SACRAMENTO -- The director of California's state parks system resigned Friday after officials discovered that her department had $54 million of unspent money in its accounts that it had not reported to the Department of Finance, even while the state said parks were so short of money that many needed to be closed.
Ruth Coleman, who had led the agency since 2003, stepped down, and the department's second-in-command, Acting Chief Deputy Director Michael Harris, was fired.
California Natural Resources Secretary John Laird said the state Attorney General's Office will be investigating and the Department of Finance will be conducting a comprehensive audit.
"It's our goal to make sure we get to the bottom of this," Laird said.
Laird said that the parks department had shielded from finance officials $20.4 million in an account that takes money from park entrance fees and concession contracts, as well as $33.5 million in a state fund for off-highway vehicle parks.
The disclosure comes at a politically difficult time for Gov. Jerry Brown, who pushed for more than a year to close 70 state parks -- one quarter of the entire park system -- to save $22 million as part of efforts to balance the state's budget.
"This is deeply disappointing because we just went to many partners around the state to get them to step up and cover the shortfall," Laird said. "I'm truly sorry about that."
The parks had been scheduled to close on July
Brown is asking voters to raise taxes in the November election, and polls show that the vote will be tight.
In an interview with the Mercury News on Friday, Coleman said she didn't know about the accounting problems until several days ago.
"I was not aware of this excess fund balance," she said. "We were beginning actions to correct it. But I do take responsibility for actions of staff."
Coleman said no taxpayer money is missing and that no funds were embezzled. Laird said a preliminary investigation showed the under-reporting of the money began at least 12 years ago, under Gov. Gray Davis' former parks director Rusty Areias.
"It was an action to keep it accumulating and not report it, not an action to spend it," Laird said.
He said he does not know how many people were aware of the money, or what their motivation was to keeping it hidden.
One parks department official who requested anonymity said it appears there was an error in accounting formulas years ago, and that as the money accumulated in the funds, staff members did not want to admit the mistake, possibly for fear that the finance department would take the money away.
The disclosure is the second major hit this month for the state parks department. On Sunday, the Sacramento Bee reported that former deputy parks director Manuel Lopez had approved $271,000 in vacation buy backs for parks staffers without authorization.
Coleman had demoted Lopez in October. Then he resigned under pressure in May.
On Friday, Coleman said Lopez was responsible for concealing the $54 million in unreported money.
"It was part of his job," she said. "He did not elevate it to my attention."
She said she learned of the problem when Lopez's successor, Aaron Robertson, uncovered it as part of an investigation into Lopez's actions. Calls to Lopez went unanswered Friday.
Court records show that Lopez, who lives in Granite Bay, filed for bankruptcy Wednesday in U.S. Bankruptcy Court in Sacramento. He reported $648,759 in assets and $707,748 in debts.
Friday's political fallout was swift.
Officials in Sonoma County pulled a $17 million parks funding measure planned for the county ballot in November. "I don't see how we can go forward," Caryl Hart, Sonoma County's regional parks director, told the Santa Rosa Press Democrat.
Lawmakers in Sacramento said they were outraged.
"Where does it end? If one department can hoard $54 million for 12 years, who else is playing the same tricks of deceit and thievery?" said state Sen. Noreen Evans, D-Santa Rosa.
The chairman of the Assembly Budget Committee, Bill Blumenfield, D-Van Nuys, announced that his committee will open hearings into the parks funding irregularities in August.
Larry Gerston, a professor of political science at San Jose State University, called the issue "a black eye" that won't help the governor as he tries to build trust and support for his tax measure.
"It's hard to cry wolf and say you are out of everything when there are accounts like this lying around," Gerston said. "But rushing to judgment with so many questions unanswered is probably not a wise thing to do."
Coleman said she hopes the extra money will be used to help shore up the state's ailing parks system, which has a $1.3 billion maintenance backlog, rather than spent other ways by the Legislature.
California Natural Resources Agency Undersecretary Janelle Beland has been appointed by Brown as acting interim parks director.
Paul Rogers covers resources and environmental issues. Contact him at 408-920-5045. Follow him at Twitter.com/PaulRogersSJMN