Governor Brown Orders State Agencies to Recover Uncollected Salary and Travel Advances

Upon learning that millions of dollars in employee salary and travel advances are going uncollected, Governor Edmund G. Brown, Jr. today issued an Executive Order to ensure state agencies and departments recover taxpayer dollars and improve internal accounting.

“It’s shocking that the state has apparently failed to collect millions of dollars in salary and travel advances owed by state employees,” Brown said. “This situation reinforces the worst stereotype of ineffective and inefficient government, and I have ordered state agencies to immediately investigate the backlog of uncollected debts and find every penny owed to taxpayers. State agencies must regain control of this program.”

Audits from the California State Controller’s Office have uncovered serious collection and internal accounting lapses at state agencies tied to salary and travel advances.

An audit conducted by the Controller’s Office in 2009, for example, found that $13.3 million in advances had not been collected at eleven state agencies. This total included more than $500,000 in advances outstanding more than three years after they were issued. In most cases, employees were granted advances and agencies were either slow to collect funds or failed to collect at all.

“The state’s poor debt collection and accounting practices are fleecing public coffers at a time when vital public programs are being decimated by unprecedented budget cuts,” California State Controller John Chiang said. “I applaud Governor Brown’s commitment to making every dollar count.”

The Controller is continuing to examine these programs at state agencies, including the California Department of Corrections and Rehabilitation (CDCR), and the audits may uncover millions more in uncollected salary and travel advances.

State law allows for advances under certain circumstances including when there are delays in issuing checks, when an employee separates and needs a final check, when an employee travels, when a hardship request is made or when a vendor requires immediate payment.

The longer a debt goes uncollected, the more likely it will not be recovered. If the employee’s agency or department does not initiate collection proceedings within three years, the agency or department cannot collect the debt without the employee’s consent.

The Governor’s Executive Order seeks to recover taxpayer dollars by directing state agencies and departments to clear salary and travel advances within 30 days through an expense claim. If advances are not cleared, agencies and departments will be expected to deduct what’s owed from the employee’s next paycheck. The Executive Order also calls for improvements in record keeping, oversight, training and collection practices.

Since taking office, the Governor has issued Executive Orders to freeze hiring across state government and cut state cell phones and the passenger vehicle fleet in half and has directed state agencies and departments to stop spending taxpayer dollars on free giveaway and gift items.

These actions are part of Brown’s efforts to save money this fiscal year and to cut millions in operational costs next fiscal year.

READ EXECUTIVE ORDER B-5-11 BY THE GOVERNOR OF THE STATE OF CALIFORNIA