Another audit of the California Department of Parks and Recreation found yet more mystery money: $3.9 million in a fund for donations that had no assigned purpose.

The audit by the state Department of Finance, released Friday, found the money in the State Park Contingency Fund, which holds private donations to the park system. According to the rules governing the fund, each donation is supposed to have a purpose assigned so it is spent according to the donor's wishes. If the donor does not specify a purpose, the department is supposed to assign one.

But the Department of Finance found that 20 percent of the fund balance, totaling $3.9 million, had sat for years with no designated purpose.

In one example, $1.5 million had been parked in the fund since 2004. Although earning interest, the money has 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 news in July, first reported by The Bee, that the parks department 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.

The "hidden money" was not reported to the Department of Finance as required by state budget rules. The revelation, on the heels of a scandal involving secret vacation buyouts at parks headquarters, prompted a housecleaning of parks leadership.

The new audit verifies there was $53.4 million in hidden money, putting to rest speculation that there might be more. It also concludes that the surplus existed as far back as 1993, longer than previously known. It may have existed even longer, Parmelee said, but auditors did not look back any further.

Among other findings:

• Executive management in the department exercised little oversight of budget staff.

• The department does not maintain written policies governing how staff calculates fund balances.

• Internal controls on state credit cards were inadequate. "Unallowable" purchases were identified in eight of 35 cases examined. In two cases, the employee who asked for purchase authorization also approved it.

In a written response, parks director Anthony L. Jackson said the department has adopted most of the audit's recommendations and is working to complete a corrective action plan within the requested 60 days. This will include deciding how to properly spend the unassigned $3.9 million.

The audit failed to answer a key lingering question: Why did state parks keep so much money hidden?

"We really couldn't determine the basis for why they were doing it," Parmelee said.

Parmelee said employees who might have the answer had been replaced, and available records shed no light on the issue. She said that question would be left to a separate investigation by the attorney general's office.

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