License Plate Money for Kids Mismanaged, State Says

About 40 percent of the funds went to administrative costs, in violation of California law.

The money from state license plates with hearts, hands and star symbols has been misspent, according to a report released Tuesday by the California State Auditor.

State departments broke the law by hiring private contractors to manage the program, according to the audit. Between fiscal years 2006-2007 and 2009-2010, about 40 percent of the money paid administrative costs to private contractors, the audit says. That's nearly $2.1 million.

The Kids Plates program was approved in 1992. For a fee, drivers could order a custom license plate with a hand, heart, star or plus sign symbol. Half of the money was to be spent on prevention of child abuse and unintentional childhood injury.

The money from the plates was administered through the Department of Public Health. But when the department hired the private San Diego State University Research Foundation to manage the program between 2004 and 2010, it broke the law, according to the state auditor.

Public Health "paid the research foundation to administer the program from the funds that the Legislature had intended it to use directly for childhood injury prevention programs," the audit found.

The SDSU Research Foundation was also operating without a valid contract, meaning it could not disburse state funds intended for childhood injury prevention, according to the audit.

Here are key points from the audit:

  • The Department of Health Services and the Department of Public Health violated state law by hiring a private contractor to manage the Kids' Plates Program, rather than having state employees perform the work.
  • The contractor performed services without an approved contract, and was unable to award any funds that could have been used to help prevent unintentional childhood injuries.
  • Health Services and Public Health spent roughly 40 percent of total appropriations received during four fiscal years, or nearly $2.1 million on the contractor's administrative costs for the Kids' Plates Program.
  • Public Health did not comply with its own contracting procedures when it awarded 115 grants to community agencies.
  • The Department of Social Services did not fulfill certain monitoring requirements for trust fund expenditures. As a result, one grantee overcharged Social Services by $10,189, and Social Services' Office of Child Abuse Prevention may have used trust fund money to pay for expenditures that did not meet the trust fund's requirements.
  • Social Services failed to fully publish certain information about the trust fund on its website as state law requires.

Money meant to help children throughout the state was not disbursed for its intended use. Who should be held accountable for this mismanagement of funds? Tell us in comments.

Dan Mattingly November 30, 2012 at 12:28 PM
THis audit was for a piddly amount and just a tip of the iceburg compared to what Health Services contracts out. They award thousands of these huge multi-million contracts and these contractors pay their hires above civil service salaries + 20% benefit package + from 10-20% profit for their for profit or non-profit companies. Profits are guaranteed wether they do a good job or not. If you read yesterday's Sac Bee, the Health Services response was "we will tighten our paperwork" which is code for: go away, we will do what we want and you will forget about this. The managers know exactly that they were breaking the law and have made no serious effort to reform themselves. Why do they do it: Because it is easy and nothing ever happens to them. When something needs to be done, they just write a contract up without even thinking how they can do the work themselves, in-house using existing resources. I know of examples where these managers have even hired contract secretaries so they don't even have to answer their phone or write a memo. Even better, now they don't have to worry about the project. Just let the contractor handle it. I think this article is a tiny porthole on how really big this problem is. What a gigantic waste our state government has become.
Bill Viteri November 30, 2012 at 05:44 PM
Oh please, Kennedy balance the budget, reduced taxes, and decrease number of welfare recipients, something that Democrats of today dont care to do today. Reagan, a Republican, gave amnesty to 3 million illegals. Lincoln, a Republican freed the slaves. Bush, a Republican, was in favor of giving amnesty. Obama administration has increase the number of people dependent on the government by 63% from 32% during Bush to 52% at present. O bimbo, has increased the federal deficit by almost 400% in only 4 years of his administration over the 8 of cumulative federal deficit by Bush even with two wars. At the rate O bimbo is going, it will be 800% cumulative federal deficit over Bush's cumulative federal deficit. For Democrats, tax increases has the same effect as drugs are for drug addicts.
William Korn December 01, 2012 at 08:39 PM
What amuses me about the rantings of the conservatives on this thread (particularly the logorrhea being exhibited by the self-described editor Mr. Ferrell), is that the abuses being described are the logical consequences of what conservatives have always said they wanted. "Government can't do anything efficiently!", they say. "Bring back Maggie Thatcher", they say. "Cut down the size of government and let the private sector do it!", they say. The fact is that the private sector is expert at appropriating substantial percentages of money from government grants/contracts for purposes other than addressing the needs for which the money was to be used in the first place - most notably enhancing the profits of the private sector companies receiving those grants/contracts. The fact that conservatives can't seem to grasp this elementary truth is yet another reason that they should not be allowed to govern. Apparently Californians have, on the whole, grasped it. One can only hope that the rest of America will catch up.
ATC December 01, 2012 at 10:08 PM
You really think that the rest of the country needs to follow California's lead? With out of control spending, huge defecits, terrible public education, crumbling infrastructure, huge numbers of illegal immigrants, the highest tax rates and worst business climate in the country, 40% of the nation's welfare recipients (and growing), businesses and upper-income taxpayers leaving in droves...Is that the "elementary truth" that you are referring to, Mr. Korn? The fact that there are so many people like you that actually believe all of the above is the right direction scares the h__l out of me. Government's job is not to take care of you. That's YOUR job! Government growth has NEVER translated into economic growth, and it never will. And success does not mean that more and more people are getting help from Government; success means that fewer and fewer people NEED help from Government. The fact that liberals can't seem to grasp this elementary truth is yet another reason that they should not be allowed to govern. California's current condition proves it. And with their new super-majority, there will be no improvement in California, only further decline; more of the same that has gotten us to this point. I was born and raised here in SoCal. We used to be the "Golden State", we are now the laughingstock of the nation. What a waste, thanks to people with your mindset.
Washy December 02, 2012 at 01:06 AM
I am amazed at the level of "shock" Have you all had your heads in the sand? Three years ago one of the designers of the "support ocean life" plate pulled their permission to use his design because not one dime has gone to save the sea. But what we need to do is start turning in our neighbors who are driving on temp tags, out of state plates (the manager here in the mobile home park lives here but has AZ plates...therefore she is stealing about 100+dollars a year from CA) Perhaps if we all took the responsibility to pay the fees outlined instead of everyone buying used cars for 500.00 (to pay the least amount of tax) and defrauding our state might we be in a better place and might those special funds be able to get to their rightful place.


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