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Gov. Jerry Brown on Thursday asked state prosecutors to investigate allegations that employees of the state Board of Equalization misused state resources.
He also suspended the board’s ability to approve new contracts, hires and promotions, requiring those actions to be approved by other agencies including the Department of General Services.
In a letter to board members, Brown also said he would ask legislative leaders to come up with new laws to address “serious problems” with the agency that were identified in a recent state Department of Finance audit. The audit uncovered mismanagement in the agency, which is responsible for collecting $60 billion in taxes annually.
“The report uncovered issues of inappropriate interference by the board that undermines its ability to carry out its core mission: the collection and administration of sales and use taxes and other revenues,” Brown wrote. “Other serious personnel allegations involving the board were uncovered during finance’s review that warrant immediate investigation.”
The Department of Finance review found tax board employees assigned to revenue-generating jobs were reassigned temporarily to help elected board members with public outreach events to boost the board members’ standing in their districts.
For example, the board held a conference on empowering women, and used 113 revenue-generating employees, including highly paid tax auditors, to help with crowd control and “parking lot duty.”
There have also been allegations of rampant nepotism at the agency.
“Californians count on the Board for the fair and efficient administration of sales and use tax revenue and other revenues to fund key services,” Brown concluded in his letter. “The Board exists to serve the public and the report highlights the extent to which it has fallen sort.”
Board member Fiona Ma, who had requested investigations into the allegations, said she welcomed the governor’s action.
“I'm happy Gov. Brown responded to my call for serious reform at the BOE so that we can restore the public's trust in this agency,” Ma said. “Based on my two years here, I have found and come to the conclusion that we must put in place real checks and balances, accountability and a willingness to be transparent.”