State auditor finds lots of illegal activity

It’s no secret that those who complain about taxes — and who doesn’t — tend to focus on how much money is taken from our wallets and pocketbooks. In California, government takes a lot with highest in the nation tax rates in most categories. But equally insulting is the poor level of service we get for our tax dollars.

Regrettably, some behavior by government employees transcends “normal” government inefficiency and encroaches into actual illegality.

Elaine Howle, the California State Auditor, pursuant to the California Whistleblower Protection Act, conducts an annual review of improper governmental activity. The latest report, released last month, reflects just a small percentage of cases brought to her office for investigation.

The results are depressing to say the least. Here are some of the notable examples.

The first involves overpayments by the California Department of Transportation (Caltrans) to employees. The taxpayers should have been able to recover that money, but it’s not going to happen. As much as $1.5 million in overpayments of salary advances was forfeited by the agency because it failed to provide notice to the employees within a three-year time limit. According to the State Auditor “Inefficiency and incompetency in Caltrans’ division of human resources contributed significantly to its failure to notify recipients and collect on the outstanding salary advances.”

Another problem involves public employees in California running side businesses out of their public office. The annual audit reports that an administrator in California’s Department of Tax and Fee Administration (CDTFA) broke the law when he advertised his experience with the agency on the website of his private tax preparation and consultation business, and when the administrator prepared private tax returns for clients who had CDTFA seller’s permits. The icing on the cake, according to the auditor, was that he was also “dishonest with CDTFA investigators when interviewed about his improper activities.”

The third example strongly reeks of cronyism. An employee of the Department of State Hospitals lied on his job application, which fooled the agency into believing that the employee met the minimum qualifications for the position. More troubling, however, was that the hiring manager fudged the process to give the employee an unfair advantage.

Taxpayers should be glad that at least someone in state government is trying to uncover and stop waste of public funds and resources.

Public employees who become aware of illegal or inappropriate activity are protected under the Whistleblower Act and should not fear reaching out to the State Auditor to report what they see. An “improper governmental activity” is defined under the Act as “any action by a state agency or by a state employee performing official duties that breaks a state or federal law, is economically wasteful, involves gross misconduct, incompetence, or inefficiency; or does not otherwise comply with the State Administrative Manual, the State Contracting Manual, an executive order of the Governor, or a California Rule of Court.”

The State Auditor assures potential and actual whistleblowers’ that their identities will be protected to the maximum extent allowed by law and that “retaliation against state employees who file reports is unlawful and may result in monetary penalties and imprisonment.”

Of course, illegal activity by state employees is a small fraction of the waste in state government.

Just wait until next week, when the Legislature passes the state budget.

Jon Coupal is president of the Howard Jarvis Taxpayers Association.