SAN FRANCISCO — Audits of a California prison and psychiatric hospital uncovered payroll abuses that led to hundreds of thousands of dollars in improper payments, according to the State Controller's Office.
The audits of California State Prison — Sacramento and the California Department of State Hospitals — Patton covered a three-year period from July 2010 through June 2013.
"Both audits found payroll management practices at the two agencies to lack fundamental internal controls which resulted in improper employee compensation," the controller's office announced on Aug. 20.
The audit of DSH-Patton, a 1,287-bed inpatient hospital run by the California Department of State Hospitals, found that it had poor oversight of its payroll transactions unit, which led to two fraud cases previously uncovered that resulted in more than $900,000 in false payments.
DSH-Patton, in San Bernardino, offers full-time psychiatric care for the severely mentally ill either ordered there by a criminal court or civilly committed.
The hospital also misstated the leave balances for 25 of the 98 employees reviewed, resulting in a nearly $30,000 overstatement, the audit found.
The Department of State Hospitals said in response that it did not agree with all of the findings of the audit, but it would work with appropriate staff at the facility to identify the causes of the "internal control deficiencies" and implement additional controls as applicable.
The audit of CSP-Sacramento, a male-only state prison in Folsom, Calif., found that it inappropriately bought back over $40,000 in vacation and personal leave credits from 10 employees. This violates collective bargaining agreements and state law, according to the controller's office.
The agency also made nearly $65,000 of improper payments for institutional worker supervision pay to employees who were not qualified to receive the pay under state policy.
The audit found another $20,000 of improper payments made by the prison, which included payments for uniform allowance and misstated holiday credits.
CSP-Sacramento said it is working on setting up accounts receivables where appropriate for the audit's findings.
"The 2012 Department of Parks and Recreation scandal demonstrated how lax oversight in managing payroll invites malfeasance at the expense of taxpayers," State Controller John Chiang said in a statement. "Regrettably, we've identified two additional state agencies that have related internal control problems causing employees to be overpaid."
Multiple investigations of the state's Parks and Recreation Department in 2012 exposed gross mismanagement and poor oversight allowing, among other things, an unlawful vacation buy-back program and miscalculations of various forms of employee compensation.
Following the investigations, Chiang worked with Gov. Jerry Brown and the legislature to resurrect a defunct program from the 1980s aimed at auditing state agencies to protect the payroll from fraud and abuse.
These two audits are the first of 14 payroll audits that will be completed by the controller's office this year.
