Audit finds problems with Calif. specialty plates

Published on NewsOK Modified: April 18, 2013 at 7:22 pm •  Published: April 18, 2013
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SACRAMENTO, Calif. (AP) — State auditors reported significant problems on Thursday in how California agencies collect and spend money from certain specialty license plate funds, including the loss of more than $22 million in revenue that could have been used for programs to help veterans, college students, firefighters and others.

Gov. Jerry Brown and lawmakers sought the audit after an investigation last year by The Associated Press. In part, the AP found that money in a Sept. 11 memorial license plate fund that was intended to help victims' families and law enforcement had been diverted to other programs.

In addition, Brown and former Gov. Arnold Schwarzenegger diverted $3 million of the $15 million raised for the California Memorial Scholarship Program to help close the state's budget deficit and never paid the money back.

The report was the first audit in the 20-year history of California's specialty license plate program. It found accounting problems within the Department of Motor Vehicles and problems in how money has been spent.

California's specialty plates have raised more than $200 million during the years to benefit the arts, Olympic athletes and other causes ranging from the California coast to Yosemite National Park and Lake Tahoe. More than 382,000 plates have been sold.

People who bought the plates were disappointed by the audit results.

"I kind of feel bad now that I didn't ask more questions about where the money was going," said Patricia Anderson, who paid $98 for a personalized plate reading "WE R 4US" when she lived in the San Francisco Bay area.

Her husband bought a second 9-11 memorial plate in the wake of the attacks.

"That was our way of expressing support. If it didn't go to what it was intended, then shame on those who asked us for our hard-earned money," Patricia Anderson said.

Auditors said the DMV failed to collect $22.2 million during the past two fiscal years alone because it undercharged some specialty plate owners and improperly did not seek the fees on inactive plates.

The review also said the DMV overstated its costs by $6.3 million for administering the California Environmental License Plate Fund, while undercharging other specialty plate funds by $1.1 million in the past three fiscal years.

The audit also cited a number of spending problems:

— The California Emergency Management Agency overcharged for administering the Anti-Terrorism Fund and spent some of the proceeds on programs not allowed by state law. For instance, auditors said it did not monitor whether the California Fire Fighter Joint Apprenticeship Committee actually provided training required under a $2.5 million contract.

— The Department of Food and Agriculture could not show that $896,000 in administrative expenses paid for out of the same fund actually involved anti-terrorism activities. It also did not properly administer contracts paid for with money from the fund.