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Controller presses lottery chief for plan to repay party costs
By Judy Lin - jlin@sacbee.com
Published 12:00 am PDT Friday, April 4, 2008
Story appeared in MAIN NEWS section, Page A3
State Controller John Chiang turned up the heat Thursday on California Lottery Director Joan Borucki, demanding to know how she plans to repay $46,336 used for an employee party.
Borucki had said lottery officials were awaiting a legal opinion on the legitimacy of the spending, but Chiang said in a letter to Borucki that he has learned that no legal opinion was requested.
"This is contrary to the lottery response to our draft audit report," Chiang wrote.
Chiang asked Borucki to come up with a repayment plan in two weeks. He said cutting administrative costs does not eliminate the need to repay public funds that were misspent.
Lottery spokesman Al Lundeen said the staff will work with Chiang's office on his concerns. When asked whether Borucki will repay the money herself, Lundeen said, "That's not been discussed."
State auditors have demanded that the lottery pay back the money spent in November on an elaborate employee recognition dinner featuring a Nintendo Wii, iPods and other prizes. The controller warned Borucki in January that she could be held liable for unallowable costs related to the event.
Borucki wrote Chiang in mid-March that "the Lottery has requested a legal opinion from the attorney general's office on the legality of the expenditures for the employee recognition event." She made similar statements during a Senate hearing Feb. 12.
"The Lottery expects this legal opinion by May 2008," Borucki wrote.
Chiang's letter said he had found that instead of seeking a formal opinion, lottery staff members are consulting state attorneys on developing new guidelines and policy changes for the Lottery Commission to consider.
Last week, the attorney general's office confirmed it had not received a formal request to review the lottery's office party policies. The Lottery Commission is expected to take up the matter May 20.
"The fact that the Lottery proposes policy guidelines governing the use of public funds does not legitimize the past expenditures that were misspent," Chiang wrote Thursday, "even if those guidelines are approved by the commission."
About the writer:
- Call Judy Lin, Bee Capitol Bureau, (916) 321-1115.
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