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Audit finds problems at recycling fund at the center of Assembly budget plan

June 22, 2010 | 10:43 am

An audit of California’s recycling program – which is at the center of Assembly Democrats’ budget proposal – has found that the program routinely projects its revenue wrongly, has no system to document fraud and is slow to act when its recyclers underpay.

The findings, released Tuesday by State Auditor Elaine Howle, come on top of problems with the fund in 2009, when insolvency forced it to stop payments to recycling centers and local conservation corps.

"Because the department does not have a systematic and documented methodology for analyzing data regarding the volume of recycled containers, it is potentially missing opportunities to detect fraud," the auditor reported.

The recycling fund is also "not able to reliably project revenues," the audit found, missing projections by between 3% and 15% over the last five years.

The budget plan put forward by Assembly Speaker John A. Perez (D-Los Angeles) would borrow about $9 billion and use the next 20 years of bottle and can deposits as collateral to receive the loan from Wall Street.

A new oil tax would be levied to pay back the loan.

Read the full audit of the Beverage Container Recycling Program here.

-- Shane Goldmacher in Sacramento