The Associated Press has a fascinating look at how — and more importantly, why — California’s Department of Parks and Recreation was able to hide tens of millions of dollars from state auditors beginning in 1998 and ending when the ruse was finally discovered in 2012.
According to the AP,
Parks Director Ruth Coleman, who had been director since 2002, resigned and a senior parks official was fired last summer after $54 million was found hidden in two special funds as up to 70 parks were threatened with closure because of budget cuts.
The report said the actual amount intentionally hidden in the State Parks and Recreation Fund was $20 million, and the remaining $34 million discrepancy was due to differences in the timing of the fund reports to the state finance department and the controller’s office. The amount of money kept hidden had grown as high as $29 million in 2003, the report said.
Apparently no employees took any of the money and because it was outside of the regular state budgeting process, there was no way for the Parks and Recreation Department to spend any of the money. So why hide it?
It appears the additional moneys started accumulating in the late 1990s and at some point employees decided that if they did report the money to the state it would result in a budget cut for Parks and Recreation as well as result in political fallout and embarrassment for those who had participated in hiding the money. So once they started failing to report the money, they were stuck having to keep hiding it until the state discovered it.