Controller Hopeful Cites McColl, Calls for More Staff

Noting that contractors at the McColl toxic waste dump in Fullerton had double-billed or overbilled the state for their work, state Sen. John Garamendi (D-Sacramento) on Wednesday proposed adding 30 auditors to the state controller’s office to verify all state claims.

Garamendi, a Democratic candidate for controller, said that if $684,000 is added to the controller’s budget in the 1986-87 fiscal year, the additional audits probably could save the state millions of dollars in questionable claims.

Garamendi held his press conference beside a chain-link fence just outside the dump, a hilly area filled with tar-like refinery wastes including arsenic, sulfuric acid and benzene.

Questionable Costs

An auditor general’s report in March on the McColl cleanup said that at least $1.4 million of the $7.4 million that the state has paid contractors so far has been for questionable or unreasonable costs. According to the report, the Department of Health Services “did not regularly monitor the work of its contractors, eliminate duplicate payments or verify that contractors perform the work they were required to do . . . . “

Garamendi’s proposal, which he said he will present to the Senate Budget Committee next week, would add 30 people to the controller’s 58-man team of auditors now performing “pre-claim audits.”

The controller has the statutory authority to perform such audits now but lacks the staff to investigate more than a sample of the 298,000 claim schedules paid during the previous fiscal year, Garamendi said.

No Veto Power

In the 1984-85 period, the pre-claim audit unit sampled and disallowed about $10.8 million in claims, he said. During that year, the state paid claims of $83.2 billion.

The controller, while lacking the authority to veto a contract, can refuse to pay it, Garamendi added.

Garamendi said that he wanted additional auditors to monitor all state contracts but focused on the state Department of Health Services handling of the McColl contracts because they exemplified “gross mismanagement.”

He cited a section of the auditor general’s report which said that Canonie Engineers Inc. of Chesterton, Ind., had been paid for work at the dump site before the work was completed. The report also said that the firm was reimbursed for equipment it never bought and was paid twice for some work.

No Procedures

“The point we’re making is that the state government didn’t know and didn’t have the procedures in place to protect the taxpayers and to see that the job was done properly,” Garamendi declared.

“It doesn’t have to be that way. The state can set up procedures. The controller ought to be doing that . . . ahead of the problem and (contractors) certainly never (should be) paid when there’s not adequate documentation, as was the case (at McColl).”

Garamendi pointed out that similar proposals to expand the staff and autonomy of the controller’s office had been made without success during the gubernatorial administrations of Ronald Reagan, Edmund G. Brown Jr. and George Deukmejian.

But he stressed that the move would be well worth any costs. “It’s not a new layer of bureaucracy,” Garamendi said. State agencies “are under heavy pressure to perform work and they often overlook the proper procedures and controls.”