Lies, sloppiness alleged at Capitol budget hearing

5:20 PM, Aug 9, 2012   |    comments
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It often feels good to vent your anger and frustrations, and so it shouldn't be surprising that assemblymembers wanted to do the same Thursday afternoon on the state parks saga that's fueled questions about all kinds of government accounting practices.

"They lied to all of us," said Assembly Budget chair Bob Blumenfield, D-Van Nuys, about officials accused of hiding some $54 million in state parks accounts.

And the venting only intensified from there.

"I think this has made a mess for all of us, and it's an embarrassment for the state of California," said Assemblywoman Diane Harkey, R-Dana Point.

The hearing seemed to teeter between the parks fiasco and the larger questions that drama has raised about oversight and accounting of the 560 special budget funds inside state government -- accounts generally for specific programs and paid for with specific fees or taxes.

As the independent Legislative Analyst's Office reported, the state's accounting requirements haven't been updated since 1984.  And both analysts and state finance officials told assemblymembers that better communication and reconciliation of accounts is needed.

"We're taking action to make sure the administrative controls are in place and are being followed," said the governor's budget director, Ana Matasantos.  Last Friday, she released an audit of all the state's special funds -- one that found errors, but no other hidden cash.

The state's hundreds of special funds have increasingly become part of the annual budget deliberations.  Five years ago, long-term borrowing from these funds totaled $749 million; now, that total has grown to $4.3 billion, with hundreds of millions of special fund loans used just this year alone.

And the need for accuracy in special funds balances is even more pressing when it comes to short-term budgetary borrowing:  $16 billion in internal cash transfers are now being relied on for the state to pay its invoices as revenues wax and wane over the year to come.

Legislators and state officials also took a few shots at the news media during the hearing, complaining about misleading or inaccurate stories in the wake of the parks revelations.  It's a fair point, though it's also important to note that if reporters can't easily determine what money the state does, and doesn't, have... then it's unlikely that the public can, either.

Lawmakers have clearly been feeling some heat since last month's parks revelations, and seemed to be searching for some certainty that the story doesn't have still untold chapters. 

Budget chair Blumenfield told representatives of the governor and state controller that he needed to know the parks scandal is an "isolated incident."

"I want that ironclad assurance," he said.

Jason Sisney, a top deputy for the Legislative Analyst put the rest of the special fund problems this way: "Sloppiness and, in some cases, confusion."

That may not rise to the level of the parks saga, but it's probably not going to make taxpayers -- especially those who vote -- much more happy.


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