License Plate Money for Kids Mismanaged, State Says

The money from state license plates with hearts, hands and star symbols has been misspent, according to a report released Tuesday by the California State Auditor.

State departments broke the law by hiring private contractors to manage the program, according to the audit. Between fiscal years 2006-2007 and 2009-2010, about 40 percent of the money paid administrative costs to private contractors, the audit says. That's nearly $2.1 million.

The Kids Plates program was approved in 1992. For a fee, drivers could order a custom license plate with a hand, heart, star or plus sign symbol. Half of the money was to be spent on prevention of child abuse and unintentional childhood injury.

The money from the plates was administered through the Department of Public Health. But when the department hired the private San Diego State University Research Foundation to manage the program between 2004 and 2010, it broke the law, according to the state auditor.

Public Health "paid the research foundation to administer the program from the funds that the Legislature had intended it to use directly for childhood injury prevention programs," the audit found.

The SDSU Research Foundation was also operating without a valid contract, meaning it could not disburse state funds intended for childhood injury prevention, according to the audit.

Here are key points from the audit:

• The Department of Health Services and the Department of Public Health violated state law by hiring a private contractor to manage the Kids' Plates Program, rather than having state employees perform the work.
• The contractor performed services without an approved contract, and was unable to award any funds that could have been used to help prevent unintentional childhood injuries.
• Health Services and Public Health spent roughly 40 percent of total appropriations received during four fiscal years, or nearly $2.1 million on the contractor's administrative costs for the Kids' Plates Program.
• Public Health did not comply with its own contracting procedures when it awarded 115 grants to community agencies.
• The Department of Social Services did not fulfill certain monitoring requirements for trust fund expenditures. As a result, one grantee overcharged Social Services by $10,189, and Social Services' Office of Child Abuse Prevention may have used trust fund money to pay for expenditures that did not meet the trust fund's requirements.
• Social Services failed to fully publish certain information about the trust fund on its website as state law requires.

Money meant to help children throughout the state was not disbursed for its intended use. Who should be held accountable for this mismanagement of funds? Tell us in comments.