The audit found that the addresses of 49 registered sex offenders matched those of 46 child care facilities throughout the state.
The state Department of Social Services has suspended licenses for nine of the homes. Officials said there is no immediate indication that any children were abused.
Nevertheless, the report angered the two lawmakers who requested the audit, Assembly members Anthony Adams, a Republican from Hesperia, and Fiona Ma, a Democrat from San Francisco.
"My biggest concern right now is the number of sex offenders that are in child care facilities," Ma said during a Capitol news conference. "Parents who go to work, drop off their kids in the morning, pick them up, should not have to worry about the safety of their children."
The audit also showed that about 51,000 registered sex offenders in California have little supervision because they have completed parole. Another 8,000 sex offenders are currently being supervised by parole agents.
"What we found is shocking," Ma said. "There is not a good monitoring system in place."
State auditors matched the addresses of 75,000 licensed facilities, including foster family homes and in-home daycare centers, with the state's database of registered sex offenders.
Auditors recommended that the state departments of justice and social services share their databases to ensure that sex offenders are not living at licensed homes.
Adams said he will seek legislation requiring agencies to cross-check their databases.
"Government has absolutely failed in this regard," he said. "They don't speak to each other at all."
Some of those who had their licenses revoked reacted angrily.
Dorothea L. Morris was among those whose licenses were suspended because her address matched the one given by her son, a registered sex offender. She had operated Morris Family Child Care in Pacoima, north of Los Angeles.
"He's not living here," her husband, Jimmye Morris, told The Associated Press in a telephone interview. "He's not even in the state. He's back East. He hasn't lived here in over seven years."
The Department of Social Services also suspended the license of Harriett J. Hunter, who had operated Hunter Family Child Care in Los Angeles.
Hunter said she obtained her license in 2002 but had never cared for a child other than her niece for a few hours each day. That stopped before her fiance, Raymond Carreon, moved to the home in 2005, she and Carreon said.
Carreon was convicted in 1996 of committing a lewd act with a child under 14, according to the audit. He told the AP that he properly registers as a sex offender each year as required by law and has no contact with children.
"I'm not even well," said Hunter, 65, who said she suffers from arthritis and other ills. "I haven't done child care, I don't do child care, I don't intend to do child care."
Of the 46 address matches identified in the audit, 25 were in Los Angeles, eight in the Central Valley, seven in the San Francisco Bay area, four in San Diego, and one each in San Bernardino and Sacramento.
Only nine licenses were suspended because in most cases inspectors for the Department of Social Services could not verify that a sex offender was living at the location. In other cases, no children were present where the offenders were living.
Under state law, those with daycare and foster care licenses must report the names of any adults living in or associated with their facilities. Ma said she will seek legislation stiffening penalties for licensees who violate that law.
The audit also found cases in which multiple sex offender parolees were living at the same address. Under most circumstances, state law prohibits a sex offender from living with other offenders while on parole.
The locations matched by state auditors often turned out to be drug treatment programs, hotels and apartment complexes. In some instances, they were hospitals or jails.
State Auditor Elaine Howle said some parolees were living in a hotel two to a room, a violation of state law. Department of Corrections and Rehabilitation spokesman Gordon Hinkle, however, denied that any of the sex offender parolees had living arrangements that were illegal.
Howle called for the Legislature to clarify the residency restrictions. Adams said his bill would close a loophole that allows up to six sex offenders to live together in group homes.
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