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Audit reveals major mishandling of CRV fund

June 22, 2010 12:00:00 AM PDT
A new audit of the state's beverage container recycling program reveals several major issues with the way it is run, problems that are costing the state much-needed millions. The beverage container recycling program was created in 1986 as part of an effort to encourage recycling.

But the new audit is critical of the way California is managing the fund that holds plastic bottle and aluminum can deposits, known as the CRVs, you pay when you buy beverages.

The audit found:

  • The state is lax in detecting fraud, like catching people who cash in containers from other states.
  • Revenue forecasts were often way off-base, over by $158 million one year.
  • It failed to collect millions from beverage companies which are also supposed to contribute to the CRV fund.

The auditor says such mismanagement hurts consumers.

"Recycling centers were closing down because there wasn't enough money to support the program," said Elaine Howle, a California state auditor. "So that affects consumers where you don't have places to take your recyclables to get your CRV back."

The state recycling program lauds its 80 percent statewide recycling rate, but acknowledges it can do better.

"For the most part, the recycling program functions very well for all consumers," said Jason Marshall, CalRecycle deputy directory. "The report does identify some things we need to do better, and we look forward to implementing those changes."

Many consumers are upset because they thought when they didn't cash in their CRV, the money helped improve the environment, when in fact the state uses it for many other things.

"It really ticks me off a lot because I work hard for my money," said Leslie Parker, who recycles. "I wish I thought they did too."

The audit report will be felt as far as Wall Street.

Assembly Democrats were hoping to use the recycling fund as collateral for a multibillion dollar loan that could help the state prevent deeper budget cuts.

"It really provides a road map for how we strengthen the fund and ultimately making it a better product to sell on Wall Street," said Assm. Bob Blumenfield (D-Los Angeles).


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