Hotline nets fraud, waste in state offices

SACRAMENTO -- Tipped off by whistle-blowers, state investigators have uncovered a raft of waste and misconduct in recent months, including employees who ran private businesses on the taxpayers’ dime and a college official who viewed 1,400 pornography images on state-owned computers.

Auditors uncovered the misdeeds thanks to a hotline on which state employees can report improper use of public resources without fear of retribution.

The whistle-blower office receives about 4,000 calls and letters each year, many leading to reforms of wasteful practices and, in some cases, disciplinary action and criminal prosecution, according to State Auditor Elaine M. Howle, who reports the findings twice each year.

“We think it’s very valuable,” Howle said in an interivew. “A lot of departments use these as educational tools with their employees, so it serves as a deterrent effect.”

Her latest report, released Thursday, says that an official at Cal Poly Pomona used two university computers to view Internet sites containing pornographic material, in violation of state law.

The employee resigned after admitting to auditors that he had misused the computers, Howle said in an interview. Authorities found that the employee viewed approximately 1,400 pornographic images on two university computers during several weeks in 2006 and from February to May 2007.

Another state employee, at the Employment Development Department, was found to have used state time and resources to conduct her private catering business, in violation of state law. She used her state computer and e-mail account to promote her personal business, auditors said.

The employee did not have a valid health permit, thereby also violating state food-preparation laws. She conducted her personal business with the knowledge and assistance of her supervisor and directed a co-worker to assist her, the audit said. The employee received a written reprimand, Howle said.

The report also noted:

* The California Public Employees’ Retirement System hired a woman even though she was working at the CalPERS building as an employee for a private vendor that provided services to CalPERS. This violated a state law that prohibits state employees from engaging in any employment or activity from which the employee receives compensation through a contract. The woman quit her contracting job.

* Two teachers at the California School for the Deaf in Riverside did not possess valid credentials or waivers for the academic year 2005-06, in violation of state law. One teacher resigned when told to renew her teaching credential, the audit said. The second teacher was dismissed from his position after failing to meet the requirements for continued employment.

* An employee of the Department of Health Services improperly used his state computer to visit modeling websites and Internet-based e-mail sites during his regular weekday work schedule, including sites where his spouse had profiles posted. The report did not state whether any disciplinary action was taken.

* The CHP spent $881,565 to buy 51 vans more than two years ago and has yet to use the vehicles for their intended purposes. That “further resulted in lost interest earnings to the state of $90,385,” the report said. The CHP acknowledged it had erred in not putting the vans into service soon after they were purchased and said the delay stemmed from some CHP employees’ proposal to redesign the way equipment was installed in and used by the vans.

The auditor’s findings were particularly painful for state officials, coming just after the Legislature made major cuts in transportation and mental health programs to erase a deficit in the state’s $140-billion budget.

“It’s just frustrating because you try so hard to fund what is necessary, and then you just see money wasted like this,” said Sen. Denise Moreno Ducheny (D-San Diego), chairwoman of the state Senate’s budget committee.

Gov. Arnold Schwarzenegger was “disappointed” to hear of the findings, according to administration spokesman Aaron McLear.

The whistle-blower hotline number is (800) 952-5665.

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patrick.mcgreevy@latimes.com