California's Recycling Program Operating At Million Dollar Losses

California’s beverage container recycling program appears to be operating very much in the red, according to a newly released report. An audit of the California Department of Resources Recycling and Recovery’s Beverage Container Recycle Program found that the initiative has exceeded its revenue by more than $100 million in three of the past four fiscal years.

According to the Los Angeles Times, the program, also known as CalRecycle, which was set up in 1986 as an incentive to encourage consumer recycling as part of a larger green initiative has been operating at a massive annual deficit. The main revenue of the program comes from beverage distributors that have to make a redemption payment for each beverage container made for sale in the state. This past year, costs surpassed revenue by almost $29 million, which was an improvement compared to the three years prior.

“Immediate action is needed to ensure the continued viability of the program,” State Auditor Elaine Howle said in the report. The audit recommended that the local state legislation change laws to reduce costs in order to stabilize the finances of the program. The audit also suggested the program implement a new fraud prevention measures that could cost the program significant amounts of money. The current management plan does not do a good enough job of identifying the kind of fraudulence that's the greatest financial risk to the program. This, Howle says, is the biggest problem in helping ensure financial efficiency in the program.

The L.A. Times reports that CalRecycle has 60 days to make changes in response to the auditing report.