LAO: Legislature should audit DWR’s bond spending

While there’s a lot of talk about the $11.1 billion water bond on the November ballot, the general public may not realize that Department of Water Resources has already been on the receiving end of over $15 billion in bond funds over the past decade. Of that sum, several billion are still available, according to a report released today by the nonpartisan Legislative Analyst’s Office.

In its analysis of the governor’s proposed budget for natural resources, the LAO concluded that DWR bond spending should be audited.

“These recent increases in the availability of bond funding for DWR are unprecedented in their magnitude,” the report says. “This has led to concerns about the department’s capacity to effectively manage such a high level of funding.”

It’s been difficult to track how DWR spends bond money, the LAO says, because the department administratively shifts money between different projects and programs. “It is not clear that, in all cases, these funding shifts were in line with the Legislature’s original funding intent,” the LAO said.

Besides recommending an audit, the LAO also zeroed in on the proposed budget for the new Delta Stewardship Council, appointments to which could come any day.

The council would receive $49.1 million in funding for 2010-11, most of it from bonds. Much of the money would pay for contractors to help write the new Delta plan which may endorse a peripheral canal or tunnel.

The council would consist of 58 staffers, including 50 existing positions transfered over from the old Calfed structure. The eight new positions would include seven council members and an assistant to the chair.

The LAO was mostly OK with the new council’s budget, but recommended killing one proposed contract position (saving $200,000) and eliminating a small amount of money that would go to Metropolitan Water District of Southern California as a “liaison” between Calfed and the Bay-Delta Conservation Plan. Such an arrangement, the LAO said, could be construed as a conflict of interest.

The LAO also warned that last November’s water deal did not include a long-term plan to pay for all the new policies put in place. It recommended the Legislature adopt such a plan.

And finally, it says the state should not spend $28 million in bond funds on the Two Gates project, since the feds have put that plan on hold pending further study.