The State Worker

Tax board’s turn for outside audit closely follows reports of misspending

Board of Equalization Executive Director David Gau
Board of Equalization Executive Director David Gau

A state tax board that in the past two years misdirected millions of dollars in revenue and approved an expensive office remodel for one of its elected members is under the microscope of a new audit.

California’s Department of General Services launched an audit of the Board of Equalization in July, three months after The Bee reported that the tax board spent $130,000 on a plush office remodeling for Board member Jerome Horton.

Since then, the board has adopted tighter spending controls and promoted a new executive director in longtime BOE employee David Gau.

In a June memo obtained by The Bee, Gau wrote to board members that he was concerned about the department’s procurement policies.

“As we have been researching the acquisition of the office furniture being called into question, and recent Public Records Act requests related to that acquisition, I have become increasingly concerned...with information and documents that have been discovered that possibly suggest irregularities in the agency’s procurement process,” he wrote.

Gau did not request the outside audit. Spokesmen for both the BOE and Department of General Services characterized it as a routine procedure.

“It was just BOE’s turn,” said Michael Liang, a spokesman for the Department of General Services.

The audit is expected to cover purchasing, contracting, administration of surplus property and real estate management. The audit is underway now and is expected to be completed in the spring of 2017.

The BOE oversees about $60 billion in taxes and fees with an elected board and field offices all over the state.

State Controller Betty Yee, a member of the board, last year drew attention to mismanagement at the agency with an audit that prompted a $343 million reallocation of revenue to funds that had been shortchanged.

Adam Ashton: 916-321-1063, @Adam_Ashton