MOORLACH UPDATE — Budget Math Error — January 20, 2017

The massive budget error is now fodder for columnists around the state and nation (MOORLACH UPDATE — Oops! — January 19, 2017 january 19, 2017 john moorlach).

Zero Hedge has its perspective in the first piece below. I was also interviewed by KFBK 1530 AM (Sacramento’s version of KNX 1070 AM), see

The second piece is from the OC Register and addresses another component from the reverberations of the Dekraai case (see MOORLACH UPDATE — AB 1328 — October 7, 2015 october 7, 2015 john moorlach). Approving record retention schedules is a standard management operating procedure and this Board agenda item was on the Consent Calendar. I believe it would be difficult to prove that something nefarious was occurring. But, the timing does raise questions, even if it is mostly coincidental.

California Governor Jerry Brown Admits To $1.5 Billion "Math Error" In State Budget

Tyler Durden's picture

by Tyler Durden
Read online here:

Budgeting can be difficult, particularly for expansive state budgets that require a ton of inputs to support 1,000s of line items each of which can result in massive variances depending on the development of various economic indicators like interest rates, commodity prices, etc. throughout the year.

That said, while forecasting variances are inevitable, we, as taxpayers, generally rely on our expensive budget office employees to at least present annual budgets that reflect sound mathematics and accounting principles. Unfortunately, that seems to be too much to ask of the math-challenged administration of California Governor Jerry Brown which decided to double count certain cost savings and simply "forgot" to incorporate other expenses altogether. Per the LA Times:

Budget staffers said there were, in fact, two mistakes:

– A double counting of state savings from a program that coordinates health, behavioral and long-term care services with local government. That error understated expenses by $913 million.

– A forgotten state government cost from two counties — San Mateo and Orange — enrolling in the coordinated program, which meant missed expenses of $573 million.

Meanwhile, adding insult to injury, Brown’s administration allegedly discovered their "accounting errors" several months ago but didn’t disclose them to State Senators until last week. Per Mercury News:

The administration discovered accounting mistakes last fall, but it did not notify lawmakers until the administration included adjustments to make up for the errors in Brown’s budget proposal last week.

The Department of Finance said it did not account for $487 million in rebates from drugmakers that the state must pay the federal government to reimburse Washington for its share of Medi-Cal drug costs.

The state also miscalculated costs for the Coordinated Care Initiative, an experimental program in seven counties to improve care for a group of high-needs patients eligible for both Medi-Cal and Medicare, the federally funded health plan for seniors and people with disabilities.

Officials double-counted some of the expected savings, leading to a budget hole of $913 million, and undercounted the costs in San Mateo and Orange counties by $573 million.

In his spending plan, Brown proposed eliminating the Coordinated Care Initiative because he said the program was not cost effective, angering counties that said the change would shift $550 million in costs to them.

Of course, the blatant attempt to cover up their "math error" rather than quickly admit the mistake last fall, led California State Senator John Moorlach to ask the obvious question of what other errors may be buried in the expansive budget, saying “It makes you wonder what else is not right. … When something like this happens, the trust factor gets eroded, and you lose confidence in what’s being provided to you." But, no matter the size of the various other "math errors" that come to light, we’re quite certain that California’s liberal legislators in Sacramento stand ready, willing and able to implement whatever tax hikes may be necessary to address such issues.


O.C. Sheriff’s Department sought permission to destroy jailhouse snitch records


Read online here:

Five days after a judge reopened an investigation into Orange County’s use of jailhouse informants, the sheriff’s department received permission from county supervisors to shred potentially incriminating records, documents show.

It is unclear if any informant records were destroyed as a result of the unanimous vote by the Board of Supervisors on Dec. 16, 2014. It’s also unclear if supervisors knew specifically what they were voting on; informant information was only a small part of an 83-page request that covered “the retention and disposition” of sheriff’s records.

Lt. Mark Stichter, spokesman for the sheriff’s department, said Thursday that his agency doesn’t have evidence of record shredding and denied that the department was trying to cover up anything.

“We have no information that informant records were destroyed and we clearly are not destroying records.”

Other records, which recently became evidence in court — jail activity logs written by deputies — show that deputies did shred some documents from 2008 through 2013 and that they routinely worked with informants.

The department’s 2014 request to destroy documents is noted in a legal brief filed this week by Assistant Public Defender Scott Sanders, who represents admitted Seal Beach mass murderer Scott Dekraai and who has unearthed the illegal use of jailhouse informants by local prosecutors and sheriff’s deputies.

Over the past two years, a half-dozen local convictions have been dismissed or renegotiated after judges ruled that prosecutors broke rules to get convictions. And last month, the Dept. of Justice launched a investigation of county prosecutors and deputies, looking at the potentially systemic misuse of jailhouse informants and withholding evidence.

Sanders believes the request to destroy documents was made specifically to cover up the department’s misuse of informants. If true, such record destruction could be a criminal offense.

In 2014, at the time of the board vote, Sanders had filed multiple legal papers demanding the release of informant documents, bolstered by a court order to surrender such records.

In the new court papers, Sanders accuses the sheriff’s department of repeatedly moving to limit his access to records and stressed that nearly six consecutive months of special handling log records were destroyed.

Sanders wrote that the department engaged in a “rapid destruction of damaging information that could embarrass the agency and undermine convictions.”

“They clearly wanted to destroy informant records and there is no legitimate reason for doing this.”

State Sen. John Moorlach, who was an Orange County Supervisor at the time of the 2014 vote, said the department’s request didn’t raise any questions and was considered to be non-controversial.

“You don’t read the details on something like that,” Moorlach said. While he didn’t remember the vote, he said the informant issue had not yet heated up.

Two years later, as local prosecutors’ tactics to gain convictions became a national controversy, county supervisors admonished the sheriff’s department and the district attorney’s office against destroying any records pertaining to informants.

All parties in the Dekraai case are scheduled to appear in court today. The judge in the case, Thomas Goethals, has grown frustrated with the lengthy wait to see all the documents related to informants, and recently threatened Sheriff Sandra Hutchens with a contempt citation if her department doesn’t produce documents he requested in 2013.

During a hearing last month sheriff’s lawyers dropped thousands of pages of records on the judge, and asked that they be kept confidential. Goethals, frustrated at what he viewed as a delay tactic, ordered the lawyers to write a specific reason why each page should be kept under seal.

Prosecutors are expected to hand off the Dekraai penalty case, which will determine whether he gets the death sentence, to the state Attorney General’s Office on today. State prosecutors have not indicated whether they will seek the death penalty or settle for life in prison, as requested by many of the relatives of Dekraai’s victims.

Contact the writer: tsaavedra


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