The State Worker

Chronicling civil-service life for California state workers

September 27, 2013
Former government tech official weighs in on Ohio's IT lessons

Thumbnail image for email.jpg Reader Steve Steinbrecher emailed his response to our Thursday State Worker column, "Lessons from Ohio's state tech project." We're publishing it here, unedited, and with the author's permission:

Dear Jon:

I read your piece in this morning's Bee with a great deal of interest. I am a retired Chief Information Officer (CIO) who worked 35 years in public sector IT. I spent a number of years as CIO for San Joaquin County, as well as Contra Costa County, and also spent a good amount of time working on integrated projects with the state and its CIO's.

Short background: I had leadership responsibility for a couple of very large and expensive, but successful county IT projects (integrated Health Care and Criminal Justice Systems for San Joaquin, a couple of Enterprise Resource Planning systems for both counties (more commonly known as "Empty Rear Pocket" if you allow the consultants to drive your project) to replace aging Payroll and Human Resources applications, and of course, the infamous Y2K project. I cut my teeth on California's first attempt at a Statewide Welfare System (I think it was called SPAN) back in the late 1970's (failure), was very involved in the only successful Statewide Automated Welfare System (SAWS) in the 1980's, and the Statewide Automated Child Support System (SACSS - A colossal failure that County CIO's warned the state of impending failure three years before it even attempted to "go live"). I truly love reading all of these stories in the Bee and other publications, because as Led Zeppelin says, "The Song Remains the Same."

Mr. Conomy got almost everything correct in your interview. However, fear NEVER works as a motivator, in my humble opinion, because when the brown stuff hits the fan with respect to a public (or private) sector IT project, the CIO is fired, the politicians and high level project sponsors cover their butts, and the project either goes on, or another one come along to take its place (just look at California's IT track record, as you so aptly pointed out in your piece). Having said that, what he DID get right is:

NEVER give an IT project to outside contractors and consultants. The only skin they have in the game is receiving your monthly payments (and yes, post-retirement, I too worked as a strategic planning IT consultant for about 8 years...)

September 26, 2013
California state auditor sounds warning on prison realignment

Supreme_Court_California_Prisons.jpgCalifornia's woefully underfunded teachers' retirement system, the state's swelling long-term health care costs for government retirees and its deteriorating roads, bridges and other infrastructure aren't the only items on the list of "high-risk" issues noted in a new report issued Thursday morning.

Like prior biannual assessments by State Auditor Elaine Howle's office, the audit dings the government for those failings and others: poor preparation for the mass exodus of retiring employees, inadequate emergency-preparedness and insufficient oversight of information technology projects.

But new to the pantheon of multibillon-dollar worries since the last high-risk report in 2011 is prison realignment, which shifts responsibility for some lower-level offenders to the counties. Here's Howle's summary:

The State does not currently have access to reliable and meaningful data concerning the realignment. As a result, the impact of realignment cannot be fully evaluated at this time. Even so, initial data indicate that local jails may not have adequate capacity and services to handle the influx of inmates caused by realignment. Until enough time has passed to allow the effectiveness and efficiency of realignment to be evaluated, we will consider it a statewide high-risk issue.

Here's the full audit:

September 10, 2013
Audit outlines California parks' budgeting, vacation leave ills

RP_SUTTERS_FORT_CANNON.JPGCalifornia's scandal-plagued parks department manipulated its roster to keep from abolishing vacant positions, lacks sound budgeting methods for individual parks and, despite extreme scrutiny of an illegal employee leave buyback program, "still has not done enough to prevent such practices from occurring," according to an audit released today.

California State Auditor Elaine Howle said her investigation turned up four additional instances of inappropriate leave buybacks between May 2010 and March 2011 that totaled $16,394.

The department couldn't document the rationale for the largest payment, $8,721. Payroll records showed the department bought down an 340 hours of time an employee banked for extra time worked.

The 43-page audit sampled operations at five park districts and describes a department budget process so unorganized that district administrators make an educated guess at how much money they'll receive when the fiscal year starts each July. They then reset their budgets sometime between August and November when they find out how much money they have.

The poor communication ran the other way. District expenditure tracking is so poor that four of the five districts audited had developed their own systems for watching their expenses on a real-time basis. That has created duplicate work in some instances and the department still does not know how much it costs to operate each park.

The lack of sound financial information would hobble the department's compliance with a law that kicks in July 1 requiring the department cut costs at its individual facilities if funding falls below a certain level.

Auditors blamed the disarray on the lack of sound budget allocation and expenditure processes, unclear communication in the organization and chaos created by extreme budget cuts the last few years.

The report also says parks officials routinely played a personnel shell game to dodge a law that abolishes state positions -- and the budget money that goes with them -- when the jobs go unfilled for months. To avoid the ax, the department temporarily transferred employees into the empty slots ahead of the deadline. The moves made it appear the positions had been correctly filled.

Aaron Robertson, parks' chief deputy director, said in five-page response that the department is either working to correct the problems identified in the audit or will soon. Examples include improving its budget allocation and expenditure-tracking processes, training on personnel issues and increasing the management oversight of leave buybacks.

We've embedded the audit below. Download a copy here.

PHOTO: Workers rebuild the roof at historic Sutter's Fort on Aug. 7, 2013, in downtown Sacramento, a California state park displaying a cannon that John Sutter bought from the defunct Russian outpost at Fort Ross. The Sacramento Bee/Randy Pench

September 4, 2013
California state law enforcement contract costs $26.5 million

RP_STATE_PARKS_BINOCS.JPGA new three-year contract for about 7,000 state workers in public safety and inspection jobs will add about $26.5 million in costs through fiscal 2015-16, according to a just-published review by the Legislative Analyst's Office.

The centerpiece of the agreement with the California Statewide Law Enforcement Association and Gov. Jerry Brown is a 3 percent raise on July 1, 2015. The union represents employees including California Highway Patrol dispatchers, Department of Motor Vehicles licensing-registration examiners, park rangers and game wardens.

Two other employee subsets in the union, state hospital police officers and developmental center peace officers, are in line for an additional 4.67 percent bump on the same date.

Related: Law enforcement officers' union agrees to new contract

The agreement also gives employees the option to cash out up to 20 hours of vacation or annual leave each year at their employing department's discretion.

There's no official estimate of what that would cost, although the LAO says it would be "a few million dollars in any given year." While the leave buyouts would hit departments in the short-term, they're a long-term savings because employees who cash out when they exit state service do so at their final pay rate.

"At the end of fiscal 2011-12," the analysis embedded below notes, "the state's liability associated with Unit 7 employees' vacation/annual leave balance was about $55 million."

August 30, 2013
Read the audit of Cal Fire's cost recovery program, training fund

130829-fire-saw-training-cal-fire.jpgOur story in today's Bee highlights the findings of a new state audit that says the California Department of Forestry and Fire Protection had no authority to create a $3.6 million off-the-books training fund fed with money from civil lawsuits settlements and didn't properly account for what the money purchased.

More broadly, auditors found that Cal Fire managers weren't tracking cases the Cal Fire Civil Cost Recovery Program, which has billed and sued responsible parties for nearly $100 million in firefighting costs since 2005.

Here's the audit:

August 15, 2013
State officials blame payroll debacle on contractor, other agency

130815-state-paychecks.jpgOfficials with the California State Controller's Office spent the better part of a three-hour hearing this afternoon explaining how their now-defunct project to overhaul the state payroll system fell victim to contracted vendors' shoddy work, poor evaluation guidelines and, in one instance, another department's insistence that the company's credentials couldn't be more deeply scrutinized.

The Senate budget subcommittee hearing, chaired by Sen. Richard Roth, D-Riverside, also underscored how term limits and employee turnover in the talent-starved information technology industry give officials a measure of cover when long-term, multimillion-dollar computer projects crash.

August 8, 2013
California IT snapshot: Tax agency going web-user friendly

Californians filed nearly 15.7 million personal income tax returns to the state Franchise Tax Board last year, translating into more $50 billion for the state's coffers.

Now the agency is working on a new IT system to streamline operations and make dealing with the agency more like handling an online bank account:

Name: Enterprise Data to Revenue Project
Department: Franchise Tax Board
Estimated total cost: $522 million
Amount spent to date: $153 million
Percent of project complete: 35 percent
Time frame: July 2008 - July 2017 (8 years)

What is it? A new system to file and electronically validate state tax documents. It will also allow filers to submit taxes online, make payments and view previous tax returns.

The official line: "This project is a major enterprise wide solution that will introduce a business process management system for the filing of tax returns in conjunction with expanded data capture of tax documents, enhanced validation of tax return information. The EDR will reduce the 'tax gap' and is anticipated to increase revenue up to $1 billion annually upon implementation."

Current red flags reported: None

This is the ninth in a series of daily posts looking at California's 10 most-expensive state computer projects as listed on the Department of Technology's website.

August 6, 2013
California IT snapshot: Medi-Cal payment-system overhaul

The Department of Health Care Services, through a contract with Xerox. services more than 8.5 million Medi-Cal recipients. Each day it processes roughly 830,000 health provider claims. Weekly payments run at about $325 million for everything from doctors' exams to prescription refills.

Ronald Reagan was in his first presidential term when the department's current IT system launched. A look at what's coming to replace it and when:

Name: California Medicaid Management Information System
Department: Department of Health Care Services
Estimated total cost: $459 million (majority of cost covered by federal funds)
Budgeted for 2013-14: $193 million ($140 million is funded through federal financial participation, and the remaining $53 million is state General Funds).
Amount spent to date: $108 million
Project complete: 12 percent
Estimated time frame: July 2009 - July 2018 (7.6 years)

What is it? Replaces a 30-year-old system that sends out payments for goods and services rendered under Medi-Cal, the state's version of the federal Medicaid program.

The official line: "This service contract processes payments to health care providers of the Medi-Cal fee-for-service program, including physicians, pharmacies, hospitals and other providers under a new Fiscal Intermediary and includes replacement of the legacy system."

Current red flags reported: None

This is the seventh in a series of daily posts looking at California's 10 most-expensive state computer projects as listed on the Department of Technology's website.

August 2, 2013
California IT snapshot: The prison management system

California's far-flung prison and parole agency for decades has used dozens of separate computer and paper systems to do business, from tracking inmates to keeping records.

An overview of the new Department of Corrections and Rehabilitation's computer system to streamline its operations:

Name: Strategic Offender Management System
Department: Corrections and Rehabilitation
Estimated total cost: $416 million
Amount spent to date: $243 million
Percent of project complete: 76.12 percent
Estimated time frame: 2007-2008 to 2012-2013 (5.7 years)

What is it? An electronic prison population management system that replaces multiple old electronic and paper database systems.

The official line:"The California Department of Correction and Rehabilitation (CDCR) proposes to replace or integrate almost all existing manual or automated offender management systems and extend system availability to 9,400 new users. The new consolidated system will provide one source for reliable and instant data to the CDCR staff who require it to manage the inmate population."

Current red flags reported: None

The Department expects incremental project schedule changes will be approved by the state in its latest report.

This is the fifth in a series of daily posts looking at California's 10 most-expensive state computer projects as listed on the Department of Technology's website.

August 1, 2013
California IT snapshot: Child welfare computer system makeover

Charged with safeguarding the well-being of children and adults, the California Department of Social Services uses its current case management system to track a plethora of data, from information used to make case-by-case child welfare decisions to collecting statistics for federal reports.

The current system, according to the department's website, is "comprised of more than 19,000 workstations, 2,000 laptops, 395 servers, 2,900 printers and other hardware." More than 19,000 state and county workers use the system at the department and at more than 429 sites around California.

But it's 16 years old and needs updating, officials say. Here is an overview of the proposed new system, which has an estimated price tag that ranks 7th on the state's list of IT projects:

Name: CWS New System
Agency: Health and Human Services Agency (Department of Social Services)
Estimated total Cost: $393 million
Estimated time frame: 2013-2014 to 2017-2018 (4.3 years)

What is it? A new data management system that will allow multiple agencies to submit information on child welfare case. It will also support mobile computing.

The official line:"The CDSS proposes to implement a fully automated and integrated web-based solution to replace CWS/CMS. The proposed CWS-NS solution provides an enterprise computing infrastructure using service oriented architecture and will optimize deployment of the counties' current and emerging business needs and will facilitate effective delivery of CWS services."

Report Status: No report cards available yet, since the project just started.

This is the fourth in a series of daily blog posts looking at California's 10 most-expensive state computer projects as ranked by the of Department of Technology.

July 31, 2013
California IT snapshot: The failed state payroll overhaul

After test runs failed miserably, state Controller John Chiang earlier this year suspended plans to shift the state's patchwork employee payroll system into a single, nimble program.

But the Human Resources Management System -- dubbed "MyCalPays" and, before that, the "21st Century Project" -- remains on the Department of Technology's tracking list, so we're including it as No. 8 on our list of California's 10 most-expensive IT projects:

Name: Human Resources Management System
Department: State Controller' s Office
Total estimated cost: $ 371 million
Amount spent: Roughly $250 million
Percent of project complete: NA
Estimated time frame: 2003-2004 to 2012-2013 (8.7 years)

What was it supposed to do? Replace the state payroll system that has been paying employees since the Vietnam War era.

The official line: "The State Controller's Office proposes to design, develop and implement an integrated HRMS/Payroll system, called MyCalPAYS in order to modernize the State of California payroll system that pays approximately 294,000 employees."

Red flags: Pilot program launch had numerous errors including under- and over-paying employees, taking incorrect deductions and making late payments.

This is the third installment in a series of daily posts looking at California's 10 most-expensive state computer projects as listed on the Department of Technology's website.

July 30, 2013
California IT snapshot: Board of Equalization's system upgrade

As the state's business tax and fee collector, the Board of Equalization takes in more than $53.7 billion annually. The agency recently put out a call for bids on a massive computer system overhaul, which ranks No. 9 on our list of California's 10 largest state government IT projects.

The tale of the tape:

Name: Centralized Revenue Opportunity System
Department: State Board of Equalization
Total Estimated Cost: $269 million
Amount spent to date: $7 million
Percent of project complete: Not available. The project is 45 percent through its procurement phase.
Time frame: July 2010 - July 2020 (10 years)

What is it? CROS will centralize the functions of old systems to make business registrations, filing and tax collections more efficient. It will also improve fraud detection.

The official line: "BOE proposes, using a benefit based procurement approach, to replace and combine the functions of the Integrated Revenue Information System (IRIS) and Automated Collection Management System (ACMS), implement data warehouse/reporting capabilities and expand e-services to tax and fee payers. The proposed system will increase tax and fee revenues by improving data collection, access to data and sharing of data for improved business efficiencies."

Red flags: The project is having trouble filling vacancies, which is why it is running under budget. State workers are performing much of the work.

Editor's Note, 3:35 p.m. Wednesday, July 31, 2013: This post has been updated. The original story reflected numbers taken from the "Total Percent Complete" section of the California Department of Technology's Project Status Report as submitted by the State Board of Equalization. However, the report only reflected the total percentage complete for the procurement phase of the project, not for the entire project. The Department of Technology and the Board of Equalization are updating the project's status report to reflect the project's current total percent completed. The project's time frame was extended until fiscal year 2020 in the project's Request for Proposal on July 1.

This is the second in a series of daily posts looking at California's 10 most-expensive state computer projects according to the Department of Technology.

June 17, 2013
California bill requires reports on moonlighting state workers

130620-RB-Super-Moon.JPGAmong the mountain of budget-related measures lawmakers approved last week, two paragraphs in the voluminous Assembly Bill 76 call for greater scrutiny of "additional appointments" and the policy that fueled them.

The measure requires the Department of Human Resources make regular reports to the Legislature on employees who hold two or more jobs in state government. The State Personnel Board would also have to make a report to the Legislature about the obscure, loosely-written policy manual departments leaned on to justify the practice.

The measure, now awaiting Gov. Jerry Brown's signature, is the latest turn in a series of events triggered by Bee reports that showed how the once-obscure policy allowed California state employees -- including salaried managers -- to take a second hourly-wage job within their same department.

A measure died in committee last month that would have prohibited salaried state employees from taking a second hourly-wage position within their same department or agency. The bill's Republican author, Assemblyman Jeff Gorell, said at the time he hoped lawmakers would enact similar legislation as part of the budget.

Gov. Jerry Brown's administration has banned the practice for salaried employees. Here's the budget trailer bill language:

May 23, 2013
Senate subcommittee rejects CalHR request for tech funding

20130311_HA_Loni_Hancock.JPGA California Senate budget subcommittee delivered a setback to a planned upgrade for the state's job website today by rejecting a proposal to fund it.

The California Department of Human Resources figures it will take about $10 million over four years to make the jobs.ca.gov portal more user-friendly. It would absorb a little more than 80 percent of that cost, but Brown's 2013-14 budget proposal includes $821,000 in supplemental funding. (Click here for a recent State Worker column about the project.)

The three-member Budget Subcommittee No. 5 gave the funding a thumbs down this morning. Chairwoman Loni Hancock, D-Berkeley, noted that an earlier estimate of the project figured it would cost half as much and that the state's high-tech history is pockmarked with failure.

May 23, 2013
Column Extra: Where the $14.6 million for MyCalPays will go


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Our column in today's fiber/cyber Bee looks at the how budget decisions regarding the failed MyCalPays project highlight the inherent tensions of governing.

In the case of the twice-failed state payroll program, officials face two related questions: Should the state commission an audit that would help other government mega-projects avoid the same errors? Or should it hold off on a detailed inward-looking forensic review -- a delay that would severely affect a review's findings and value -- to avoid undercutting potential litigation between the state and the MyCalPays contractor?

The Brown administration's May revision of the governor's proposed 2013-14 budget adds $14.6 million for cleaning up the wreckage from the failed system, but nothing for an independent review.

So where will that money go? Here's a breakdown provided by Controller John Chiang's spokesman Jacob Roper:

May 20, 2013
From the notebook: Table tallies California managers' dual jobs

Thumbnail image for NOTEBOOK_use_this.jpgAs we reported late last Friday and Saturday, the Brown Administration and the State Personnel Board released their audits of California state managers and supervisors who had a second (and in some cases, a third and a fourth) appointment to hourly-wage jobs in their same departments.

About 85 percent, CalHR said, held secondary positions in violation of state hiring policies and civil service laws that aim to make state jobs subject to a fair and open process.

The remaining 76 of the appointments were appropriate, CalHR investigators said.

What follows is the unedited spreadsheet from CalHR that summarizes its auditors' findings:

May 17, 2013
Audit: Departments wrongly doled out hourly jobs to managers

Some of California's most prominent departments improperly gave salaried managers additional jobs that pay an hourly wage, violating civil service rules, according to a audit released late this afternoon.

The state's prison and hospital systems, CalPERS and the Department of Social Services together accounted for nearly all the 504 salaried managers and supervisors who held a second hourly-pay position in 2012. Human resources auditors in the Gov. Jerry Brown's administration said 428 employees, or 85 percent, shouldn't have received secondary job titles because the hourly work fell within the scope of their salaried job duties.

Brown's human resources department and the State Personnel Board investigated 11 agencies whose managers also held hourly part-time jobs last year. The audits launched after The Bee first reported on the policy in January. Brown subsequently banned additional appointments for state managers and supervisors.

The state human resources department dedicated 10 staffers to research and write their reports over the course of three months. Still, their findings lack some basic information, such as how much the departments spent overall on managerial additional appointments last year. CalHR spokeswoman Pat McConahay couldn't come up with that figure when asked this afternoon.

May 16, 2013
Survey: Governments rely less on hiring freezes and pay cuts

A new survey finds that "the picture is brightening" for the state and local government civil service workforce as fewer employers resort to hiring freezes and layoffs -- although they're continuing to whittle away at employee benefits costs.

About one-third of state and local governments told the non-profit Center for State & Local Government Excellence that they're freezing pay this year. That's down from 51 percent in 2012.

Just 18 percent of government employers said they're laying off workers, compared to 28 percent that axed jobs last year.

Governments have continued making changes to health and retirement benefits, with 56 percent modifying health benefits in 2013 and 44 percent altering retirement programs. The change most often cited in both areas: shifting cost from the employer to the employee through higher contributions.

Meanwhile, 22 percent of employers surveyed said their retirement-eligible employees accelerated their retirement plans this year, the same as 2012.

Here are the survey results in detail. Click here to view the 2012 report for comparison.

May 7, 2013
From the Notebook: CalPERS' health-care verification program

Thumbnail image for NOTEBOOK_use_this.jpgCalPERS' decision to get tougher on dependent eligibility checks for medical insurance presents a ticklish public relations challenge for an agency that has long prided its customer service-oriented reputation.

If the system's amnesty message is too feeble, it will be ignored. Come on too strong, and CalPERS risks backlash from offended employees and retirees.

April 17, 2013
From the notebook: The CalPERS pension fund risk report

NOTEBOOK_use_this.jpg

Our story in today's Bee about why a CalPERS accounting change will cost state and local governments billions of dollars references a report about the fund's risk of extreme, even fatal, losses over the next 30 years. We've embedded the report below.

The story also mentions that the actuarial rule of thumb has long been that healthy pension funds' assets equal at least 80 cents of every dollar promised to members. What we didn't mention is that notion was challenged last year by the American Academy of Actuaries in a brief, "The 80% Pension Funding Standard Myth."

The academy said the origin of that standard has no clear origin and that "most plans should have the objective of accumulating assets equal to 100% of a relevant pension obligation."

Annual Review of Funding Levels and Risks as of June 30, 2012

April 3, 2013
California state retirements on the rise in 2013

CALPERS_COURTYARD_JAY_MATHER_2005.JPGCalifornia state employee retirements rose nearly 8 percent for the first quarter of this year when compared with the same period in 2012, according to the latest data from CalPERS.

The 3,576 retirement applications were just below the record-setting January-to-March period in 2011 when 3,626 state workers took their pensions.

The increase indicates that California's aging state employee population is retiring in greater numbers, a trend that will continue for the foreseeable future, said Elizabeth Kellar, president of the Center for State and Local Government.

"This isn't unexpected," Kellar said in a telephone interview.

Furloughs and labor unrest in 2010 and 2011 likely pushed many state workers to leave a little sooner, Kellar said, which is why the retirement numbers spiked to record highs for those two years before they fell in 2012.

"But now we're entering a more normal environment in terms of the way people make decisions," Kellar said, so the California's retirement rate has returned to the gradual increase that demographers predicted many years ago as baby boomers take their pensions.

More broadly, first quarter CalPERS retirement applications from state and local government employees and school district workers rose by a bit more than 10 percent, to 8,888 from January through March.

CalPERS counts applications from mid-month to mid-month, so the first quarter data includes the second half of December. Owing to the method CalPERS uses to calculate pensioners' first cost-of-living increase, more employees retire at the end of the calendar year than at any other time. Those retirements are counted in the January numbers.

March 22, 2013
From the notebook: The State Athletic Commission's woes

NOTEBOOK_use_this.jpgAs we reported in this post, the California State Athletic Commission is struggling financially after a long history of management miscues and other lapses. The problems are so long-lasting and severe that State Auditor Elaine Howle says lawmakers should consider winding it down and transferring its duties to the Department of Consumer Affairs.

Click here to read the auditor's report. This link will download a 2011 background paper prepared for the Senate Committee on Business, Professions and Economic Development. The committee meets again on April 8 for another review.

We can never get everything we learn into a news story. "From the notebook" posts give you some of the extra details, notes and quotes behind the news.

ILLUSTRATION CREDIT: Gabi Campanario / Seattle Times 2007

March 21, 2013
Auditor says CA athletic commission needs to change or go

PK_GLADIATOR 416.JPGThe commission that regulates boxing, mixed martial arts and similar sporting events has been so badly managed for so long that it's time to think about axing it, a new audit released this morning says.

The State Athletic Commission has mismanaged its finances, failed to document facility and equipment safety inspections, mishandled revenue collections from promoters and bungled boxers' pension payments. according to State Auditor Elaine Howle.

March 19, 2013
Audit: California courts' statewide financial report incomplete

130319-elaine-howle-2011-autumn-cruz.JPGA sampling of the business reports by the California court system's administrative body reveals some flaws in how local courts assigned contracts last year and reporting gaps in goods or services purchases, according to a report released this morning.

State Auditor Elaine Howle found that the Administrative Office of the Courts' financial report to the Legislature for the first half of 2012 contained "several instances where data in (the report) was inaccurate,"

The AOC is the business arm of the Judicial Counsel, which sets policy for the California's network of 58 county courts. By law, it gives lawmakers a financial report twice each year.

March 14, 2013
Report: California's furloughs driving up leave cash-out costs

130314-mac-taylor-2013-byer.JPGCalifornia paid more than a quarter-billion dollars to cash out state employee leave last year, according to a new state report, in part because furloughed state workers haven't been taking as much paid time off.

STATE PAY DATABASE UPDATE: The Sacramento Bee state pay database now includes 2012 civil service pay

The report from the office of Legislative Analyst Mac Taylor says employee leave cash outs cost $270 million in 2011-12 and concludes that the liability in future years is so heavy that lawmakers should consider a leave-buyback program rather than carry the time on the books. The Legislative Analyst's Office also suggests the state impose a "use-it-or-lose-it" policy on future leave accruals and clamp down on enforcing the state's leave cap, which some departments have routinely ignored.

Furloughs have cut the state's employee payroll costs by about $5 billion since fiscal 2008-09 when former Gov. Arnold Schwarzenegger and lawmakers imposed them, but the savings are less, the analyst says, because employees have taken less paid leave.

Those hours, in turn, stack up in employees' leave banks. Since unused time is cashed out at a worker's final pay rate when he or she leaves state service leave balances gain value to an employee -- and costs the state more -- with every raise or promotion.

"Probably nearly $1 billion of these furlough savings was not long-term savings," the LAO concludes. "Instead, the state must pay this money as they retire or otherwise leave state service."

The state's employee-leave balance tab hit $3.9 billion in June 2012, according to the analyst.

The state caps accrued leave at 640 hours for most of its employees, but more than 23,700 of them -- roughly 10 percent of the state workforce -- had more that that much time banked in January. Furloughs contributed to those blown leave caps: State workers' average leave balance grew by 16 days between 2008 and 2012.

Furloughs also affected state operations. Employees' average allowed time off increased 50 percent in the last five years. From fiscal 2008-09 through the current fiscal year, correctional officers have taken an average 94 unpaid days off, the most of any employee group. Employees represented by SEIU Local 1000 and managers and supervisors received 79 days off, with most other groups receiving 70. Firefighters (20 unpaid days) and CHP officers (12 days) weren't furloughed for most of the last five years.

PHOTO CREDIT: Legislative Analyst Mac Taylor holds a press conference reviewing Gov. Jerry Brown's budget on Jan. 14, 2013, in Sacramento, California. Renée C. Byer / Sacramento Bee

March 6, 2013
Report: State payroll system upgrade may not be feasible

RB_State_Checks_Machine.JPGAfter nine years and $262 million spent on a twice-failed project to upgrade California's employee pay system, the Legislative Analyst's Office says an overhaul of the current system may not be possible.

A report released today lays out the ugly details of the 21st Century / MyCalPays project: The 2004 launch with an optimistic $130 million price tag, the escalating cost estimates that reached $373 million; the contractors hired and fired when the job wasn't done.

Last month State Controller John Chiang terminated a contract with global tech firm SAP after a test run of 1,300 paychecks was riddled with errors. For now, the state continues to process payroll with the 30-year-old system it had hoped to discard.

"Due to recent events, it is unclear to our office that integrating the state's payroll systems, in their current structure, is feasible," the analyst's office wrote.

January 9, 2013
View parks' budget investigation interview transcripts

130107 natural_resources_logo.jpgAmateur sleuths, break out your magnifying glasses.

We've received inquiries about whether The State Worker will post documents from the attorney general's recent investigation of the parks department's budget-reporting scandal, since we posted more than a 1,000 pages from an earlier investigation of its secret leave cash-out program.

This time we'll batch together links to interview transcripts provided by the California Natural Resources Agency , which has made more than 2,000 pages of documents available.

Here are the first 12 transcripts, including the interview with former director Rusty Areias, of more than 40 released by the agency:

January 4, 2013
California attorney general releases parks investigation results

Attorney General Kamala Harris' office has released its investigation into how and why the Department of Parks and Recreation hid tens of millions of dollars in special funds for at least 15 years.

Bee reporter Matt Weiser, who broke the story last summer, has a breaking news story here.

Our sister blog, Capitol Alert, has an executive summary of the investigation at this link. Watch for more news in tomorrow's cyber/fiber Bee.

January 3, 2013
New LAO report dissects California state employee costs

So how much does California pay for state employee compensation? What is the state's running tab for retiree benefits? How many get a paycheck from the state?

The Legislative Analyst's Office answers all those questions and more in its new Cal Facts 2013 report, a compendium of public finance and program trends in California.

State Worker blog users will be most interested in pages 23 through 25, which deal with those state retirement liabilities, state employee compensation costs and the numbers of employees in various areas of government.

The LAO publication distills complex topics and trends into easy-to-understand charts and graphs. It's a go-to source for quick answers on everything from how many inmates transfer to state hospitals to renewable energy facts and state residents' average daily driving distance.

2013 Calfacts

December 31, 2012
Engineers put Prop. 32 defeat at top of 2012 political priority list

California's state engineers union gave top priority to defeating Proposition 32, contributing $600,000 to efforts that turned back the campaign finance measure at the November polls.

Professional Engineers in California Government's PECG PAC's contributions to the No on 32 campaign accounted for more than one-third of the $1.7 million the engineers gave to campaigns, parties and causes, according to the 13,000-member union's political contribution filings.

Total political spending by PECG came to $2.2 million this year. Professional services ranked a distant second on the union's expense list, with the money going to a pair of well-known Sacramento-based consulting firms, Blanning & Baker Associates ($56,000) and Aaron Read & Associates ($28,000).

Blanning & Baker is the consulting/lobbying/labor relations firm co-founded by Bruce Blanning, PECG's executive director. (Click here for a piece ithat profiles Blanning as one of The Bee's Californians to Watch in 2013.)

As you look through the data below, tabs at the bottom of the table open other worksheets that parse the numbers in a few different ways.

Expenditures show everything a union PAC spent on political activities, including operating costs such as fees paid to political consultants and attorneys. Contributions pages break out donations given to political campaigns and causes.

For groups that are not independently organized, such as SEIU, AFSCME, IUOE and others, the data don't reflect spending by their umbrella organizations.

December 21, 2012
Report: California parks department lacks budget controls

A new report has concluded that state Parks and Recreation officials need to rebuild trust and tighten reporting procedures after flawed internal controls gave them room to hide tens of millions of dollars collected from fees, even as they planned to cut services and close facilities for lack of funds.

Department of Finance auditors concluded that Parks needs to more tightly control its budgeting and purchasing procedures. They also concluded that a special department fund that takes in gifts, bequests, and donations also is poorly administered and at risk for abuse.

In a letter that accompanied its assessment, the Department of Finance told Parks Director Anthony L. Jackson to deliver a plan to correct the lapses within 60 days.

Jackson's responses to the criticisms, which are included with the report, generally concur with what auditors found and their recommendations to fix the problems.

The finance report comes just a few days after Controller John Chiang's office released a scathing audit of the department's pay policies that included overpaying some employees.

Parks has come under scrutiny since The Bee reported that officials in the department squirrelled away some $54 million over many years and secretly cashed out employees' leave time. Meanwhile, it cited extreme budget constraints to persuade private-sector interests to give money and resources to keep facilities open.

The audit focuses on Parks' Administrative Services Division at the center of the scandal, which brought down longtime Director Ruth Coleman.

Matt Weiser, the reporter who broke the parks pay scandal, has also taken a look at the Finance audit. Look for even more details from Weiser in Saturday's Bee.

December 17, 2012
From the notebook poll: Should state audits name bad-acting workers?

notebook-thumb-216x184-9328.jpgWe can never get everything we learn into a news story. "From the notebook" posts give you some of the extra details behind the news.

Last week's state audit, a follow-up story and an editorial in The Bee prompted several calls and emails to The State Worker about the California Whistleblower Act and the anonymity given to state employees caught acting badly -- including those whose actions land them in jail.

The dozen opinions we fielded were evenly split between those who agreed with the blanket application of anonymity provisions in the law and those who thought employees convicted of crimes should be named.

If you've never read the law, Government Code Section 8547-8547.13, you can click here to view the fine details. The auditor references 8547.5 through 8547.7 as prohibiting the release of individuals' names, even those convicted of crimes.

Then weigh in on our poll:

December 11, 2012
State education department issues statement on audit

In response to a new audit that highlights a state employee's misuse of state resources during work hours, the Department of Education released this statement today:

SACRAMENTO--The California Department of Education responded today to the report issued by the California State Auditor.

"The Department has taken a number of steps that address issues raised in today's report by the State Auditor," said Communications Director Paul Hefner. "Prior to the report's release, the Department installed upgraded software that restricts employees from posting content to social media Web sites without authorization. The first supervisor named in the report has received additional training. In addition, while the Department was evaluating information provided by the Auditor, the employee involved voluntarily left employment with the Department."

RELATED POST:
California state employee posts nearly 5,000 online comments from work

December 11, 2012
Updated: California state employee posts nearly 5,000 online comments from work

Editor's note, 1:02 p.m.: This post has been updated with more information about disciplinary action taken and recommended against the employee who is the focus of the story and his supervisor.

A California Department of Education employee posted approximately 4,900 comments on The Sacramento Bee's website between December 2010 and December 2011, according to a state report released this morning that details several lapses, abuses and illegal acts by state workers and agencies.

Investigators found that the education employee posted comments on sacbee.com 195 days of the 208 days he was at work, averaging about 25 comments per day. On his most active day he wrote 70 comments during business hours.

Quizzed by auditors, the unnamed employee offered several explanations.

First, he said, his online postings were limited to his break times. Auditors looked at online comment records and found otherwise.

Then the employee said his commenting activity fulfilled his job obligation to follow educational technology news. Auditors knocked that down, too: "Although the employee's duty statement allocated 15 percent of his time to technical research and analysis, it made no mention of using state time to post public commentary regarding the results of his research."

Finally, the serial commenter said that for most of 2011 he had a lot of time on his hands because he didn't have any work to do, despite asking for more.

Federal government changes had indeed lightened the employee's workload, a supervisor confirmed, but management "had been able to find other projects to fill approximately 80 percent of the employee's time."

Auditors reported that education took "some informal action against the employee as a result of this investigation" and nothing more. The employee continued to use state resources to post comments.

The report recommends blocking the employee's computer from accessing sacbee.com for a "specified period," and taking "appropriate corrective action" against the serial commenter for misusing state resources and against his supervisor for allowing it to happen.

Auditors also found that the employee misused state time and equipment for his private contracting business during work hours.

Other highlights of the State Auditor's report covering investigations completed between April 2011 and June 2012 (summarized here and embedded below):

November 15, 2012
Column Extra: The fiscal, political pressure on retiree health care

ha_pres_obama34203-thumb-300x234-19600.jpegWith just 400 to 450 words for our weekly State Worker column, much of what we learn each week never sees print. Column Extras give you some of the notes, the quotes and the observations that inform what's published.

Our column in today's Bee looks at an item on Gov. Jerry Brown's unfinished business list: cutting the cost of state retiree health benefits.

If you haven't read the column, check it out and then go through these links to dive more deeply into several points it touches on:

November 14, 2012
Revamped California public pay site offers more data and utility

121114 govt pay database1.jpgA California state-run website that tracks state and local government employee compensation relaunched this week with major upgrades that aim to make the data more accessible to the public.

The refurbished site, publicpay.ca.gov, includes maps, simple search engines and even allows users to build their own custom reports, compare pay rates and download raw numbers for their own research. The State Controller's Office, which maintains the site, says it includes the latest state and local compensation data available -- 2011 for state and higher education, 2010 for cities, counties and special districts.

It's the first time that the numbers include wages and benefit data for 69 of the state's 72 community college districts.

Unlike The Bee's state pay database, however, the SCO's data doesn't include the names of individual employees.

The site "does remain a work in progress, and my office will continue to improve and expand this public pay project," Controller John Chiang said in a news release marking the relaunch.

Click here to open publicpay.ca.gov. You can view a menu of video tutorials about how to use the site by clicking here.

IMAGE: The report-building page on the state controller's revamped government employee compensation website. / www.publicpay.ca.gov

October 15, 2012
The parks investigation: Park law enforcement official didn't think employees would return leave cash

In response to blog user requests, The State Worker has posted dozens of state Parks and Recreation documents released by the Natural Resources Agency that lay out an investigation this year into a secret leave buyback program. We realized this month that an interview transcript of one other parks employee was not part of the batch we received.

When The Bee asked about the transcript, the agency promptly turned over the reacted document. In the interest of being thorough, we're posting the transcript here. We've already added it to our parks investigation document index.

Person interviewed: Tina Williams
Job: Parks and Recreation division chief, law enforcement and emergency services
Interviewed by: Corrine Murphy, Justice Department deputy attorney general, and Angela Nowicki, Superintendent II, State Parks Law Enforcement Emergency Services
Date of interview: Mar. 28, 2012
Notable quote: "Good luck with that." -- Williams recollection of her thought when her supervisor, Manuel Lopez, suggested that an employee complaint about the leave buyback program could force employees to return cashouts they had received.

October 3, 2012
California near bottom in government workers-to-residents ratio, tops in pay

California remains among the nation's cellar dwellers in its ratio of state and local government employees to residents, according to a new analysis by the Center for Continuing Study of the California Economy. Meanwhile, state workers here are, on average, the highest-paid.

The Golden State was fifth from the bottom in its number of full-time equivalent state and local government employees relative to population: 476 workers per 10,000 state residents. Nevada had the fewest (420 per 10,000) followed by Arizona (433), Mississippi (462) and Pennsylvania (465). Texas ranked No. 1 with 565 state and local government employees per 10,000 residents, 8 percent above the national average of 525.

September 23, 2012
Why we posted California parks documents, available here

A few blog users have asked why The State Worker has posted more than 1,000 pages of interviews, adverse action notices and reports released by the California Natural Resources Agency that detail a covert employee leave buyback program at the Department of Parks and Recreation during the summer of 2011.

The agency released the documents after The Bee's Matt Weiser broke the leave credit purchase story, which evolved into a revelation that parks had squirreled away $54 million while also preparing to close facilities and seeking private-sector donations and partnerships.

The impact of the story has spilled over into the political debate over Proposition 30, a tax measure on the November ballot that Gov. Jerry Brown supports.

The documents we've posted over the last month provide a rare window into state's self-policing infrastructure and touches on many issues: cronyism, the impact of retiree turnover, state management, budget management, retired annuitants and the chain of command. Still, "Does anybody even read them?" one person asked in an email.

Yes, they do. Parks is one of the biggest departments in California state government, and feedback we've received indicates that the series is particularly well-read by those employees. Some users have said they read the interviews like an unfolding novel. Many readers, both in and out of government, have responded positively to the series and weighed in with comments and questions that will undoubtedly shape future stories.

Beyond that, posting public records from the investigation helps hold public servants accountable and deters future misdeeds.

This post concludes the series by responding to several users' requests for a single item with links to all the documents. We've organized them in alphabetical order after the jump.

September 19, 2012
The parks investigation: The final report

Here's the final state investigators' report on the leave buyback scandal at the California Department of Parks and Recreation.

The report is among the more than 1,000 pages of interviews, adverse action notices and audits released by the Natural Resources Agency that detail a covert employee leave buyback program at parks during the summer of 2011.

Natural resources issued the documents online in response to media requests after The Bee's Matt Weiser broke the story of the leave cash-out program, which spurred the revelation that parks squirreled away millions of dollars while also threatening to close facilities due to extreme budget pressure.

This post is the next in a series intended to make the documents readily accessible to the public.

Lopez Investigation 2012-5-1 r

September 12, 2012
The parks investigation: Administrator reprimanded for going along with leave buyouts

Person interviewed: Dave Saxby
Job: parks administrative services assistant deputy director
Interviewed by: Corrine Murphy, Justice Department deputy attorney general, and Angela Nowicki, Superintendent II, State Parks Law Enforcement Emergency Services
Dates of interviews: Feb. 15, 2012, and April 25, 2012
Notable quote No. 1: "I said I can understand that you can do buy back for excess hours but just to help somebody, (I) said what would be our logic if ... somebody comes and puts a microphone in our face, what do we say? ... I personally can't think of anything and I said you're crazy if we do that." -- Saxby's account of his advice to Manuel Lopez to resist requests to allow employees in financial hardship to participate in the parks leave buyback program even if their hours didn't exceed the state's 640-hour cap. (See February transcript page 22.)
Notable quote No. 2: Most people were scared of him, wouldn't tell him the truth. ... People don't like being yelled at." -- Saxby's description of Lopez's "dysfunctional" management style. (See April transcript page 28.)

Saxby, a long-time state employee, received a formal reprimand for neglect of duty, misuse of state property and other failure of good behavior. Parks officials said that he knew, or should have known, that the leave scheme needed state approval and shouldn't have assumed the program had received it. We've posted the Notice of Adverse Action along with Saxby's two interview transcripts.

The California Natural Resources Agency released more than 1,000 pages of interviews, adverse action notices and reports that detail a covert employee leave buyback program at the Department of Parks and Recreation during the summer of 2011.

Natural resources issued the documents online in response to media requests after The Bee broke the story of the leave cash-out program, which spurred the revelation that parks squirreled away millions of dollars while also threatening to close facilities due to extreme budget pressure.

This post is the next in a series intended to make the documents readily accessible to the public.

September 11, 2012
The parks investigation: Employee's leave buyback processed in one day

Person interviewed: Kevin Smith
Job:
Interviewed by: Corrine Murphy, Justice Department deputy attorney general, and Angela Nowicki, Superintendent II, State Parks Law Enforcement Emergency Services
Date of interview: Mar. 9, 2012
Notable quote: "The next day." -- The amount of time it took for Smith to get a leave buyout check of about $2,400 once he provided proof of financial hardship to Paris Jackson, his manager in the parks administrative division. (See transcript page 12.)

The California Natural Resources Agency recently released more than 1,000 pages of interviews, adverse action notices and reports that detail a covert employee leave buyback program at the Department of Parks and Recreation during the summer of 2011.

Natural resources issued the documents online in response to media requests after The Bee broke the story of the leave cash-out program, which spurred the revelation that parks squirreled away millions of dollars while also threatening to close facilities due to extreme budget pressure.

This post is the next in a series intended to make the documents readily accessible to the public.
Smith Interview 2012-3-9

September 11, 2012
See who's fighting Proposition 32

The spreadsheets below, downloaded from the California Secretary of State's filings this morning, detail $35.8 million in contributions to the No on 32 campaign.

Labor organizations have made defeating the measure a top priority this fall, since it would squeeze their political spending resources. The measure would ban payroll-deducted monies from use for political purposes, cutting off unions' chief means of raising such funds. Corporations would come under the same restrictions, but the measure wouldn't impact them as significantly since they play in politics with money contributed by executives and companies' funds.

We're posting this spreadsheet in response to several blog users' requests that we make the information easily accessible. We'll soon publish the details behind the funds raised by the Yes on 32 side, which amounts to a little more than $3 million.

September 10, 2012
The parks investigation: Staff complained about HQ leave buyouts while field was 'bleeding'

Person interviewed: Lisa Ortega
Job classification: accounting administrator II
Interviewed by: Corrine Murphy, Justice Department deputy attorney general, and Angela Nowicki, Superintendent II, State Parks Law Enforcement Emergency Services
Date of interview: Feb. 24, 2012
Notable quote: "So somebody brought that up ... that admin was buying leave while the field is bleeding." -- Ortega's account of what a parks superintendent said in a meeting when attendees were asked to describe unethical behavior in their departments. (See page 17)

The California Natural Resources Agency recently released more than 1,000 pages of interviews, adverse action notices and reports that detail a covert employee leave buyback program at the Department of Parks and Recreation during the summer of 2011.

Natural resources issued the documents online in response to media requests after The Bee broke the story of the leave cash-out program, which spurred the revelation that parks squirreled away millions of dollars while also threatening to close facilities due to extreme budget pressure.

This post is the next in a series intended to make the documents readily accessible to the public.
Ortega Interview 2012-2-24

September 7, 2012
CalSTRS explains how pension reform affects members

The California State Teachers' Retirement System has published a succinct summary of the provisions in Assembly Bill 340, the pension reform measure on Gov. Jerry Brown's desk. The chart explains the details of the measure and members, whether current employees, retirees or workers hired on or after Jan. 1, 2013.

CalSTRS AB 340 Fact Sheet

September 6, 2012
Column Extra: What CalPERS said on 1999 pension increases

With just 400 to 450 words for our weekly State Worker column, much of what we learn each week never sees print. Column Extras give you some of the notes, the quotes and the observations that inform what's published.

Supporters and critics of pension reform legislation sent to Gov. Jerry Brown last week both make the point that the measure rolls back retirement benefits for future hires to pre-1999 levels. That year is significant because that's when the Legislature passed Senate Bill 400, retroactively and prospectively increasing benefits for state and local workers. Reformers consider the measure the Big Mistake in California public pensions' recent history.

We thought it might be interesting to see how CalPERS contributed to the discussion 13 years ago, so we've posted the staff analysis below. The agenda item from June 15, 1999, shows that the CalPERS board was given three scenarios of how much the enhanced package would cost in 10 years, depending on how well the fund's investments performed. The estimates ranged from zero costs to $679 million to nearly $4 billion.

The board went with the no-cost scenario in its campaign for the increases. (We'll soon post the CalPERS brochure that reflects the fund's pro-SB 400 position.)

Below the staff report you'll find a chart that shows In fiscal 2010-11, the state's actual SB 400 cost was $553 million, or $26 million below the mid-range scenario that staff envisioned in 1999.

September 4, 2012
The parks investigation: Covert leave cashouts put manager in 'awkward position'

Person interviewed: Sedrick Mitchell
Job: deputy director of external affairs, Parks and Recreation
Interviewed by: Corrine Murphy, Justice Department deputy attorney general, and Angela Nowicki, Superintendent II, State Parks Law Enforcement Emergency Services
Date of interview: Feb. 16, 2012
Notable quote: "I expressed my disappointment that, one, we would be going down a path at this time, it puts us in an awkward position ... I've been telling my teams all along that we were going to be ... coming in under budget, that we had to make sacrifices, that the department was taking severe cuts and why are we doing this. And I said this is just another example of policies that are being put in place and ... I find out about it later ..." - Mitchell's reaction to learning about the parks' covert leave buyback program after he had been told -- and told a subordinate -- that no such program existed.

The California Natural Resources Agency recently released more than 1,000 pages of interviews, adverse action notices and reports that detail a covert employee leave buyback program at the Department of Parks and Recreation during the summer of 2011.

Natural resources issued the documents online in response to media requests after The Bee broke the story of the leave cash-out program, which spurred the revelation that parks squirreled away millions of dollars while also threatening to close facilities due to extreme budget pressure.

This post is the next in a series intended to make the documents accessible to the public.
Mitchell Interview 2012-2-16

September 4, 2012
The parks investigation: The problem with state workers' big leave balances

Person interviewed: Rachele Manges
Job: budget manager, Parks and Recreation
Interviewed by: Corrine Murphy, Justice Department deputy attorney general, and Angela Nowicki, Superintendent II, State Parks Law Enforcement Emergency Services
Date of interview: Mar. 9, 2012
Notable quote: "(T)his department does have a problem all the time where we have employees that get huge payouts that we're not anticipating and then, you know, it could put us over budget with the tighter budget constraints. It's really going to be an issue this year -- and next." - Manges, on transcript page 9, explaining a rationale for the parks' leave buyback program.

The California Natural Resources Agency released more than 1,000 pages of interviews, adverse action notices and reports that detail a covert employee leave buyback program at the Department of Parks and Recreation during the summer of 2011.

Natural resources issued the documents in response to media requests after The Bee broke the story of the leave cash-out program. The report triggered a subsequent revelation that parks squirreled away millions of dollars while also threatening to close facilities because it lacked funds.

This post is the next in a series intended to make all of those documents readily accessible to the public .
Manges Interview 2012-3-9

September 2, 2012
The parks investigation: Assistant describes parks official's worry over state audit

Person interviewed: Katerina Jose
Job : administrative assistant, Parks and Recreation
Interviewed by: Corrine Murphy, Justice Department deputy attorney general, and Angela Nowicki, Superintendent II, State Parks Law Enforcement Emergency Services
Date of interview: Mar. 9, 3012
Notable quote: "You can tell with him ... he turns red, you know ..." - Jose's comment (on transcription page 26) about how she knew her boss, parks personnel officer Jason Summers, was upset that the department was being audited.

The California Natural Resources Agency recently released more than 1,000 pages of interviews, adverse action notices and reports that detail a covert employee leave buyback program at the Department of Parks and Recreation during the summer of 2011.

Natural resources issued the documents online in response to media requests after The Bee broke the story of the leave cash-out program, which spurred a subsequent revelation that parks squirreled away millions of dollars while also threatening to close facilities due to extreme budget pressure.

This post is the next in a series intended to make all of those documents readily accessible to the public.
Jose Interview 2012-3-9

September 2, 2012
The parks investigation: Employee 'furious' to learn about covert leave program

Person interviewed: Delores Mejia
Job classification: associate government program analyst, Parks and Recreation
Interviewed by: Corrine Murphy, Justice Department deputy attorney general, and Angela Nowicki, Superintendent II, State Parks Law Enforcement Emergency Services
Date of interview: Feb. 16, 2012
Notable quote: "So I was furious. And I go, you know, that's kind of unfair because, you know, knowing that we're going through a budget crisis, knowing that we weren't allowed to buy supplies and, you know, to do this and that." - Mejia's recollection of her reaction to finding out a parks employee had cashed out $18,000 worth of leave. After asking her supervisor why some employees got leave money and others didn't, Mejia was allowed to cash out 60 hours of leave time.

The California Natural Resources Agency recently released more than 1,000 pages of interviews, adverse action notices and reports that detail a covert employee leave buyback program at the Department of Parks and Recreation during the summer of 2011.

Natural resources issued the documents online in response to media requests after The Bee broke the story of the leave cash-out program, which spurred the revelation that parks squirreled away millions of dollars while also threatening to close facilities due to extreme budget pressure.

This post is the next in a series intended to make the documents accessible to the public.
Mejia Interview 2012-2-16

August 31, 2012
The parks investigation: Official says parks managers told to keep quiet about leave buyouts

Person interviewed: Mike Flores
Job classification: Data Processing Manager III, Parks and Recreation
Interviewed by: Corrine Murphy, Justice Department deputy attorney general, and Angela Nowicki, Superintendent II, State Parks Law Enforcement Emergency Services
Date of interview: Mar. 28, 2012
Notable quote: "During the meeting, after it was introduced, we usually have ... discusion. And I think I would have to say that it was brought up that maybe it would be best, you know, to keep it quiet." - Flores response, transcribed on page 17, when asked whether managers at a June 2011 parks managers' meeting were told to keep a leave buyback plan secret.

The California Natural Resources Agency recently released more than 1,000 pages of interviews, adverse action notices and reports that detail a covert employee leave buyback program at the Department of Parks and Recreation during the summer of 2011. The Bee broke the story of the leave cash-out program, which spurred a subsequent revelation that parks squirreled away millions of dollars while also threatening to close facilities due to extreme budget pressure.

This post is the next in a series intended to make the parks investigation documents readily accessible to the public.

Flores Interview 2012-3-28

August 31, 2012
The parks investigation: Investigators talk with department's No. 2

Person interviewed: Michael Harris
Job: Acting chief deputy director, State Parks
Interviewed by: Corrine Murphy, Justice Department deputy attorney general, and Angela Nowicki, Superintendent II, State Parks Law Enforcement Emergency Services
Date of interview:Feb. 24, 2012
Notable quote: "My immediate thought was there was a large lapse of judgment at the very least. A large lapse of judgment serious enough that ultimately we relieve Manuel of his CEA duties." - Harris recalling his thoughts when he first heard of the parks covert leave buyback plan hatched by Deputy Director Manuel Lopez. The quote is found on page 14 of the transcript.

Note: The leave scandal cost Harris his job. He received this termination letter from the department on July 20. The effective termination date was Aug. 9.

This post is part of a series intended to make public all of the documents released by the California Natural Resources Agency's investigation of the leave covert cash out of leave time by parks employees in the summer of 2011, even as it was preparing to close facilities for lack of funds.

Harris Interview 2012-2-24

August 31, 2012
The parks investigation: Personnel officer recounts leave buyback debate

Person interviewed: Paris Jackson
Job: Assistant personnel officer, Parks and Recreation
Interviewed by: Corrine Murphy, Justice Department deputy attorney general, and Angela Nowicki, Superintendent II, State Parks Law Enforcement Emergency Services
Date of interview: Feb. 16, 2012
Notable quote: "There was like, no we can't do this. Yes, we can. No, just over 640. Okay. We'll do those who are under as well. Then it was like, no, we're not doing it." - Jackson recounting a debate between parks administration services management over whether the division could buy back accumulated employee leave time. (Transcript page 23.)

Investigators say Jackson manipulated the payroll system to obscure the payouts as overtime and backdated some entries to circumvent controls. As a result of her role in the leave buyback program, the department cut her pay 5 percent for one year. Click here to read the Notice of Adverse Action against her.

The California Natural Resources Agency recently released more than 1,000 pages of interviews, adverse action notices and reports that detail a covert employee leave buyback program at the Department of Parks and Recreation during the summer of 2011.

Natural Resources issued the documents online in response to media requests after The Bee broke the story of the leave cash-out program, which spurred a subsequent revelation that parks squirreled away millions of dollars while also threatening to close facilities due to extreme budget pressure.

This post is the next in a series intended to make all of those documents accessible to the public.

Jackson Interview 2012-2-16

August 30, 2012
The parks investigation: Deputy director hid money, budget manager says

Person interviewed: Cheryl Taylor
Job: Caltrans budget manager
Interviewed by: Corrine Murphy, Justice Department deputy attorney general, and Angela Nowicki, Superintendent II, State Parks Law Enforcement Emergency Services
Date of interview: April 12, 2012
Notable quote: "Manuel gets to decide every year what he's going to report." - Taylor's assessment former parks deputy director Manuel Lopez decided how much money the parks department reported to the Department of Finance each year. (See transcript page 38 below.)

The California Natural Resources Agency recently released more than 1,000 pages of interviews, adverse action notices and reports that detail a covert employee leave buyback program at the Department of Parks and Recreation during the summer of 2011.

Natural resources issued the documents online in response to media requests after The Bee broke the story of the leave cash-out program, which spurred the revelation that parks squirreled away millions of dollars while also threatening to close facilities due to extreme budget pressure.

This post is the next in a series intended to make the documents readily accessible to the public.

Taylor Interview 2012-4-12

August 30, 2012
The parks investigation: State official says she warned against leave buyouts

The California Natural Resources Agency recently released more than 1,000 pages of interviews, adverse action notices and reports that detail a covert employee leave buyback program at the Department of Parks and Recreation during the summer of 2011.

The Bee broke the story of the leave cash-out program, which spurred a subsequent revelation that parks squirreled away millions of dollars while also threatening to close facilities due to extreme budget pressure.

This post is the next in a series intended to make all of the parks documents readily accessible to the public.

Person interviewed: Helen Carriker
Job classification: Deputy director, Department of Fish and Game
Interviewed by: Corrine Murphy, Justice Department deputy attorney general, and Angela Nowicki, Superintendent II, State Parks Law Enforcement Emergency Services
Date of interview:Mar. 29, 2012
Notable quote: "I said you can't do that without getting approval to do it. That's something you just cannot do. It's, you know, a big deal. It's union issues and all sorts of stuff. You can't just pay it." - Carriker's recollection, transcribed on page 6, of what she told Manuel Lopez and another parks official when they asked about the propriety of buying back staff leave time.
Carriker Interview 2012-3-29

August 30, 2012
The parks investigation: Parks accounting chief explains why leave cash outs were kept quiet

Person interviewed: Dorothy Kroll
Job : Accounting chief, Parks and Recreation
Interviewed by: Corrine Murphy, Justice Department deputy attorney general, and Angela Nowicki, Superintendent II, State Parks Law Enforcement Emergency Services
Date of interview: Feb. 26, 2012
Notable quote: "I knew why." - Kroll explaining to investigators that she assumed that parks Deputy Director Manuel Lopez didn't want anything about his leave buyout plan for administrative managers communicated via email because word might leak out to other employees. (Transcipt page 15 and following.)

The California Natural Resources Agency recently released more than 1,000 pages of interviews, adverse action notices and reports that detail a covert employee leave buyback program at the Department of Parks and Recreation during the summer of 2011. A Bee report about the program led to the revelation that parks had squirreled away millions of dollars, part of which paid for the leave buyouts.

This post is part of a series intended to make all of those documents readily accessible to the public.

Kroll Interview 2012-2-16

August 29, 2012
The parks investigation: Parks executive says he declined leave buyout for tax reasons

Person interviewed: Alan Friedman
Job classification: Chief information officer, State Parks
Interviewed by: Corrine Murphy, Justice Department deputy attorney general, and Angela Nowicki, Superintendent II, State Parks Law Enforcement Emergency Services
Date of interview:Feb. 23, 2012
Notable quote: "Well, I'm a CEA II and so I pay a significant amount in taxes. ... Getting a buyout is just going to create (an) additional tax load on me ... and to me it's ... going to make much more sense to ... transfer that money into a 401(k) and a 457 plan." - Friedman, as quoted on page 13 of the transcript, explaining why he didn't participate in the parks covert leave buyout plan.

The California Natural Resources Agency recently released more than 1,000 pages of interviews, adverse action notices and reports that detail a covert employee leave buyback program at the Department of Parks and Recreation during the summer of 2011. The Bee's investigation of the program led to a revelation that the department had squirreled away millions of dollars while threatening to close facilities for lack of funds.

This post is the next in a series intended to make all of those documents readily accessible to the public.

Friedman Interview 2012-2-23

August 28, 2012
The parks investigation: Parks manager details how leave payouts dodged payroll controls

Person interviewed: Ronette Martinez
Job: Staff services manager I, Parks and Recreation
Interviewed by: Corrine Murphy, Justice Department deputy attorney general, and Angela Nowicki, Superintendent II, State Parks Law Enforcement Emergency Services
Date of interview: Feb. 23, 2012
Notable quote: "I just told my boss that because I know that." - Martinez explaining that she told Paris Jackson, a parks assistant personnel officer, how to key in the deparment's under-the-radar leave cashouts to circumvent state payroll processing controls.

The California Natural Resources Agency recently released more than 1,000 pages of interviews, adverse action notices and reports that detail a covert employee leave buyback program at the Department of Parks and Recreation during the summer of 2011.

Natural resources issued the documents online in response to media requests after The Bee broke the story of the leave cash-out program. The report spurred a subsequent revelation that parks squirreled away millions of dollars while also threatening to close facilities due to lack of funds.

This post is the next in a series intended to make all of the documents readily accessible to the public.

Martinez Interview 2012-2-23

August 28, 2012
The parks investigation: Parks employee explains her 200-hour leave cash out

Person interviewed: Karyn Lombard
Job: Training specialist, Parks and Recreation
Interviewed by: Corrine Murphy, Justice Department deputy attorney general, and Angela Nowicki, Superintendent II, State Parks Law Enforcement Emergency Services
Date of interview: Mar. 29, 2012
Notable quote: "I believe he said, it's your money anyways." - Lombard, on page 12 of the transcript, recalling what parks Personnel Officer Jason Summers said when she thanked him for a 200-hour leave cashout she received.

The California Natural Resources Agency recently released more than 1,000 pages of interviews, adverse action notices and reports that detail a covert employee leave buyback program at the Department of Parks and Recreation during the summer of 2011.

Natural resources issued the documents online in response to media requests after The Bee broke the story of the leave cash-out program. The report spurred a subsequent revelation that parks squirreled away millions of dollars while also threatening to close facilities due to lack of money.

This post is the next in a series intended to make all of those 38 documents readily accessible to the public within the next few days.
Lombard Interview 2012-3-29

August 27, 2012
The parks investigation: Resources official said he 'assumed' leave buyouts followed protocol

The California Natural Resources Agency recently released more than 1,000 pages of interviews, adverse action notices and reports that detail a covert employee leave buyback program at the Department of Parks and Recreation during the summer of 2011.

Natural resources issued the documents online in response to media requests after The Bee broke the story of the leave cash-out program, which spurred a subsequent revelation that parks squirreled away millions of dollars while also threatening to close facilities due to extreme budget pressure.

This post is the next in a series intended to make all of those documents readily accessible to the public.

Person interviewed: Patrick Kemp
Job: Assistant secretary for administration finance, Natural Resources Agency
Interviewed by: Corrine Murphy, Justice Department deputy attorney general, and Angela Nowicki, Superintendent II, State Parks Law Enforcement Emergency Services
Date of interview: Mar. 29, 2012
Notable quote: "I just assumed he, you know, if he was going to do it just went out and did -- did the proper process." - Kemp's recollection of his thoughts after telling parks Deputy Secretary Manuel Lopez in the summer of 2011 that a leave buyback program would need approval from the state's finance and personnel departments. (Transcript page 11.)
Kemp Interview 2012-3-29

August 27, 2012
The parks investigation: Personnel manager distanced himself from leave scandal

Person interviewed: Jason Summers
Job: personnel manager, parks and recreation
Interviewed by: Corrine Murphy, Justice Department deputy attorney general, and Angela Nowicki, superintendent II, State Parks Law Enforcement Emergency Services
Dates of interviews: Feb. 15, 2012 and April 25, 2012 (click the link below to view both transcripts.)
Notable quote: "Well, if there's an excuse now would be the time to come up with it, I must say." - Murphy pressing Summers, quoted in the April 25 transcript on page 20, to explain how he was so removed from the leave buyback "situation" as it developed at parks.

Note: Summers eventually was demoted for, among other things, portraying himself to investigators as having "bowed out" of the leave buyback process when he was involved and for "inexcusable neglect of duty to assure the legality of the program." Click here to see the department's notice to Summers of his demotion from staff services manager III to staff services manager II.

The California Natural Resources Agency recently released more than 1,000 pages of interviews, adverse action notices and reports that detail a covert employee leave buyback program at the Department of Parks and Recreation during the summer of 2011.

Natural resources issued the documents online in response to media requests after The Bee broke the story of the leave cash-out program, which spurred the revelation that parks squirreled away millions of dollars while also threatening to close facilities due to extreme budget pressure.

This post is the next in a series intended to make the documents readily accessible to the public .

August 22, 2012
The parks documents: the Elsie Brenneman interviews

The California Natural Resources Agency recently released more than 1,000 pages of interviews, adverse action notices and reports that detail a covert employee leave buyback program at the Department of Parks and Recreation during the summer of 2011.

Natural resources issued the documents online in response to media requests after The Bee broke the story of the leave cash-out program, which spurred a subsequent revelation that parks squirreled away millions of dollars while also threatening to close facilities due to extreme budget pressure.

This post is the next in a series intended to make all of those 38 documents readily accessible to the public within the next few days.

Person interviewed: Elsie Brenneman
Job classification: Parks budget officer
Interviewed by: Corrine Murphy, Justice Department deputy attorney general, and Angela Nowicki, Superintendent II, State Parks Law Enforcement Emergency Services
Date of interviews:Feb. 23, 2012, and Mar. 9, 2012 (click the link below to access)
Notable quote: "I just figured -- I assumed it was there personal information so why would they feel the need to share it, but if they wanted to, it was their information." - Brenneman on page 17 of the Feb. 23 interview explaining why she spread word of the parks leave buyout plan verbally and not in writing.
Brenneman Interview 2012-2-23

August 22, 2012
The parks investigation documents: Robert Bonner interview

The California Natural Resources Agency recently released more than 1,000 pages of interviews, adverse action notices and reports that detail a covert employee leave buyback program at the Department of Parks and Recreation during the summer of 2011.

Natural resources issued the documents online in response to media requests after The Bee broke the story of the leave cash-out program, which spurred a subsequent revelation that parks squirreled away millions of dollars while also threatening to close facilities due to extreme budget pressure.

This post is the next in a series intended to make all of those 38 documents readily accessible to the public within the next few days.

Person interviewed: Robert Bonner
Job classification: State Parks labor relations manager
Interviewed by: Corrine Murphy, Justice Department deputy attorney general, and Angela Nowicki, Superintendent II, State Parks Law Enforcement Emergency Services
Date of interview:Feb. 24, 2012
Notable quote: "The 'gray zone' is -- my understanding is those areas of policy that aren't really detailed in policy. ... And that's an area, you know, you certainly want to be careful because while there are no guidelines for how you're operating, for your -- one way or another, you can certainly get yourself into some problems." - Bonner's explanation on page 17 when asked whether he was familiar with the term, "the gray zone."
Bonner Interview 2012-2-24

August 21, 2012
The parks investigation documents: Lynn Black interview

The California Natural Resources Agency recently released more than 1,000 pages of interviews, adverse action notices and reports that detail a covert employee leave buyback program at the Department of Parks and Recreation during the summer of 2011.

Natural resources issued the documents online in response to media requests after The Bee broke the story of the leave cash-out program, which spurred a subsequent revelation that parks squirreled away millions of dollars while also threatening to close facilities due to extreme budget pressure.

This post is the next in a series intended to make all of those 38 documents readily accessible to the public within the next few days.

On Feb. 23, 2012, investigators interviewed Lynn Black, who had been an administrative assistant to parks Deputy Director Manuel Lopez before he was demoted. In her seven years on the job at the time of the interview, "I've had seven bosses in seven years," she said.

The interview dissects meetings and conversations about the leave program. At one point Black says that other divisions in parks had heard about the leave program. After Lopez left his deputy position, he called Black to thank her for a favor she did for him. During the conversation, Black recalled, Lopez said, "I feel like I let everybody down."

Click here to read the Lynn Black interview.

August 21, 2012
The parks investigation documents: Read the audit

The California Natural Resources Agency recently released more than 1,000 pages of interviews, adverse action notices and reports that detail a covert employee leave buyback program at the Department of Parks and Recreation during the summer of 2011.

Natural resources issued the documents online in response to media requests after The Bee broke the story of the leave cash-out program, which spurred a subsequent revelation that parks squirreled away millions of dollars while also threatening to close facilities due to extreme budget pressure.

This post is the next in a series intended to make all of those 38 documents readily accessible to the public within the next few days.

Authur J. Lee, the parks department audits office chief, made several findings in this 14-page report:

• Parks leave buyback was not properly authorized by the state's human resources department.
• The personnel service section of the parks department executed a similar $197, 937 leave cash out in 2008. Like the latest cash out, that one lacked sufficient documentation and "does not appear to be in complete compliance" with state rules.
• The department also launched a questionable leave buyout plan for Off Highway Motor Vehicle Recreation division that paid $111,645, including $20,598 paid to a superintendent.
• Leave payments were taken out of money budgeted for the 2011-12 fiscal year.
Auditors were "astonished" that Manuel Thomas Lopez, chief of the administrative services division and the person who launched the leave buyback plan, cashed out more that four weeks of vacation pay in August 2011 using 2011-12 budget dollars after cashing out nearly nine weeks of leave for $19,135 a few months earlier.

Parks Personnel Officer Jason Summers responded to the audit in a letter dated Mar. 27, 2012:

"As a result of the finding and recommendations in your audit report, the Personnel Section and Administrative Division have taken the following actions to improve processes and procedures regarding leave buy back as well as clarify and communicate to staff the Division's expectations for professional excellence, integrity and personal responsibility.

On Aug. 3, Summers was demoted for his involvement. He and two other parks officials were disciplined for "inexcusable neglect of duty," "misuse of state property" and "failure of good behavior" for their roles in the leave scheme.

Audit of Internal Controls Over Leave Buy Back

August 20, 2012
Read Manuel Lopez's account of parks leave cash-out plan, disciplinary documents

Manuel Thomas Lopez, the central figure behind the parks and recreation scandal, spoke with state investigators about the plan before abruptly leaving his post earlier this year.

Below, we've posted links to the department's Notice of Adverse Action against the former parks deputy director, and the October 2011 termination notice for his deputy director job. Lopez left that post for a lower-level position in the department and was about to be fired when he retired earlier this year.

We've embedded Lopez's April 3 interview below and the subsequent investigation report of Lopez and the leave cash-out program signed by Deputy Attorney General Corinne Lee Murphy.

If you haven't already, read California parks officials were looking to spend while shortchanging parks, documents show, for context and then check out the documents:

Lopez Notice of Adverse Action
Lopez Termination Letter

July 26, 2012
Column Extra: Read the California Department of Finance's plan to audit Parks and Recreation

With just 400 to 450 words for our weekly State Worker column, much of what we learn each week never sees print. Column Extras give you some of the notes, the quotes and the observations that inform what's published.

Today's column lays out more details of the Parks and Recreation secret leave buyout program and its connection to the discovery last week of $54 million the department had in two accounts -- even as it was planning to close 70 facilities around the state.

The Department of Finance didn't know about the money, which has been accumulating for at least 12 years, although the State Controller's Office did. Many department managers didn't know about the money either, and they worked to raise private money and build partnerships to keep facilities on the hit list open.

Imagine how the staff who beat the bushes for money and partnerships feel now.

Along with the State Controller's Office and the attorney general, Finance has launched an investigation of the Parks Department's budget, accounts and procedures. As you'll see in the outline below, its audit plan will initially unwind five years of records.

Finance spokesman H.D. Palmer said Wednesday that the Parks matter in relation to the state's budgeting process is analogous to a tripped fuse discovered during a home remodeling project.

"You go back and check all the fuses," Palmer said, so the state also is taking a wider look at how departments report their budgets.

Audit Plan - Parks

July 24, 2012
Study: State worker mentality makes Sacramento State a management challenge

Employees at California State University, Sacramento, are difficult to manage because of a "state worker environment" fostered by the school's bureaucratic neighbors, according to an report commissioned by officials and obtained by The Bee.

Interim Vice President for Human Resources Christine Lovely asked McKnight Associates Inc., a Westlake Village-based university HR consulting firm, to follow up on a 2006 study that examined the school's Office of Human Resources. The firm gave its findings to officials in April, noting that the university's grievance caseload at the time was two to three times that of any other CSU campuses surveyed.

The numbers:

Sacramento: 114
Long Beach: 52
San Jose: 46
San Francisco: 38
Northridge: 37
Fullerton: 32

Sacramento State's Office of Employment Equity last year fielded 77 formal complaints of discrimination, harassment, retaliation and other types of civil rights issues, McKnight reported, and spent $83,885 for outside firms to investigate employment issues.

"It is also noted that grievances from the CSUEU union account for about two-thirds of the total," the report says.

McKnight said that the same problems existed six years ago, and cites a key passage of the 2006 report as a big reason:

"There was a consensus among those interviewed that the campus culture presents a challenging workforce to manage. It was most frequently described as a 'state worker' environment greatly influenced by its close proximity to the bureaucratic attitudes of State offices. It was made clear by mid-level administrators that a high level of 'management fatigue' in dealing with this environment has historically been present."

We verified the report's authenticity with Sacramento State. Here it is:

May 31, 2012
CalPERS cuts pension benefits for Vernon officials

Editor's note, 6:11 a.m., June 1, 2012: An earlier version of this post incorrectly attributed the following memo to CalPERS. The summary is from a source outside of the fund, but CalPERS confirmed its accuracy.

CalPERS has whacked the pensions for several former City of Vernon officials in the wake of the scandal there and a subsequent audit that looked at city records from 2002 to 2010.

The decisions severely cut or completely eliminate benefits for most of the named CalPERS members.

Here's a memo detailing the fund's determinations followed by letters sent to each person earlier this month explaining the penalties and the rationale:

City of Vernon Membership and Compensation

Below is the information regarding the membership and compensation determinations for the City of Vernon employees. Based on the information we received, you will find that there were service credit periods removed for most of these members. In our letters addressed to the individuals below, we stated that determinations were given as a result of conflicting and insufficient information. The individuals and/or the City may provide additional documentation to supplement the information previously submitted. Any additional information must be submitted within 30 days of the date of the letter and must be specific and clearly show evidence that the members properly held the specific positions listed and that those positions were established and meet the requirements outlined by law, resolution or ordinance.

Eric Fresch (All service removed)
· Independent Contractor for service with the City of Vernon making him ineligible for membership for service with the City from 1986-2010
· 28.746 total years of service removed - of which 16.1 years was arrears service
· 5 years of Additional Retirement Service Credit removed - Reimbursement and/or credit to be effectuated in accordance with State and Federal law.
· Safety Classification denied
· If membership is proved CalPERS cannot determine payrate due to conflicting and lack of information.
· Pay schedules provided do not meet CalPERS requirements and contract agreements conflict with pay schedules provided.

Jeffrey Harrison (All service removed)
· Independent Contractor for service with the City of Vernon making him ineligible for membership for service with the City
· 4.676 total years of service removed
· Safety Classification denied
· If membership is proven CalPERS still cannot determine payrate due to conflicting and lack of information.
· Pay schedules provided do not meet CalPERS requirements and contract agreements conflict with pay schedules provided.

Eduardo Olivo
· Independent Contractor for service with the City of Vernon making him ineligible for membership for service with the City for 1994-2002
· 15.265 total years of service removed - of which 7.770 years was arrears service
· 5 years of Additional Retirement Service Credit removed - Reimbursement and/or credit to be effectuated in accordance with State and Federal law.
· If membership is proven CalPERS still cannot determine payrate due to conflicting and lack of information.
· Pay schedules provided do not meet CalPERS requirements and contract agreements conflict with pay schedules provided.

Roirdan Burnett
· Eligible membership date was changed to February 6, 2008 from December 3, 2002
· Part of his 4.462 years of service credit is determined to be as an Independent Contractor but still determining the period - If no documentation is provided, all service will be removed
· If membership is proven CalPERS still cannot determine payrate due to conflicting and lack of information.
· Pay schedules provided do not meet CalPERS requirements and contract agreements conflict with pay schedules provided.

Bruce Malkenhorst Jr. (Membership and Comp)
· Part of his 10.647 years of service credit is determined to be as an Independent Contractor but still determining the period - If no documentation is provided, all service will be removed
· Safety Classification denied
· Pending the verification of membership, payrates have been verified from 11/97-6/05 and 10/07-last day of employment
· If membership is proven the payrate cannot be determined from 7/05-9/07
· Member has requested a refund
· Member informed, upon correction of payroll elements by the City, CalPERS will contact member regarding a refund and/or credit of normal contributions. Reimbursement and/or credit to be effectuated in accordance with State and Federal law.

Bruce Malkenhorst Sr. (Comp Issue Only)
· The pre-deprevation letter, which includes our preliminary determination to adjust his allowance downward, was returned to program from LEGO on 5/21/12 for review. The letter will be mailed Friday 5/25/12, giving them until 6/25/12 to respond.
· He held multiple positions simultaneously, which were unable to be pulled apart to determine compensation related to each position
· His payrate did not comply with the requirements of being paid "pursuant to publicly available pay schedules" under the meaning of that phrase in the statutory and regulatory definitions for payrate. In addition, the amounts failed to meet other definitional requirements of payrate in so far as they were not for the normal duties of one full-time position and were amounts reported for duties or services performed for other simultaneous positions that would constitute "overtime" under the PERL.
· In an effort to determine a reportable payrate for the member CalPERS will be using $7,875 to calculate his allowance. This amount is the payrate for the position of the acting City Clerk, which is one of the position Mr. Malkenhorst held during the tenure of his employment. The $7,875 payrate was given to Mr. Malkenhorst's successor. It was provided in a Resolution signed June 29, 2005, and effective July 1, 2005. Mr. Malkenhorst's retirement date was July 1, 2005.
· His longevity has been determined to be limited to 20%, instead of the 25% his initial allowance was calculated with. This is due to the additional 5% only being available to him.
· The final compensation amount of $44,128 originally used to calculate his retirement allowance has been reduced to $9,450. This will reduce his allowance amount from $45,073.52 to $9,654.

Mark Whitworth (Comp Issue Only)
· The City is currently reporting a payrate based on his service rendered as the Fire Chief. This compensation includes a payrate of $16,599 and 5% ($829.95) Educational Incentive for a total reported compensation amount of $17,429.01.
· Mr. Whitworth is currently working in multiple positions and the City must substantiate the full-time payrate for each position and report the payrate(s) accordingly.
The pay must be for services rendered on a full-time basis during normal working hours and cannot be for additional duties or services related to other positions

Donal O'Callaghan
· Member refunded
· Notes have been added to the system in order to insure he cannot reinstate or redeposit without being reviewed and approved by the Compensation Committee.

Here are the cover letters and determination letters that CalPERS sent to each official:

May 21, 2012
From the notebook: Lessons from Utah's 4-day workweek

notebook-thumb-216x184-9328.jpg

We can never get everything we learn into a news story. "From the notebook" posts give you some of the extra details behind the news. (Editor's note, 9:45 a.m.: This post now includes a direct link to the Working 4 Utah audit.)

With Gov. Jerry Brown proposing a four-day workweek for California state workers, our A1 story in today's Bee looks at what happened when Utah became the first state in the nation to try it.

Of course, a significant difference is that Utah didn't cut employee hours. Brown's plan is a 2-hours-per-week furlough.

Two years ago, the Beehive State's legislative auditor general looked at the program's strengths and weaknesses. What follows is the report on the program former GOP Gov. Jon Huntsman launched in 2008. If you can't access the embedded document, click here to download the PDF.
A Performance Audit of the Working 4 Utah Initiative

May 18, 2012
Legislative Analyst says 4-day week for California workers 'problematic'

The Legislative Analyst's Office said today that Gov. Jerry Brown's proposal to move state workers into a 4-day, 9.5-hour-per-day schedule would create some serious problems.

The criticisms conclude a lengthy analysis of Brown's state budget proposal to close what the administration estimates is a $15.7 billion budget deficit (the LAO says it's more than that). Among the issues raised with Brown's furlough plan:

• Employees won't use as much leave, which will increase the state's deferred costs.
• It will hinder interaction with government agencies that operate on regular schedules.
• It may not reduce energy costs.

Then the analyst makes this comment about cutting employee costs:

Employee compensation, including salaries and benefits, will cost the state's General Fund $10.5 billion in 2012-13. Given the severity of the state's budget shortfall, we think the Legislature will need to consider reductions in these costs. There are, however, no ideal ways to achieve such reductions.

Why? Bargaining, the analyst said, usually means some sort of trade-off that negates savings. Layoffs take a long time and can adversely affect services. Furloughs and leave programs carry deferred costs (see above). The Legislature could impose pay cuts, but that "could require the administration to negotiate with unions for new contracts under the terms of the Dills Act. Unilateral state actions of this type may produce significant state savings, but pose many concerns. Such concerns include negative effects on employee-management relations."

The report also discusses the state's job vacancies and changes that Brown is proposing to the way the state budgets for positions, including eliminating vacant positions.

Click here to open the LAO's report. Scroll down to the "Employee Compensation" section for more analysis about Brown's plan for the 4-day workweek and vacant positions.

May 14, 2012
Jerry Brown's budget proposes longer days, shorter weeks for state workers

Thumbnail image for Thumbnail image for Thumbnail image for 080811 Jerry Brown.JPGState employees would work longer shifts but fewer of them under the revised budget plan proposed by Gov. Jerry Brown this morning, saving the government more than $800 million.

Brown's budget envisions putting a four-day, 38-hour workweek for "the majority of state employees." If broken into four equal shifts, that translates into four 9.5-hour workdays and a reduction of hours and pay of eight hours over four weeks.

Brown's plan doesn't spare prisons or state hospitals: "The Administration will pursue commensurate reductions in work hours and pay for employees of entities that operate 24 hour a day, 7 days a week when implementation of the four-day workweek is not feasible."

The plan also cuts the state's operating costs by cutting energy usage at state-occupied buildings.

In sum, the workweek reconfiguration plan would save an estimated $839.1 million in fiscal 2012-13. Of that, $401.7 million would be savings for the general fund, which Brown says is confronting a $16 billion deficit.

The budget plan also anticipates more savings through cutting outside contracts, particularly in information technology services, eliminating "non essential" hiring of retired annuitants and cutting 11,000 state positions on top of the 15,000 eliminated in the 2011-12 budget.

PHOTO: Gov. Jerry Brown / Sacramento Bee file

May 1, 2012
CalPERS' audit slaps City of Vernon

The City of Vernon failed to provide adequate documentation for its employees and improperly characterized some as working in safety classifications that receive more generous retirement benefits, according to a new report released by CalPERS this morning.

The incomes of about two dozen current, former and retired city workers could be affected, since the fund will make "adjustments to retirement benefits or reported compensation" as appropriate, CalPERS said in a press release issued this morning.

Vernon has been under scrutiny for quite some time. Assembly Speaker John A Pérez authored legislation last year to dissolve Vernon, saying it would address allegations of corruption in a city that is home to fewer than 100 residents but more than 1,000 businesses. Under his proposal, which failed, Vernon would become an unincorporated part of Los Angeles County.

The report caps CalPERS' year-long audit of Vernon's records covering July 1, 2002 through June 30, 2010.

Among the findings:

April 30, 2012
Public pensions assets rebounded in 2010

From Dan Walters at our sister blog, Capitol Alert:

California's state and local government pension funds saw a 12.4 percent increase in their assets during the 2010 fiscal year, according to a new Census Bureau report, markedly higher than the national pension fund increase.

Click here for the rest of Dan's post. A spreadsheet with some of the pension data is posted below:

April 26, 2012
California shaves computer system cost estimate by $1 billion

Officials overseeing California's troubled financial computer system project say it will cost nearly $1 billion less than earlier estimated, according to a new Bureau of State Audits report.

The latest projections by the the Financial Information System for California, or FI$CAL, figure that the massive hardware and software makeover will cost $616.8 million, down from a 2007 estimate of $1.6 billion over 12 years.

April 24, 2012
Analyst says some state worker contracts 'modestly' increase costs

The Legislative Analyst's Office figures that four union contracts that Gov. Jerry Brown has agreed to extend for one year will "maintain or modestly increase the state's costs for employee compensation."

The nonpartisan LAO looked at so-called "rollover agreements" with the Union of American Physicians and Dentists (Bargaining Unit 16) and the American Federation of State, County and Municipal Employees (Unit 19) and concluded that they don't cost the state more than the deals that expire in July.

The state's cost for employees covered by the International Union of Operating Engineers (Unit 12) and the California Association of Psychiatric Technicians (Unit 18), however, will grow by an estimated 9.5 percent due to increased health benefit costs. Those contracts have clauses requiring the state to cover increases in health coverage.

The contracts together cover roughly 24,000 state workers, including equipment operators, social service professionals, psychiatric technicians and doctors.

MOU Fiscal Analysis: Bargaining Units 12, 16, 18, and 19

April 11, 2012
How many unionized state workers are there, anyway?

One question that we're sometimes asked is, how many state workers are represented by a union?

The figure fluctuates daily. According to the latest State Controller's Office report to the Department of Personnel Administration, as of the end of last year, 181,822 state employees were represented in the 21 bargaining units that negotiate with the governor.

That count doesn't include the state's two university systems, the Legislature or the judicial branch, which all handle their own personnel matters.

Here's the tally by bargaining unit, denoted on the list as R01, R02, etc.:

April 5, 2012
Column Extra Poll: Government's call to 'customer' service

With just 400 to 450 words for our weekly State Worker column, most of what we learn each week never sees print. Column Extras give you some of the notes, the quotes and the observations that inform what's published.

Our column in today's fiber/cyber Bee examines the notion that government has "customers." Click here to view the section of the 2004 California Performance Review we referenced today, titled "Putting Californians First -- Creating a Customer Service Framework."

Read the column, check out the report and then take our poll:

March 1, 2012
Lawmakers hammer Corrections official for lack of accounting

Lawmakers lit into a California state prisons official Wednesday afternoon for his department's failure to account for its spending -- twice.

Assemblyman Gil Cedillo, D-Los Angeles, called his budget subcommittee to order and then quickly skipped down to the second issue on the agenda, an update on why the Department of Corrections and Rehabilitation hasn't produced spending reports that the Legislature demanded when it gave CDCR an extra $380 million last year.

As Cedillo and other angry assemblymembers at the hearing noted, the extra money went to Corrections while programs for the elderly, the sick and children all suffered cuts.

But after years of what amounted to fictional cost estimates and perpetually blown budgets for the state's most expensive agency, Gov. Jerry Brown and lawmakers agreed to a 2011-12 budget that gave the $9 billion-plus department the extra money. According to figures provided to The Bee by Assembly Budget Committee Chairman Bob Blumenfield's office, it was the fourth year in the past five that the Legislature kicked up extra money to cover CDCR's overspending. The augmenting funds totaled nearly $3 billion.

Last year, hoping to get costs under control, the Legislature added reporting strings to the money. The first report was due within 75 days of the budget's enactment last June. A second report is due today. Corrections hasn't produced any information yet.

February 24, 2012
John Chiang: California needs to pay down retiree health costs

Controller John Chiang today urged the state to scrape up at least a little extra cash to pay down state retiree health and dental benefit costs, which his latest commissioned report pegs at $62.1 billion over 30 years.

The figure, a snapshot of the unfunded health obligations on June 30,2011, represents a 5 percent increase over $59.9 billion identified a year earlier. Actuaries with Gabriel Roeder Smith & Co. had expected an even higher number, but CalPERS' push to trim health costs through a variety of programs, fewer and less expensive claims and lower-than-anticipated use of services have trimmed expenses.

For the most part, the state is covering those costs year to year, paying retiree health bills as they come up. A more prudent course, Chiang said, is to treat the long-term benefit expenses like the state treats pensions: set aside money now, invest it and then use the returns on investments to defray future retiree medical and dental costs.

"Even slight amounts set aside will help lessen the impact on future generations, and ensure that we fulfill our responsibilities to the state workforce and our taxpayers," Chiang said in a press release.

February 21, 2012
Stanford: California's local public pensions $135.7 billion short

The 24 largest independent pension systems in California, including Sacramento County's, are facing a combined $135.7 billion in long-term obligations that they won't have the assets to cover, a new Stanford University report says.

Sacramento County is carrying $4.75 billion in unfunded liabilities, according to the report, with a funded ratio of 57.5 percent. Those numbers are based on an assumed rate of investment return of 5 percent used by the university's Institute for Economic Policy Research.

Generally, experts consider an 80 percent funding ratio for public pensions' financial health, but that figure is greatly affected by what the funds -- or in this case, Stanford researchers -- assume its investments will return. Many pension systems assume they'll earn 7.5 percent or more.

The average funded ratio of all 24 systems outside of CalPERS is 53.6 percent, using the lower Stanford investment return assumption. The research covers Alameda, Contra Costa, Fresno, Kern, Los Angeles, Orange, Sacramento, San Diego, San Francisco, San Joaquin, San Mateo, Santa Barbara, Sonoma, Stanislaus and Ventura counties. The cities whose pensions were examined include Fresno, Los Angeles, San Jose, and San Diego. The 24 systems account for more than 99 percent of independent system assets, Stanford says.

Between 1999 and 2010, the local municipalities' pension spending grew at 11.4 percent per year, more than the rate of growth for any other expenditure category, according to the report.

California Common Sense also sponsored the research by Stanford professor Joe Nation and student researcher Evan Storms. In December, Nation published a report that concluded California's three big statewide public pension systems have a combined $500 billion in unfunded liabilities. Public employee unions and CalPERS rejected Nation's conclusions.

MORE PENSION MATH: Funded Status, Benefits, and Spending Trends for California's Largest Independent Public...

February 7, 2012
California Prison Industry Authority: Agency business costs hurt bottom line

After years of profitability, the California Prison Industry Authority suffered a $15.3 million loss last year, according to its latest annual report to the state Legislature.

The losses in fiscal 2010-11 came from a $17.4 million drop in operating revenues and $8.6 million the self-funded PIA set aside in anticipation of settling union furlough lawsuits. The authority also paid $6.3 million to cover Other Post-Employment Benefits such as retiree health care and a $2.8 million expense from factory closures.

"If not for the furlough expense, the annual OPEB charge, and the onetime costs associated with factory closures, CALPIA would have continued its profitability in FY 2010-11," the report says.

The PIA oversees four inmate training programs that operate manufacturing, service, and agriculture industries at 22 correctional facilities. They produce everything from modular buildings and fire protection gear to furniture and pre-packaged meals. Most of what PIA makes is purchased by the state or other government entities.

More than 7,000 inmates participate, saving the state "more than $11 million annually in General Fund costs for rehabilitation positions that CDCR does not have to fund," the annual report says. Those inmates make between 30 and 95 cents per hour before deductions.

Participants without a high school diploma must earn a GED within two years to continue in the program. Joint Venture Program participants earn a comparable wage less deductions for things like taxes, room and board, crime victim compensation, government-ordered restitution such as child support. Inmates in the program also have to put money into a savings account.

Graduates from the PIA's Career Technical Education program, which gives inmates "hands-on experience in real world training," were 89 percent less likely to return to prison when compared with the prison system's general population, according to the report. Overall, PIA participants across the board had a 24 percent to 30 percent lower recidivism rate than the general prison population.

January 12, 2012
Column Extra: Read Auditor Elaine Howle's FI$Cal report

With just 400 to 450 words for our weekly State Worker column, most of what we learn each week never sees print. Column Extras give you some of the notes, the quotes and the observations that inform what's published.

Our column in today's Bee outlines State Auditor Elaine Howle's update on the Financial Information System for California, the biggest information technology project in state government.

Click here to read Howle's latest FI$Cal report, which has more details about the project than we could cram into our column.

January 5, 2012
The State Worker's Top 10 of 2011: No. 1 -- Little Hoover pension reform report

countdown 1.JPGThis is the last installment in a series of posts looking back at the most-read State Worker blog items in 2011.

The debate over public employee pensions took an unexpected turn last February when the state's Little Hoover Commission suggested what had been the unthinkable: Change pension benefits promised to current state and local government employees.

A locally based research group, Californians for Fiscal Responsibility, had called for changing the guaranteed benefits promised to current employees. But now a government entity was suggesting the legally precarious and politically explosive idea.

The commission said that the public pension crisis is so severe that changing benefits for future workers won't fix it quickly enough. So the bipartisan panel said that state and local governments should freeze their defined-benefit pension promised to current employees and then prospectively place them into cheaper "hybrid" plans that blend smaller traditional pensions with more volatile 401(k)-type savings programs.

Both sides of the pension debate said that such a move would undoubtedly spark litigation. Conventional wisdom holds that pension promises are protected by both state and federal law, but the commission's report said that the principle should be directly tested in the courts.

Here's the link to the most-viewed State Worker blog post of 2011: "Commission's plan rolls back pensions for current workers," which ran on Feb. 24.

Postscript: The idea to alter pensions promised to current employees is dead for now. Two proposed ballot measures to alter pensions offered by another local group, California Pension Reform, and a plan promoted by Gov. Jerry Brown focus on lowering benefits for workers hired in the future.

January 3, 2012
The State Worker's Top 10 of 2011: No. 3 -- More audit news

Thumbnail image for countdown 3.JPGThis is the latest installment in a series of posts looking back at the most-read State Worker blog items in 2011.

Each year the Bureau of State Audits publishes the results of investigations sparked by tips sent to its whistleblower hotline. Last August's compilation of investigations included stories of misused state vehicles, excessive break times and the mishandling of sensitive documents.

Some of the 300 or so comments on, "Audit chronicles state employee abuse and bad management," the third-most viewed State Worker blog item of 2011, accused The State Worker's report as a thinly veiled attempt to cast all state workers as dishonest and lazy. Others thought the item proved that all state workers are dishonest and lazy.

Our take: One definition of news is that which is out of the ordinary. That's why the sun's rise each morning isn't news. We expect it to happen.

The auditor's report was news because it chronicled bad behavior -- actions by state employees that were outside of the ordinary. We hope that the day never arrives that inefficiency and ineptitude are considered so routine that they're not worth covering.

January 2, 2012
The State Worker's Top 10 of 2011: No. 4 -- Audit outs misdeeds

Thumbnail image for Thumbnail image for countdown 4.JPGPosts about government employee misdeeds draw plenty of attention and provoke debate over workplace fairness, public-sector standards vs. private-sector standards and the media's news reporting role.

Consider these comments from the fourth most-read State Worker blog item of 2011, "Audit reveals California state employee misdeeds and miscues," posted Jan. 18:

December 27, 2011
Legislative Analyst releases review of California pension plans

Two public pension reform plans aimed for the November 2012 ballot wouldn't make much of a dent in government costs for decades, and the savings to employers' retirement expenses would be "offset to some extent by increases in other employee compensation costs," according to the nonpartisan Legislative Analyst's Office.

The LAO's take on both plans -- one a so-called "hybrid" system for new workers and the other a 401(k)-style retirement account for new workers -- concludes that they are fraught with legal peril and could wind up costing state and local government more or less depending on how they're "interpreted and administered."

The analyses share much of the same language and conclusions. Click here for the LAO's review of the defined contribution plan backed by California Pension Reform. This link opens the review of CPR's alternative hybrid pension proposal that mirrors a plan backed by Gov. Jerry Brown.

The LAO called Brown's plan "a bold, excellent starting point" for changing public pensions, but that it also "leaves many questions unanswered."

December 13, 2011
Read the new Stanford pension report

Stanford's Institute for Economic Policy Research has issued it's new report, "Pension Math: How California's Retirement Spending is Squeezing the State Budget." Click here for our previous post on the study.
Pension Math: How California's Retirement Spending is Squeezing the State Budget

November 24, 2011
From the notebook: More about the CalPERS computer system

Thumbnail image for notebook-thumb-216x184-9328.jpgWe never get all of what we learn into a news story, but this blog can give users the data, the notes and the quotes from the notebook that informed what was published.

Our story today reports on CalPERS' problems with its new computer system, dubbed my/CalPERS, and its implementation, the Pension System Resumption Project. Since the system's startup in September, the fund has been slower to process death benefits claims for some members. The delayed payments have prompted some health insurance providers to take some members off their rolls for failing to pay their premiums -- which must be deducted from the death benefit payments).

CalPERS says it's giving the matter top priority and that no one is in danger of losing their medical coverage because of the computer problems.

Want to dig deeper? Here are some of the documents that informed the story:

The transcript of the CalPERS Board of Administration meeting on Oct. 19. The my/CalPERS discussion starts on page 48.

The transcript of the Nov. 16 CalPERS Board of Administration meeting. Scroll down to page 53 for my/CalPERS talk.

An Oct. 31 performance report on the transition from CalPERS' old patchwork computer system to the new one. We thought one of the metrics on page 2 was particularly interesting: "CalPERS reputation may be damaged if Judges and Legislators functionality is not properly implemented."

IMAGE: www.freeclipart.com

November 21, 2011
Poll: Washington audit finds state paid for unused cellphones

Washington state's auditor says that nearly 6,700 state-issued cellphones that cost the government $1.8 million -- nearly a third of those reviewed -- were used infrequently or not at all during a study that ran from March 2010 through February of this year. Of those, a third weren't used one time during the audit period, reported Washington State Auditor Brian Sonntag, but the state still paid more than $533,000 for them.

The Washington audit, which you can read here, echoes a similar study of California's state cellphones that found about 25 percent of the 54,000 wireless lines tracked in December 2010 weren't used -- but still cost the government more than $300,000.

Those finding supported Gov. Jerry Brown's February order to cut the government's cellphone inventory in half by June 1 of this year.

Departments turned in about 29,000 of 67,000 cellphones covered by Brown's order, with thousands more still under review as of the deadline, the administration said at the time.

Prompted by the Washington audit, we're curious about the impact to California state workers of the state's cellphone slim-down nearly six months later:

November 16, 2011
LAO: Retirement costs to increase by $200 million over 5 years

111116 Pension chart.JPGState pensions will cost government employers about $200 million more in fiscal 2016-17 than expected next year, according to a new report from the Legislative Analyst's Office. About half of those rising costs will hit the general fund.

The chart above comes from page 40 of the LAO report released this morning. It depicts California's general fund employee retirement expenses past, present and future.

Here's a slice of what the report says:

November 8, 2011
California Pension Reform hammers analysis of Brown's plan

California Pension Reform's Mike Genest has issued this statement about the LAO's review of Gov. Jerry Brown's pension proposals:

It is disappointing that the LAO omits the most critical flaw of the Governor's proposal: By his own admission his plan only solves $4-$11 billion of what is at least a $240 billion unfunded liability. While the Governor's plan has merits, it solves less than 5% of our problem. We need bold, comprehensive reform now and cannot continue to wait as politicians debate the issue and tinker around the edges.

California Pension Reform recently filed two ballot proposals with the attorney general's office for official title and summary. It hopes to start gathering signatures in January in hopes of qualifying one of the two measures for the November 2012 ballot.

November 8, 2011
View the LAO video on Jerry Brown's pension reform plan

The Legislative Analyst's Office has released an eight-minute video, embedded below, that sums up its review of Gov. Jerry Brown's pension reform proposal.

"We view Gov. Brown's (pension) proposal as a bold one, and one that should very carefully considered by the Legislature," says the LAO's Jason Sisney.

Still, he says, "we don't understand some key aspects" of Brown's proposals, particularly how putting new employees into a hybrid plan or pushing back new hires' qualifying retirement age would work.

The LAO also has questions about how pensions could be capped and notes that the unfunded liabilities of the CalSTRS and UC pension systems aren't addressed.

"In our view ... it doesn't really make a whole lot of sense to change all of these (UC and CalSTRS) benefits substantially and not think about how they're going to be funded into the future," Sisney says.

And, Sisney notes, the governor's plan is silent on retiree health benefits for local government workers.

November 8, 2011
Labor responds to assessment of Jerry Brown's pension plan

Thumbnail image for 110224 dave low.JPGCalifornians for Retirement Security, a labor coalition representing 1.5 million state and local public employees, has issued a statement in response to this morning's LAO review of Gov. Jerry Brown's pension reform package.

Here's the statement emailed to media a few minutes ago quoting Dave Low, the coalition's chairman:

The LAO's mixed assessment of the Governor's pension proposals hits the nail on the head when it says that the Legislature should move forward in a deliberate and reasoned fashion to craft solutions to California's complex pension systems. There are far too many unanswered questions and lack of details to fairly and accurately evaluate the impact of these proposals. Those proposals that impair the negotiated benefits of current employees are a legal dead end. As the report points out, these are matters that should be settled at the bargaining table, not in courtrooms. We will continue to work in the upcoming Legislative session, just as we have for the past several years, to achieve the spirit of the Governor's reforms without taking a wrecking ball to the retirement security of California's teachers, firefighters, police officers, and other public workers.

PHOTO: Dave Low / Courtesy California School Employees Association

November 8, 2011
Analyst: Jerry Brown pension plan a 'bold' start -- with gaps

The Legislative Analyst's Office has published its review of Gov. Jerry Brown's pension plan, concluding that it is "a bold, excellent starting point" for changing public pensions, but that it also "leaves many questions unanswered."

In particular, we do not understand key details of how his hybrid benefit and retirement age proposals would work. Moreover, the Governor's plan leaves unaddressed many important pension and retiree health issues, including how to address the huge funding problems facing the state's teachers' retirement fund, the University of California's (UC's) significant pension funding problem, retiree health benefit liabilities, and other issues. In making significant changes to pension and retiree health benefits, we would urge the Legislature also to tackle these very difficult issues concerning the funding of benefits.

The report also cautions that Brown's plan to mandate current employees pay more toward their retirement accounts is a "legal and collective bargaining minefield." Ditto for suggestions by The Little Hoover Commission and others (not Brown) that current employees' accrued benefits could be frozen and then reduced going forward:

October 20, 2011
Federal contracts study says privatization isn't cheaper

Thumbnail image for Thumbnail image for 100831 calculator.JPGA recently-released study by the nonpartisan watchdog Project On Government Oversight says the federal government signs off on service contract billing rates that, "on average, pay contractors 1.83 times more than the government pays federal employees in total compensation, and more than 2 times the full compensation paid in the private sector for comparable services."

The report, which was issued last month, concludes, "Given that one-quarter of all discretionary spending now goes to service contractors, a reassessment of the total federal work force, with a focus on contractor billing rates, could save taxpayers billions of dollars annually."

Thanks to Blog User G for flagging this for The State Worker.

October 13, 2011
Berkeley report: Don't blame public employees for budget woes

111013 Government jobs chart.JPGA new report from the University of California, Berkeley's Center for Labor Research and Education and Center for Wage and Employment Dynamics finds that state budget woes around the country have come from imploding housing markets and the Great Recession -- not public employee costs.

The report takes a look at the relationship between public sector workers, their unions, and state budget deficits.

"The Wrong Target: Public Sector Unions and State Budget Deficits" by researchers Sylvia Allegretto, Ken Jacobs and Laurel Lucia concludes that:

October 13, 2011
California pension systems' assets fell 27 percent in 2009

The California's state and local public employee retirement systems had $470 billion in cash and investment holdings in 2009, down 27 percent from $643 billion in 2008, according to new statistics released by the U.S. Census Bureau.

Nationwide, state and local government retirement systems saw their cash and investments lose a collective $726 billion, falling to $2.5 trillion in 2009. The 23 percent drop in 2009 followed a $177 billion loss for the funds in 2008.

The data come from the Local Public Employee Retirement Systems Survey, which takes an annual snapshot of the financial activity and membership information of the nation's state and local public employee retirement systems. The figures include funds' revenues, expenditures and investment holdings nationally and broken out by state and local government categories.

October 5, 2011
Study: Public, private workers' retirement wealth roughly equal

Thumbnail image for 100831 calculator.JPGA new study by the Center for Retirement Research and Boston College refutes the notion that state and local government workers as a group end up a lot richer than their private sector counterparts.

The study used 1996-2006 data from the University of Michigan's Health and Retirement Study to examine whether state and local government employees are wealthier in their retirement years.

October 3, 2011
Berkeley research: Private sector needs guaranteed pensions

Thumbnail image for Thumbnail image for 100831 calculator.JPGUC Berkeley's Center for Labor Research and Education has released "Meeting California's Retirement Security Challenge," which argues for a return to private-sector defined benefit pensions.

The center said that the work was supported by International Brotherhood of Electrical Workers Local 1245, Service Employees International Union California State Council, and Californians for Retirement Security.

Over on our sister blog, Capitol Alert, Dan Walters has some details. We've also posted the 118-page research compilation below.

September 22, 2011
Commission OKs fines for CalPERS administrators, employees

The Fair Political Practices Commission signed off on fines for more than a dozen current and former CalPERS board members and employees today, closing the books on an investigation that started with 58 people connected to the mammoth pension fund.

110922 FPPC logo.JPGThe action today rubber stamped penalties already agreed to by 16 individuals who violated state law by failing to report meals, alcohol, clothing, sports and entertainment tickets and other gifts received from CalPERS investment partners since 2006.

The fines ranged from $3,600 against portfolio manager Shaun Greenwood to $200 for Sue Kane an adviser to CalPERS' board President Rob Feckner.

September 15, 2011
Column Extra: Memo puts CalPERS' staff disclosure errors in context

With just 400 to 450 words for our weekly State Worker column, most of what we learn each week never sees print. Column Extras give you some of the notes, the quotes and the observations that inform what's published.

Our column in today's Bee looks at the final chapter of the Fair Political Practices Commission's investigation into gift reporting lapses at CalPERS.

Bottom line: The investigation turned up paperwork gaps and 16 people have agreed to pay fines totaling about $20,000 for failing to disclose some freebies they received from companies doing business with CalPERS.

In an unusual move, FPPC Chief of Enforcement Gary Winuk, wrote a memo to commissioners about the investigation in advance of the Sept. 22 hearing set to consider the 16 stipulated settlements reached. He concluded that there were several factors working in CalPERS favor, including the employees' and board members' cooperation, confusion between an in-house reporting mandate and what the law requires and CalPERS' "strict no-gifts rule for staff and ethics training programs that go beyond the requirements of state law."
CalPERS investigation memo by FFPC Enforcement Chief Gary Winuk

September 6, 2011
Private vendor legislation headed for Jerry Brown's desk

110906 contract rip-260.jpgA measure that would require state agencies and departments to terminate illegal private contracts is on its way to Gov. Jerry Brown's desk.

Assembly Bill 740, authored by Assemblyman Bob Blumenfield, D-Woodland Hills, cleared the Senate last Thursday on a 24-14 vote. The Assembly voted 54-17 in May to approve it.

SEIU Local 1000, the American Federation of State, County and Municipal Employees and Professional Engineers in California Government, supported the bill, which aims to strengthen laws against needless private contracting.

August 31, 2011
Legislative Analyst issues summary of labor contract provisions


The Legislative Analyst's Office has issued a webcast and handout summarizing the major provisions of collective bargaining agreeements that lawmakers ratified in fiscal 2010-11.

Think of it as a sort of an analytical cleansing of the contractual palate as the first wave of state workers return to regular hours and pay after 31 months of furloughs and personal leave programs.

View the video above, read the summary below.
Summary of State Collective Bargaining Agreements

August 25, 2011
Audit chronicles state employee abuse and bad management

whistleblower report 2.JPGThe Bureau of State Audits has just released its latest whistleblower report. Some highlights:

* -- An official appointed to a post at the Department of Mental Health claimed he was conducting state business in 2009 when he hobnobbed with celebrities in Southern California, planned fundraising galas and attended events such as golf tournaments, the Golden Globe Awards, a celebrity's funeral and a Julio Iglesias concert (see chart at left). Those activities, he said, allowed him to network with celebrities and enlist their support for Mental Health programs.

The auditor said the activities didn't benefit the state, but it did cost at least $51,244 in salary for the wasted time. The official used a state car, but the bureau couldn't figure out how much of the official's travel wasn't on state business, so it didn't estimate that cost.

August 18, 2011
CalSTRS funding labeled 'high risk' issue confronting California

State Auditor Elaine Howle has placed funding the California State Teachers' Retirement System on a growing list of "high risk" issues facing state government. CalSTRS joins a fiscal and political gallery of tough problems that include the state's budget, managing the state's workforce and maintaining California's infrastructure.

Bee colleague Dale Kasler has more in this report. You can read the audit below. Click here to see a summary of California's high-risk issues and departments.
The California State Auditor's Updated Assessment of High‑Risk Issues the State and Select State Agencies ...

July 21, 2011
Read Controller John Chiang's Department of Corrections audit

As we reported Wednesday, Controller John Chiang's auditors found several problems with how the Department of Corrections and Rehabilitation accounts for some payroll and travel expenses.

Several blog users asked us to post the audit. Here it is.
Audit Report: ADMINISTRATIVE AND INTERNAL ACCOUNTING CONTROLS OVER THE OFFICE REVOLVING FUND

July 20, 2011
Audit hammers Corrections for poor financial controls

Thumbnail image for Thumbnail image for 100831 calculator.JPGA fired state employee received a final lump-sum paycheck for nearly $15,000 -- twice.

An $8,000 salary advance to one state worker went uncollected -- for nearly three years.

Overpayments to employees approaching a half-million dollars were carried on the books for three years or more.

Those are just three examples of what Controller John Chiang this afternoon called, "grossly inadequate" payroll and travel advance tracking discovered through an audit of the California Department of Corrections and Rehabilitation.

June 8, 2011
How are departments following Jerry Brown's cellphone order?

The state has dumped 44 percent of its cellphone inventory, according to this report by The Bee's David Siders, but Gov. Jerry Brown wants to shut off more.

Here's a spreadsheet with a breakdown of cellphone inventory by department. Use the tool bar at the bottom of the embedded document to magnify or reduce the image. Look for more about Brown's war on cellphones in tomorrow's Bee.
California state cellphone inventory by department

April 4, 2011
Analyst publishes review of engineers' and scientists' MOUs

Thumbnail image for 100831 calculator.JPGThe Legislative Analyst's Office has published its review of the tentative agreements reached with California Association of Professional Scientists and with Professional Engineers in California Government.

This review, like those before it, says that the administration has overstated the contract's cost savings for the current fiscal year and that the savings for 2011-12 are about 6 percent, short of the 8 percent to 10 percent in contract savings that Gov. Jerry Brown has said that he needs.

The Department of Personnel Administration's savings estimates don't include a provision that it negotiated later with the California Correctional Peace Officers Association and then applied via a March 30 memo to the five units that reached deals with Brown. The provision gives cash value to personal leave program time.

The analyst published its analysis of the contracts on Friday. That same day, DPA sent the CCPOA contract to the LAO for review. The analyst has 10 days to issue its review of the deal, although we expect it will finish earlier.

Here's the fiscal analysis of the contracts for units 9 and 10:

March 30, 2011
Committee OKs freeze on state pay over $150,000 per year

The Assembly Public Employees, Retirement and Social Security Committee has approved a bill that would freeze the pay of state employees earning more than $150,000 per year.

Assembly Bill 7, authored by Assemblyman Anthony Portantino, D- Pasadena, prohibits the salary increases or bonuses for those higher-end employees until Jan.1, 2014, while they are employed in the same position or job classification.

The measure exempts unionized state employees and anyone "who occupies a classification that is deemed necessary to public safety and security by the Governor through an executive order, or a person whose salary is set by the State Constitution," according to this Assembly committee analysis.

Portantino's bill doesn't affect UC system employees, but, "(a)t a time when the University of California Board of Regents is raising student fees, it is imperative that they show leadership and fiscal responsibility for two years by not granting raises or bonuses for employees that make in excess of $150,000 per year," the bill says.

This is the seventh time Portantino has introduced pay freeze legislation. It now goes to the Assembly Appropriations Committee for another hearing.
Assembly Bill 7, introduced by Assemblyman Anthony Portantino, D-Pasadena

March 24, 2011
Audit: EDD has problems, but don't blame furloughs

110118 Bureau of State Audits seal.jpgThe Bureau of State Audits says that the state Employment Development Department, squeezed by soaring unemployment rates and funding problems, has struggled to meet federal standards to process first-time benefits claims. While a hiring spree and allowing employees to work more overtime eased the crunch to degree, the department is still dealing with technical issues -- phones, software -- that are slowing the public's access to services and has put federal stimulus funding at risk.

Furloughs? Not an issue, auditors said:

We also found that the former governor's furlough orders, which affected program representatives, had minimal impact on the department's performance because the average overtime hours worked by program representatives generally exceeded their average number of leave hours.

A few highlights from the report, which you can read in full by clicking here:

January 10, 2011
State computer finance project faces hurdles, audit update says

110107 FISCAL.JPGTalk about irony.

Work on a massive state computer hardware and software system to improve its financial reporting continues, but no one seems to know for sure how much the project will eventually cost or how to pay for it, according to a new state report.

The uncertain future of the Financial Information System for California project, or FI$Cal, and former Gov. Arnold Schwarzenegger's hiring restrictions translated into high turnover among the project's key staff and hurt efforts to hire qualified replacements.

That further hampered work on the project, which aims to integrate the state government's vast and varied accounting, human resources and procurement systems into one. Currently, the state's financial data networks are a patchwork of dissimilar systems built piecemeal over many years.

State Auditor Elaine Howle's five-page update on the project notes:

November 30, 2010
Report blasts peace officer status for Office of Inspector General staff

101130 oversight and outcomes logo.jpgA new report blasts the "questionable wisdom" of giving guns and cars to lawyers and auditors at the Office of Inspector General and classifying them as peace officers.

We touched on the policy in last week's State Worker column
, noting that the OIG has started relieving some employees of their firearms and going from take-home cars to a motor pool system. But the office isn't changing anyone's peace officer status.

Today's highly critical 53-page report, published by the Senate Office of Oversight and Outcomes, goes into more detail and recommends that the state re-examine whether lawyers and inspectors should get the guns, cars and pensions that police and firefighters receive.

We found that the peace-officer designation stems from the unsupported premise that OIG staff must be prepared to stave off violence and wield weaponry. In reality, such actions seldom if ever arise in these job categories. We also found that OIG uses peace officer perquisites - generous pensions and take-home state cars - to attract and retain its professional team of lawyers and auditors.

Among the report's findings:

November 18, 2010
Audit: State government's bilingual services inadequate

The Bureau of State Audits has released a report that says the state doesn't fully comply with the Dymally-Alatorre Bilingual Services Act. The 1973 law mandates that government agencies serving a "substantial" number of non-English-speaking people must employ enough bilingual workers to "ensure provision of information and services to the public in the language of the non-English-speaking person."

The State Personnel Board needs to do more to enforce the law at the state level, auditors said, and the departments/agencies reviewed needed to do a better job of surveying their foreign language needs and follow through, such as providing translations of written materials.

Auditors in 1999 had many of the same criticisms, the report says.

Local governments surveyed by the BSA fell down on the job, too. Of the 10 locals reviewed, nine conducted required language surveys, but four reported "erroneous results and two could not adequately support their results."

Click here for the summary of the report, scroll or word search the full document below using Scribd's tools, or click the link to download the PDF. Responses from the Personnel Board, Highway Patrol, DMV, Justice and other audited state departments start on page 71.

Dymally-Alatorre Bilingual Services Act Audit

July 15, 2010
Chiang files court papers opposing minimum wage order

100715 chiang schwarzenegger.jpgLitigation over state worker minimum wage has been moving so quickly that we're just now catching up to the news that Controller John Chiang filed a court papers late Tuesday opposing Gov. Arnold Schwarzenegger's minimum wage pay order.

You can download the opposition brief here. It's a continuation of the legal back-and-forth that restarted last week.

The filings include these declarations by former state payroll chief John Harrigan, Chiang, consultant Brent Ehrman and others who say that the state payroll system cannot turn on and turn off minimum wage in a way that complies with Schwarzenegger's order without running afoul of federal law.

The SCO also commissioned public accounting and consulting firm Crowe Horwath to study the payroll system. The firm issued this study, dated July 2, that backs up the minimum wage arguments that the controller has made.

Another report dated July 11 lays out several options to get the SCO in position to execute a minimum wage withholding during a budget impasse. It concludes that the best options would require up to four years and up to $11.7 million to implement. Even those would be "partial" solutions.

PHOTO: Gov. Arnold Schwarzenegger speaks with State Controller John Chiang after he delivered an address to the state Legislature last month. The two are at odds again over pay for state workers. / Hector Amezcua, 2009 Bee file

May 19, 2010
Audit: Deferred Corrections furloughs to cost up to $563 million

The Bureau of State Audits released a Corrections and Rehabilitation Department report yesterday that looked at the costs of health care for "three strikes" inmates. What grabbed our attention was the section titled, "Furloughs Have Created New Liabilities," which starts on page 60 of the 80-page document.

At page 61, the auditor makes these calculations and conclusions (we've added paragraphs and bold type for readability and emphasis):

March 16, 2010
Questionnaire draws criticism, department narrows its scope

Officials at the state Division of Occupational Safety and Health on Monday issued a "clarification" of a controversial employee questionnaire that drew fire from the American Civil Liberties Union and the state engineers' union for what they said was an invasion of employee privacy.

The 2-page form (which you can read by clicking here) went out to employees on Mar. 1 after a yet-to-be-released Bureau of State Audits report "revealed several serious problems with regard to a former Division employee who, among other inappropriate activities, taught and delivered presentations concerning occupational safety and health for pay and other compensation while working for the Division as a full-time employee," according to this Feb. 24 memo to DOSH staff from division Chief Len Welsh.

His boss, Department of Industrial Relations Director John Duncan deputized department Chief Counsel Vanessa Holton and Senior Special Investigator Frank Dickey to conduct an internal DIR investigation into "the inappropriate activities discovered by the BSA."

A week later, Dickey issued the questionnaire, titled "DOSH AUDIT," asking "under penalty of perjury" that professional staff to detail their "teaching, training or presentations in any form" including "those for which you were compensated or not and performed during work hours or not." Division employees had until Monday to fill out the form, sign and return it. You can click here to read the memo from Dickey that accompanied the questions.

Click the following link to read more about the DOSH questionnaire, the questions it raised, the protests that ensued and how the division clarified what investigators want to know.

February 17, 2010
Bill would set e-waste disposal standards for state agencies

Sen. Jenny Oropeza, D-Long Beach, has introduced a measure that would set standards for state agencies to track and dispose of computers, fax machines, TVs and other electronic devices. The California Department of Toxic Substances Control would oversee the program.

Click here to read SB 1052. This link opens Oropeza's press announcement about it, which includes references to a 2008 audit of five state agencies that found problems with how the state handles e-waste disposal. Click here to read the summary of "Electronic Waste: Some State Agencies Have Discarded Their Electronic Waste Improperly, While State and Local Oversight Is Limited."

February 16, 2010
How much does Bureau of State Audits matter?

State Auditor Elaine Howle estimates that unheeded recommendations dating back to 2002 have cost the state $1.4 billion in lost opportunities and waste, according a report released this morning.

In the last two years, more than 20 percent of the recommendations made by the Bureau of State Audits have gone unheeded, the reports says. Auditors in 2008 and 2009 made 281 recommendations to departments and agencies. Of those, 132 have been completely implemented and another 88 partially implemented. The other 61, about 22 percent, haven't been implemented.

Click here to open the summary of "Implementation of State Auditor's Recommendations: Audits Released in January 2008 Through December 2009." The page contains links to the introduction and content links organized by entity or by legislative oversight committee.

February 9, 2010
From the notebook: State vehicle home storage permits

Today, the IRS begins an 18-month-long audit of state government's 2008 vehicle home storage permits. As we reported in this blog post and in today's Bee, the feds want to know if state employees have driven state cars and trucks for personal use without reporting it. If so, they could be liable to pay back taxes for the perk -- and the state could be on the hook, too.

Some pertinent links:

A May 2009 memo to departments from Kathy Hicks, who at the time was chief of the Office of Fleet and Asset Management, requesting annual vehicle home storage permit counts from departments.

A vehicle home storage request/permit form, which includes codes governing state vehicle use. Check out page 2, which lays out the penalties for misusing state cars and trucks:

The department, upon its own initiative, may suspend from state service without pay for a period not exceeding 30 days, any officer or employee of this state exempt from civil service for violating this chapter or the rules and regulations adopted pursuant thereto.

And this:

An employee shall be liable to the State for the actual costs to the State attributable to his/her misuse of a state-owned motor vehicle. Where, however, and to the extent that a superior directs the misuse, the superior and not the subordinate shall be liable.

The IRS newsletter from 2002 that lays out the conditions under which vehicles can be excluded from consideration as taxable income. Scroll down to pages 9 through 11.

To look at business vehicles from the employer's side of the tax code, click here to open Publication 15 "Employer's Tax Guide." Scroll down to "Accountable plan," and read through "non-accountable plan."

And finally, in case that's not enough, read, "Vehicle Provided by Your Employer" "Reimbursements" "Accountable Plans" and "Nonaccountable Plans" in Chapter 6 of Publication 463, "Travel, Entertainment, Gift, and Car Expenses," by clicking this link.


February 8, 2010
IRS to audit state vehicles; Health Care Services' info breach

100208 IRS logo.JPGThe IRS wants a peek at how state employees used state-owned and state-leased vehicles in 2008.

A Jan. 27 memo from Department of General Services Acting Director Ron Diedrich lays out the info that federal auditors want:

The Department of General Services (DGS) has been informed by the State Controller's Office (SCO) that the Internal Revenue Service (IRS) will be conducting an audit regarding tax reporting associated with personal use of state-owned or -leased vehicles. Specifically, the IRS has requested that DGS assist the SCO by obtaining a list of all civil service and exempt employees from each department and agency that had state-owned or -leased vehicles assigned to them and/or home storage permits authorized during calendar year 2008. This list must include: 1) Employee Name; 2) Social Security Number; 3) Date Vehicle or Home Storage Permit was assigned that coincides with the 2008 calendar year.

The SCO is working closely with the Department of Personnel Administration to prepare for an eighteen-month IRS audit. The IRS informed the SCO that it will issue summons for payroll records to review State employee tax reporting associated with the taxable event
triggered by the use of an employer-provided vehicle for personal use,

The Controller's Office confirmed that the IRS is conducting a state vehicle audit. The Diedrich memo says that departments and agencies have until today to fax their lists to the SCO. The IRS starts digging in on Tuesday.

Click here to read the entire Diedrich memo.

Hat tip to blog user T for bringing this to The State Worker's attention.

In an unrelated breaking story on our sister blog, Capitol Alert, Bee colleague Andrew McIntosh has this report:

The Department of Health Care Services said today it may have breached the privacy of 49,352 state residents who receive adult day health care services from the state.

In a terse news release, the department said that letters it mailed a week ago to 49,352 beneficiaries wrongly included those patients' Social Security Number on address labels.

The Department said the incident took place Feb. 1. It was notified of the error on Feb. 4. It started to notify the 49,352 beneficiaries about the problem on Sunday.

Click here for more.

February 2, 2010
Audit: State could lose $93 million in Recovery Act money

The Bureau of State Audits released a report this morning that California is on the verge of losing $93 million in American Recovery and Reinvestment Act money earmarked for residential weatherization. The money is contingent on California proving it has effectively used $93 million already received through July of last year for the same purpose, but "as of December 1, 2009, no homes had been weatherized," auditors found.

The state's Department of Community Services and Development, which is the responsible for using the money, says that a lack of timely guidance at the federal level over things like prevailing wage standards for weatherization workers delayed lining up contractors. And the department takes seriously its obligation to be transparent and to choose contractors wisely -- priorities that have understandably slowed down the process, CSD Director Lloyd Throne said in a response letter attached to the audit.

Click here to download the BSA report. This link will open the audit's fact sheet.

Added at 11:30 a.m.: Click here to read California Recovery Task Force Director Herb K. Schultz's response to the audit.

January 14, 2010
State auditor reports on recommendations left undone

Thumbnail image for Bureau of State Audits seal.jpgThe Bureau of State Audits has released a report on recommendations it made to departments at least one year ago that haven't been fully implemented. From the bureau's fact sheet on the report:

From January 2005 through October 2008, the bureau issued 69 reports on audits requested by the Joint Legislative Audit Committee or required in legislation. Based on the most recent responses from state agencies, the bureau reports the following:

• There were 131 recommendations made to 29 state agencies that had been outstanding for at least one year but were not fully implemented. Of the 131 recommendations, 90 remain not fully implemented.

• Although not all recommendations have been fully implemented, many agencies have reported progress. For example, the Department of Health Care Services reported that, as a result of the bureau's findings and recommendations, it has begun recouping payments it incorrectly made to providers. The department reported that it has thus far recovered $5.3 million.

• In many cases, agencies stated that they expect to fully implement outstanding recommendations by the end of 2010. In other instances, agencies reported that they do not expect to fully implement recommendations for several years. For example, one agency stated that it will not fully implement a specific recommendation until 2015. In a few cases, agencies indicated they will not implement certain recommendations.

Click here to download the BSA report.

January 7, 2010
FI$Cal awards $1.3 million to document financial systems

The managers overseeing the massive FI$Cal project to modernize California's ailing and antiquated financial systems have awarded a $1.3 million contract as a small step forward on the billion-dollar effort.

News about the contract was tucked inside the latest update on FI$Cal on the project by  Elaine Howle, the state auditor.  To read Howle's latest project monitoring letter, click here.

The Financial Information System for California (FI$Cal) project office awarded the contract to Cambria Solutions Inc. in December.

Between now and the early fall, Cambria's job will be "documenting the current business processes of 44 current state entities," says Howle's letter to the governor and legislators. 

In regular English, that means Cambria will contact each of the 44 assigned state organizations and write up an inventory of each entity's computer financial management methods, listing the applications (software) and systems (hardware) that support the work.

No word on why a consultant was needed to do that seemingly simple job.

Also included in Howle's report was a list of state departments and agencies whose workers will be among the first wave to implement FI$Cal when it's ready to launch.

Among them: staffers at the Board of Equalization and the Department of Justice.

November 24, 2009
Audit: Board paid for business-class airfare to France, engaged in no-bid contracting

The Bureau of State Audits has released a new report on the Board of Pilot Commissioners for the Bays of San Francisco, San Pablo and Suisun, which licenses and regulates the pilots who guide ships in those bays and ports in West Sacramento and Stockton.

The 68-page document, which you can read by clicking here, outlines nine areas of concern, including:

  • The board paid for business-class airfare for pilots attending training in France, which may constitute a misuse of public funds.
  • The board lacked a procedure, required in state law, for access to confidential information, and it released information to the public that included a pilot's home address and Social Security number.
  • The board did not consistently adhere to state law when licensing pilots. In one case, it licensed a pilot 28 days before he received a required physical examination; he piloted vessels 18 times during this period.
  • The board renewed some pilots' licenses even though the pilots had received physical examinations from physicians the board had not appointed and, in one case, renewed a license for a pilot who had not had a physical examination that year.
  • Of the 24 investigations we reviewed, 17 went beyond the 90-day statutory deadline for completion.
  • The board did not investigate reports of suspected safety standard violations of pilot boarding equipment, as required by law.
  • The board failed to ensure that all pilots completed required training within specified time frames.
  • The board did not ensure that some of its members and investigators filed required statements of economic interests.
  • The board did not approve several changes to the rates pilots charge for their services, as required by law.

Click the following link to read excerpts of the auditor's report about travel to France and the board's no-bid arrangement for physical exams for pilots.

October 27, 2009
State audit criticizes Veterans Affairs department

091027 BSA seal.jpgState Auditor Elaine Howle says that the California's Department of Veterans Affairs isn't delivering services like it should to the 2.1 million veterans living here. The Bureau of State Audits report outlines these problems:

  • The department sees its role as providing few direct services to address issues California's veterans face, such as homelessness and mental illness. Instead, it relies on other entities to provide such services and its Veterans Services division (Veterans Services) is responsible for collaborating with these different entities.
  • The department has only recently shifted its attention from its primary focus on veterans homes, deciding that Veterans Services should take a more active role in informing veterans about available benefits and coordinating with other entities.
  • One of the department's primary goals for Veterans Services is to increase veterans' participation in federal disability compensation and pension benefits (C&P benefits). However, its ability to meet this goal is hampered by various barriers, including veterans' lack of awareness of the benefits, the complexity of the claims process, and delays at the federal level in processing these claims.
  • Both Veterans Services and the County Veterans Service Officer programs (CVSOs) assist veterans to obtain C&P benefits. However, better coordination with the CVSOs and the use of additional data may enhance Veterans Services' ability to increase veterans' participation in these benefits.
  • The department did not formally assess veterans' needs or include key stakeholders such as the CVSOs in its strategic planning process, nor did it effectively measure its progress toward meeting the goals and objectives identified in its strategic plan.
  • As of March 2009 the CalVet Home Loan program served 12,500 veterans. However, the program is generally not designed to serve homeless veterans or veterans in need of multifamily or transitional housing.

Howle suggests a number of fixes for those problems that are outlined in this executive summary. You can click here to download the 92-PDF-page audit.

Click the link below to read the department's response and link to a 2-year-old report that highlights similar DVA problems:.

October 20, 2009
Audit: Mental Health and Developmental Service employees rack up OT

The Bureau of State Audits has released a report that employees at five entities -- not including the Department of Corrections and Rehabilitation -- accounted for at least $1.3 billion of the more than $2.1 billion in overtime pay from 2003-04 to 2007-08.

And of those, the auditors found, a good chunk of that OT went to relatively few workers in a couple of job classes at the departments of Mental Health and Developmental Services. From the report:

For instance, in fiscal year 2007-08, at Mental Health's Napa State Hospital (Napa), 19, or 4 percent, of the 489 nurses in the registered nurse- safety classification averaged $78,000 in regular pay and $99,000 in overtime compensation.

Staffing demands accounted for the reason for the extreme overtime at Napa State Hospital and Sonoma Developmental Center, two facilities auditors examined, and raise concerns that employees working so many hours in safety and public health positions might pose a danger to their own or to their patients' well-being.

The other departments that logged heavy OT: the Highway Patrol, Forestry and Fire Protection and Veterans Affairs.

The report contains this caveat:

State law was changed in February 2009 to no longer allow leave to be counted in computing overtime for the two job classifications we tested. However, this same state law indicates that it may be superceded by agreements ratified subsequent to the law's effective date that once again could contain provisions that allow employees' leave time to be counted as time worked in computing overtime.

Click here to read a summary of the audit. Clicking here will download the full report. And this link opens an audit fact sheet.

September 10, 2009
Audit: Department contracts riddled with flaws

The Bureau of State Audits has released a report on vendor contracts at the departments of Health Care Services and Public Health. Here are highlights from the audit:

  • Over the last five years, the State Personnel Board (board) has disapproved 17 of 23 IT contracts challenged by a union.
  • Many of the board's decisions were moot because the contracts had already expired before the board rendered its decisions.
  • Of the six IT contracts still active at the time of the board's decisions, only three were terminated because of board disapprovals.
  • Health Care Services did not comply with state policy regarding the use of blanket positions and was disingenuous with budgetary oversight entities.
  • Neither Health Care Services nor Public Health has a complete database that allows it to identify active IT contracts and purchase orders.
  • The departments complied with many, but not all, state procurement requirements.
  • The departments did not obtain the requisite financial interest statements from half the sampled employees responsible for evaluating contract bids and offers.
  • Click here for the audit summary, which includes recommendations to increase the role of the State Personnel Board and unions in contracting. View the complete report, all 89 PDF pages, by clicking here.

    September 10, 2009
    Column extra: Correctional officer overtime

    With just 400 to 450 words for our Thursday State Worker column, much of what we learn in the ramp up to writing it never sees print. Column Extras give you some of the notes, the quotes and the observations that don't make the cut.

    Today we looked a bit at state correctional officer overtime through the lens of Tuesday's CDCR report by the Bureau of State Audits. (We blogged about the report when it was released. Click here for that report.)

    The column in today's fiber and cyber Bee includes overtime figures for this calendar year that weren't part of the audit. As we noted, the numbers are down significantly from last year.

    You can click this link to see the year-over-year January through June numbers we received from Corrections in response to our request for overtime figures. Disregard the last paragraph leading into the 2008 numbers: Department Deputy Director for Fiscal Services Dave Lewis told us in an interview on Wednesday that the drop in OT this year isn't a result of furloughs. Instead, as the column mentions, it's from policy changes that exclude leave time from counting toward the threshold for overtime and an influx of new hires through last year.

    September 9, 2009
    State releases Corrections audit

    Thumbnail image for Bureau of State Audits seal.jpgThe Bureau of State Audits has issued a report on the Department of Corrections and Rehabilitation. Some highlights:

    While Corrections' expenditures have increased by almost 32 percent in the last three years, the inmate population has decreased by 1 percent during the same period.
    Corrections' ability to determine the influence that factors such as overcrowding, vacant positions, escalating overtime costs, and aging inmates have on the cost of operations is limited because of a lack of information.

    The cost of housing an inmate out of state in fiscal year 2007-08 was less per inmate than the amount Corrections spent to house inmates in some of its institutions.
    Overtime is so prevalent that of the almost 28,000 correctional officers paid in fiscal year 2007-08, more than 8,400 earned pay in excess of the top pay rate for officers two ranks above a correctional officer.

    Over the next 14 years, the difference between providing new correctional officers with enhanced retirement benefits as opposed to the retirement benefits many other state workers receive, will cost the State an additional $1 billion.

    Nearly 25 percent of the inmate population is incarcerated under the three strikes law. We estimated that the increase in sentence length due to the three strikes law will cost the State an additional $19.2 billion over the duration of the incarceration of this population.

    Although Corrections' budget for academic and vocational programs totaled more than $208 million for fiscal year 2008-09, it is unable to assess the success of its programs.
    California Prison Health Care Services' ability to transition to using telemedicine is impeded by a manual scheduling system and limited technology.

    And here's a summary of CDCR's response:Thumbnail image for CDCR.jpg

    Corrections believes that the report does not completely capture the complexity of many of the issues it addresses. For example, Corrections asserts that the source of the difficulty in determining the number of custody officers associated with a given group of inmates is that inmates have multiple characteristics and thus may be a part of more than one group. In addition, it believes that some of the topics discussed in the report are not solely within its purview to address and that while it agrees with our recommendation that it should seek better data to more effectively manage, it questions how this will allow it to reduce certain types of costs. Finally, Corrections believes that it has made progress in several of the areas discussed in the report, and will address the specific recommendations in future corrective action plans.

    Click here to download the summary. Access all 112 PDF pages by clicking this link.