State Wasted $8 Million on Late Fees. An investigative report by the Los Angeles Times revealed that the state wasted $8 million during the past two fiscal years on penalties for bills that weren't paid on time. "For the two-year period ending June 30, state agencies reported paying more than 38,000 invoices late," the newspaper reported.
The story continued: "The problem of late payments has been known for a long time. An internal audit of the state Parks and Recreation Department last year found that it had incurred late payment penalties of $232,000 in the preceding two years. 'The payment of late payment penalties represents resources that could be better used in furtherance of the department mission,' the audit said."
State officials said the lateness of recent state budgets caused cash-flow problems that made it impossible to pay some bills on time, and others were late simply because of bureaucratic problems.
Cal-Tax Director of Communications David Kline, quoted in the Times story, said: "There shouldn't be any reason why the state can't pay its bills on time. It's disappointing that tax dollars are being wasted on penalties that should be avoidable."
The Times story prompted similar reports on several radio and television stations. Mr. Kline was interviewed on FOX 40 News (Sacramento) and KFI Radio (Los Angeles), where he stressed the need for more oversight and accountability for government's use of tax dollars. (Cal-Tax: The state's lax oversight of invoices raises additional questions, such as whether anybody is checking invoices to make sure the invoiced products or services were actually delivered. Equally important, is anybody overseeing the process to ensure that the invoiced products or services were needed in the first place?) (Source: Los Angeles Times, October 6.)
Cal-Taxletter, October 9, 2009
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