Another new audit of the California Department of Parks and Recreation found yet more mystery money -- this time $3.9 million in a fund for donations which had no assigned purpose.
The audit by the state Department of Finance, released Friday, found the money in the State Park Contingency Fund, created to collect private donations to the state parks system. Each donation is supposed to have a project number assigned to it to ensure it is spent for the purpose intended by the donor.
But the Department of Finance found that 20 percent of the fund balance, totaling $3.9 million, had no project numbers assigned and had been languishing in the fund for years. The monies were designated as "general purpose," which is contrary to the intent of the fund.
In one example, $1.5 million had been parked in the fund since 2004. Although the money has been earning interest, it had not been put to use to help the beleaguered park system.
"We haven't seen a lot of these type of funds, but it was a little surprising," said Frances Parmelee, audit manager at the Department of Finance.
The latest audit was triggered by the news in July, first reported by The Sacramento Bee, that state parks had been sitting on nearly $54 million in two special funds for many years, even as it began closing 70 parks due to state budget cuts.
This "hidden money" was not reported to the Department of Finance, as required by state budget rules. The revelation, on the heels of a related scandal involving a secret vacation buyout program for employees at parks headquarters, led to a housecleaning of parks leadership staff and numerous investigations.
The latest audit verifies that the "hidden money" amounts to $53.4 million, putting to rest speculation that it might actually be larger. It also concludes the surplus existed as far back as 1993, much longer than previously known. It may have existed even longer, but auditors did not look back any further than 1993.
A disappointment is that the big question remains unanswered: Why did state parks keep this money hidden?
Finance auditors said they were unable to probe this question because responsible officials at state parks have been replaced, and no records were available from the department that would provide an answer. They emphasized their audit was focused on internal financial controls, and they are leaving the question to the attorney general office, which is conducting a separate investigation.
"We really couldn't determine the basis for why they were doing it," Parmelee said.
In a written response dated Dec. 17, the new parks director Anthony L. Jackson said the department has already adopted most of the finance department's recommendations and is working to complete a corrective action plan within the requested 60 days. This will include determining how to properly spend the unassigned $3.9 million in the contingency fund.
"We are confident that by incorporating all recommendations for improvement, California state parks will be a stronger and more accountable system on into the future," Jackson said in a statement.