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Shell Game Shakes Down Taxpayers

Monday June 9th, 2014   •   Posted by K. Lloyd Billingsley at 7:00am PDT   •  

CDFA_200We have noted that California’s Parks Department protected its budget by hiding more than $50 million in a secret fund, at a time when it was shutting down parks and giving government employees lucrative vacation payouts. Now, in “California State Departments Play Shell Game,” Jon Ortiz and Jim Miller of the Sacramento Bee have charted another way bureaucrats protect their budgets and abuse taxpayers.

According to state law, if a state government position goes unfilled for six months the department loses the money. To keep the funds flowing, write Ortiz and Miller, the departments “simply altered the identifying numbers to make it appear that a job was filled with a transferred employee, thus avoiding a cut to their budgets.” They cite the case of Lindsay Rains, an environmental scientist at the Department of Food and Agriculture. She held that job steadily over many years, but in one fiscal year “she transferred 14 times through nine positions in one fiscal year. Her title never changed, but the serial numbers the state uses to identify her position changed repeatedly.” Department of General Services boss Ricardo Martinez was transferred 11 times in 18 months. Daniel Kieselhorst of the State Department of Hospitals shuttled between two positions 15 times in three years.

And so on, enabling the departments to keep the money coming. Bureaucrats can use the unspent salary money to cover operating costs such as “leave balances, office rent, new equipment or employee raises.” The last one is very important for government employees.

The State Department of Finance knows about the practice, but nobody seems to be doing anything about it. The state attorney general is not investigating, and as Ortiz and Miller note, “There’s no watchdog” to determine whether state departments “are manufacturing personnel moves to keep vacant slots and the tax dollars budgeted for them.” They estimate that at least $80 million is in play here. All of that comes from taxpayers, who are getting a raw deal.

As the shell game and hidden money scandal confirm, California’s bureaucrats’ bosses have no incentive to prevent waste, fraud and abuse. Indeed, bureaucrats can indulge waste, fraud and abuse with impunity. That’s why government remains off limits to reform.

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June 2014