Recommendations

Investigation of Improper Activities by State Agencies and Employees Waste of State Funds, Misuse of Bereavement Leave, Misuse of State Resources, Dishonesty, and Supervisory Neglect of Duty April 2020 INVESTIGATIVE REPORT I2020‑1 IMAGE PENDING CALIFORNIA STATE AUDITOR 621 Capitol Mall, Suite 1200 | Sacramento | CA | 95814 916.445.0255 | TTY 916.445.0033 For complaints of state employee misconduct, contact us through one of the following methods: Whistleblower Hotline | 1.800.952.5665 auditor.ca.gov/hotline INVESTIGATIONS, California State Auditor PO Box 1019 | Sacramento | CA | 95812 Whistleblower FAX line | 916.322.2603 Don’t want to miss any of our reports? Subscribe to our email list at auditor.ca.gov For questions regarding the contents of this report, please contact Margarita Fernández, Chief of Public Affairs, at 916.445.0255 This report is also available online at www.auditor.ca.gov | Alternate format reports available upon request | Permission is granted to reproduce reports Elaine M. Howle State Auditor April 2, 2020 Investigative Report I2020‑1 The Governor of California President pro Tempore of the Senate Speaker of the Assembly State Capitol Sacramento, California 95814 Dear Governor and Legislative Leaders: The California State Auditor, as authorized by the California Whistleblower Protection Act, presents this report summarizing some of the investigations of alleged improper governmental activities that my office completed between January 2019 and December 2019. This report details 11 substantiated allegations involving several state agencies. Our investigations found waste of state funds, misuse of bereavement leave, misuse of state resources, employee dishonesty, and supervisory neglect of duty. In total, we identified about $618,000 of inappropriate expenditures. For example, the California Department of Fish and Wildlife (Fish and Wildlife) wasted more than a half million dollars of state and federal funds when it purchased a custom-built research boat in June 2017 that has remained largely unused. The original specifications and subsequent changes were inadequate to ensure that Fish and Wildlife could use the research boat as it intended. In another case, a veterans long-term care home (veterans home) administrator at the California Department of Veterans Affairs wasted nearly $38,000 of state funds by failing to ensure that veterans home staff followed state procedures to inspect a bedbug treatment oven upon delivery in 2015. Staff then left it outdoors and unprotected from the elements for four years, rendering it inoperable. Further, we found that during a two-year period, seven employees at five state agencies improperly claimed a total of more than 320 hours of bereavement leave valued at almost $10,000. The supervisors for these employees also failed to adequately review staff timesheets to ensure that the employees charged bereavement leave in accordance with permissible limits. State agencies must report to my office any corrective or disciplinary action they take in response to recommendations we have made. Their first reports are due within 60 days after we notify the agency or authority of the improper activity, and they continue to report monthly thereafter until they have completed corrective action. Respectfully submitted, ELAINE M. HOWLE, CPA California State Auditor 621 Capitol Mall, Suite 1200 | Sacramento, CA 95814 | 916.445.0255 | 916.327.0019 fax | www.auditor.ca.gov iv Investigative Report I2020-1 | CALIFORNIA STATE AUDITOR April 2020 Blank page inserted for reproduction purposes only. CALIFORNIA STATE AUDITOR | Investigative Report I2020-1 v April 2020 Contents Summary 1 Introduction 5 Chapter 1 | Waste of State Funds 7 California Department of Fish and Wildlife: It Wasted More Than a Half Million Dollars on a Research Boat That It Rarely Uses Case I2017-1372 Chapter 2 | Waste of State Funds 13 California Department of Veterans Affairs: A Veterans Home Administrator Wasted State Funds When He Failed to Properly Store Specialized Equipment Case I2018-0364 Chapter 3 | Misuse of Bereavement Leave 17 Several State Agencies Failed to Ensure Employees' Proper Use of Bereavement Leave Case I2018-0428 Chapter 4 | Misuse of State Resources, Time, Leave, Vehicles, Dishonesty, and Supervisory Neglect of Duty 25 California Energy Commission: A Supervisor Misused State Parking Permits to Provide Free Parking for Herself and Staff Members Case I2019-0010 27 California Department of Transportation: Two Employees Failed to Obtain Home Storage Permits and Misused Their State Vehicles to Commute Case I2018-0675 31 Department of State Hospitals: A Psychiatrist Improperly Used Continuing Medical Education Leave to Work a Second Job Case I2018-0665 33 Department of State Hospitals: A Psychiatric Technician Claimed Time That Was Not Worked Case I2019-0489 35 vi Investigative Report I2020-1 | CALIFORNIA STATE AUDITOR April 2020 California Department of Public Health: Two Employees Misused State Time, and Their Supervisor Failed to Monitor Their Attendance Case I2018-0756 37 Franchise Tax Board: An Administrator Was Dishonest About Her Work, and Her Supervisor Neglected His Duty Case I2018-1274 41 California Prison Industry Authority: Supervisors Failed to Ensure Accurate Time Reporting, and an Employee Displayed Dishonesty Case I2018-1820 45 California Department of Social Services: It Failed to Recover Overpaid Salary and to Monitor Bereavement Leave Use Case I2018-1932 49 Appendix | Corrective Actions Taken in Response to Investigations 51 Index 53 CALIFORNIA STATE AUDITOR | Investigative Report I2020-1 1 April 2020 Summary Results in Brief Investigative Highlights . . . Under the authority of the California Whistleblower Protection Act State employees and agencies engaged in (Whistleblower Act), the California State Auditor (State Auditor) various improper governmental activities, conducted investigative work from January 1, 2019, through including the following: December 31, 2019, on 1,645 allegations of improper governmental » A state agency purchased a custom-built activity. These investigations substantiated numerous improper research boat for more than a half million activities, including the waste of state funds, misuse of bereavement dollars almost three years ago that has leave, misuse of various state resources, dishonesty, and supervisory remained largely unused. neglect of duty. Within this report, we provide information on a selection of these cases. » A state agency left equipment it purchased inoperable because its staff did not follow proper procedures to inspect it California Department of Fish and Wildlife upon delivery in 2015, and the equipment deteriorated because staff left it outdoors The California Department of Fish and Wildlife (Fish and Wildlife) and unprotected for four years. wasted more than a half million dollars of state and federal funds » A supervisor at an agency improperly when it purchased a custom-built boat in June 2017 that it cannot distributed paid parking permits to seven use for research surveys as it intended. Weaknesses in Fish and staff members wasting nearly $13,500. Wildlife’s procurement process enabled this wasteful purchase. In particular, it relied on a now-retired environmental program » Two employees from an agency did not manager (program manager) to write a technical scope of work for follow protocols for storing and using construction of the research boat. However, the program manager state-owned vehicles. lacked the necessary skills and did not seek help from appropriate experts. In addition, the program manager did not inform Fish » Seven employees at five state agencies and Wildlife when he verbally agreed to significant changes to the improperly claimed a total of more than contract that he should have documented. To compound matters, 320 hours of bereavement leave valued at Fish and Wildlife’s regional manager approved final payment to almost $10,000. the contractor for services and equipment that it did not receive. » Four state agencies wasted funds for Ultimately, the original specifications and subsequent changes were some employees missing work time and inadequate to ensure that Fish and Wildlife could use the research improperly reporting attendance. boat as it intended. As a result, the research boat has been largely unused for more than two years. California Department of Veterans Affairs A veterans long-term care home (veterans home) administrator at the California Department of Veterans Affairs wasted nearly $38,000 in state funds by failing to ensure that veterans home staff followed state procedures to inspect a bedbug treatment oven (equipment) upon delivery. The equipment has been inoperable since its delivery in 2015 and has deteriorated because staff left it outdoors and unprotected from the elements for more than four years. 2 Investigative Report I2020-1 | CALIFORNIA STATE AUDITOR April 2020 Bereavement Leave From July 2016 through June 2018, seven employees at five state agencies—the California Air Resources Board, the California Department of Transportation (Caltrans), the Department of General Services, the California Department of Social Services (Social Services), and the Employment Development Department— improperly claimed a total of more than 320 hours of bereavement leave with a value of almost $10,000. In all seven instances, the supervisors for the employees failed to adequately review their timesheets to ensure that employees charged bereavement leave in accordance with permissible limits. California Energy Commission For several years, a supervisor at the California Energy Commission (commission) violated state law when she improperly distributed commission-paid parking permits to up to seven of her staff members so that she and they could park their personal vehicles at the State’s expense. Her misuse of the parking permits resulted in the employees receiving free parking at an estimated cost to the State of $13,500. California Department of Transportation Two Caltrans employees failed to obtain valid vehicle home storage permits for their state-owned vehicles. They also improperly used these vehicles to commute between their homes and headquarters. Department of State Hospitals A psychiatrist at one of the hospitals in the Department of State Hospitals (DSH) improperly used 46 hours of state-compensated continuing medical education leave to work at another job that conflicted with the psychiatrist’s regularly scheduled workdays at the DSH hospital. The psychiatrist’s misuse of this leave cost the State nearly $6,500. In addition, a psychiatric technician at one of the DSH hospitals reported working nearly 50 hours that the technician did not actually work during a one-year period, resulting in a cost to the State of about $1,500. CALIFORNIA STATE AUDITOR | Investigative Report I2020-1 3 April 2020 California Department of Public Health Two employees of the California Department of Public Health arrived to work late, took extended breaks, and left work early without accounting for their missed work time. We estimate that during the one-year period we reviewed, these employees missed nearly 300 hours of work, costing the State more than $9,300 in salary it paid for work that was not performed. Franchise Tax Board An administrator at the Franchise Tax Board did not work her agreed-upon work hours, and she was dishonest about the hours that she actually worked. In addition, the administrator’s most recent supervisor neglected his responsibility to ensure that the administrator properly accounted for her work hours. California Prison Industry Authority Over a three-year period, three California Prison Industry Authority supervisors in one unit failed to ensure that the attendance records for a subordinate employee were accurate, even though they were aware that these records likely did not reflect the employee’s actual attendance. In addition, the employee was dishonest during the investigation when he provided conflicting information about his attendance. California Department of Social Services Social Services failed to recover an overpayment to a former employee and failed to ensure that another employee used bereavement leave appropriately. 4 Investigative Report I2020-1 | CALIFORNIA STATE AUDITOR April 2020 Blank page inserted for reproduction purposes only. CALIFORNIA STATE AUDITOR | Investigative Report I2020-1 5 April 2020 Introduction Under the California Whistleblower Protection Act (Whistleblower Act), anyone who in good faith reports an improper governmental activity is a whistleblower and is protected from retaliation.1 An improper governmental activity is any action by a state agency or by a state employee performing official duties that does the following: • Breaks a state or federal law. • Is economically wasteful. • Involves gross misconduct, incompetence, or inefficiency. • Does not comply with the State Administrative Manual, the State Contracting Manual, an executive order of the Governor, or a California Rule of Court. Whistleblowers are critical to ensuring government accountability and public safety. The California State Auditor (State Auditor) protects whistleblowers’ identities to the maximum extent allowed by law. Retaliation against state employees who file reports is unlawful and may result in monetary penalties and imprisonment. Ways That Whistleblowers Can Report Improper Governmental Activities Individuals can report suspected improper governmental activities through the toll-free Whistleblower Hotline (hotline) at (800) 952-5665, by fax at (916) 322-2603, by U.S. mail, or through our website at www.auditor.ca.gov/contactus/complaint. We received 1,418 calls and inquiries from January 1, 2019, through December 31, 2019. Of these, 779 came through our website, 422 through the mail, 178 through the hotline, 36 through fax, two through internal sources, and one through an individual who visited our office. In addition, our office received hundreds of allegations that fell outside of our jurisdiction; when possible, we referred those complainants to the appropriate federal, local, or state agencies. Investigation of Whistleblower Allegations The Whistleblower Act authorizes our office, as the recipient of whistleblower allegations, to investigate and, when appropriate, report on substantiated improper governmental activity by state agencies and state employees. We may conduct investigations 1 The Whistleblower Act can be found in its entirety in Government Code sections 8547 through 8547.15. It is available online at http://leginfo.legislature.ca.gov. 6 Investigative Report I2020-1 | CALIFORNIA STATE AUDITOR April 2020 independently, or we may request assistance from or elect to have other state agencies perform confidential investigations under our supervision. Over the past 25 years, our investigative work has identified and made recommendations to remediate a total of $579.9 million in state spending resulting from improper governmental activities such as gross inefficiency, theft of state property, conflicts of interest, and personal use of state resources. During the one-year period covered by this report, we conducted investigative work on 1,645 cases that we opened either in previous periods or in the current period. As Figure 1 shows, 1,172 of the 1,645 cases lacked sufficient information for investigation or are pending preliminary review. For another 299 cases, we conducted work or will conduct additional work—such as analyzing available evidence and contacting witnesses—to assess the allegations. We notified the respective agencies for an additional 89 cases so they could investigate the matters further, and we independently initiated investigations for another 34 cases. Further, we requested that state agencies gather information for 51 cases to assist us in assessing the validity of the allegations. Some of these cases may still be ongoing. Figure 1 Status of 1,645 Cases, January 2019 Through December 2019 299 18% 1,645 Conducted or will conduct 1,172 71% work to assess allegations Lacked sufficient information to conduct TOTAL CASES an investigation or 89 6% are pending review Referred to another agency for investigation 51 3% Requested information from another state agency 34 2% Initiated investigation Source: State Auditor. For information about the corrective actions taken in response to our investigations program, please refer to the Appendix, starting on page 51. CALIFORNIA STATE AUDITOR | Investigative Report I2020-1 7 April 2020 Chapter 1 CALIFORNIA DEPARTMENT OF FISH AND WILDLIFE It Wasted More Than a Half Million Dollars on a Research Boat That It Rarely Uses CASE I2017-1372 Results in Brief About the Agency The California Department of Fish and Wildlife Fish and Wildlife manages California’s diverse fish, wildlife, (Fish and Wildlife) wasted more than a half million and plant resources, as well as the habitats upon which dollars of state and federal funds when it purchased they depend to protect their ecological value and their use a custom-built research boat in June 2017 that and enjoyment by the public. It receives state and federal funding to help with monitoring fish and aquatic resources. cannot perform the tasks for which it was intended. This wasteful purchase resulted largely from Relevant Criteria weaknesses in Fish and Wildlife’s procurement process. In particular, Fish and Wildlife relied on Government Code section 8547.2 specifies that economic an environmental program manager (program waste by state agencies or employees constitutes an manager) who has since retired to write a technical improper governmental activity. scope of work for construction of the research boat. State Administrative Manual section 3510.4 provides that However, the program manager neither had the failure to meet any of the requirements contained in a expertise necessary to design a research boat for purchase order is grounds for rejection of the goods. the required purposes nor did he seek help from State Contracting Manual volume 2, section 8.6.1, requires outside contractors or consultants. Furthermore, that modifications to contracts must be documented the program manager did not inform Fish and through written, signed, and approved contract Wildlife when he orally agreed to significant amendments. In addition, section 9.A1.10 specifies that state changes to the contract—including changed agencies should not pay for non-information technology specifications and waived requirements—that goods until they have documented that the goods were should have been in writing. To compound matters, satisfactorily received, and section 10.1.0 specifies that the Fish and Wildlife’s regional manager approved receiving process includes the inspection and acceptance the final lump-sum payment to the contractor for of the goods to ensure that they conform to the purchase services and equipment that Fish and Wildlife did terms and conditions. Finally, section 2.C1.0 requires state agencies that purchase mobile equipment to document, not receive. or register, their purchases with the U.S. Coast Guard. Ultimately, Fish and Wildlife procured the research boat to conduct research surveys but cannot use the boat for that purpose because the original specifications and subsequent changes were inadequate to ensure that the boat could be used to do so. As a result, the research boat has been mostly unused for more than two years. Background Fish and Wildlife, the Department of Water Resources (Water Resources), and the U.S. Bureau of Reclamation (Reclamation) coordinate project operations in the California Central Valley. The agencies share the costs of all environmental monitoring surveys and associated special studies for certain water projects. Some of the surveys and 8 Investigative Report I2020-1 | CALIFORNIA STATE AUDITOR April 2020 special studies require deployment of a variety of gear, such as nets, used to collect samples to monitor fish and invertebrate populations. As part of these shared costs, Water Resources and Reclamation equally funded the boat purchase that is the subject of this investigation. The State Contracting Manual (contracting manual) sets forth the requirements for state agencies to use when making significant purchases via contract. In particular, the contracting manual requires that amendments to contracts be written, signed, and approved. In addition, it specifies that state agencies should not pay for goods until they have documented that the goods were satisfactorily received, and it further specifies that the receiving process must include inspection and acceptance of the goods to ensure that the goods conform to the purchase terms and conditions. Finally, the contracting manual requires state agencies that purchase mobile equipment, such as the research boat, to document, or register, the purchase with the U.S. Coast Guard. Fish and Wildlife Purchased a Research Boat The Research Boat’s Specifications Contained That Has Been Rarely Used Because It Failed to Significant Design Flaws and Safety Issues Adequately Develop Highly Technical Specifications • The research boat is difficult to steer straight because of the way Fish and Wildlife modified the hull. Fish and Wildlife relied solely on one of its • The helm was installed on the port (left) side instead program managers to develop the research boat’s of the traditional right side, and the draft height (how highly technical specifications, even though he high the boat sits in the water) was increased; both of lacked sufficient experience completing such these modifications by Fish and Wildlife have resulted in tasks. In addition, the program manager did not an obstructed view for the driver. consult with any outside resources or experts • The boat’s square design is problematic, catching the for assistance. Instead, he developed the plans by wind and causing the boat to rock. In addition, the boat’s refining outdated specifications from 2007 for a nets catch on the hull corners. similar research boat that the U.S. Fish and Wildlife Service had acquired. Further, the program • When the fuel tank is full, the research boat cannot reach manager received only limited feedback about the its specified cruising speed. research boat’s specifications from other staff • The placement and design of the fuel tank cause the within Fish and Wildlife. No one internally— boat to list (lean to one side) when the tank is full. either at the regional or headquarters offices— • The winches were installed on the back of the research reviewed the specifications from a technical boat instead of the sides, creating difficult positioning for standpoint because, as the program manager aptly staff operating them. pointed out, Fish and Wildlife is not in the research • The framed structure that supports the nets is too low boat designing business and none of its employees and wide, creating a hazard for staff. has that expertise. The end result was a boat with design flaws and safety concerns that could not • The dimensions of the framed structure also make meet Fish and Wildlife’s needs. For instance, nets pulling the boat into the marina slip difficult. on the research boat are used to obtain survey Source: State Auditor review of Fish and Wildlife's samples from the water. However, the boat hoists documentation for the research boat. CALIFORNIA STATE AUDITOR | Investigative Report I2020-1 9 April 2020 the nets onto it too slowly, which presents a safety concern when trying to avoid interference with other boats and objects. The text box lists the other problems with the research boat. Two of these design flaws illustrate our concerns with the procurement process. First, the installation of the helm on the port side and the increase of the draft height were made with only the verbal approval of the program manager instead of using a written contract amendment; therefore, Fish and Wildlife management was not aware of these changes in design. Second, even when Fish and Wildlife determined that the speed needed to retrieve the boat’s nets was too slow, it did not ask the contractor to correct the problem at no cost. Instead, it paid an additional $2,830 for a different contractor to try to replace the hydraulic pump as a way to fix the retrieval speed for the nets. However, that effort did not correct the problem. As a result of its poor design, the research boat—costing more than The research boat—costing more $535,000—has remained mostly unused in a marina since its delivery than $535,000—has remained in June 2017. Fish and Wildlife operated it only 14 times, for a total of mostly unused in a marina since 74 engine hours, from June 2017 through May 2019. By comparison, June 2017. Fish and Wildlife typically uses its other less specialized research boats for surveys about 10 days and about 80 hours each month, or about 1,000 hours every year. Finally, Fish and Wildlife did not properly document, or register, the boat in accordance with federal law. The program manager admitted in an email that he “dropped the ball” on getting the research boat registered. After this realization, he submitted the proper documents to regional administrative staff, who sent the documents to headquarters for processing. Headquarters staff mistakenly submitted the documents to the Department of Motor Vehicles to register the research boat and did not properly document it with the U.S. Coast Guard, as required. In fact, Fish and Wildlife operated the unregistered boat in violation of state requirements until after our investigation inquiry. The research boat was correctly documented in October 2019, more than two years after its purchase. Fish and Wildlife Did Not Inspect the Research Boat for Compliance With Its Specifications, as State Law Requires Fish and Wildlife could have minimized its waste of resources if it had completed all inspections of the research boat to ensure that it complied with the design specifications and followed the relevant state contracting laws before paying for it. Fish and Wildlife’s contract for the research boat included costs for inspections—one midway through building and one at delivery—and training after delivery that were not performed. The program manager who designed the boat waived the first inspection without consulting anyone, despite an out-of-state 10 Investigative Report I2020-1 | CALIFORNIA STATE AUDITOR April 2020 travel budget for inspection totaling $2,600 that was included in the contract and authorized him or his designee to travel to the out-of-state facility where the research boat was being built to inspect it before the boat was completed. In addition, the contract included 16 hours of training for Fish and Wildlife staff by the contractor, but the program manager waived about 12 of those training hours—at a cost of $2,200—without consulting his supervisor. Thus, Fish and Wildlife ultimately paid $4,800 for inspections and trainings that were not performed. In addition, even though Fish and Wildlife was responsible for ensuring that the contract specifications were met, neither of the Fish and Wildlife employees involved in inspecting the boat at delivery reviewed the design specifications line by line as identified in the contract and compared them to the actual boat. At the very least, these Fish and Wildlife staff should have ensured that the boat’s design met the specifications identified in the contract. More importantly, if Fish and Wildlife staff had conducted the first inspection while the research boat was being built, which was planned for and included in the purchase cost, they might have identified the numerous design flaws and safety concerns that were observed months later when the staff took delivery of the research boat. Recommendations To remedy the effects of the improper governmental activities this investigation identified and to prevent those activities from recurring, Fish and Wildlife should take the following actions: • Clearly define and train staff on procurement roles to avoid having only a few employees primarily guiding an acquisition of this magnitude. • Train staff who administer or approve contracts on the requirement for all contracts and amendments to be in writing and to work with contractors if there are issues with modifications needed pursuant to warranty. • Retain a professional with appropriate expertise for future procurements of a highly technical nature to develop specifications and engineered drawings and to inspect the equipment for satisfaction of contractual specifications before accepting delivery. • Consider using progress payment schedules for contracts when procuring newly constructed, high-dollar technical equipment. • For future acquisitions, immediately consult with its legal staff to resolve any probable or possible contract deviations. CALIFORNIA STATE AUDITOR | Investigative Report I2020-1 11 April 2020 • Create a process to ensure that any newly acquired fleet assets are registered or documented with the relevant authorities before authorizing use of the asset. • Ensure that its legal staff assesses Fish and Wildlife’s ability to recover the money paid to the contractor for any contract requirements that remain unfulfilled. Agency Response In February 2020, Fish and Wildlife reported that it believed our report mischaracterized its involvement in the purchase and design of the research boat. Fish and Wildlife pointed out that because the cost of this purchase exceeded its delegated purchasing authority, the Department of General Services (General Services) made the purchase on its behalf and provided engineering services with regard to the design specifications of the research boat. However, as stated in the report, the program manager developed the plans for the design specifications using outdated information and limited feedback. In addition, even with engineering assistance from General Services, Fish and Wildlife maintained ultimate responsibility to ensure that the design of the research boat met all of its requirements. Fish and Wildlife agreed that its employees did not complete the first inspection of the research boat but stated that a General Services engineer may have inspected the boat. However, Fish and Wildlife stated that it had no evidence that a General Services engineer conducted the first inspection. More importantly, Fish and Wildlife did not contact General Services in the nearly three years since the purchase of the boat to inquire whether the General Services engineer had conducted the first inspection. Further, Fish and Wildlife provided its planned corrective actions for the significant design flaws and safety concerns that we identified. It also stated that a new program manager will oversee its vessel operations, a qualified marine surveyor will conduct annual inspections of all research boats for safety and proper functioning, and a lead vessel operator will support operations, maintenance, and inspections of research boats to encourage timely reporting and addressing of deficiencies. Finally, Fish and Wildlife addressed each of our recommendations. Regarding our recommendation that it clearly define and train staff about procurement, Fish and Wildlife stated that it currently trains staff on procurement roles and responsibilities. It also stated that for purchases that exceed its purchasing authority, it relies on the 12 Investigative Report I2020-1 | CALIFORNIA STATE AUDITOR April 2020 guidance and expertise of General Services and stated that it will continue to train staff and work with General Services to follow prescribed procurement requirements. With respect to our recommendation that Fish and Wildlife train staff regarding contract requirements, it stated that it trains staff who administer contracts on the requirement that all contracts and amendments must be in writing. In addition, Fish and Wildlife stated that it provides additional training and support when it learns that staff members are not following this requirement. It further stated that in this circumstance, its staff and the contractor should have been aware of the requirement and that the contractor should not have agreed to any changes unless they were in writing or approved by General Services. Fish and Wildlife disagreed with our recommendation that it retain a professional with appropriate expertise to develop specifications and engineered drawings and to inspect equipment before accepting delivery. Fish and Wildlife stated that it must allow General Services to conduct procurements above the delegated purchasing authority and, accordingly, to provide the necessary engineering expertise. However, Fish and Wildlife could have worked with General Services to ensure that a professional with expertise in designing and building boats was involved with the purchase and delivery of this research boat. Fish and Wildlife also disagreed that it should consider using progress payment schedules for similar purchases, as it stated that it relied on the expertise of General Services in these types of procurements, including the judgment of General Services’ staff about the creation of payment schedules. It further stated that paying for the research boats in increments during construction would not have prevented the outcome. However, we contend that with the use of progress payments, Fish and Wildlife would have paid only for part of the purchase cost and could have withheld final payment pending the outcome of the issues it identified at delivery or shortly thereafter. Fish and Wildlife agreed with our remaining recommendations about consulting immediately with its legal staff to resolve contract deviations, creating a process to ensure that any new fleet assets are registered or documented appropriately, and ensuring that Fish and Wildlife’s legal staff assesses its ability to recover any money paid for any contract requirements that remain unfulfilled. Fish and Wildlife stated that it will investigate the failures identified with the boat’s registration and will develop and implement procedures to ensure proper and timely registration. It also stated that its legal staff will investigate this procurement further to determine the steps that are necessary or likely to produce the recovery of money or to further enforce the terms of the contract. CALIFORNIA STATE AUDITOR | Investigative Report I2020-1 13 April 2020 Chapter 2 CALIFORNIA DEPARTMENT OF VETERANS AFFAIRS A Veterans Home Administrator Wasted State Funds When He Failed to Properly Store Specialized Equipment CASE I2018-0364 About the Agency Results in Brief CalVet serves nearly 1.8 million California veterans and A veterans long-term care home (veterans home) their families. It strives to ensure that veterans obtain the state and federal benefits and services they have earned, administrator at the California Department of including the long-term care it provides at eight veterans Veterans Affairs (CalVet) wasted nearly $38,000 in homes. The homes range in size from 60 residents on state funds by failing to ensure that veterans home a 20-acre campus to more than 1,000 residents on a staff followed state procedures to inspect a bedbug 500-acre campus. treatment oven (equipment) upon delivery. The equipment, which is approximately 7 feet by 7 feet Relevant Criteria in size, has been inoperable since delivery in 2015 Government Code section 8547.2 specifies that economic and has deteriorated as a consequence of being left waste by state agencies or employees constitutes an outdoors and unprotected from the elements for improper governmental activity. more than four years. State Contracting Manual volume 2, chapter 10.3.1, recommends that upon receipt of purchased items, agency Background staff should conduct inspections for damage and operability and should verify packaging integrity. In addition, chapter An administrator manages and oversees the 10.3.2 suggests that inspections should be completed day-to-day operations of each veterans home and within a reasonable amount of time or as specified in the reports to the deputy secretary of veterans affairs purchase documents. If an agency knows that an inspection at CalVet headquarters. In early 2014, the deputy will not be immediate, the purchase document must specify when and how the inspection will occur. secretary issued a verbal directive to all eight home administrators to purchase the specialized State Administrative Manual chapter 8422.20 indicates that equipment to provide for the health and well-being agency receiving staff should prepare stock-received reports of their residents and staff by preventing the or use approved purchase order documents to record spread of bedbugs. CalVet headquarters’ staff receiving information when agencies receive goods. provided recommendations to the homes about equipment they should acquire, but it allowed each home to decide how best to fulfill the directive. In October 2014, the administrator at one home ordered equipment that was larger than suggested by the deputy secretary because the administrator thought it would be more appropriate for the home. The home received the equipment in March 2015. Prior to its delivery, the administrator directed receiving staff to place the equipment in an outdoor, partially covered area on the veterans home property. 14 Investigative Report I2020-1 | CALIFORNIA STATE AUDITOR April 2020 The Administrator Failed to Ensure That Veterans Home Receiving Staff Followed Procedures and Failed to Exercise Due Diligence, Which Led to the Home Wasting Nearly $38,000 The administrator failed to make certain that the veterans home’s receiving staff followed contracting and State Administrative Manual (administrative manual) requirements upon accepting the equipment before ensuring that it was complete, intact, and functioned properly. The contracting manual states that, upon receipt of goods, employees need to conduct an inspection for damage or breakage, operability, and packaging integrity. However, the veterans home’s procurement and purchasing office and the The receiving staff accepted the administrator stated that the receiving staff accepted the equipment equipment without performing a without performing a proper inspection; therefore, no one knew proper inspection; therefore, no one whether the equipment worked upon delivery. In addition, the knew whether the equipment receiving staff should have recorded the condition and operability worked upon delivery. of the equipment on a stock-received report or on its purchase order. Further, if staff did not have time to perform an inspection of the equipment immediately, they should have followed the administrative manual’s requirement to note when the inspection would occur in the future. However, they did not. The administrator stated that during the six months from when the equipment first arrived in March 2015 to when it was inspected in September 2015, he and his staff were addressing more urgent and immediate health and safety concerns for the residents in the home, such as issues involving the water supply, resident accommodations, and the air conditioning system. Thus, the equipment remained idle outdoors for those six months. As a result of failing to properly inspect the equipment upon its delivery, the veterans home staff did not determine whether any pre-existing damage that may have contributed to the equipment’s failure to function was a possible factor in its eventual inoperability. When the veterans home’s staff finally unwrapped, inspected, and attempted to operate the equipment in the fall of 2015, the equipment would not function. Its inoperability was exacerbated by deterioration because it was not built to withstand outdoor weather conditions. The administrator stated that he was unaware that the equipment could not be kept and operated outdoors and, due to its size, he could not imagine housing it within the home. When staff determined that the equipment was inoperable, the veterans home’s chief of plant operations (operations chief) contacted the manufacturer for assistance. When the manufacturer learned that the equipment had been stored outdoors, it informed the operations chief that storing the equipment outdoors had voided its warranty. In October 2015, the Department of General Services (General Services), which had facilitated the purchase of the equipment, informed the administrator that it would purchase replacement parts to help CALIFORNIA STATE AUDITOR | Investigative Report I2020-1 15 April 2020 repair the equipment, but it directed the administrator to move the equipment indoors immediately. However, the administrator did not follow the General Services-directed action because he believed that the equipment had deteriorated so much that it no longer mattered where it was housed. He made the decision to leave it outdoors while staff continued to try to make it operational. Moreover, the administrator did not exercise his necessary due diligence before purchasing the equipment to ensure that it would operate in the outdoor location where he intended to use it. For a capital purchase of this amount, the administrator should have spoken directly with the manufacturer and sought its recommendation about the purchase based on the type of equipment needed, its intended use, and where it would be housed. The equipment has remained outdoors since its delivery in early 2015 and remains inoperable. The administrator left state employment in 2019. Recommendations To address the improper governmental activity we identified in this investigation, CalVet should do the following: • Determine the best option to recoup whatever funds it can of the nearly $38,000 it spent on the equipment, such as submitting it to General Services’ state surplus property auction. • Train receiving staff at the home on applicable contracting manual requirements for the receipt of purchased goods. • Determine whether the home needs a bedbug oven and, if so, ensure that it is properly stored in accordance with its specifications. Agency Response CalVet reported in February 2020 that the veterans home has repaired the equipment and that, nearly five years after the purchase, it is finally operational. In addition, CalVet reported that the veterans home moved the equipment to a covered, fully enclosed exterior space to protect it from weather conditions. Finally, CalVet reported that during the past two years its office of procurement and contracts has provided training to all veterans homes related to contract manager training, service order requirements, and Financial Information System for California requirements related to receiving inventory. 16 Investigative Report I2020-1 | CALIFORNIA STATE AUDITOR April 2020 Blank page inserted for reproduction purposes only. CALIFORNIA STATE AUDITOR | Investigative Report I2020-1 17 April 2020 Chapter 3 SEVERAL STATE AGENCIES FAILED TO ENSURE EMPLOYEES’ PROPER USE OF BEREAVEMENT LEAVE CASE I2018-0428 Results in Brief About Bereavement Leave From July 2016 through June 2018, seven employees The State of California provides paid leave for state at five state agencies claimed 324 hours of leave employees when their family members or individuals living that was improperly categorized as bereavement in their homes die. The State typically grants up to 24 work leave and valued at almost $10,000. In all instances, hours of paid bereavement leave per approved occurrence. the supervisors for the employees failed to adequately review employee timesheets to ensure Relevant Criteria that employees charged bereavement leave in The relevant bargaining agreements entitle state employees accordance with permissible limits. represented by labor unions to receive up to three days (24 work hours) of paid bereavement leave for the deaths of certain family members. Government Code section 19859.3 Background allows employees who are not represented by labor unions to claim bereavement leave for the deaths of any persons The State’s paid bereavement leave benefits apply related by blood, adoption, or marriage. Both represented differently depending on whether employees are and unrepresented employees are entitled to bereavement represented by a union (represented employees) leave for the deaths of any individuals residing in their or are excluded from collective bargaining immediate households at the time of death. (unrepresented employees). Because collective California Code of Regulations, title 2, section 599.665, bargaining agreements govern bereavement leave requires state agencies to keep complete and accurate time for represented employees, the bereavement leave and attendance records for all of their employees. benefits vary slightly depending on the bargaining Government Code section 19838 directs the State, when agreement. Figure 2 shows these differences. it identifies overpayments to employees, to act to recoup those funds in a prescribed manner: it must notify the The frequency with which a represented employee employee of the overpayment, allow the employee time to may claim bereavement leave depends on whether respond, and commence recoupment actions within three the employee’s bargaining agreement has categorized years from the date of the overpayment. relationships as part of the immediate or extended family. As Figure 2 shows, regardless of the number of occurrences, a represented employee may claim bereavement leave for immediate family members’ deaths. Each occurrence of bereavement leave for immediate family members is limited to three days (24 work hours) of paid time off. The same employee can claim only 24 hours in each fiscal year for bereavement leave for all extended family members. If paid bereavement leave is not available, an employee may use another category of accrued leave, such as vacation or annual leave credits, with supervisory approval. More generous provisions apply for unrepresented employees. State law does not identify specific familial relationships, stating only that the deceased must be a “family member related by blood, adoption, or marriage.” Although each occurrence allows for a maximum paid bereavement leave of three workdays, state law entitles unrepresented employees to an unlimited number of occurrences and requires employees to substantiate each occurrence. 18 Investigative Report I2020-1 | CALIFORNIA STATE AUDITOR April 2020 Figure 2 Bereavement Leave Benefits Differ for Represented Employees and Unrepresented Employees Represented employees unrepresented employees Per fiscal year, each employee may use Per each occurrence without regard to the following: the number of occurrences, an employee may use the following: Up to three eight-hour days (24 hours) of Up to three days of paid leave for any paid leave per occurrence for immediate family member related by blood, family members, such as parents, children, adoption, or marriage. and spouses, regardless of the number of occurrences. Up to 24 hours of paid leave in total for Up to three days of paid leave for any extended family members, such as aunts, person residing in the immediate uncles, nieces, or nephews, regardless of household of the employee at the time the number of occurrences. of death. Bereavement leave for cousins and friends Bereavement leave for friends is not permitted. is not permitted. If the supervisor requests it, an employee An employee must provide substantiation must provide substantiation for the for all requests for bereavement leave. requested bereavement leave. Source: Government Code section 19859.3 and analysis of the relevant bargaining agreements. Each supervisor is responsible for reviewing and approving employees’ timesheets, and each is responsible for being familiar with the statutory and bargaining agreement limitations of bereavement leave for subordinate employees. If the leave an employee takes for a specific absence does not meet the criteria for approved bereavement leave, the supervisor should direct the employee to use another category of accrued leave to account for the time off. Upon receiving several complaints regarding the improper use of bereavement leave, we identified the 10 represented and 10 unrepresented employees in the State who claimed the most bereavement leave in fiscal years 2016–17 and 2017–18. From those 20 employee records, we selected 10 for closer review, requesting that departments provide us with the substantiation and family relationship for each bereavement leave claim. These 10 employees worked for seven state departments: the California Air Resources Board (ARB), the California Bureau of Automotive Repair (BAR) within the Department of Consumer CALIFORNIA STATE AUDITOR | Investigative Report I2020-1 19 April 2020 Affairs, the California Department of Human Resources (CalHR), the California Department of Transportation (Caltrans), the Employment Development Department (EDD), the Department of General Services (General Services), and the California Department of Social Services (Social Services). Departments Failed to Adequately Monitor Employees’ Use of Bereavement Leave Our investigation concluded that seven of the 10 employees whose records we reviewed improperly claimed 324 hours of bereavement leave valued at nearly $10,000. We determined that the leave was improper for three reasons: • The employee claimed bereavement leave in excess of statutory limits. • The employee claimed bereavement leave for an impermissible individual or reason. • The employee failed to provide any substantiation for the bereavement leave claimed. The following examples demonstrate the three reasons that the employees improperly claimed bereavement leave. EXAMPLE 1: Employee A Claimed a Total of 100 Hours in Excess of His Allowed Bereavement Leave Employee A, a represented employee working at Caltrans, claimed 108 hours of bereavement leave, or 13.5 workdays, over the span of two months for the passing of his mother. The employee’s bargaining agreement only permitted a maximum of 24 work hours of paid bereavement leave, resulting in the wrongful accounting of 84 leave hours. A few months later, Employee A claimed 40 hours of bereavement leave for the passing of his mother-in-law, resulting in an additional wrongful accounting of 16 leave hours. In total, Employee A claimed 100 hours in excess of the limits established in his collective bargaining agreement, valued at an estimated $5,400. Employee A’s supervisor was responsible for being familiar with the limitations of bereavement leave for Employee A and should have required him to use another category of accrued leave to account for any absences that exceeded the number of work hours permitted by his bargaining agreement. 20 Investigative Report I2020-1 | CALIFORNIA STATE AUDITOR April 2020 EXAMPLE 2: Employee B Claimed Bereavement Leave for the Death of a Friend As an unrepresented employee of the ARB, state law permits Employee B to use bereavement leave for any family member related by blood, adoption, or marriage. However, the death of a friend is not a legitimate basis for using bereavement leave. Our investigation found that in fiscal year 2016–17, Employee B indicated on her timesheet that her bereavement leave was for the passing of a “friend.” Employee B’s supervisor was responsible for being familiar with the statutory limitations of bereavement leave and should have required that the employee use another category of accrued leave to account for this absence. EXAMPLE 3: Employee C Failed to Substantiate Her Bereavement Leave Claim As an unrepresented employee at Social Services, Employee C must provide substantiation to support each bereavement leave claim. Our review of Employee C’s timesheets found that she failed to provide substantiation for the family member for whom she claimed bereavement leave. As part of our review, we asked Social Services to contact Employee C and obtain substantiation for the claim. The employee responded to Social Services that she had erroneously claimed bereavement leave to volunteer at her child’s school. Employee C’s supervisor should have required the employee to provide substantiation to support her bereavement leave claim; had he done so, this claim would have been categorized correctly to another leave type. As the departments' representatives, these employees' supervisors should have adequately monitored or tracked the employees' use of bereavement leave to avoid the improper use. When employees improperly use bereavement leave, they retain other accrued leave balances, such as annual leave, vacation, or personal holidays, all of which have value for cashing out as part of a buyback program or to be used to increase time served and retirement benefits. Bereavement leave, on the other hand, has no value to the employee if not used. Table 1 presents the total number of hours and the estimated dollar values that we deemed improper for each of the seven employees who misused bereavement leave. CALIFORNIA STATE AUDITOR | Investigative Report I2020-1 21 April 2020 Table 1 Seven Employees Claimed Nearly $10,000 of Improper Bereavement Leave in Fiscal Years 2016–17 and 2017–18 EMPLOYEE DEPARTMENT TYPE CLAIMED HOURS IMPROPER HOURS IMPROPER AMOUNTS Employee A Caltrans Represented 148 100 $5,401 Employee B ARB Unrepresented 128 8 308 Employee C Social Services Unrepresented 136 8 293 Employee D General Services Represented 192 40 611 Employee E General Services Represented 152 104 1,755 Employee F EDD Represented 136 56 1,168 Employee G Caltrans Represented 160 8 227 Totals 1,052 324 $9,763 Source: Analysis of the employees’ reported bereavement leave claims, timesheets, and supporting documentation. Note: Amounts do not include the retirement value for the hours identified. During our investigation, we also reviewed the bereavement policies for the seven departments we originally identified and observed that two departments had bereavement leave policies for unrepresented employees that are inconsistent with state law. Specifically, we found that CalHR’s and EDD’s policies with respect to unrepresented employees were not consistent with Government Code section 19859.3. Both departmental policies require substantiation only if requested by the supervisor. However, state law mandates that “the employee . . . shall provide substantiation to support the request” for bereavement leave. Recommendations To address the improper governmental activities we identified in this investigation, the five departments we identified in Table 1 should take the following actions: • Recoup or correct all overpayments made to the seven employees we determined to have taken inappropriate bereavement leave. • Notify all employees of bereavement leave requirements and where they can find additional information specific to bereavement leave. 22 Investigative Report I2020-1 | CALIFORNIA STATE AUDITOR April 2020 • Remind supervisors of their responsibilities to ensure that employees charge leave properly, including bereavement leave, and to not allow employees to exceed the allowable limits that the bargaining agreements and state law provide. To address inconsistent bereavement leave policies, CalHR and EDD should revise their policies to mirror the requirements of Government Code section 19859.3, which requires unrepresented employees to submit substantiation for each leave request. To ensure that represented employees properly claim bereavement leave, CalHR should work with labor unions to change the bargaining agreements’ provision to require represented employees to submit substantiation for each claim of bereavement leave as state law requires for unrepresented employees. In addition, the Legislature should require any represented employees who use bereavement leave to submit substantiation for each leave request. To prevent future misuse of bereavement leave, CalHR should proactively issue guidance to all state entities reminding them of the bereavement leave requirements and how they differ between represented and unrepresented employees. Agency Response In January 2020, all involved departments reported that they agreed with our recommendations and that all of the recommendations had either been fully implemented or were pending completion, as shown in Table 2. For items pending completion, the applicable departments were expected to provide additional detail regarding their implementation by March 31, 2020. CALIFORNIA STATE AUDITOR | Investigative Report I2020-1 23 April 2020 Table 2 Status of Implementing the Recommendations SOCIAL GENERAL RECOMMENDATIONS ARB CALTRANS EDD CALHR SERVICES SERVICES Recoup or correct all overpayments made to the seven employees we determined to have taken inappropriate NA bereavement leave. Notify all employees of bereavement leave requirements and where they can find additional NA information specific to bereavement leave. Remind supervisors of their responsibilities to ensure that employees charge leave properly, including bereavement leave, and to not allow employees NA to exceed the allowable limits that the bargaining agreements and state law provide. CalHR and EDD should revise their policies to mirror the requirements of Government Code section 19859.3, NA NA NA NA which requires unrepresented employees to submit substantiation for each leave request. CalHR should work with labor unions to change the bargaining agreements’ provision to require represented employees to submit substantiation for NA NA NA NA NA each claim of bereavement leave as state law requires for unrepresented employees. CalHR should issue guidance to all state entities reminding them of the bereavement leave NA NA NA NA NA requirements and how they differ between represented and unrepresented employees. Source: Agency responses from the relevant department. Fully Implemented Pending NA = Not applicable 24 Investigative Report I2020-1 | CALIFORNIA STATE AUDITOR April 2020 Blank page inserted for reproduction purposes only. CALIFORNIA STATE AUDITOR | Investigative Report I2020-1 25 April 2020 Chapter 4 MISUSE OF STATE RESOURCES, TIME, LEAVE, VEHICLES, DISHONESTY, AND SUPERVISORY NEGLECT OF DUTY As stated in the Introduction, state law requires the California State Auditor (State Auditor) to investigate allegations of improper governmental activities that whistleblowers report. Although some substantiated allegations do not identify significant individual losses to the State, the State Auditor’s finding and reporting of numerous similar improprieties can identify weaknesses in the State’s system of internal controls and, more importantly, can serve as a deterrent to state employees who might attempt to engage in such improprieties. This chapter provides examples of eight investigations in which we substantiated several allegations. State law prohibits state employees from using state resources—including land, buildings, facilities, equipment, supplies, vehicles, leave, and state-compensated time—for personal purposes. Accordingly, some of the investigations that we highlight in this chapter focus on the misuse of state-issued parking permits, state-owned vehicles, state-compensated time, continuing medical education leave, and bereavement leave. In addition, state law identifies as causes for discipline the dishonesty of state employees and the neglect of duty by state supervisors and managers. Other investigations in this chapter focus on employees displaying dishonesty regarding their work or attendance during the investigation and on the failure of supervisors to monitor attendance and time reporting of their subordinate employees. 26 Investigative Report I2020-1 | CALIFORNIA STATE AUDITOR April 2020 Blank page inserted for reproduction purposes only. CALIFORNIA STATE AUDITOR | Investigative Report I2020-1 27 April 2020 CALIFORNIA ENERGY COMMISSION A Supervisor Misused State Parking Permits to Provide Free Parking for Herself and Staff Members CASE I2019-0010 Investigative Results We initiated an investigation in response to an allegation we received that a supervisor at the About the Commission California Energy Commission (commission) The commission is the State’s primary energy policy and misused state parking permits. Our investigation planning agency and is committed to reducing energy costs determined that, for years, and likely since 2013, the and environmental impacts of energy use while ensuring a supervisor misused and distributed commission- safe, resilient, and reliable supply of energy. Headquartered paid parking permits for up to seven of her staff in downtown Sacramento, the commission employs more so that she and her staff could park their personal than 600 employees, including five governor-appointed vehicles at the State’s expense, a violation of state commissioners and 15 executives. law. As Figure 3 illustrates, the misuse resulted in the employees receiving parking valued at an Relevant Criteria estimated $13,500. Government Code section 8314 prohibits state employees from using or allowing others to use public resources for The commission’s inadequate control over its private gain or advantage. Any person who intentionally parking permits facilitated the supervisor’s or negligently violates this law is liable for a civil penalty misuse. For several years, the commission has not to exceed $1,000 for each day on which a violation been paying the Department of General Services occurs, plus three times the value of the unlawful use of (General Services) for 25 parking permits to be public resources. used in two of General Services’ nearby parking Government Code section 19990 requires state employees garages. These permits are primarily for use by to devote their full time, attention, and efforts to state occasional guests of the commission as well as employment during work hours; they may not use state some designated commission employees who supplies for private gain or advantage. reimburse the commission between $50 and $70 Government Code section 8547.2 specifies that economic per month to use the parking permits. However, we waste by a state agency or employee constitutes an found that the commission’s procedures for issuing improper governmental activity. the permits and tracking payments are inadequate, and the supervisor confirmed that the commission has no internal policy for regulating this process. Some of the designated employees went months without making payments to the commission. When we interviewed an executive who oversaw the supervisor’s division, he said that he did not know why the commission paid for the permits, how many permits the commission paid for, what criteria the commission applied in assigning permits, or what method it used to track permit assignments. The supervisor took advantage of the commission’s lack of internal controls and distributed the unassigned permits to herself and her staff. For the majority of her time at the commission, the supervisor was in charge of storing and issuing the permits to official commission guests and employees who had purchased and been assigned permits. In this position, she had direct access to the permits and was aware of how many unassigned permits were available at all times. In addition, 28 Investigative Report I2020-1 | CALIFORNIA STATE AUDITOR April 2020 the supervisor confirmed that upper management seldom inquired about the issuance of permits. These conditions presented the opportunity for the supervisor to easily misuse the permits without detection. When interviewed, the supervisor acknowledged that she used the unassigned permits on a regular basis and allowed her staff to do likewise. Figure 4 illustrates the commission’s intended use for parking permits and the supervisor’s improper distribution to her staff. Figure 3 The Value of the Misused Parking Permits Was Nearly $13,500 $8,874 $4,620 Supervisor Supervisor’s Staff 2013 through 2019 2013 through 2019 Source: Analysis of commission invoices and interviews of commission staff. Although the supervisor and some staff members initially stated that their use of the permits was primarily duty-related, their claims lacked credibility and conflicted with statements by other staff members. Specifically, the majority of the staff members interviewed admitted to regular, personal use of the permits; for one employee, such use began on the employee’s first day on the job. The employee said that the supervisor told the employee not to worry about budgeting for parking because the use of the unassigned permits was a “perk” of having a supervisor in charge of the commission’s parking permits. Another employee said that the supervisor offered the unassigned permits to her staff as soon as the supervisor started at the commission. A third employee acknowledged using a permit daily so the employee could park close to work. The supervisor herself stated that there was a good possibility that their use of the permits “[got] out of hand.” CALIFORNIA STATE AUDITOR | Investigative Report I2020-1 29 April 2020 Figure 4 The Supervisor Misused State Parking Permits So She and Her Staff Could Park for Free Supervisor PROPER USE MISUSE A For commission employees who have For the supervisor and her staff purchased and been assigned permits. to use at commission expense. These employees remit payment to the commission. OR B For official guests of MY NAME IS the commission. GUEST Source: Commission invoices and interviews of commission staff. A few years ago, the supervisor’s former manager discovered that the supervisor was distributing unassigned permits to her staff and removed the supervisor’s responsibility to oversee the permits. Consequently, she no longer had access to the permits. Shortly thereafter, in 2017, we received a complaint alleging that the supervisor had started illegally parking her vehicle in a restricted fire lane, possibly to avoid parking fees. Our office referred the matter to the commission so it could address the situation, and the executive who oversaw the division instructed her to cease this behavior. However, after the former manager left the commission, the same executive—unaware of the supervisor’s previous misuse— returned the permits to her so she could once again issue and track them. In addition to the supervisor’s misuse, the commission’s lack of adequate controls over the parking permits resulted in wasted state funds because it paid for permits that it did not need. For the month of August 2019, more than half of the commission’s total parking permits remained unassigned and cost the commission nearly $1,000. Although it may be practical to maintain a few extra permits for authorized guest use, the amount the commission currently pays for those that go unassigned appears excessive and 30 Investigative Report I2020-1 | CALIFORNIA STATE AUDITOR April 2020 wasteful, which constitutes an improper governmental activity. This surplus of unassigned parking permits also likely contributed to the improper use by employees. Recommendations To address the improper governmental activity we identified in this investigation, the commission should take the following actions: • Immediately and permanently remove the supervisor’s responsibility for issuing and tracking the parking permits. • Within 60 days, take appropriate corrective or disciplinary action against the supervisor for her misuse of state resources. • Within 30 days, establish and disseminate to all executive staff the policies for the parking permits to minimize future misuse. • Reevaluate the number of parking permits the commission pays for and reduce the number of permits if business need warrants a reduction. Agency Response In January 2020, the commission stated that it was committed to ensuring that it effectively and efficiently administers and manages public funds and programs. It stated that it eliminated 23 of the 25 agency-assigned parking permits, transferring them back to General Services for its administration. The commission retained two parking permits that are specifically assigned to two state vehicles. In February 2020, the commission reported that, after conducting its own investigation into the supervisor’s misconduct, it served her with a notice of termination, and she then retired. It stated that it plans to counsel the subordinate staff. CALIFORNIA STATE AUDITOR | Investigative Report I2020-1 31 April 2020 CALIFORNIA DEPARTMENT OF TRANSPORTATION Two Employees Failed to Obtain Home Storage Permits and Misused Their State Vehicles to Commute CASE I2018-0675 Investigative Results In response to an allegation we received that two regional maintenance employees at the California About the Agency Department of Transportation (Caltrans) Caltrans manages more than 50,000 miles of California’s improperly commuted using their state vehicles, we highway and freeway lanes, provides intercity rail services, initiated an investigation and requested Caltrans’ and permits more than 400 public-use airports and special- assistance in conducting it. The investigation use heliports. It assigns its maintenance employees to the confirmed that the employees failed to obtain valid care and upkeep of state highways, which conserves the vehicle home storage permits (storage permits) and public’s investment in the highway system and ensures that misused their state-owned vehicles to commute the system continues to provide maximum benefits to the between their homes and headquarters. traveling public. The two maintenance employees improperly parked Relevant Criteria their state-owned vehicles in the vicinities of their Government Code section 19993.1 provides that homes without obtaining storage permits. As we state-owned motor vehicles must be used only in the describe in the relevant criteria, state law requires conduct of state business. employees who park state-owned vehicles in the Government Code section 8314 prohibits state employees vicinity of their homes for more than 72 nights in from using public resources, such as state-owned vehicles, a year to obtain storage permits. A review of GPS for personal purposes. data from the two maintenance employees’ vehicles California Code of Regulations, title 2, section 599.808, revealed that in 2018 they parked their state-owned requires that when employees frequently store state-owned vehicles overnight at secured locations near their vehicles at or in the vicinity of their homes, they must homes, including a fire station and a transportation obtain permits in advance from their agencies, regardless office, a total of 195 and 96 times, respectively. of the reason. For the purpose of enforcing this rule, During the investigation, the employees’ supervisor frequently is defined as storing a state-owned vehicle at an explained that he had instructed them to park their employee’s home or in its vicinity for more than 72 nights state-owned vehicles at secured locations near their over a 12-month period or more than 36 nights over a homes so that they could more quickly respond to three-month period. overnight calls to remove debris from roads, which was part of their duties. However, Caltrans noted that, although the employees’ parking near their homes was cost-beneficial, they were nonetheless required to obtain storage permits because they parked at these locations for more than 72 nights in a year. These two employees also misused their state-owned vehicles when they used them to commute directly between their homes and headquarters. Because they were expected to park their state-owned vehicles at secured locations in the vicinity of their homes, they should have used their personal vehicles to drive between their homes and those secured locations. However, the state-owned vehicles’ GPS data for 2018 showed that the employees parked the vehicles at their homes five and 39 times, respectively. On these days, they used their state vehicles to commute between their homes and headquarters. 32 Investigative Report I2020-1 | CALIFORNIA STATE AUDITOR April 2020 Recommendations To address the improper governmental activities we identified in this investigation, Caltrans should do the following: • Take appropriate corrective actions against the two employees for failing to obtain storage permits and for misusing their state vehicles to commute between their homes and headquarters. • Require these employees to obtain storage permits. • Determine whether other maintenance employees who work in the same region have been allowed to park at or in the vicinity of their homes without storage permits. If so, require all applicable employees to obtain these permits. Agency Response In January 2020, Caltrans reported that it agreed with the information presented in our report and that it had implemented all of our recommendations. Caltrans specified that it documented verbal warnings issued to the employees regarding the improper use of state vehicles and the need to apply for storage permits. In addition, it informed us that it issued storage permits to both employees after evaluating their applications and determining that they met the requirements to receive these permits. Finally, Caltrans stated that it identified an additional maintenance employee in the region who should apply for a storage permit. It subsequently issued a storage permit to that employee after evaluating his business need. CALIFORNIA STATE AUDITOR | Investigative Report I2020-1 33 April 2020 DEPARTMENT OF STATE HOSPITALS A Psychiatrist Improperly Used Continuing Medical Education Leave to Work a Second Job CASE I2018-0665 Investigative Results In response to an allegation we received that a psychiatrist employed at a state hospital misused About the Agency leave to work at a second job, we initiated an DSH oversees five state hospitals throughout California. investigation and requested that the Department The hospitals provide mental health services to individuals of State Hospitals (DSH) assist us in investigating mandated for treatment by the courts, mentally ill inmates it. The investigation concluded that the psychiatrist transferred from California prisons, and certain parolees. The improperly used 46 hours of state-compensated five hospitals employ medical staff to provide treatment to continuing medical education (CME) leave valued their patients. at $6,492 to work at another job. State law allows a state employee to work at a second job provided Relevant Criteria the employee’s department determines that the Government Code section 8314 prohibits state employees additional job does not conflict with the employee’s from using state-compensated time for personal purposes state duties or responsibilities. that exceed minimal and incidental use. Government Code section 19990 allows state employees to State employees accrue state-compensated engage in other employment if their employing agencies leave, such as annual leave or vacation and sick determine that the other employment does not conflict leave, on a monthly basis and may use that leave with their duties as state employees. However, employees after receiving management approval to do so. may not use paid state time for private gain. Some collective bargaining agreements establish The bargaining unit agreement that applies to DSH supplementary leave categories for employees psychiatrists provides them with up to 56 hours of leave per who are represented by those union bargaining fiscal year exclusively for continuing medical education. units. In this case, the State’s collective bargaining agreement with Bargaining Unit 16 provides its medical professionals, whose conditions of employment require state licensure, up to 56 hours of CME leave each year. This state-compensated time allows employees to attend trainings and conferences directly related to maintaining their licenses, and they must use it exclusively for courses directly related to maintaining licenses. From January 2018 through July 2018, the psychiatrist improperly used 46 hours of CME leave valued at $6,492 to work at a second job with shifts that occurred during regularly scheduled workdays for the State. The psychiatrist used CME leave on five separate occasions during this period to account for absences from the hospital while working a second job. By improperly using CME leave to work a second job rather than using leave from another category with management approval, the psychiatrist used state-compensated time for private gain, allowing the psychiatrist to save state-compensated time, such as annual leave or vacation, for later use. 34 Investigative Report I2020-1 | CALIFORNIA STATE AUDITOR April 2020 After completing our investigation, we notified DSH that the psychiatrist inappropriately used CME leave to work a second job. DSH took the following actions in response: • It required the psychiatrist to amend time records and replace the improperly used CME leave with a different type of accrued leave. • It provided one-on-one training regarding proper timekeeping policies and procedures to the psychiatrist. • It provided training on proper timekeeping methods and other related policies to the hospital psychiatry staff. CALIFORNIA STATE AUDITOR | Investigative Report I2020-1 35 April 2020 DEPARTMENT OF STATE HOSPITALS A Psychiatric Technician Claimed Time That Was Not Worked CASE I2019-0489 Investigative Results In response to an allegation we received that a psychiatric technician (technician) at Patton State About the Agency Hospital (Patton) was inaccurately reporting the DSH oversees five state hospitals throughout California. technician’s time and attendance, we initiated an The hospitals provide mental health services to individuals investigation and asked the Department of State mandated for treatment by the courts, mentally ill inmates Hospitals (DSH) to conduct it under our authority transferred from California prisons, and certain parolees. The and supervision. The investigation confirmed five hospitals employ medical staff to provide treatment to that from May 1, 2018, through April 30, 2019, their patients. the technician reported working 48 hours that the technician did not actually work, resulting in a cost Relevant Criteria to the State of approximately $1,500. California Code of Regulations, title 2, section 599.665, requires state agencies to keep complete and accurate time Although the technician was an hourly employee and attendance records for all of their employees. and required to account for partial-day absences, Government Code section 8314 prohibits state employees the technician failed to account for late arrivals from using state-compensated time for personal purposes to work, early departures, and some sick days. that exceed minimal and incidental use. The technician also reported overtime hours that were not actually worked. When interviewed, the Government Code section 19990 requires state employees technician, who provided direct care to patients to devote their full time, attention, and efforts to state behind a secured perimeter, claimed to maintain employment during work hours; they may not use state time for private gain. accurate timesheets. However, witnesses confirmed that they observed the technician arriving late and Government Code section 19838 directs the State, when leaving early. Further, electronic data from Patton’s it identifies overpayments to employees, to act to recoup security gates, through which the technician had those funds in a prescribed manner: it must notify the to pass when arriving to and departing from the employee of the overpayment, allow the employee time to facility, confirmed 48 unaccounted hours. When respond, and commence recoupment actions within three years from the date of the overpayment. informed of these findings, the technician replied that the gate data must be incorrect. DSH gave the technician more than a month to provide support that the technician worked during the unaccounted hours, but the technician was unable to provide any such support. A lack of direct supervision contributed to the technician’s misuse of state time. Although the supervisor expressed surprise about the technician’s attendance pattern, the supervisor acknowledged being unable to observe the technician’s arrivals and departures because they work different shifts, which means that the supervisor must rely on shift leads to monitor employees’ schedules. However, the technician was a shift lead for part of the review period; thus, the technician was not always subject to observation by a supervisor. 36 Investigative Report I2020-1 | CALIFORNIA STATE AUDITOR April 2020 Recommendations To address the improper governmental activity we identified in this investigation, DSH should take the following actions: • Within 60 days, take appropriate corrective or disciplinary action against the technician for improperly reporting hours worked. • Recover overpayments made to the technician or adjust the technician’s leave balances to account for the missed work time. • Ensure that supervisory staff are present at the beginning and end of the employee’s work shifts to ensure proper time reporting. Agency Response In January 2020, DSH reported that it agrees with our recommendations and that it intends to take corrective actions to address the improper governmental activity identified in this investigation. Specifically, DSH stated that within 60 days, it would take appropriate corrective or disciplinary action against the technician and initiate the collection process for overpayments made to the technician. In addition, DSH stated that it would develop and implement a plan to monitor the hours the technician works to ensure proper time reporting. CALIFORNIA STATE AUDITOR | Investigative Report I2020-1 37 April 2020 CALIFORNIA DEPARTMENT OF PUBLIC HEALTH Two Employees Misused State Time, and Their Supervisor Failed to Monitor Their Attendance CASE I2018-0756 Investigative Results In response to an allegation we received that two employees in the Center for Health Care About the Agency Quality at the California Department of Public The Center for Health Care Quality within Public Health is Health (Public Health) did not account for missed responsible for monitoring infection rates and for regulatory work time, we initiated an investigation and oversight of licensed health facilities and certain health care requested Public Health’s assistance in conducting professionals. it. The investigation confirmed that the employees arrived to work late, took extended breaks, and left Relevant Criteria work early without accounting for their missed work time. We estimated that, during a one-year Government Code section 19990 requires state employees to devote their full time, attention, and efforts to state period, the two employees missed a total of nearly employment during work hours; they may not use state 300 hours of work, costing the State more than time for private gain. $9,300 in salary paid for work not performed. Government Code section 8314 prohibits state employees An analysis of the two employees’ building access from using state-compensated time for personal purposes records in comparison to their timesheets from that exceed minimal and incidental use. March 2018 through February 2019 showed that Government Code section 19572 specifies dishonesty as a both employees failed to account for significant cause for discipline of state employees. amounts of their missed work hours. Specifically, California Code of Regulations, title 2, section 599.665, Public Health’s review of Employee A’s building requires state agencies to keep complete and accurate time access records and timesheets revealed that she and attendance records for all of their employees. failed to account for 117 hours of missed work time on her timesheets by claiming to have worked full days despite consistently arriving to work late. We estimate that the State paid her more than $3,400 in salary for her missed work time. Similarly, Public Health’s review of employee B’s building access records and timesheets revealed that he failed to account for 167 hours of missed work time by claiming to have worked full days despite consistently arriving to work late, taking extended breaks, and leaving work early. We estimate that the State paid him about $5,900 in salary for his missed work time. Although both employees A and B claimed during the investigation that they had made up for any occasional missed work time, neither of them could provide any contemporaneous evidence to support their claims. Moreover, both employees were dishonest when they said during the investigation that they generally arrived to and left from work on time and that their timesheets accurately reflected the hours they worked. The employees’ supervisor failed to monitor their attendance even after being notified that they were possibly arriving to work late and taking extended breaks. When interviewed, the supervisor reported that he did not verify the accuracy of these employees’ timesheets because his manager had informed him that it was not his responsibility to do so. However, the manager said during the investigation that 38 Investigative Report I2020-1 | CALIFORNIA STATE AUDITOR April 2020 he never provided the supervisor with such guidance. Instead, the manager stated that on several occasions, he discussed with the supervisor the importance of handling the tardiness of staff. In fact, the manager explained that after being notified about these two employees’ attendance issues, he discussed the attendance issues with the supervisor and suggested that the supervisor periodically vary his own attendance so that he could verify when the employees arrived and left. During this investigation, we also became aware that these employees were using an outdated version of the State’s standard monthly timesheet. The current version of the standard timesheet requires that a supervisor acknowledge that the facts on the timesheet are accurate and fully comply with legal requirements. The outdated version the employees were using does not include this requirement. Recommendations To address the improper governmental activities we identified in this investigation, Public Health should do the following: • Take appropriate corrective or disciplinary actions against employees A and B for their misuse of state time and for their dishonesty during the investigation. • Determine the amount of time employees A and B can be charged to account for their missed work hours, reduce their leave balances accordingly, and, if applicable, seek to recover from them any wages paid to them for time they did not work. • Take appropriate corrective or disciplinary actions against the employees’ supervisor for failing to verify that his subordinates accurately reported their attendance. • Require that these employees, along with any other employees who may be using the outdated version, fill out the most updated version of the State’s standard monthly timesheet. Agency Response In January 2020, Public Health reported that it agrees with our recommendations and that it plans to take appropriate corrective actions against employees A and B. In addition, Public Health stated that it will take steps to determine the specific amount of time employees A and B can be charged to account for their missed work hours and that subsequently it will take appropriate actions CALIFORNIA STATE AUDITOR | Investigative Report I2020-1 39 April 2020 to either reduce their leave balances accordingly or to recover wages paid to them for time they did not work. Public Health added that its 60-day response will include more specific information on these steps. Furthermore, Public Health informed us that it issued to these employees’ supervisor a counseling memorandum outlining his failure to hold these employees accountable for their work time and reiterating his supervisory responsibility to ensure that his subordinates accurately report their attendance. Finally, Public Health stated that it will take appropriate steps to ensure that employees use the most current version of the State’s standard monthly timesheet. 40 Investigative Report I2020-1 | CALIFORNIA STATE AUDITOR April 2020 Blank page inserted for reproduction purposes only. CALIFORNIA STATE AUDITOR | Investigative Report I2020-1 41 April 2020 FRANCHISE TAX BOARD An Administrator Was Dishonest About Her Work, and Her Supervisor Neglected His Duty CASE I2018-1274 Investigative Results In August 2019, we asked the Franchise Tax Board (FTB) to investigate an allegation that, About the Agency for two years, its management had allowed an FTB helps taxpayers to file timely, accurate tax returns and administrator to work four hours per day while to pay the correct amounts to fund services important she received a full paycheck. The investigation to Californians. It accomplishes its goals by protecting determined that during this period, the taxpayer information and privacy, carrying out its fiduciary administrator’s regular schedule was 9 a.m. to responsibilities, and operating with transparency to 2:30 p.m. to account for an approved 2.5 hours maintain public trust and confidence. of Family Medical Leave Act (FMLA) leave she received. However, the administrator failed to Relevant Criteria ensure that she worked these agreed-upon hours, California Code of Regulations, title 2, section 599.665, and she was dishonest with her manager about requires state agencies to keep complete and accurate time the hours that she worked. The investigation also and attendance records for all of their employees. determined that the administrator’s most recent Government Code section 19572 specifies dishonesty and supervisor neglected his supervisory responsibility. inexcusable absence without leave as causes for discipline of state employees. From August 2017 through September 2019, the administrator failed to consistently follow FTB procedures to track her FMLA leave use. FTB requires its employees to complete an FMLA leave use form each month and submit it to their supervisors for approval, along with a monthly timesheet. Although the administrator and her supervisor claimed that the administrator had completed the forms each month, FTB had approved forms on file for only 12 of the 26 months reviewed. After FTB directed the administrator to recreate the missing forms, it determined that the administrator exceeded her approved FMLA leave use in 2017 by nearly 30 hours. In addition, the investigation concluded that, during this two-year period, the administrator regularly worked from home but did not follow FTB’s procedures for telecommuting. The supervisor reported that he expected the administrator to request and receive approval before working from home. When shown the dates the administrator worked from home, the supervisor expressed surprise because he believed that she worked from home only a few times each year. The supervisor noted that some of the dates that the administrator worked from home coincided with his scheduled days off. The administrator failed to inform her supervisor that she was working from home even though she ensured that her staff knew. The administrator claimed that she was unaware that she was expected to request approval before working from home. 42 Investigative Report I2020-1 | CALIFORNIA STATE AUDITOR April 2020 The administrator also failed to charge leave on three days on which she did not work; instead, she claimed that she worked from home on these days. After reviewing the administrator’s calendar and email activity, FTB identified that the administrator had, in fact, taken these three days off. When questioned about them, the administrator acknowledged that she should have charged leave for those days. The investigation concluded that the administrator was dishonest in her interactions with her supervisor because she did not inform him when she worked from home and when she took these three days off. State law requires all state agencies to keep complete and accurate time and attendance records for their employees, and FTB supervisors are responsible for ensuring the accuracy of such records for their subordinate employees. The supervisor neglected his duty to provide adequate supervision of the administrator. Although he expected the administrator to work her scheduled hours, he made little effort to ensure that this occurred. The supervisor stated that he rarely visited the administrator’s work area because his office was on a different floor than the administrator’s office. Thus, he was not able to verify whether she arrived on time or completed her expected work hours. The supervisor also failed to ensure that the administrator submitted the FMLA leave use form each month with her timesheets. Although the administrator and the supervisor claimed to have completed these forms, they were missing for more than half of the months reviewed. During the investigation, FTB directed the administrator to adhere to her scheduled work hours. In late 2019, FTB served an adverse action notice to the administrator. The administrator and her supervisor retired in late 2019. Recommendations To address the improper activities we identified in this investigation, FTB should take the following actions: • Require the administrator to repay the State for the three days that she reported working but did not work. • Ensure that FTB staff members who telework have an approved telework agreement on file and follow all the requirements set forth in the agreement, including pre-approval on telework days, if required. • Ensure that managerial employees know the work schedules of their staff members and require those staff members to adhere to their expected work schedules. CALIFORNIA STATE AUDITOR | Investigative Report I2020-1 43 April 2020 Agency Response FTB reported in February 2020 that it has taken action to address the improper activities identified in this report. In particular, FTB adjusted the administrator’s leave balances to account for the three days she reported working but actually did not work. In addition, in January 2020 it added a segment on teleworking to its leadership and human resources training provided to new and existing supervisors. Similarly, FTB added a segment on teleworking to its security and disclosure training that is completed annually by all FTB employees. Further, it asked all supervisors with staff members who telework to ensure that those employees have a telework agreement on file and that the employees have received proper training on teleworking. To further address the improper activities, FTB stated that, in January 2020, it sent an internal communication to all employees with a telework agreement reminding them that a telework form must be submitted to their supervisors annually. FTB stated that by March 2020 it also will send a communication to its staff clarifying that supervisors are expected to know their employees’ work schedules and that all staff, including employees who are exempt from the Fair Labor Standards Act, are expected to adhere to their schedules and may not use leave credits, or leave the office, without notifying and receiving approval from their supervisors or designees. 44 Investigative Report I2020-1 | CALIFORNIA STATE AUDITOR April 2020 Blank page inserted for reproduction purposes only. CALIFORNIA STATE AUDITOR | Investigative Report I2020-1 45 April 2020 CALIFORNIA PRISON INDUSTRY AUTHORITY Supervisors Failed to Ensure Accurate Time Reporting, and an Employee Displayed Dishonesty CASE I2018-1820 Investigative Results In August 2019, we asked the California Prison Industry Authority (CalPIA) to investigate an About the Agency employee at one of its facilities. As a result of the CalPIA is a self-supporting agency that operates under the investigation, we determined that three CalPIA policy direction of the 11-member Prison Industry Board. supervisors in one unit failed to ensure that the Its mission is to reduce the operating costs of the California attendance records for a subordinate employee Department of Corrections and Rehabilitation and to offer were accurate over a three-year period, even inmates the opportunity to develop effective work habits though they all knew that these records very likely and occupational skills. did not reflect the employee’s actual attendance. In addition, at various stages of the investigation, Relevant Criteria the employee was dishonest with investigators California Code of Regulations, title 2, section 599.665, when he provided conflicting information about requires state agencies to keep complete and accurate time his attendance. and attendance records for all of their employees. Government Code section 19572 specifies that dishonesty constitutes a cause for discipline of state employees. Supervisors Failed to Ensure That Attendance Records Were Accurate State law requires all state agencies to keep complete and accurate time and attendance records for their employees, and CalPIA supervisors are responsible for ensuring the accuracy of such records for their subordinate employees. According to CalPIA, it requires staff members who work in the employee’s unit to manually sign in and out with their name and their arrival and departure times each day. At the end of the month, employees must also report their hours worked and absences on a timesheet that they submit to their supervisor for approval. CalPIA determined that the employee in this investigation failed to either sign in or out on numerous occasions, yet in a nearly three-year period, the employee’s supervisors did not address his failure to follow the established attendance verification procedures. Specifically, from October 2016 through August 2019, multiple supervisors approved the employee’s timesheets. Supervisor 1 reported that she reviewed and signed the timesheets for the unit before September 2018 and that she relied on the sign-in and sign-out sheets when reviewing the monthly timesheets. However, had she actually compared the employee’s monthly timesheets to the daily sign-in and sign-out sheets, she could have identified many instances in which the employee failed to sign in or out and that his timesheets contained errors, such as failing to charge leave when the employee reportedly signed in and out for less than his shift or when he worked overtime but failed to report it on his monthly timesheet. Supervisor 2 intermittently acted as the employee’s supervisor and reported that he observed the employee leaving early and arriving late on multiple occasions. He characterized the employee’s attendance behavior as “stealing time.” Supervisor 2 46 Investigative Report I2020-1 | CALIFORNIA STATE AUDITOR April 2020 also reported to the investigator that he believed the employee signed in that he arrived on time, even though the employee was late and Supervisor 2 knew that the employee failed to sign in or out regularly. However, Supervisor 2 did not report these failures to anyone and approved the employee’s timesheets despite obvious discrepancies. Supervisor 3 took some action but still approved timesheets with apparent errors. Supervisor 3 reported to CalPIA that he relied on the information on the sign-in sheets to compare with the monthly timesheets but said he also began documenting on his own calendar when staff members called in sick or arrived late to work. Nevertheless, Supervisor 3 continued to approve timesheets with errors. Had these supervisors consistently compared the employee’s monthly timesheets to the available sign-in and sign-out sheets, as the investigator did, they could have ensured that the employee corrected his timesheets and accurately accounted for his time. In addition, they should have taken action to correct the employee’s behavior. The Employee Was Dishonest When He Provided Conflicting Statements During the Investigation When interviewed, the employee said he understood that he was expected to sign in and out when arriving for and leaving work. When the investigator asked if he ever left work early, the employee initially stated that he did not recall leaving early. He later estimated that he may have left up to eight hours early each month. He then revised his statement again to say that he only left work early one to two hours each month. The employee also claimed to the investigator that he almost always signed in or signed out. However, when presented with evidence that refuted his statements, the employee admitted that he consistently arrived to work late, left work early, and failed to sign in and sign out. Recommendations To address the improper activities we identified in this investigation, CalPIA should take the following actions: • Establish new procedures or enforce the rules whereby supervisors are responsible for ensuring the accuracy of subordinates’ timesheets. • Take appropriate corrective or disciplinary actions against the supervisors who failed to ensure that the timesheets they approved were complete and accurate. CALIFORNIA STATE AUDITOR | Investigative Report I2020-1 47 April 2020 • Take appropriate corrective or disciplinary actions against the employee for dishonesty when providing conflicting accounts of his attendance during the investigation. • Reconcile the employee’s attendance records to determine whether he owes the State any time for failing to report his actual work hours or whether the State owes him for unreported overtime during the period reviewed. Agency Response CalPIA reported in February 2020 that it will take appropriate actions to address the supervisory deficiencies and leave accounting inaccuracies, including recovering the funds associated with inaccurate attendance records. In addition, CalPIA reported that it will take steps to ensure that supervision and leave accounting is performed accurately. 48 Investigative Report I2020-1 | CALIFORNIA STATE AUDITOR April 2020 Blank page inserted for reproduction purposes only. CALIFORNIA STATE AUDITOR | Investigative Report I2020-1 49 April 2020 CALIFORNIA DEPARTMENT OF SOCIAL SERVICES It Failed to Recover Overpaid Salary and to Monitor Bereavement Leave Use CASE I2018-1932 Investigative Results In August 2019, we asked the California Department of Social Services (Social Services) About the Agency to investigate two incidents of alleged improper Social Services serves and protects the State’s vulnerable governmental activities pertaining to its oversight. children and adults. Its goals include strengthening The first allegation related to Social Services’ families, encouraging personal responsibility, and fostering failure to recover an apparent overpayment to a independence. Its 4,200 employees are responsible for former employee. The second allegation involved overseeing and administering its many programs. an employee who claimed more bereavement leave than was allowed. As a result of this investigation, Relevant Criteria Social Services has recovered salary and leave Government Code section 19838 directs the State, when valued at $3,437. it identifies overpayments to employees, to act to recoup those funds in a prescribed manner: it must notify the employee of the overpayment, allow the employee time Social Services Failed to Recover Overpaid Salary to respond, and commence recoupment actions within three years from the date of the overpayment. In June 2018, an employee accepted a promotion Government Code section 19859.3 allows state employees to a managerial position at another state agency who are not represented by unions up to three paid with a salary increase to $7,897 per month. workdays of bereavement leave for the deaths of Two months later, the employee exercised her family members. right to return to her previous position at Social Services at her previous lower salary. However, the employee continued to receive the manager’s salary, which represented an overpayment of $2,520. Although Social Services corrected the employee’s salary for September 2018, it failed to do so for August 2018. In February 2019, a manager in the human resource services branch was made aware of the overpayment; however, Social Services failed to take any action to recover the funds until August 2019, when it issued a payroll adjustment to recoup the overpayment. Although Social Services initiated action to recover the overpayment within the time period allowed by law, it did so only after our office recommended that it take action. Social Services Failed to Monitor Use of Bereavement Leave Social Services also recovered 16 hours of excess bereavement leave that a manager claimed in June 2018. The manager reported on that month’s timesheet 40 work hours of bereavement leave, even though state law allows for only 24 work hours for the death of a family member. The manager should have charged the 16 additional hours toward another category of her accrued leave, such as vacation. After we brought this issue to Social Services’ attention, it adjusted the manager’s leave balance to account for 24 work hours of bereavement leave and charged the remaining 16 work hours to another category of the manager’s accrued leave. 50 Investigative Report I2020-1 | CALIFORNIA STATE AUDITOR April 2020 Recommendations To address the improper activities we identified in this investigation, Social Services should take the following actions: • Determine whether corrective action is appropriate for the manager in the human resource services branch who was aware of the salary overpayment yet failed to promptly initiate action to recover the funds. • Ensure that procedures are in place to monitor employees’ use of bereavement leave so that all such claims comply with state law or union bargaining agreements. Agency Response Social Services reported that the manager who was aware of the salary overpayment left in July 2019 and, therefore, it lacks authority to take corrective action. In addition, Social Services reported it has established procedures to ensure that bereavement leave complies with state law or union agreements. Specifically, it stated that a personnel specialist will audit bereavement leave on employees’ timesheets and will refer to an internal bereavement leave reference guide to ensure that the leave used is allowed in the relevant bargaining agreement. Finally, Social Services stated that it will audit bereavement leave from February through April 2020 and provide training in March and September 2020. Respectfully submitted, ELAINE M. HOWLE, CPA California State Auditor April 2, 2020 CALIFORNIA STATE AUDITOR | Investigative Report I2020-1 51 April 2020 Appendix CORRECTIVE ACTIONS TAKEN IN RESPONSE TO INVESTIGATIONS Under the California Whistleblower Protection Act, the California State Auditor (State Auditor) may issue public reports when investigations substantiate improper governmental activities. When issuing public reports, the State Auditor must keep confidential the identities of the whistleblowers, any employees involved, and any individuals providing information in confidence to further the investigations. The State Auditor may also issue nonpublic reports to the head of the agencies involved and, if appropriate, to the Office of the Attorney General, the Legislature, the relevant policy committees, and any other authority the State Auditor deems proper. For nonpublic reports, the State Auditor cannot release the identities of the whistleblowers or any individuals providing information in confidence to further the investigations without those individuals’ express permission. The State Auditor performs no enforcement functions: this responsibility lies with the appropriate state agencies, which are required to regularly notify the State Auditor of any actions they take in response to the investigations, including disciplinary actions, until they complete their final actions. The chapters of this report describe the corrective actions that state agencies implemented on some of the individual cases for which the State Auditor completed investigations from January 2019 through December 2019. In addition, Table A summarizes all corrective actions that state agencies took in response to investigations from the time that the State Auditor opened the hotline in July 1993 until December 2019. These investigations have also resulted in many state agencies modifying or reiterating their policies and procedures to prevent future improper activities. 52 Investigative Report I2020-1 | CALIFORNIA STATE AUDITOR April 2020 Table A Corrective Actions July 1993 Through December 2019 TYPE OF CORRECTIVE ACTION TOTALS Convictions 12 Demotions 25 Job terminations 91 Resignations or retirements while under investigation 40* Pay reductions 59 Reprimands 345 Suspensions without pay 32 Total 604 Source: State Auditor. * The State Auditor began tracking resignations and retirements in 2007, so this number includes only those that occurred during investigations since that time. CALIFORNIA STATE AUDITOR | Investigative Report I2020-1 53 April 2020 Index PAGE DEPARTMENT/AGENCY CASE NUMBER ALLEGATION NUMBER Air Resources Board I2018-0428 Failure to ensure proper use of bereavement leave 17 Bureau of Automotive Repair, California I2018-0428 Failure to ensure proper use of bereavement leave 17 California Energy Commission I2019-0010 Misuse of state resources 27 Employment Development Department I2018-0428 Failure to ensure proper use of bereavement leave 17 Fish and Wildlife, California Department of I2017-1372 Waste of funds 7 Franchise Tax Board I2018-1274 Dishonesty, supervisory neglect of duty 41 General Services, Department of I2018-0428 Failure to ensure proper use of bereavement leave 17 Human Resources, California Department of I2018-0428 Failure to ensure proper use of bereavement leave 17 Prison Industry Authority, California I2018-1820 Inaccurate time reporting, dishonesty 45 Public Health, California Department of I2018-0756 Misuse of state time 37 Social Services, California Department of I2018-0428 Failure to ensure proper use of bereavement leave 17 Failure to recover overpayment, failure to ensure I2018-1932 49 proper use of bereavement leave State Hospitals, Department of I2018-0665 Misuse of leave 33 I2019-0489 Misuse of state time 35 Transportation, California Department of I2018-0428 Failure to ensure proper use of bereavement leave 17 Failure to obtain home storage permits, misuse of I2018-0675 31 state vehicles Veterans Affairs, California Department of I2018-0364 Waste of state funds 13