Audit: Calif. Corrections Overpaid Workers

SACRAMENTO, Calif. (AP) -- California's corrections department overpaid some employees for salaries and travel advances and was slow to collect those funds, according to an audit the state controller's office released Wednesday.

The Department of Corrections and Rehabilitation gave one former employee a lump sum check for $14,950 to meet a deadline for leaving the state's employment, but the department did not deduct that from the employee's final paycheck, meaning that person received both a salary advance and a final paycheck.

Another employee received a salary advance of more than $8,000 in January 2008, plus a regular paycheck, the audit found. Three years later, the advance had not been collected.

The controller also warned that the department -- the state's largest with 66,000 employees -- is putting itself at risk of fraud and abuse because it hasn't done a good job of reconciling bank accounts. As of June 30, 2010, the department's major accounts showed $27 million in unresolved funds in its bank balance but more than $31 million in unresolved funds on its book balance.

"This is the latest in a series of agency audits conducted by my staff that point to the waste and abuse of state funds due to the lack of attention to collecting overpayments," state Controller John Chiang said in a statement.

Past audits by the state controller's office have found the state has not done a good job of getting the money back or making sure it was spent properly.

Gov. Jerry Brown took a cue from Chiang in April and ordered all state agencies to recover millions of dollars in salary and travel advances that were given to state workers but never repaid. The Democratic governor issued an executive order directing agencies to investigate a backlog of uncollected debt.

California gives salary and travel advances to state employees under special circumstances, such as when an employee is leaving state service and needs a final check, when an employee makes a hardship request, or when an employee travels.

The latest audit focused on the corrections department's use of its revolving fund. The controller's office reviewed the department's revolving fund from July 1, 2009, through July 31, 2010, and found the state has been slow to collect millions of dollars in overpayments to employees for travel and salary advances.

Of more than $6 million in advances, $4 million took longer than 60 days to collect. And $465,000 had been outstanding for more than three years.

Martin Hoshino, undersecretary for the corrections department's administration and offender services, said the agency made collections a priority and has so far collected $2.2 million of the more than $6 million in outstanding advances.

"We will continue in our efforts," Hoshino said in statement.

As of Nov. 30, the audit found the department had not received reimbursement for more than $3.5 million issued before June 30, 2010. The audit also found that the agency used its revolving fund to spend more than the department was appropriated under the state budget.

Paul Verke, a corrections spokesman, said the department agreed with the audit's findings and has implemented better controls using newer technology.

"We thank controller Chiang for his work on this issue, and CDCR has made significant advances in addressing the problem, collecting $2.2 million in the last six months," Brown's spokesman Gil Duran said Wednesday.

(Copyright 2011 by The Associated Press. All Rights Reserved.)