California officials stashed $54M while asking for donations to keep parks open

  • Ano Nuevo State Park, in San Mateo County, Calif.

    Ano Nuevo State Park, in San Mateo County, Calif.  (California State Parks)

  • Bean Hollow State Beach on California's San Mateo Coast, roughly 18 miles south of Half Moon Bay.

    Bean Hollow State Beach on California's San Mateo Coast, roughly 18 miles south of Half Moon Bay.  (California State Parks.)

California’s prized park system -- from the Sierra Nevada to the golden southern beaches – is facing big problems as a high-priority audit gets underway to learn how officials stashed a $54 million secret surplus while soliciting money from local governments and others to stay afloat.

The independent state audit is scheduled to begin immediately and produce findings within the next few months, said GOP Assemblywoman Beth Gaines, who helped win bipartisan approval for the probe.

“These parks define us as Californians,” Gaines told FoxNews.com. “And this is a victory for transparency in California state government.”

The park system’s director, Ruth Coleman, resigned Friday after officials discovered the money, which had not been reported to the state’s finance department. And the system’s second-in-command, acting Chief Deputy Director Michael Harris, was fired in the wake of the scandal.

The state’s Department of Parks and Recreation has been facing hard questions about its handling of taxpayer money since at least May 2011, when officials announced a plan to close 70 of their 278 parks due to budget cuts. However, they narrowly avoided that scenario through foundation money, help from municipalities and corporate-management agreements.

Gaines said Monday the $54 million has been in state coffers for as long as 12 years, and she thinks government financiers intentionally hid the money.

“They use sticky notes” as record-keeping, she said.

State officials have not responded to requests for comment.

The audit was announced just days before three high-ranking parks officials were disciplined for their part in an unauthorized vacation-buyout program that cost state taxpayers more than $271,000.

The program occurred inside the parks and recreation department’s headquarters and allowed more than 50 employees to trade unused vacation time for cash. Only the state’s human resources department could approve such trade-ins, and the three officials on Monday received letters of reprimand.

“That’s not OK, laws were broken,” said Gaines, who intends to take the issue to the state’s attorney general.

The audit, being led by California State Auditor Elaine Howle, is part of a larger one expected to conclude in January 2013 and reportedly will cost taxpayers $300,000.

Assemblyman Jared Huffman, a Democrat representing San Rafael, recently told The Los Angeles Time the new revelations are “a disaster” toward efforts to build partnerships and create strategies to support the state’s 1.4 million acres of park.

Gaines, whose district is about 20 miles northeast of Sacramento, said she is pleased about the audit but thinks California is still “a long way from restoring the public's trust" and that the known problems are “just the tip of the iceberg.”

The city of Whittier put together an $80,000 package of public-private money to keep open Propico State Park for roughly a year and sent the first quarterly installment of $20,000 before news broke about the hidden $54 million.

Assistant City Manager Nancy Mendez said Whittier officials immediately asked for a refund but have agreed to wait 30 days in part to see whether the park system can use $20 million of the hidden money to keep open parks.