California budget audit finds no other hidden funds

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Gov. Jerry Brown’s administration announced Friday that a sweeping audit of California’s hundreds of dedicated funds did not find any accounting problems like those that led to scandal at the parks department.

‘There are not other hidden asset-type circumstances,’ said Ana Matosantos, the governor’s finance director.


The Department of Finance reported $415 million in fund discrepancies, blamed mostly on accounting methods, timing of when bills are counted, and ‘human error.’ They equate to nearly 5% of the money in special funds.

Matosantos said the audit will help the state improve its accounting practices.

The Brown administration launched the audit after it was revealed that the state Department of Parks and Recreation had a $54-million hidden surplus. The department’s director resigned and park supporters were outraged because they had been raising money to keep parks open. The state attorney general’s office has also begun a separate investigation.

The revelation also exposed weaknesses in how the state accounts for more than 500 “special” funds, which make up almost 28% of the state’s total $142.4-billion budget.

State officials said the parks department had been sending accurate financial data to the controller’s office, which manages cash flow, and inaccurate information to the governor’s Department of Finance, which plans the state budget. Those two ledgers are not regularly compared for any of the state’s special funds, which observers say makes it harder to spot accounting discrepancies.

Although special funds are a somewhat obscure part of the state budget, they’ve also become a political issue. Republicans have seized on the revelation as evidence that the state can’t manage its money and voters should reject the governor’s campaign for tax increases.

Special funds have played an increasing role in the state’s budget crisis. Although they’re created to fund specific programs with taxes and fees, lawmakers have borrowed $4.3 billion from special funds to pay day-to-day bills, a nearly sixfold increase from 2008.


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-- Chris Megerian in Sacramento