Lawmakers give warning over departments’ reported misuse of funds

California lawmakers are growing more frustrated over revelations that state agencies are hiding funds by not depositing them in the state treasury, but one legislative panel has stopped short of imposing a financial penalty against one of the departments involved.

A Senate budget subcommittee balked Thursday at a staff recommendation that it reduce funding for the Department of Fish and Wildlife by $1 million until the agency management comes up with specific proposals to halt what lawmakers call the misappropriation of funds. But the panel warned it may not be so forgiving if the misconduct is not cleaned up.

The department leases wildlife protection areas to farmers and failed to deposit at least $1.7 million, as required, in the state’s Wildlife Restoration Fund, having farmers provide some of the money in the form of Home Depot gift cards to cover department office expenses.

A report to the Senate subcommittee by its staff criticized “numerous instances (over 50) where lease payments were made but never deposited in state coffers. These payments were used for other public and perhaps private purposes (for example property or building improvements, or agricultural equipment).”

“The department also discovered widespread non-payment of monies owed to the state under lease arrangements that were never collected or even referred to Sacramento for further action,” the staff report said.

The panel headed by Sen. James Beall Jr. (D-San Jose) decided against cutting the department’s budget, at least for now, after its director, Chuck Bonham, assured legislators he was making it a priority to take corrective action.

“We are going to give him time between now and the budget process to clean up the problems or the Legislature will act,’’ Beall said. “My goal is to recover all the money that should have gone into the state treasury.’’

Mark Hariri, director of the state Treasurer’s Office, told the panel that his staff has so far identified 50 accounts by various state agencies where money was not put into the state treasury as it should have been, adding the problem is “much larger than we thought.’’

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patrick.mcgreevy@latimes.com