The word “scandal” is tossed about indiscriminately in news coverage these days, encompassing everything from the tweeting of inappropriate photos of bulging men’s underwear to the bilking of billions of dollars from retirees in a massive Ponzi scheme.
As those two examples illustrate, not all scandals are created equal.
With that in mind, it is time to assess the scale of wrongdoing involved in the great California state parks scandal last year, in which it was revealed that accounting officers in the Department of Parks and Recreation failed to disclose to the governor and Legislature the existence of $20 million in special funds.
The Attorney General’s Office, after reviewing documents and interviewing 40 current and former department employees, last week released its report on what happened.
It shows that if this was a scandal, it was one of cowardice and stupidity on the part of timid bureaucrats, not one of avarice or the theft of public funds.
To the degree that the money may have been hoarded, the report says, it was for no purpose. The money in the state Parks and Recreation Fund was an “essentially useless reserve that could not be spent by the parks department,” it says. Further, it concludes there is no evidence of “any surreptitious expenditure of SPRF funds.” To the degree that it was being kept hidden, it was being hidden in plain sight. Each year, the report notes, the balance in the fund was accurately reported to the state Controller’s Office, where the amount has “always been readily and publicly available.” Nor did Department of Justice investigators find anything to suggest that hoarding of funds began as part of a plot to deceive.
“No evidence has been adduced,” the report says, “that suggests the disparity in SPRF balance reports was initially conceived, or began its dramatic ascent in fiscal year 1997-98, as a result of intentional conduct.”
So why was the balance consistently misreported to the Department of Finance every year? It was, the report says, the result of “a fear that the department’s general fund appropriation would be cut if the DOF learned of the moneys.” Some context is in order. As with many state agencies and departments, parks derives its annual operating budget from both special funds — in this case, one that consists of revenues collected from park user fees — and from the state general fund that comes from general tax revenues.
In the current budget, it receives $271 million from special funds and $112 million from the general fund. That ratio has been gradually shifting over the years; five years ago, the department received $135 million from the general fund and $215 million from special funds.
Given that trend and the severity of the state’s budget problems over the last several years, the fears of the parks department bureaucrats were almost certainly well-founded. Had the governor’s bean-counters known that there was more money in the Parks and Recreation Fund, there is a great likelihood they would have reduced the department’s appropriation from the general fund and chosen instead to recommend that money be spent on other priorities.
So the scandal here is that some midlevel, unelected bureaucrats were making state spending decisions that weren’t theirs to make.
They essentially decided to keep quiet about a rainy-day fund even as a statewide fiscal storm was raging.
They even kept quiet as budget-cutting plans unfolded to close 70 state parks. But they didn’t flat-out lie about the money; they accurately reported it each year to the controller and hoped no one would notice the discrepancy.
The attorney general’s report suggests that only a few people knew of the accounting discrepancy. It says there is no evidence that former longtime director Ruth Coleman, who was immediately fired after the discrepancy became known to administration officials, knew of it. In her interview with investigators, an employee who has been quoted in press reports saying that Coleman was aware of it acknowledged that her assertion was based solely on “speculation.” Since the discrepancy was made public, lawmakers have taken steps to shore up accounting procedures, including a requirement that the Department of Finance and the Controller’s Office regularly reconcile their differences.
Was it a scandal that the parks department’s financial officials didn’t honestly report up the line how much money was in their special fund? Well, it was clearly wrong, embarrassingly stupid and damaging to the entire state budget process.
But no one was enriched, and no public money was diverted for unintended purposes.
As scandals go, it seems this one was more dumb than devious.
Timm Herdt is a columnist for the Ventura County Star.