It's not a big story, but an interesting one: the annual report from state auditors of government workers who have done wrong.

And this year doesn't disappoint: improper travel expenses, inappropriate email, unnecessary consultants, and more.
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California's portion of the federal stimulus money seems to be flowing a little faster every day. And with it comes folks watching how it will be spent. A lot of folks.

On this morning's edition of The California Report, I reported on the complexity involved in managing some $48 billion in money from the American Recovery and Reinvestment Act. That management, and distribution, is passing through multiple channels, often led by Governor Schwarzenegger's economic stimulus task force but also including the Legislature, local officials, and others.

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A popular topic for those inside the state Capitol rooting around for spare change to help close the annual budget gap has been to get rid of surplus state property.

And yet, a state audit released today shows that it's not quite that simple, years after everyone said it should be.
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Not that you needed a formal audit of California government to know it, but today's detailed report gives some final clarity to how much the state took in last year... and how much more it spent.
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When Governor Schwarzenegger ran in the 2003 recall election, he promised a full audit of state's finances that would finally shed light on the causes of California's budget dysfunction. But the much ballyhooed audit actually ended up being a short spreadsheet of numbers whose calculations were much criticized.

Based on a comprehensive report issued today, maybe he should've just used the California Bureau of State Audits.

That report, released by State Auditor Elaine Howle, classifies the annual budget process as a "high risk" issue added to a watch list of some of state government's most vexxing operations.

(Summary is here.)

The data points in Howle's report are thought provoking, especially as we wait for a sign of white smoke in ongoing private negotiations between Schwarzenegger and legislative leaders over a $40 billion deficit solution.
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A new state audit concludes the original federally court appointed receiver overseeing health care in California prisons "improperly" approved $26.7 million in spending on information technology needs.

State Auditor Elaine Howle's new report raps the knuckles of the receivership program for not following proper proceduresl, though the knuckles rapped belong the guy who used to be prison health care receiver: Robert Sillen. Sillen was replaced in January 2008 by Clark Kelso, a law professor who's been called upon to fix a number of state government messes in recent years.

The audit (summary here, full report here) concludes that under Sillen's watch, the receivership operation spent $26.7 million on IT goods and services without following proper competitive bidding procedures. The auditor says that one of two processes could have been used: state government's competitive bidding process, or an "alternative" method for the receivership approved by U.S. District Judge Thelton Henderson, who created the receivership a few years back as part of a long-running lawsuit against health conditions in the prisons.

"Staff at various levels," says the audit, "had little, if any, understanding about the competitive bidding requirements imposed by the federal court."

The audit also says that "wok environment" in the receivership offices discouraged staffers from raising concerns about how the IT money was being spent.

In a press release, Kelso said he's taken steps to fix the problems created before his arrival, and to ensure the IT services in question are "appropriate and in the best interest of the state."

[update 10:39 a.m. -- Kelso told reporters in a conference call this morning that he's referred the matter to Attorney General Jerry Brown. Those could be interesting conversations, given Brown's ongoing attack against Kelso's $8 billion prison health care plan.]

You can say one thing about those pesky state auditors: they sure are picky about how taxpayer dollars are spent.

The annual report on "Improper Activities by State Employees" is out from the Bureau of State Audits, chock full of little anecdotes about no-nos the auditors discovered.

The report obviously isn't an indictment of the vast majority of state workers (no emails, please) or of most government agencies. Nonetheless, it always provides some insight into how a handful of folks think they've gotten away with something... for a little while, at least.

Without any further ado...

Two Jobs Are Better Than One: The audit found a full-time employee at the California Department of Housing and Community Development was holding down a job on the outside at the same time she drew a state paycheck. And if that wasn't enough, the outside job was with a non-profit organization that was receiving grants from the department. Total cost to the state: $34,687. Ummm, didn't anyone notice? Apparently not. From the auditors' report: "The employee's managers at HCD did not sufficiently supervise her attendance and failed to respond appropriately to numerous indications that the employee was working simultaneously at the nonprofit."

There's No Business Like... No Business: Over at the state Environmental Protection Agency, auditors found an employee who was apparently taking time off but being paid as though she was on the job. The employee (all persons are unnamed in the audit, by the way) was away from work a total of 768 hours over a 22 month period. That's 19.2 weeks of vacation... assuming a standard workweek... in less than two years. Cost to the state: $23,320. Again, the audit raps the knuckles of supervisors who failed to stay on top of the situation.

On the Job Drinking: At the California Employment Development Department, auditors discovered an employee who was drinking alcoholic beverages while working, which (shockingly) "impeded his ability to perform his duties safely." But it gets better. "Moreover," says the report, "his supervisors had been aware of the situation for years." In the time since the auditors filed their report, supervisors at the agency decided to suspend the worker, without pay, for two days.

The list goes on with other small, but interesting, snippets of folks not necessarily walking the straight and narrow. The incidents came to light through California's Whistleblower Protection Act, and the report was officially submitted to the governor and Legislature today by State Auditor Elaine Howle.

The entire report, in all its glory, can be found here.

The state auditor is out with a report this morning sure to further complicate not only the state's financial picture, but the larger debate over expenses and needs inside California's prisons. The news: a new Death Row facility at San Quentin State Prison will end up costing more than $400 million to build and open, and tens of millions more to maintain.

State Auditor Elaine Howle's full report is here. In it, she concludes that even the upwardly revised estimates from state officials for a new condemned inmate facility were too low.

The original price tag when the Legislature gave the green light in 2003: $220 million. The revised estimate, even after the Death Row project was downsized, was $356 million. Today's audit now pegs the cost of building the facility at $395.3 million, plus another $7.3 million to actually open the facility.

If you're keeping score at home, that's $402.6 million... an increase of some 83% from the original legislative appropriation.

There's also an additional cost to actually staff the new Death Row building. The auditor projects that will cost an average of $58.8 million a year, or some $1.2 billion over the next 20 years.

And just to make matters worse... will the new cells fill to capacity too soon? Auditor Howle's report says that while the California Department of Corrections and Rehabilitation (CDCR) plans to place two condemened inmates in each cell, her analysts are raising red flags about that proposal. Not only do her experts conclude that there may be legal issues with a lack of privacy for inmates preparing their appeals cases, but doubling up "increases the risk of harm to the inmates who are housed together, particularly for long periods of time."

Howle's report says if shared cells can't work, the new Death Row could actually be full as soon as 2014. That's just three years after it's expected to open.

When asking for the audit, legislators also wanted Howle to examine sites other than San Quentin for the new Death Row; she's expected to release those findings next month.