California’s Hidden Checkbook

California’s State Controller, Betty Yee, is responsible for paying each of the state’s bills. Unfortunately for Californians, she may have just bought the state a costly lawsuit because she has refused to account for any of the 49 million checks her office writes each year, covering $320 billion in payments.

California is being sued by OpenTheBooks, a nonpartisan, nonprofit watchdog organization that tracks how politicians and bureaucrats spend taxpayer dollars, which seeks to provide transparent access of that information to the public. In a recent article in Forbes, OpenTheBooks’ CEO Adam Andrzejewski describes how out out-of-sync California’s state controller office is with all the other states in the union:

California State Controller Betty Yee admits to paying 49 million bills last year. Yet, she won’t produce a single transaction subject to our public records request for line-by-line state spending.

Out of the 50 states, California is the only one that refuses to produce its state checkbook to our auditors at OpenTheBooks.com. Even though it’s home to Silicon Valley, the state government isn’t letting tech drive transparency when it comes to its own records.

It shouldn’t take subpoenas and litigation to force open the books.

And yet, it is. Andrzejewski continues to explain why it shouldn’t:

Last year, Yee paid 49 million bills for about $320 billion in payments. If you can make the payment, then you can track the payment. The state controller’s office – whose job it is to stop waste, fraud, corruption, and taxpayer abuse – may be in violation of transparency laws.

In 2013, then-California State Controller John Chang rejected our public records request for the state checkbook telling us: stop asking because the records can’t be located. Today, six-years later – Yee is still parroting the same answer.

As a general rule, whenever something as fundamental and basic to the operation of the state government as making and recording 100 percent of the payments it has authorized isn’t being made easily visible to the public, it is reasonable to assume it is because significant portions of those payments will not stand up to scrutiny.

That may start changing in California later this year, when about 65 percent of the state’s spending may finally be made transparent when a new accounting software system goes online. What’s telling however is what that system won’t be covering, as Andrzejewski explains:

It’s a start. However, the FISCAL website will never contain the spending for ten major units of state government including colleges and universities, the California Public Employees’ Retirement System, the state legislature, California State Teachers’ Retirement System, and the office of legislative counsel.

Furthermore, another ten major business units are deferred for years to come. These substantial departments include corrections, rehabilitation, health and human services, the lottery, justice, motor vehicles, water resources, and transportation.

That’s totally unacceptable. We are based in Illinois, which, sadly, is famous for corruption. Our experience tells us that government can hide a lot of taxpayer abuse in $100 billion of non-transparent spending.

Speaking of the potential for corruption, here are several reasons why the omission of so many of California’s state government institutions from complying with requirements to transparently disclose their payments deserve to be a major cause for concern:

California needs to stop hiding its checkbook from the public. Many of the abuses described in these stories could either have been stopped or have been made much less costly if all the state’s payments were fully visible to public oversight.

Craig Eyermann is a Research Fellow at the Independent Institute and the creator of the Government Cost Calculator at MyGovCost.org.
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