Finance Department Finds No Hidden Funds in Calif. State Budget

It sounded outrageous. At a time when the California state government was desperately cutting support for moms on welfare, sick kids and college students, it appeared to have $2.3 billion squirreled away in hidden slush funds.

Not, so Finance Department auditors said on Friday in a special report.

The question arose after the discovery that the Parks Department had a secret fund of $54 million, an unauthorized pot of money used to buy back vacation time from department employees.

The revelation led to the resignation on July 20 of State Parks Director Ruth Coleman and the dismissal of her second-in-command. Inquiring minds immediately wanted to know what other state departments might have similar stashes. And a quick look at accounts of special funds maintained in various departments raised eyebrows.

As the Finance Department acknowledges, the total amount of special fund balances reported by the State Controller's Office as of June 30 was $12.5 billion. But the Finance Department reported that the funds held a total of $8.8 billion.

The discrepancy, however, could be explained by different accounting methods and time frames used by the two offices, the Finance Department said on Friday.

The details are frankly boring. A lot of it had to do with goods ordered but not not received by the end of the year.

There were some accounting errors -- $196.7 million worth -- the department said, which to you and me is not chicken feed. But there was no deliberate deception, other than the $54 million from the Parks Department, the auditors concluded.

In other words, we will all have to look elsewhere for buried treasure.