State audits find prison, hospital payroll abuses

State auditors found payroll abuses at California State Prison-Sacramento near Folsom, shown here, and at the Patton state psychiatric hospital.
(California Department of Corrections)

Audits of a state prison and psychiatric hospital detail hundreds of thousands of dollars in improper payments and financial problems, including outright payroll fraud, and medical staff and guards receiving questionable bonuses and holiday pay, according to reports released Wednesday.

The financial reviews at California’s Sacramento prison near Folsom and the Patton State Hospital in San Bernardino are among 14 state agency audits required this year in the wake of payroll abuses uncovered two years ago at California’s parks department.

The reviews, conducted by the state Controller, found rates of unauthorized or improper pay in as many as 88% of the relatively small number of files examined, amounting to excess payments to state workers of nearly $230,000.

Auditors have called on the state agencies to conduct full internal reviews of their payroll systems for the last three years.


There was no immediate response from the Department of State Hospitals, but a spokesman said the corrections department is conducting such a review and has issued new requirements to document who signs off on payroll decisions.

At the prison, auditors said medical and mental health workers who needed extra cash were given improper checks for unused leave and vacation days, in the guise of overtime. Auditors also said there was inadequate documentation for more than 75% of the extra pay given to corrections officers to supervise inmate workers. Prison workers received holiday pay in months when there were no holidays, and numerous other unwarranted bonus payments, according to the audits.

State auditors reported lapses in financial controls at the Department of State Hospitals’ Patton psychiatric facility. Auditors noted the hospital disclosed $900,000 in alleged payroll fraud from 2007 to 2011 by five employees who claimed false work and vacation time. The auditors described lack of adequate oversight and instances of employees signing daily attendance logs for others.

In a written rebuttal, State Hospitals chief auditor Cindy Woolston objected to inclusion of the fraud cases in the audit because they were uncovered by “diligent Patton staff.” Woolston also stated that auditors in some cases examined too few files to make broad conclusions, and challenged findings that some employees were overpaid. She said some of the problems were caused by efforts to fill empty posts during critical staffing shortages.