Controller Orders Audits of Prisons, Education Office : Finances: Kathleen Connell also announces that a review of Medi-Cal is under way. She says the probes are needed to identify potential savings.

State Controller Kathleen Connell on Monday ordered top-to-bottom audits of the state’s prison system and the Department of Education.

She also announced that a full-scale examination of the Medi-Cal program already is under way.

She said the probes were necessary to “eliminate any hint of conflict of interest and to maximize savings.”

“These are the most significant portions of the state budget, and they are the fastest growing,” Connell said. “If we don’t get control over them, we will have no ability to fund the other, discretionary parts of the budget. These programs have never been aggressively audited.”

Connell, a Democrat not shy about poking into the Republican Wilson Administration, said potentially millions of dollars were being wasted by the three agencies, which account for more than half of state spending. She said she invoked her constitutional authority to conduct the audits because “California is facing another year of budget battles while millions of dollars in potential savings go unidentified.”

“I don’t think that saving money is a partisan issue,” she said. She also said she would reintroduce legislation next year calling for performance evaluations of all state operations. Similar legislation was opposed by the Administration and died during the last legislative session.

Medi-Cal is operated by the Department of Health Services, part of Gov. Pete Wilson’s Administration. The Department of Corrections, which operates two dozen prisons, also is headed by a Wilson appointee.

Wilson’s press office did not comment on Connell’s action. The Department of Finance, which writes the governor’s annual state budget, said performance audits of state operations already have been ordered.

“The performance audit stuff already has happened. The performance review unit already has been set up. It met last week on Corrections,” said Finance Department spokesman H. D. Palmer.

Connell, a political unknown until she was elected controller last year, is considered a likely contender for governor in 1998. Her probable Democratic foe is Lt. Gov. Gray Davis, who served two terms as state controller. She denied that her audit orders were motivated by politics.