I2025-1 Investigations of Improper Activities by State Agencies and Employees
Waste, Improper Payments, Misuse of State Resources, and Other Improper Governmental Activities
Published: December 12, 2025
Audit Recommendations Disclosure
When an audit is completed and a report is issued, auditees must provide the State Auditor with information regarding their progress in implementing recommendations from our reports at three intervals from the release of the report: 60 days, six months, and one year. Additionally, Senate Bill 1452 (Chapter 452, Statutes of 2006), requires auditees who have not implemented recommendations after one year, to report to us and to the Legislature why they have not implemented them or to state when they intend to implement them. Below is a listing of each recommendation the State Auditor made in the report referenced and a link to the most recent response from the auditee addressing their progress in implementing the recommendation and the State Auditor’s assessment of auditee’s response based on our review of the supporting documentation.
Recommendations to Employment Development Department (I2025-1099)
Recommendation 1
Immediately review nonusage reports for all accounts EDD has with wireless carriers and work with its respective branches to terminate the service for mobile devices that have gone unused for more than 90 days.
Agency response status:
Fully implemented
Date of implementation:
Sept. 2025
State Auditor assessment status:
Fully implemented
Agency Response to Recommendation
EDD began implementing enhanced controls to identify and ensure termination of unused lines. It established a process to terminate any lines that remain unused for 90 days or more by conducting monthly reviews of the nonusage reports. EDD reported that it identified and terminated 4,679 inactive lines across all of its branches.
Recommendation 2
Within 30 days, finalize its policy to terminate service for mobile devices that are not used for 90 consecutive days and establish and implement a process for enforcing the policy.
Agency response status:
Fully implemented
Date of implementation:
Sept. 2025
State Auditor assessment status:
Fully implemented
Agency Response to Recommendation
EDD finalized its policy to terminate any unused mobile devices that remain inactive for 90 days. This policy requires its staff to review 30, 60, and 90-day nonusage reports and to deactivate those devices that have not been used for 90 consecutive days.
Recommendations to California Air Resources Board (I2024-13524)
Recommendation 3
Reassess its leave audit calculations and pursue repayment of the overpayments it made.
Agency response status:
Not fully implemented
Date of implementation:
Unknown
State Auditor assessment status:
Partially implemented
Agency Response to Recommendation
CARB informed us that it has reassessed its leave audit calculations and addressed the errors we cited in our report. It further stated that it is in the process of establishing an account receivable to collect the overpayment it made to the employee.
Recommendation 4
Confirm that all position number changes are error-free and up-to-date in the SCO’s leave system.
Agency response status:
Fully implemented
Date of implementation:
Dec. 2025
State Auditor assessment status:
Fully implemented
Agency Response to Recommendation
CARB reported that it has corrected the employee’s position number with the SCO. It confirmed that no other employees were affected as a result of an error like the one with this employee’s position number. CARB stated that it has developed an audit process to ensure that no other position numbers are incorrect with the SCO.
Recommendation 5
Correct the control deficiencies we identified, including by creating an audit process to review and correct leave input errors each month as the CalHR Human Resources Manual requires.
Agency response status:
Fully implemented
Date of implementation:
Dec. 2025
State Auditor assessment status:
Fully implemented
Agency Response to Recommendation
CARB has revised its policy on the use of leave prior to retirement and has implemented a monthly leave audit process.
Recommendation 6
Determine whether its managers and supervisors require additional training on CARB’s leave policies and provide such training as needed.
Agency response status:
Not fully implemented
Date of implementation:
Unknown
State Auditor assessment status:
Partially implemented
Agency Response to Recommendation
CARB reported that it plans to provide training to its managers that will support its revised policy and reinforce understanding of roles and responsibilities.
Recommendations to California Department of Veterans Affairs (I2025-2429)
Recommendation 7
Report to the SCO previously unreported and underreported taxable fringe housing benefits for the 12 employee-tenants and inform these employee-tenants of their potential tax liabilities.
Agency response status:
Not fully implemented
Date of implementation:
12/31/25
State Auditor assessment status:
Partially implemented
Agency Response to Recommendation
CalVet reported that it will work with Human Resources to report to the SCO the taxable fringe housing benefit amounts for the 12 employee-tenants and will notify them of their potential tax liabilities. CalVet expects to complete this action by the end of the year.
Provide training to the manager and to CalVet’s Human Resources personnel who report taxable fringe housing benefits to ensure that all individuals involved in such reporting to the SCO understand their responsibilities.
Agency response status:
Not fully implemented
Date of implementation:
12/31/25
State Auditor assessment status:
Pending
Agency Response to Recommendation
CalVet reported that it will establish a standard operating procedure that will outline the roles and responsibilities of the manager and CalVet’s Human Resources personnel on state-owned housing, which will serve as a training guide to ensure consistency and accurate reporting to the SCO. CalVet expects to complete this action by the end of the year.
Develop and document a process in which the manager and CalVet Human Resources consult monthly regarding the information they must each determine to make accurate reports to the SCO.
Agency response status:
Not fully implemented
Date of implementation:
12/31/25
State Auditor assessment status:
Pending
Agency Response to Recommendation
CalVet reported that effective immediately, headquarters will facilitate monthly communications between the manager and Human Resources personnel to verify the accuracy of compliance reporting to the SCO until procedures are adopted and routine communication has been established.
Recommendations to Department of Alcoholic Beverage Control (I2025-0539)
Recommendation 10
Review the vehicle use of the employees identified in this report and recoup the cost of any state vehicle misuse.
Agency response status:
Not fully implemented
Date of implementation:
Unknown
State Auditor assessment status:
Partially implemented
Agency Response to Recommendation
ABC informed us that it completed its own investigation of the vehicle misuse. It had not yet initiated any efforts to recoup the costs of the misuse.
Recommendation 11
Take appropriate corrective action for those individuals.
Agency response status:
Not fully implemented
Date of implementation:
Unknown
State Auditor assessment status:
Pending
Agency Response to Recommendation
ABC informed us that it completed its own investigation of the vehicle misuse and had placed one manager on administrative leave. It stated that further corrective action was pending executive review of its investigation.
Ensure that the supervisor and managers involved in this investigation have received training on and are familiar with ABC policy and state law related to state vehicle use.
Agency response status:
Not fully implemented
Date of implementation:
Unknown
State Auditor assessment status:
Pending
Agency Response to Recommendation
ABC stated that it plans to have its employees refresh their knowledge of its vehicle use policy. It said it would ensure that its employees are trained on that policy and state law related to vehicle use. It also stated that it will require employees to obtain executive-level approval to store a state vehicle at an employee’s home until it can train its employees and implement improved controls.
Determine whether the department’s vehicle misuse extends beyond managers who report to the supervisor and address identified misuse, if any.
Agency response status:
Not fully implemented
Date of implementation:
Unknown
State Auditor assessment status:
Partially implemented
Agency Response to Recommendation
ABC stated it was analyzing vehicle use data statewide to determine whether vehicle misuse extends beyond the managers identified in our report.
Recommendations to Department of Parks and Recreation (I2025-1229)
Recommendation 14
Review the receipts that Employees A and B submitted, ensure that the State has received all items that these employees purchased, that all of these purchased items are appropriate, and that the items have been inventoried where required.
Agency response status:
Not fully implemented
Date of implementation:
Unknown
State Auditor assessment status:
Partially implemented
Agency Response to Recommendation
State Parks informed us that it initiated its own investigation, which will include a thorough review of purchases made by the employees to confirm that the items purchased are appropriate and are properly tagged and inventoried.
Take appropriate corrective action for those involved and ensure that they receive training on and are familiar with State Parks policy and state law related to procurement.
Agency response status:
Not fully implemented
Date of implementation:
Unknown
State Auditor assessment status:
Partially implemented
Agency Response to Recommendation
State Parks reported that it has suspended the employees’ CAL-Card privileges until its investigation is complete and reported that its property custodian in the employees’ district will verify that purchased assets are properly inventoried each month. It further reported that it is requiring all staff in the district with CAL-Card responsibilities, including all supervisors and managers, to participate in refresher training on the applicable policies, laws, and internal controls related to purchasing and procurement.
Correct the control deficiencies we identified, including adding all assets that cost more than $400 to the inventory list and creating a process for the separation of duties in purchasing.
Agency response status:
Not fully implemented
Date of implementation:
Unknown
State Auditor assessment status:
Pending
Agency Response to Recommendation
State Parks stated that it will update its internal purchasing database to include requests for approval, justifications for purchases, and acknowledgement that the items have been added to the inventory list. It reported that its property custodian will receive a report each month to verify that staff follow its asset processes. State Parks also stated that it will review purchasing roles to ensure its staff follow the required separation of duties.
Provide training to all relevant managers on the applicable policies, laws, and internal controls related to purchasing and procurement.
Agency response status:
Not fully implemented
Date of implementation:
Unknown
State Auditor assessment status:
Pending
Agency Response to Recommendation
State Parks reported that it is requiring all staff in the district with CAL-Card responsibilities, including all supervisors and managers, to participate in refresher training on the applicable policies, laws, and internal controls related to purchasing and procurement.
