Lawmakers knew something was wrong at the Office of Criminal Justice Planning (OCJP) two years ago when they couldn't get information from the agency to prepare the state budget. After abolishing the office, auditors were called in to review the books. What they found was criminal.
Cash receipts, payments, and accounts receivable weren't recorded. Funds intended for some programs were spent on others. Files the agency did keep were incomplete and filled with errors.
In fact, accounting records were in such poor shape that forensic accountants had to reconstruct the agency's files before auditors could do their job. To complete the review, it took 46 employees 16,000 hours and cost over $1 million.
In my 30 years experience, this is the worst thing I've ever seen," said Samuel Hull, chief of state audits. When we got into there and started looking at things ... the problems just kept ballooning.
A copy of the report has been forwarded to the attorney general's office, and a state legislator said prosecutors would investigate whether fraud was committed.
From July 1999 to December 2003, the OCJP received $425 million in federal grant money to be dispersed among local governments for crime prevention and community programs that assist victims of domestic violence, child abuse, rape, and homicide. Because of the agency's shoddy accounting practices, however, it's unknown how much of the money was actually distributed.
About $10 million in funds have been frozen pending the report, and millions more could be lost permanently. The federal departments of Justice and Health and Human Services, which issued the grants, could penalize the state, seek reimbursement, or deny future funding.
In a supposedly unrelated case, the OCJP's former director has admitted illegally using his position in the agency to help Sun Law Energy Corporation beat out a rival in its bid to build a Stockton power plant. In January 2005, N. Allen Sawyer, 36, pleaded guilty to mail fraud in a Sacramento court. Prison time is expected.
Source: officer.com, Associated Press
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