SACRAMENTO — State finance officials on Friday hope to complete a much-anticipated review of hundreds of special funds that was started after the California parks department underreported $53.8 million in two accounts.
Gov. Jerry Brown's administration is reconciling the amounts in all the state's 560 special funds, which receive money directly from users, to make sure the balances match what has been reported to the finance department and the state controller. Finance spokesman H.D. Palmer said Wednesday the review is expected to be completed by the end of the week.
"We're going to have an extremely thorough explanation of what we found and what the differences are of significance and the reasons for those differences," he said.
Meanwhile, the attorney general's office is investigating the Department of Parks and Recreation to determine why agency officials deliberately underreported the money in two special funds.
U-T San Diego reported in its online edition Wednesday that finance officials were alerted to discrepancies in state park funds 15 years ago. The controller's office pointed out "significant variations in what was being reported by the parks departments as far back as 1997-98," Jacob Roper, a spokesman for the controller's office, told the newspaper by email.
Roper said the controller's office found discrepancies in other departments, as well. He did not immediately return a request for comment from The Associated Press on Wednesday.
The alerts to the finance department stopped in 2003, when Democrat Steve Westly was in charge of the controller's office. A telephone message left for Westly was not returned.
Palmer told U-T San Diego that the current finance staff does not know how the discrepancy reports from the controller were handled nearly a decade ago.
"In terms of looking at special funds, in terms of a long look back, we're not looking through the rearview mirror," Palmer told the U-T. "We're looking through the windshield in working with the controller's office to reconcile these types of fund balance questions."
California's $91.3 billion general fund budget is generated largely through income, sales and corporate taxes. It spends another $39.4 billion through special funds, which receive money from taxes and fees for such things as recycling beverage containers, registering vehicles and renewing driver's licenses.
While the parks scandal focused on allegations that top employees purposely underreported the amount in two special funds, it also raised questions about basic government accounting. The amount of money in special funds that is used by the finance department to fashion the annual state budget can differ considerably from the amount of money the controller's office says is in the funds.
Palmer said different bookkeeping procedures and different times when an expense is logged account for some of the discrepancies between the balances.
For example, the two sets of balances for the state's Mental Health Services Fund, which is funded by a tax on millionaires to assist the mentally ill, are off by $570 million. However, $470 million of that was the result of the finance department subtracting money already allocated to local governments, while the controller logged the check at a later date.