A formal audit says state officials broke the law by contracting out a program to help prevent child injuries, and allowed the same contractor to spend more than $2 million on administrative costs.
The report from state Auditor Elaine Howle raises questions about the oversight of two special funds earmarked for efforts to stem childhood injuries and abuse. Money for the programs comes from specialized license plates known as 'Kids Plates,' birth certificate, fees, and the state budget.
The most notable finding is that state officials allowed a contractor -- the San Diego State University Research Foundation -- to oversee the license plate program for 12 years "without an approved contract, in violation of state law," says the audit. State officials finally raised a red flag about the relationship in 2010.
The foundation spent some 40 percent of the money in a four year period, almost $2.1 million, on salaries and other administrative costs -- even though, as the audit reports, legislators intended for the funds to only pay for actual childhood injury prevention.
The state law violation apparently stems from the use of an outside group -- the SDSU foundation -- for work that could otherwise be performed by existing state employees.
That problem was apparently caught in 2010, and the state paid a $322,000 claim to the foundation for work performed that year -- even as the foundation couldn't legally award any grants.
"In other words," says the audit, "the state ended up paying more than $300,000 in administrative costs without awarding any funds that might have helped to prevent unintentional childhood injuries."
The audit also seems to lay some blame at the feet of the Legislature. For example, when state officials reclaimed oversight from the SDSU of the childhood injury grants, legislators failed to give them enough money to administer the program. That led to only a fraction of grants being awarded since 2010.
Auditors also detail other problems with the management of these special funds, including a grantee that the report says overcharged the state Department of Social Services by $10,189.
None of the state agencies disputed the audit's findings in the report made to Gov. Jerry Brown and the Legislature Tuesday morning.
Update 5:45 p.m. Anita Gore, a spokesperson for the California Department of Public Health, says officials recognize "errors in administration of the program" in previous years.
"The current administration at CDPH," says Gore in an email, "is working to ensure that the funds are used as they are intended and is utilizing the [audit] report findings to prompt review of its contract management procedures."