I2024-1 Investigations of Improper Activities by State Agencies and Employees

Audit Recommendations Disclosure

When an audit is completed and a report is issued, auditees must provide the State Auditor with information regarding their progress in implementing recommendations from our reports at three intervals from the release of the report: 60 days, six months, and one year. Additionally, Senate Bill 1452 (Chapter 452, Statutes of 2006), requires auditees who have not implemented recommendations after one year, to report to us and to the Legislature why they have not implemented them or to state when they intend to implement them. Below is a listing of each recommendation the State Auditor made in the report referenced and a link to the most recent response from the auditee addressing their progress in implementing the recommendation and the State Auditor’s assessment of auditee’s response based on our review of the supporting documentation.

Investigative Case I2022-0803

Department of General Services

Recommendation 13

Provide refresher training on the State’s and DGS’s hiring rules and prohibitions against nepotism to all hiring managers and supervisors within the regions that the custodian supervisor and two building managers work. Such training, at a minimum, should include the following: (1) The State’s good-faith appointment requirements, as described in California Code of Regulations, title 2, sections 243 and 250, and (2) DGS’s anti-nepotism policy, which must comply with California Code of Regulations, title 2, section 87.

Recommendation 14

Take appropriate corrective or disciplinary action against the custodian supervisor and the two building managers for their roles in the improper governmental activities described in this report.

Recommendation 15

Consult with CalHR regarding the appointments that were discussed in this report and work with CalHR and SPB to void the appointments if appropriate.

Investigative Case I2023-0174

Department of Social Services

Recommendation 16

For both Employees A and B, work with CalPERS to appropriately address the employees’ employment as retired annuitants in the absence of a bona fide separation in service.

60-Day Agency Response

Social Services reported that it has been in contact with CalPERS about this matter and that CalPERS has been working directly with the two employees to address this issue.

Recommendation 17

Provide Human Resources and management staff with training regarding requirements for employing retirees, including the two conditions of a bona fide separation.

60-Day Agency Response

Social Services previously reported that it provided training to applicable staff on the requirements of a bona fide separation. In its most recent response, Social Services provided evidence of this training.

Investigative Case I2023-0364

Department of Veterans Affairs

Recommendation 8

Cover any furniture that is currently stored outside, exposed to the elements, or move that furniture indoors.

Recommendation 9

Create and distribute a policy that prohibits the practice of storing furniture outside. The policy should prohibit CalVet’s procurement of furniture unless the home has sufficient space to safely store it until it is put into service.

Recommendation 10

Determine whether the bed frames are serviceable or can be refurbished. If they are, make additional efforts to obtain the parts needed to put the bed frames into service.

Investigative Case I2023-1220

Department of Transportation

Recommendation 11

Caltrans should pursue appropriate corrective or disciplinary action against the manager.

California Department of Human Resources

Recommendation 12

The California Department of Human Resources (CalHR), in consultation with the State Personnel Board (SPB), should work with the affected agencies to address the unlawful appointments discussed in this report and pursue voiding appointments and collecting compensation reimbursement as appropriate.

Recommendation 3

Provide the accounting supervisor and his staff with training on how to properly document and deposit each received check, including refresher training on the proper logging and scanning of checks awaiting deposit.

Recommendation 4

Develop written procedures defining the actions staff must take when checks arrive without sufficient documentation.

Recommendation 5

Develop and implement a mechanism for assessing, at regular intervals, whether Health Care Services’ new controls and policies are being followed.

Investigative Case I2023-14333

Department of Education

Recommendation 19

Implement a process to conduct on-site reviews before certifying nonpublic agencies and to monitor nonpublic agencies on a three-year cycle in accordance with applicable state law and regulations.

60-Day Agency Response

Upon reviewing our report, Education reported that it was preparing a plan to implement our recommendation. In October 2024, Education reported that it will use a three-year monitoring process for all nonpublic agencies (NPA), which will include a self-review, onsite review, and follow-up visit for NPAs that offer services onsite at their business addresses, and a virtual onsite review and follow-up visit for NPAs that do not offer services at their business addresses. In December 2024, Education reported that it notified NPAs that have been selected for the 2025 self-review monitoring process. Those NPAs selected for self-review in 2025 will have an onsite review in 2026 and a follow-up visit in 2027. Education also reported that it will also host a webinar in January 2025 to assist NPAs with the self-review monitoring process.