and fromwork over a nine-year period. When we interviewed the manager,he acknowledged that four to ve days a week he had driven statevehicles home, stored them overnight, and then returned themto the state garage the next day. Te manager justied his use ofthe vehicles by stating that he needed to take the vehicles hometo test-drive them for safety and to drop them o at vendor shopswhere he would pick up other state vehicles that had been repaired.However, an administrator in the managers division informedus that while the manager may have had a legitimate reason tooccasionally take a vehicle home, it was inappropriate for the

manager to take vehicles home as frequently as he did.

We estimate that the cost to the State for the three years ofmisuse that occurred and for which records were availablefromJuly 2006 through July 2009totaled $12,379. We restricted ourexamination of the cost associated with the managers misuse ofvehicles during this time period because records for prior periodswere not complete. able 3 displays our estimate of the numberof miles the manager improperly commuted in state vehiclesand the associated costs, which we determined by the number ofdays the manager worked each month and the applicable mileagereimbursement rates in eect at the time. However, because themanager acknowledged that he used state vehicles to commute towork for about the past nine years, the total cost to the State of hismisuse is signicantly higher.

Table 3

Estimated Commute Miles the Manager Drove in State Vehicles and

the Associated Costs

July 2006 Through July 2009

TIME PERIOD

ESTIMATED NUMBER

OF COMMUTE MILES

AVERAGE REIMBURSEMENT

RATE PER MILE

ESTIMATED

COST OF MISUSE

July through December 26 3,667 $.445 $1,632

January through December 27 8,1 .485 3,885

January through December 28 8,295 .544 4,512

January through July 29 4,272 .55 2,35

Estimated number of commute

miles and cost of misuse 24,244 $0.5106 $12,379

Sources: Bureau of State Audits analysis of the managers time sheets, home location, swornstatement, and applicable mileage reimbursement rates.



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Te manager retired from state service shortly after we interviewedhim. He was still under investigation at the time of his retirement.

Recommendations

o address the managers improper acts and prevent similar actsfrom occurring, General Services should take the following actions:

Seek reimbursement from the manager for the costs associatedwith his misuse of state vehicles.

Issue a memorandum regarding the appropriate use ofstate-owned vehicles to all division employees with access

to state vehicles.

Agency Response

In December 2010 General Services reported that it planned to seekreimbursement from the retired manager for the costs associatedwith the misuse. In addition, it stated that in March 2010, prior tothe completion of our investigation, it issued a number of operatingpolicies to its employees that prohibit the use of state-ownedvehicles for travel to and from an employees home withoutexpress permission.



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Chapter 6

CALIFORNIA DEPARTMENT OF TRANSPORTATION:FAILURE TO ADHERE TO ESTABLISHED WORK SCHEDULE,FAILURE TO MONITOR EMPLOYEES ATTENDANCECase I20081046

Results in Brief

Over a six-week period in June and July 2008, two electricalengineers at the California Department of ransportation(Caltrans) repeatedly left work early to teach classes at a localcommunity college. As a result, the engineers each missed 24 hours

of work, at a total cost to the State of $2,080. Teir supervisor failedto monitor their attendance even though Caltrans had previouslyreprimanded both engineers for similar actions.

Background

Caltrans is responsible for designing, building, operating, andmaintaining Californias state highway system, bridges, and intercityrail passenger services. Caltrans employs engineers to perform avariety of electrical and electronic engineering work in oce andeld settings.

As state employees, Caltrans employees are subject to theprovisions of section 8314 of the Government Code, whichprohibits employees from using public resources, includingstate-compensated time, for their personal enjoyment or privategain. In addition, section 19990 of the same code prohibits stateemployees from engaging in any employment, activity, or enterprisethat is clearly inconsistent, or in conict with, their duties as stateemployees. Section 13401 of the same code declares that all levelsof management at state agencies must be involved in assessingand strengthening administrative controls to minimize fraud,

errors, and waste of government funds. Finally, California Codeof Regulations, title 2, section 599.665, requires departments tokeep complete and accurate time and attendance records foreach employee.

When we received an allegation that two Caltrans engineers hadrepeatedly left work early over a six-week time period, we askedCaltrans to assist us with the investigation.



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Facts and Analysis

Our investigation found that two Caltrans engineers failed toproperly account for their absences when they left work earlywithout approval in June and July 2008 to teach classes at a localcommunity college. As a result, they each failed to account for24 hours, at a total cost to the State of $2,080.

Caltrans had investigated the two engineers for similar behavior in2005 and found that their work at the college conicted with theirstate work schedules. As a result, Caltrans formally reprimandedthe two engineers in May 2006 and provided them and otheremployees in their unit with a workplace expectations memo inJune 2007. Te 2006 reprimands directed both engineers to adhere

to their work schedules. It specically stated that if in the futurethe two engineers left work to teach on state time, Caltrans wouldconsider them absent without leave, and they would therefore besubject to adverse action. Te 2007 workplace expectations memo,which both engineers signed, required that they seek and receivepermission from their supervisor if they wanted to alter theirschedules in any way.

During our investigation of the allegations involving June andJuly 2008, the two engineers admitted that they had left workearly to accommodate their teaching schedules without obtainingapproval from their supervisor. Te engineers work schedulesrequired them to work Monday through Friday from 6 a.m. to2:30 p.m. However, during the 2008 summer term, both taughtclasses that started at 3:00 p.m. at a college that is located 31 milesfrom their headquarters. Our investigation determined that thecommute time between the two locations averages between 34 and45 minutes. Tus, the two engineers violated the conditions of theirMay 2006 reprimands and the workplace expectations memo. Tetwo engineers asserted that they had made up the time that theywere not at work, either by working additional time not capturedon their time sheets or by skipping lunch. However, both engineersacknowledged that they had not always notied their supervisor of

their actions.

Te supervisor of the two engineers failed to show the diligencenecessary to ensure that they were not leaving work early. Whenquestioned, the supervisor stated that he allowed his employeesexibility in adjusting their work schedules as long as they informedhim. However, as we noted previously, the two engineers failedto notify the supervisor when they left work early to teach at thecollege. Te supervisor also stated that he was at times unable tomonitor his employees because he had to attend meetings outsidethe oce. Nevertheless, he was unable to explain why he was notaware that the two engineers had left early during the six-week

The two engineers each failed toaccount for 24 hours of absences

when they left work early to teach

classes at a community college.



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period under investigation. Te supervisor stated that he had notknown of his employees teaching schedules because he considered

that activity to be taking place on their own time. However, webelieve that he should have been more proactive in this instance,given that he had previously admonished these two engineers forleaving work early. Tus, under these circumstances, he failed toshow the diligence necessary to ensure that they were not againleaving work early.

Both engineers stated they believed they had worked full 40-hourweeks during the six-week period in question. However, theinvestigation found that they had not adhered to their ocial workschedules, had not obtained permission from their supervisorto leave work early, had violated the provisions of the workplace

expectation memo, and had failed to follow the directives outlinedin their 2006 reprimands. Based on the ndings, Caltrans againissued written reprimands to each of the engineers and requiredeach one to charge 24 hours as absent without leave to compensatefor the work they had missed.

Recommendations

o ensure that the engineers adhere to their established schedulesand that the supervisor adequately monitors his subordinatesattendance, Caltrans should take the following actions:

Verify that the two engineers follow the directives outlined intheir reprimands.

Require that the supervisor establish practices that enable him toensure that his subordinates work their entire shifts.

ake appropriate adverse or corrective action againstthe supervisor for his failure to adequately monitor hissubordinates attendance.

Agency Response

Caltrans reported in December 2010 that the supervisor andhis manager established a plan to verify that the employees arefollowing the directives outlined in their reprimands. It alsostated that the supervisor established practices to ensure that hissubordinates work their entire shifts. Finally, Caltrans stated thatit verbally reprimanded the supervisor for his failure to adequatelymonitor his subordinates attendance and gave him a letter ofwarning for his poor performance.



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Chapter 7

DEPARTMENT OF MOTOR VEHICLES: THEFT OFREGISTRATION FEESCase I20090832

Results in Brief

An employee of the Department of Motor Vehicles (Motor Vehicles)stole at least $448 in registration fees from Motor Vehicles. Afterproperly charging customers for transactions, the employee alteredrecords to waive late fees and to show that lesser amounts werepaid. Te employee stole the late fees paid by the customers and

forged documents to make the alterations appear legitimate. Afterthe completion of our investigation, the employee was convicted ofone count of misdemeanor theft.

Background

Te employees duties at Motor Vehicles included interpretingprovisions of the States Vehicle Code, regulations, and policiespertaining to the registration of motor vehicles and the licensingof drivers. She was also responsible for issuing drivers licensesand vehicle registrations and for processing fees collected duringthose transactions.

Penal Code section 484 denes theft as the taking of personalproperty of another person. Government Code section 19572,subdivision (f ), mandates that state employees have a duty tobehave honestly with their state employers and that acts ofdishonesty may be cause for disciplinary action.

When we received an allegation that the Motor Vehiclesemployee was stealing transaction fees, we contacted it and askedfor assistance with our investigation. Motor Vehicles had already

begun investigating the employees conduct, and we provided itwith additional evidence that it used to substantiate the allegation.

Facts and Analysis

On at least six occasions between April and October 2009,the employee properly collected transaction and late fees fromcash-paying customers, entered the amounts paid into MotorVehicles computer system, and then provided the customers withnew registrations. However, after completing the transactions, theemployee altered the information in Motor Vehicles computer



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system by waiving the late fees and adjusting the amounts paidby the customers to match the amounts due after the late fees

were waived. Te employee then pocketed the dierence, in eectstealing the late fees paid by the customers. On at least two of theseoccasions, the employee also forged documents in an eort to makethe altered transactions appear legitimate.

When confronted by investigators, the employee admitted to stealinglate fees collected from customers. Te investigation revealed that theemployee had stolen at least $448. Te employee was convicted ofone count of misdemeanor theft in March 2010, and Motor Vehiclesterminated her eective June 2010.

After we concluded our investigation, Motor Vehicles informed

us that when an employee waives a fee or makes an adjustment,the transaction is included in an exception report. Motor Vehiclespolicy states that a manager or other designee should review thisexception report within two working days of the transaction.However, the employees manager appears to have failed to followthis practice consistently.

Recommendations

o prevent the future theft of transaction fees by its employees,Motor Vehicles should take the following actions:

Ensure that managers or their designees review exception reportswithin two working days, as required by Motor Vehicles policy.

Determine whether corrective or disciplinary action is necessaryfor the employees manager.

Agency Response

Motor Vehicles reported in July 2010 that it had issued a counseling

memo to the employees manager regarding her failure to properlyadhere to the exception report review process. In addition, MotorVehicles stated that it had given the managers designee, anothersupervisor, a memo of discussion since the designee had beeninconsistent in her review of exception reports. Motor Vehiclesstated that it had provided training to the manager and the designeeto ensure that the proper review of exception reports occurs in thefuture. Further, Motor Vehicles temporarily assigned the supervisorto another Motor Vehicles eld oce to receive additional trainingregarding her role as a supervisor in overseeing the exception reportreview process.



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In December 2010 Motor Vehicles reported that it agreed with ourrecommendation to ensure that managers or their designees review

exception reports within two working days. Specically, it stated thatit would provide additional training to all of its eld supervisors toensure compliance with its exception report review policies.



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Chapter 8

DEPARTMENT OF CORRECTIONS AND REHABILITATION:IMPROPER OVERTIME REPORTINGCase I20070887

Results in Brief

An employee with the Department of Corrections andRehabilitation (Corrections) improperly reported 16 hours ofovertime for responding to building alarm activations that neveroccurred. Because Corrections did not have adequate controlsto detect the improper reporting, it compensated the employee

$446 in overtime pay she did not earn. After discovering theemployees misconduct, it failed to take appropriate actionsto establish controls, discipline the employee, or collect theimproper pay.

Background

Te mission of Corrections is to enhance public safety throughsafe and secure incarceration of oenders, eective parolesupervision, and rehabilitative strategies that help oenderssuccessfully reintegrate into communities upon their release.Corrections ensures that its nonprison facilities remain secure byusing alarm systems and subscribing to monitoring services. Insome instances, Corrections assigns employees to respond whenbuilding alarms are triggered to conrm that the locations aresecure and to reset the alarms.

When Corrections requires an employee to respond to an alarmoutside of normal business hours, the employee is typically entitledto receive credit for four hours of work. For example, the collectivebargaining agreement between the State and Bargaining Unit 4states that when an employee has completed a normal work shift

and is then ordered back to work, the employee must be creditedwith a minimum of four hours of work.

California Code of Regulations, title 2, section 599.665, requireseach state agency to keep complete and accurate time andattendance records for each of its employees. Consistent with thisregulation, Corrections requires that its employees certify theaccuracy of their time sheets and that its managers and supervisorsapprove time sheets submitted by their subordinates only afterensuring that those time sheets are accurate. Further, Government



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Code section 19572, subdivision (f ), provides that state employeeshave a duty to behave honestly with their state employers and that

acts of dishonesty may be cause for disciplinary action.

After receiving a complaint that a Corrections employee hadclaimed overtime for responding to building alarm activationsthat had not occurred, we contacted Corrections and requested itsassistance in conducting an investigation.

Facts and Analysis

Our investigation revealed that the employee improperly reportedand received compensation for 16 hours of overtime that she did

not earn. From March 2007 through June 2007, the employeerecorded on her monthly time sheets that she responded to a totalof seven separate building alarm activations. On each occasion,she recorded four hours of overtime as specied by her unionsbargaining agreement. However, the alarm companys recordsindicated that on ve of these occasions no building alarms hadbeen activated. Te employee explained that the alarm companyspractice was to call her cell phone when an alarm was activated,yet the employees cell phone records indicate that in four of theve instances the alarm company did not call her. As a result ofthe employees misconduct, the State improperly compensated herapproximately $446.

Corrections lacked controls to ensure the legitimacy of theovertime recorded on the employees time sheets and failed to takeappropriate action when it discovered the employees misconduct.Because the time recorded by the employee for responding tobuilding alarm activations occurred after regular business hours,the employees supervisor should have veried the legitimacy of theovertime with the alarm company. However, the supervisor did notfollow this practice and thus failed to ensure that the employeestime and attendance records were accurate. As of February 2010Corrections still had not implemented a similar control to ensure

that overtime related to building alarm activations is accuratelyrecorded on time sheets.

In August 2009during our investigationCorrections took stepsto remove the employees responsibility to respond to buildingalarm activations. However, it deemed that corrective action wasnot warranted to address the 16 hours of overtime the employeeimproperly reported. As a result, Corrections allowed the employeeto retain compensation that she did not earn.

7 The employee elected to receive compensating time o in lieu of cash for some of the overtime

hours claimed.



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Recommendations

o address the employees misconduct and to ensure the accuracyof employee time sheets in the future, Corrections should take thefollowing actions:

ake appropriate disciplinary actions against the employee andpursue collection eorts for the compensati