Sacramento Bee Flags $30M in Revolving Fund Expenses

Monday, August 24, 2026 | 0

The Sacramento Bee on Friday reported that the California Department of Industrial Relations has tapped into the revolving fund for projects and expenses that it could not connect to administering the state's workers' compensation system over the last six years.

California employers pay an annual assessment to finance the Workers' Compensation Administration Revolving Fund. Labor Code Section 62.5 says money in the account can be used only for the administration of the workers' compensation program and the $120 million Return-to-Work Supplement Program. 

The Bee reports that it found $30 million worth of DIR expenses from 2020 to 2026 that were paid for out of the revolving fund that had no obvious relationship to the workers' compensation system.

The DIR spent about $80,000 to investigate a Cal/OSHA district manager accused of bullying, the Bee reported.

Additionally, the newspaper says the agency paid $5.87 million from the revolving fund to CPS HR Consulting, a human resources consulting firm.

The Bee reports that the DIR paid the consulting firm $209,000 in 2020, the year that Gov. Gavin Newsom appointed Katie Hagen as director of the DIR. By 2024, the DIR was paying the firm $1.8 million per year.

Hagen resigned from her position with DIR in 2025 to take a position as CEO of CPS HR Consulting.

Hagen and CPS HR declined to comment.

The Bee's reports are here and here.