I2024-1 Investigations of Improper Activities by State Agencies and Employees
Waste and Inefficiency, Improper Hiring, and Other Improper Governmental Activities
Published: November 21, 2024
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.
Agency response status:
Not fully implemented
Date of implementation:
Unknown
State Auditor assessment status:
Partially implemented
Agency Response to Recommendation
DGS reported that in December 2024, it provided training on DGS’ hiring and nepotism policies to the managers within the region. Two managers were not available at the time of the training and DGS stated that it plans to reschedule with them when they are available.
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.
Agency response status:
Not fully implemented
Date of implementation:
Unknown
State Auditor assessment status:
Partially implemented
Agency Response to Recommendation
DGS reported that it is in the process of conducting its own investigation, after which it will evaluate the evidence and determine the most appropriate corrective action.
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.
Agency response status:
Not fully implemented
Date of implementation:
Unknown
State Auditor assessment status:
Pending
Agency Response to Recommendation
DGS stated that once it completes its own investigation and evaluates the evidence, it will consult with CalHR and SPB based upon the results of its findings.
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.
Agency response status:
Fully implemented
Date of implementation:
July 2024
State Auditor assessment status:
Fully implemented
Agency Response to Recommendation
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.
Agency response status:
Fully implemented
Date of implementation:
July 2024
State Auditor assessment status:
Fully implemented
Agency Response to Recommendation
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.
Agency response status:
Fully implemented
Date of implementation:
July 2024
State Auditor assessment status:
Fully implemented
Agency Response to Recommendation
CalVet reported that during a cite inspection in July 2024, it documented that it had moved all of the mattresses and bedframes 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.
Agency response status:
Fully implemented
Date of implementation:
March 2025
State Auditor assessment status:
Fully implemented
Agency Response to Recommendation
CalVet reported that it updated and distributed its non-IT procurement policies and procedures, including an excerpt outlining the importance of delivery and storage for tangible assets. CalVet’s updated policies and procedures require that all goods should be delivered in quantities based on current usage trends and that when just-in-time delivery is not possible, they must store received goods in a securely covered weatherproof area where goods are not subjected to the elements.
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.
Agency response status:
Fully implemented
Date of implementation:
Nov. 2024
State Auditor assessment status:
Fully implemented
Agency Response to Recommendation
CalVet reported that the home received all the necessary additional parts and has fully assembled the 15 beds. It further reported that the assistant director of nursing inspected the beds and confirmed that they are ready to be put into service.
Investigative Case I2023-1220
Department of Transportation
Recommendation 11
Caltrans should pursue appropriate corrective or disciplinary action against the manager.
Agency response status:
Will not implement
Date of implementation:
Oct. 2024
State Auditor assessment status:
Resolved
Agency Response to Recommendation
In February 2025, Caltrans reported that as of October 2024, the manager had left Caltrans and it can no longer pursue 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.
Agency response status:
Not fully implemented
Date of implementation:
Unknown
State Auditor assessment status:
Partially implemented
Agency Response to Recommendation
CalHR reported to us that since its last update, it has requested documentation to assist in implementing our recommendation. It also published in November 2024 an updated policy on unlawful appointments to assist in guiding departments on how to take appropriate actions. CalHR also drafted a standardized template to communicate with impacted departments so that all will receive consistent guidance regarding our recommendation. Lastly, CalHR reported that it collaborated with SPB in December 2024 to ensure both agencies have awareness of and consensus on a planned approach for facilitating the correction of unlawful appointments.
Investigative Case I2023-11492
Department of Health Care Services
Recommendation 1
Ensure that Health Care Services ultimately deposits the $874,707 refunded by LA County.
Agency response status:
Fully implemented
Date of implementation:
Nov. 2024
State Auditor assessment status:
Fully implemented
Agency Response to Recommendation
In November 2024, LA County sent a replacement check to Health Care Services for $874,707, and it subsequently deposited the check.
Recommendation 2
Determine why duplicate payments were issued in February 2022 and March 2022 and why the department’s internal controls did not prevent or detect this overpayment.
Agency response status:
Fully implemented
Date of implementation:
March 2025
State Auditor assessment status:
Fully implemented
Agency Response to Recommendation
Heath Care Services updated its procedures to require its staff to conduct a second verification to ensure that warrants have not been previously reissued before reissuing each check.
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.
Agency response status:
Fully implemented
Date of implementation:
Aug. 2024
State Auditor assessment status:
Fully implemented
Agency Response to Recommendation
In February 2025, Health Care Services provided documentation showing that the supervisor and his staff attended the August 2024 training.
Recommendation 4
Develop written procedures defining the actions staff must take when checks arrive without sufficient documentation.
Agency response status:
Fully implemented
Date of implementation:
Jan. 2025
State Auditor assessment status:
Fully implemented
Agency Response to Recommendation
Health Care Services reported that it has developed and executed written procedures defining the actions staff must take when checks arrive without sufficient documentation. The new procedures include escalation and notification requirements and ultimately require that all unidentified checks be deposited and posted as miscellaneous revenue no later than three business days after receipt.
Recommendation 5
Develop and implement a mechanism for assessing, at regular intervals, whether Health Care Services’ new controls and policies are being followed.
Agency response status:
Fully implemented
Date of implementation:
Jan. 2025
State Auditor assessment status:
Fully implemented
Agency Response to Recommendation
Health Care Services reported that it will be able to assess the effectiveness of its new procedures through monitoring and review by several managers. For instance, the new procedures require a manager to regularly review the incoming check and deposit logs to ensure all checks are deposited timely. Further, Health Care Services stated that on a monthly basis, the section chief will provide an update to the branch and division chiefs on any checks exceeding four business days without being deposited. It further stated that if any checks fall into this category, it would trigger additional training for staff.
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.
Agency response status:
Fully implemented
Date of implementation:
Jan. 2025
State Auditor assessment status:
Fully implemented
Agency Response to Recommendation
Education reported in January 2025 that it notified NPAs that have been selected for the 2025 self-review process to complete a self-review form by March 10, 2025. Education also reported that the NPA unit hosted a webinar in January 2025 for NPAs explaining the self-review process.
Investigative Case I2023-36545
State of California
Recommendation 18
Take appropriate corrective or disciplinary action against the CISO for the improper disclosure of personal information.
Agency response status:
Fully implemented
Date of implementation:
Dec. 2024
State Auditor assessment status:
Fully implemented
Agency Response to Recommendation
The department completed its investigation of the issues raised in this report and issued a memo to the CISO to address the improper disclosure of personal information.
Investigative Case I2024-09196
California Department of Tax and Fee Administration
Recommendation 6
Finalize, document, and implement a reconciliation process that involves comparing travel charges against travel expense claims to promptly identify unsupported travel expenses, and identify appropriate staff who will complete this reconciliation following any necessary training.
Agency response status:
Fully implemented
Date of implementation:
Jan. 2025
State Auditor assessment status:
Fully implemented
Agency Response to Recommendation
CDTFA reported in January 2025 that its Travel Unit has implemented a process whereby it assigns a team member to reconcile travel charges against claims on a monthly basis to ensure staff submit appropriate claims or supporting documentation.
Recommendation 7
Implement a specific plan to resolve unsupported travel expenses incurred before 2024.
Agency response status:
Fully implemented
Date of implementation:
Jan. 2025
State Auditor assessment status:
Fully implemented
Agency Response to Recommendation
CDTFA reported that, as of December 2024, it has resolved and cleared all unsupported travel expenses that occurred before 2024.
