SHELLEY MISMANAGED CASH AUDIT: SECRETARY OF STATE IMPERILED VOTING MACHINE FUNDING FOR COUNTIES.

Byline: David M. Drucker Sacramento Bureau

Secretary of State Kevin Shelley badly mismanaged a federally funded voter-rights program, costing counties the money they need to replace outdated voting machines, a state audit released Thursday concluded.

Shelley - California's chief elections official - also failed to prevent his staff from improperly participating in overtly partisan Democratic events, the audit said. And his mishandling of Congressional Help America Vote Act funds and bungling of the HAVA program has left the state subject to federal penalties and in danger of missing a January 2006 deadline for instituting new voting requirements.

``The office's insufficient planning and poor management practices hampered its efforts to implement HAVA provisions in a timely way,'' State Auditor Elaine Howle wrote in her 60-page report. ``Additionally, the office's disregard for proper controls and its poor oversight of staff and consultants led to questionable uses of HAVA funds.''

Shelley disagreed with some of the audit's findings, issuing a statement saying the mistakes were unintentional. The San Francisco Democrat said administering the 2003 gubernatorial recall election is partly to blame for his failure to properly implement HAVA, and added his office is already working to improve the program.

``This office, like most secretaries of state nationwide, had no previous experience in administering federal funds, or even state funds, pursuant to such a complex program. We question whether other states would fare differently under the scrutiny of a similar review.''

Los Angeles County Registrar-Recorder Conny McCormack, who also heads the California Association of Clerks and Elections Officials, called on Gov. Arnold Schwarzenegger to strip Shelley of his authority over HAVA. She said the secretary's mismanagement of the program means there will be an unspecified delay in Californians' ability to benefit from the improvements in voter access and ballot accuracy afforded by HAVA.

``We're in a crisis,'' McCormack said.

U.S. Election Assistance Commission Chairman DeForest B. Soaries Jr. said nothing in the law stops Schwarzenegger from relieving Shelley of the responsibility for the HAVA program.

A Schwarzenegger spokesman said the governor is studying his options.

``We're reviewing the applicable federal and state laws and considering what steps may be appropriate to take,'' spokesman H.D. Palmer said.

HAVA, passed by Congress in 2002 in the wake of Florida's 2000 presidential election controversy, has provided California with $180.6 million in federal money - in addition to $169.6 million allotted this year - to modernize voting machines, pay for voter education programs and improve access to voting for the disabled and military personnel serving abroad.

According to the audit, Shelley failed to provide money to counties to upgrade voting machines and conduct voter-outreach programs in a timely manner, costing them interest earnings that could be used to help purchase voting equipment and jeopardizing their ability to work out the kinks of any new voting system before the June 2006 primary election.

The state could ultimately be sued by the U.S. Justice Department, or be subject to an investigation by the U.S. Comptroller-General and be forced to reimburse Washington for improperly spent HAVA funds.

Staff Writer Harrison Sheppard contributed to this report.

David M. Drucker, [phone]

david.drucker(at)dailybulletin.com