Yesterday the EAC released their report of California’s HAVA expenditures. Here is the report’s basic statement of their auditing of California’s use of HAVA funds:
Of the $4,977,829 in reviewed expenditures, we classified $3,269,791 as questioned costs, consisting of $509,325 in cost exceptions and $2,760,466 in unsupported costs; and of the $3,755,723 in reviewed obligations, we classified $590,570 as questioned costs, consisting of $268,177 in cost exceptions and $322,393 in unsupported costs. In total, we questioned $3,860,361 in HAVA expenditures, consisting of $777,502 in cost exceptions and $3,082,859 in unsupported costs.
In broad terms, we took exception to those expenditures related to the purchase of capitalized general purpose equipment, promotional items and memorabilia, costs not related to HAVA, contract costs paid that were outside the terms of a contract, and costs that did not conform to federal cost principles. In addition, we classified as unsupported those expenditures lacking adequate support documentation, including expenditures related to personal service costs, procurement awards, indirect costs, and other costs.
Procurement award expenditures were generally classified as unsupported because competitive bidding requirements were not met …
In the definition used by the auditors, a questioned cost was one that:
- “resulted from a violation or possible violation of a provision of a law, regulation, contract, grant, cooperative agreement or document governing the use of federal funds;
- at the time of the audit, was not supported by adequate documentation; or
- appeared unreasonable and did not reflect the actions a prudent person would take in similar circumstances”
But the devil is in the details, and reading the detailed sections of the audit report are quite interesting. If you look at Table 2 in the report, it breaks out the questioned expenditures of HAVA funds into a number of categories, including $1.6 million in unsupported costs for consultant services, $937,269 in unsupported costs for personal services, and $7,289 in unsupported costs for offfice equipment. Most of the questioned costs for consultant services regard 34 contracts that were awarded after the Secretary of State’s office did not follow California state competitive bidding requirements. The unsupported office equipment regarded purchases of laptops outside the state bidding process, and phone charges without proper documentation. Also, apparently the auditors took exception to the purchase of a $15 frame, “because the expense was non-HAVA related.”
Of the cost exceptions, one of the more distressing claims regarded $308,388 in questionable printing, postage and shipping costs. These questionable costs regarded:
- “$83,756 for promotional items and memorabilia (T-shirts, buttons, balloons and other souvenirs), which are not allowed …”
- “$224,632 for postage to mail absentee ballot applications.
As for the $83,756 — that is a lot of illegal t-shirts and balloons! But what were they doing using HAVA funds to buy balloons?
The absentee ballot questions regarded the mailing of absentee ballot applications to permanent absentee voters, without consulting county election officials who are in charge of mailing absentee ballot applications. The report noted: “After county registrars expressed concerns about applications sent to voters already registered as permanent absentee voters, the Office canceled mailing any remaining applications and received a credit of $502,868 from the U.S. Postmaster, leaving a cost of $224,632 for postage already expended. We found the $224,632 cost unreasonable and therefore not allowable …” Question — why were they mailing absentee ballot applications to permanent absentee voters?
On one hand, this audit report from the EAC, along with the audit report produced earlier by the California State Auditor, helps shine light into the way that California has expended HAVA funds under former Secretary of State Kevin Shelley. Given the large amounts of money that have been handed out to the states under such a short period of time, it is excellent to see auditing of how those funds have been used (or in this case, misused). But on the other hand, it is disturbing to see so much misallocation and misuse of these funds; one wonders whether California would be in a much better position today regarding improving our electoral process had these funds been better spent. I also wonder, to the extent that voters and citizens are paying attention to the reports of the misallocation of HAVA funds in California, whether this will have any effect on their trust in governmental officials or their confidence in those who administer elections.