In the wake of revelations that the California Department of Parks and Recreation had millions of dollars hidden in one of its operating funds, the Department of Finance embarked upon a quick audit of other agencies that turned up $200 million spread here and there.

Last week, the Los Angeles Times added to the count when it wrote about $3.6 million that the auditors missed—and the newspaper found—stashed, at various times, by the Department of Forestry and Fire (Cal Fire).

The funds were proceeds from legal settlements the department collected for seven years that were meant to be turned over to the state’s General Fund. Instead, the department paid the nonprofit California District Attorneys Association to handle the money, effectively shielding it from oversight. Cal Fire spokesperson Janet Upton told the Wall Street Journal that the association was chosen because of “the mutual objective of wanting to strengthen investigative skills which make for stronger cases and increase chances of recovering taxpayer dollars.”

The cash was periodically tapped for equipment purchases and training, including $600,000 for 600 digital cameras and evidence sheds.

The Wildland Fire Investigation Training and Equipment Fund (WiFiter) was set up in 2005 and money from settlements with large companies over major fires was funneled into it. Lawsuits over the 2007 Moonlight Fire in Northern California eventually brought the fund to light, but documents show that department officials were fretting about it in 2008.

A Cal Fire investigator wrote to Sierra Pacific Industries, Inc. in 2009 seeking more than $8 million in reimbursement for the Moonlight Fire, which burned 65,000 acres, and directed that $400,000 of that be deposited in WiFiter. The company refused to pay and they headed for court.

A letter in September 2009 from a Cal Fire auditor to the department’s director expressed concern about the “possible perception” that the fund was being used to “bypass state contracting, purchasing, and travel rules and guidelines.”

A January 2010 memo from previous Cal Fire Director Del Walters made passing reference to the fund, and a new agreement between the department and the association was inked in 2011. In August 2012, the fund was frozen and the association has notified Cal Fire that it will cease managing it in February.   

The Department of Finance is conducting an investigation.  

–Ken Broder

To Learn More:

Fire Agency Hid $3.6 Million from State (by Jeff Gottlieb, Los Angeles Times)

California Agency Burned by Discovery of Bank Account (by Hannah Karp, Wall Street Journal)

CAL FIRE Kept $3.6 Million in Off-the-Books Account (by Bill Gabbert, Wildfire Today)

Timber Company Vows to Keep Fighting after Record Moonlight Fire Settlement (by Ken Broder, AllGov California)