Report I2019-0559 Recommendation 9 Responses
Report I2019-0559: California Prison Industry Authority: It Gave Nearly $1.3 Million in Unlawful Gifts to Other State Agencies and Repeatedly Violated Merit‑Based Employment Principles (Release Date: July 2021)
Case Number I2019-0559
Recommendation #9 To: Prison Industry Authority
CalPIA should, in consultation with the Personnel Board, consider voiding appointments and requiring employees who acted in bad faith to return all compensation as the Table on page 22 shows.
Agency Response From October 2023
In October 2023, CalPIA reported that despite recent follow-up efforts with CalHR, it is still waiting for the Personnel Board to make a final determination for each appointment. CalPIA still plans to promptly perform the required steps to comply with the Personnel Board's pending direction.
California State Auditor's Assessment of Status: Partially Implemented
Agency Response From November 2022
In November 2022, CalPIA acknowledged that it had cited the incorrect criteria in its unlawful hiring packages but reiterated that because CalPIA acted in other than good faith, it had requested that the employees not be penalized for its actions. However, even when employees are found to have acted in good faith, state law allows departments to correct unlawful appointments.
Moreover, CalPIA noted that it takes responsibility for the unlawful appointments for six of the seven employees included in our report and does not believe the employees acted in bad faith. Therefore, it did not request that any of those employees return compensation even though we recommended that it consider doing so for one of those employees, who we found acted in bad faith. CalPIA failed to identify any errors in our report that would lead it to believe that the employee did not act in bad faith. In addition, although CalPIA agreed that Employee D acted in bad faith for one of his three appointments, it still did not request to have Employee D return the compensation he received. CalPIA did not provide an explanation as to why it did not request that Employee D return compensation and instead stated that it is waiting for the Personnel Board to make a final decision on the unlawful hiring packages.
Lastly, CalPIA stated that prior to submitting its first unlawful hiring package in March 2022, CalHR directed it to work with and submit the packages directly to CalHR rather than the Personnel Board. Later in July 2022, CalPIA spoke to an individual at the Personnel Board to confirm that it had received the documentation that CalPIA had submitted to CalHR. At that time, CalPIA also confirmed that the Personnel Board was working with CalHR to review the unlawful hiring documents provided by CalPIA. CalPIA stated that once the Personnel Board makes a determination for each unlawful appointment we identified, CalPIA plans to promptly perform the required steps to comply with the Personnel Board's direction.
California State Auditor's Assessment of Status: Partially Implemented
Agency Response From July 2022
By July 2022, CalPIA provided to us copies of the unlawful hiring packages that it submitted to CalHR for all seven individuals identified in our report. In the packages, CalPIA incorrectly claimed that when more than one year passes from the date of an appointment and the employee is not found to have acted in bad faith, the appointment should stand. As a result, it did not specifically request that any of the 10 unlawful appointments we identified in the report be voided. Under state law, unlawful appointments that have been in effect for more than one year may be voided if only the appointing power acted in other than good faith. The law does not require that the employee acted in other than good faith for an appointment to be voided.
CalPIA also did not request that any of the employees be required to return compensation, despite our findings that three of the individuals acted in bad faith and could be required to return all the compensation they unlawfully earned. Further, the packages it submitted to CalHR contained other erroneous information that conflicted with the evidence we found and did not include important details regarding some of the appointments.
Finally, CalPIA has yet to consult with the Personnel Board as we recommended. As we noted in the report, Personnel Board staff assisted us as subject matter experts during this investigation and have an intimate knowledge of the appointments in question. They could have provided valuable guidance to CalPIA as it drafted the unlawful appointment packages.
California State Auditor's Assessment of Status: Partially Implemented
Agency Response From May 2022
In April 2022, CalPIA reported that it is working on completing unlawful appointment packages for each of the appointments discussed in our report. Because CalPIA does not have the authority to void appointments after one year, it submitted the unlawful appointment packages to CalHR to review. Upon approval from CalHR, the packages will be forwarded to the Personnel Board for approval before submission to the State Controller's Office for processing.
As of May 2022, CalPIA has submitted unlawful appointment packages to CalHR for four of the seven appointments.
California State Auditor's Assessment of Status: Partially Implemented
Agency Response From January 2022
CalPIA reported in January 2021 that it is still continuing to work with CalHR on this recommendation.
California State Auditor's Assessment of Status: Partially Implemented
Agency Response From September 2021
CalPIA stated that it met with CalHR in August 2021 to determine the appropriate actions for those employees who acted in bad faith. It stated that once CalHR provides direction, CalPIA plans to promptly respond to CalHR's requests.
California State Auditor's Assessment of Status: Partially Implemented
Agency Response From June 2021
CalPIA responded that it will work with CalHR to take appropriate action for all employees and their respective positions identified in this report, regardless of their current employment status with CalPIA.