State Auditor Elaine Howle in hearings this week referred to the hidden surplus as a "useless reserve" because state Department of Parks and Recreation officials in theory couldn't spend the money without telling lawmakers of its existence. But that left some lawmakers unsatisfied.
"I can't get my head around the nature of this," said Assemblyman Bob Blumenfield, D-Woodland Hills, chairman of the Assembly Budget Committee, asking later Wednesday whether "sheer stupidity" was to blame. If officials couldn't spend the money, Blumenfield wondered, what was their motive for willfully hiding the funds?
Howle acknowledged that after writing her 60-page audit last week, she and her colleagues were also scratching their heads.
Peter Southworth, supervising attorney at the Department of Justice, said, "It's unlikely we will ever know the cause of this."
But Howle later offered a credible, albeit complicated, hypothesis: the Legislature authorizes the parks department to spend a certain amount of self-generated fee revenue each year. If the parks department had a down year for fee collection -- say, receiving $15 million instead of $20 million that the Legislature projected -- it's possible the department could have tapped $5 million out of the hidden funds. The Legislature would have already given its approval for $20 million, so parks could spend the hidden $5 million rather than face cuts.
Howle said her office plans to further explore this possibility in the coming months.
State lawmakers from both parties grilled investigative agencies for a second straight day, questioning why DOJ seemingly let parks officials off the hook from legal charges, while demanding more information from Howle about motives.
Southworth said that his office had transferred its files to the Sacramento County District Attorney's Office for review. But his department could not provide the juiciest transcripts offering the most extensive descriptions of what happened because it offered legal protection to employees who testified in an administrative investigation.
Southworth, however, said the matter is "still under criminal review in my office."
PHOTO CREDIT: A waterfall cascades down a hill in Russian Gulch State Park in Mendocino on Thursday, November 8, 2012. Randall Benton / Sacramento Bee file, 2012.