State Education Official Misused Public Funds, Auditor Reports

An Education Department manager used thousands of dollars in government money to cover vacation trips to the Caribbean and other personal expenses, and improperly diverted business to a close friend, the state auditor reported Monday.

At least $65,000 in direct payments were questioned, although auditors said the estimate is inexact because of missing records.

“Payments to cash, the department manager, hotels, airlines etc., were frequently unsupported by any documents showing the reason for the expenditure. As a result, the dollar amounts of our findings, and possibly the scope of the investigation, were limited by the lack of documentation,” the audit said.

The unidentified supervisor, who was responsible for monitoring contracts, retired Aug. 6 under fire and is expected to be the target of a criminal prosecution, the Department of Education said.

Employees allegedly linked to his activities were disciplined and the chain of command dealing with his specialty--vocational service groups--was replaced.

The audit disclosed that the employees paid $37,480 for nonexistent services, and spent more than $76,000 without obtaining competitive bids. One employee allegedly misappropriated $1,800 in public funds, according to the study.

State Auditor Kurt Sjoberg, in a letter to the state’s political leadership accompanying the audit, described the financial irregularities as “misappropriation of public funds, false claims and gross mismanagement.” He said the workers engaged in “illegal activities,” and he reported the audit’s findings to state and federal tax officials, as well as the Department of Justice and the Fair Political Practices Commission.

His report noted that less than half the questioned expenditures were documented.

The audit focused on the supervisor’s activities in connection with the California Association of Vocational Industrial Clubs of America, which promotes student training and leadership.

The state provides some funding for the group--which is part of a national organization based near Washington, D.C.,--and helps manage it out of the state Education Department. The program also receives money from the federal government and other sources, including charities.

During the three-year period between 1992 and 1995, the group received a total of $234,097, about two-thirds of it in the form of government reimbursements for various services. About half the funds came from a local community college district.