I agree with the majority opinion that the convictions are sound. I disagree concerning the order of probation—specifically, the order of restitution as a condition of probation. In my view, it should be affirmed.
Added to the California Constitution by Proposition 8, a 1982 initiative, article I, section 28, subdivision (b) mandates: “It is the unequivocal intention of the People of the State of California that all persons who suffer losses as a result of criminal activity shall have the right to restitution from the persons convicted of the crimes for losses they suffer. [<JH Restitution shall be ordered from the convicted persons in every case, regardless of the sentence or disposition imposed, in which a crime victim suffers a loss, unless compelling and extraordinary reasons exist to the contrary.” The constitutional amendment expressly required the Legislature to “adopt provisions to implement this section . . . .” (Ibid.)
In 1983, the Legislature acted on the constitutional mandate. It enacted former Penal Code section 1203.04, which, in 1993, provided: “In every case where a person is convicted of a crime and is granted probation, the court shall require, as a condition of probation, that the person make restitution . . . [t]o the victim . . . .” (Former Pen. Code, § 1203.04, subd. (a).) The statute went on to define “restitution” as “full or partial payment for the value of stolen or damaged property, medical expenses, and wages or profits lost due to injury or to time spent as a witness or in assisting police or prosecution, which losses were caused by the defendant as a result of committing the crime for which he or she was convicted.” (Former Pen. Code, § 1203.04, subd. (d).)
The majority concludes the defendant did not steal the funds; instead, he caused them to be expended improperly. Furthermore, urges the majority, we cannot conclude the funds were stolen for the purpose of restitution under former Penal Code section 1203.04 because we must resolve any ambiguity *361in favor of the defendant. This approach ignores the fundamental objective of statutory construction, that is, discovery of legislative intent.
The Supreme Court set the standard for interpretation of statutes effectuating Proposition 8. “Through the passage of Proposition 8, an initiative to reform the criminal justice system, the voters of the State of California amended the state Constitution to require the enactment of legislation providing that, unless ‘compelling and extraordinary reasons’ exist, restitution be ordered from any person convicted of a crime ‘in every case ... in which a crime victim suffers a loss . . . .’ (Cal. Const., art. I, § 28, subd. (b).)” (People v. Broussard (1993) 5 Cal.4th 1067, 1077 [22 Cal.Rptr. 278, 856 P.2d 1134].)
In Broussard, the defendant pleaded guilty to two counts of receiving stolen property. He was sentenced to prison and ordered to pay $5,545 in restitution. He appealed, contending the trial court lacked the power to order him to pay restitution under Government Code section 13967, subdivision (c) , the statute that governs orders of restitution when the defendant is sentenced to prison. (5 Cal.4th at p. 1069.) It requires the defendant to pay restitution to the “victim” for “economic loss.” Former Government Code section 13960 defined a “victim” as “[a] person who sustains injury or death as a direct result of a crime.”
Relying on the definition of “victim” in Government Code section 13960, the defendant asserted he could be ordered to pay restitution only for physical injury or death. (People v. Broussard, supra, 5 Cal.4th at p. 1070.) The Supreme Court rejected this interpretation. Instead, it found that the Legislature intended to follow its constitutional mandate to effectuate Proposition 8: “First and most important, as we have seen, the Legislature is under an express constitutional mandate (Cal. Const., art. I, § 28, subd. (b)) to enact laws requiring trial courts to order restitution ‘in every case ... in which a crime victim suffers a loss . . . .’ This constitutional requirement makes no distinction between losses that result from physical injury and losses that are purely economic. Thus, unless the Legislature chose to ignore the obligation that the voters of California imposed on it through the passage of article I, section 28, subdivision (b) of the Constitution, it must have intended that [Government Code] section 13967 protect all crime victims, regardless of the nature of their loss.” (Id. at p. 1075.) “ ‘The intent prevails over the letter, and the letter will, if possible, be read so as to conform to the spirit of the act.’ ” (Id. at p. 1071, quoting Lungren v. Deukmejian (1988) 45 Cal.3d 727, 735 [248 Cal.Rptr. 115, 755 P.2d 299].) Accordingly, the court held that “injury” includes purely economic loss, without physical injury, associated with the defendant’s crime of receiving stolen property. (Id. at pp. 1075-1077.)
*362As did the Broussard court with respect to Government Code section 13697, subdivision (c), we must interpret former Penal Code section 1203.04 to conform to the constitutional mandate of California Constitution, article I, section 28, subdivision (b), because there is no indication the Legislature intended to ignore, even if it could, this express constitutional obligation. (See People v. Broussard, supra, 5 Cal.4th at p. 1075; see also People v. Cruz (1996) 13 Cal.4th 764, 784-785 [55 Cal.Rptr.2d 117, 919 P.2d 731].) Doing so, I conclude that the term “stolen property,” as used in former Penal Code section 1203.04, subdivision (d) includes property wrongfully appropriated as a result of felony conflict of interest. Indeed, “to steal,” in a broad sense, is defined in the Oxford English Dictionary as taking or appropriating dishonestly anything belonging to another, whether material or immaterial. When an appropriation is made in violation of the conflict of interest laws, it is dishonest as a matter of law. There is no indication the Legislature intended the term “stolen property” to refer to any of an assortment of narrower definitions used in the theft and receiving stolen property statutes.
The majority avoids this analysis by incanting the rule of lenity—that we must interpret an ambiguous criminal statute in favor of the defendant. However, if we are to construe former Penal Code section 1203.04 the way the Legislature intended it, that is, as an effectuation of Proposition 8, then we must construe “stolen property” to include funds improperly appropriated due to a conflict of interest. This precludes interpretation of “stolen property” in favor of the defendant. The rule of lenity “applies only when some doubt exists as to the legislative purpose in enacting the law” (In re Pedro T. (1994) 8 Cal.4th 1041, 1046 [36 Cal.Rptr.2d 74, 884 P.2d 1022]) and must yield when it collides with legislative intent. (People v. Phelps (1996) 41 Cal.App.4th 946, 951 [48 Cal.Rptr.2d 855].) Here, there is no doubt concerning legislative intent. Indeed, if the rule of lenity could be invoked to defeat legislative intent, a skillful semanticist could nullify any penal statute by confining each constituent word or phrase to its narrowest sense in favor of the defendant.
In 1995, the Legislature repealed former Penal Code section 1203.04 and amended section 1202.4 to provide, in part: “Restitution shall, to the extent possible, be of a dollar amount that is sufficient to fully reimburse the victim or victims, for every determined economic loss incurred as a result of the defendant’s criminal conduct, including all of the following: [U (1) Full or partial payment for the value of stolen or damaged property. . . .” (Stats. 1995, ch. 313, §§ 5 & 8, italics added.) This clarifies that the legislative intent was to reimburse for all economic loss, not just for “stolen property,” narrowly construed. (Oldham v. Kizer (1991) 235 Cal.App.3d 1046, 1059 [1 Cal.Rptr.2d 195] [subsequent amendment of a statutory scheme may be *363clarification of legislative intent].) Accordingly, in my view, former Penal Code section 1203.04 provided for mandatory restitution in this case for the state’s losses.
The defendant contends the evidence does not support the trial court’s conclusion the state actually suffered a loss as the result of the QEP contracts. In reaching that conclusion, the court correctly recognized restitution can be ordered only upon a finding, by a preponderance of the evidence, of loss caused to the victim by the defendant’s conduct. (People v. Baumann (1985) 176 Cal.App.3d 67, 80 [222 Cal.Rptr. 32].) The court found, as a proven fact, the state suffered loss. The court’s finding is supported by substantial evidence.
Stripped to their essentials, these contracts are simple. The defendant ordered his staff, over the vigorous objection of his deputy, James Smith, to arrange for the state to pay funds to certain school districts that were not expected to, and did not, do anything other than serve as conduits for the payment of the salaries of individuals who worked for a private corporation. In order to avoid such things as competitive bidding, Department of General Services oversight, and the like, the contracts were set up with the school districts as named contractors and assigned fictitious local duties that were never intended to be performed by the districts. As the trial court found, the school districts, as the defendant fully intended, did nothing more than float the funds to employees hired by QEP before the contracts were made.
Because Page, Dunbar and Law worked for QEP and QEP donated services to some school districts, the defendant asserts it must be concluded the state derived benefit from the contracts and thus did not suffer a loss. To the contrary, article IX, section 6, of our state Constitution provides that no part of the public school system shall be, directly or indirectly, transferred from or placed under the jurisdiction of any authority other than one included in the public school system. By arranging to keep Page, Dunbar and Law on the payroll of the public school system while they worked exclusively for QEP (free from any direction or control by any part of the public school system), defendant violated this provision. Article XVI, sections 3 and 6 of the Constitution preclude state officials from using any state money for the benefit of any corporation or from making any gift or grant of public funds to private corporations. Regardless whether QEP donated services to school districts not identified in the contracts, the compensation of its employees was its responsibility. By arranging to use state funds for the payment of compensation to QEP’s employees while they were in the sole employ of QEP, the defendant violated these provisions.
The evidence shows the defendant collected rent from QEP and his wife collected a salary. In other words, they received income from QEP. During *364the investigation, the defendant stated: “I’ll stipulate that it helped out on our income.” This use of improper contracts to take money from the Department of Education and turn it into income for himself is akin to money laundering. (See U.S. v. Parlavecchio (D.N.J. 1995) 903 F.Supp. 788, 796.)
In Parlavecchio, the defendants were employed by the city board of education. They established a corporation, thus concealing their individual identities, and bought property for the corporation which was later leased to the board for use as an elementary school. In effect, the defendants received rental payments from the board in violation of the conflict of interest laws. (903 F.Supp. at pp. 789-790.) The federal district court upheld their indictment on money laundering charges because “the defendants caused transfers of rent checks from the Board to specified bank accounts held by [the corporation] and then caused transfers from [the corporation’s] accounts to specified accounts held by each defendant,” the latter transfer constituting money laundering. (Id. at p. 796.)
The defendant directed the Department of Education’s employees to process unusual contracts with the districts. Donna Salaj, an experienced contracts manager for the department, had never seen contracts in which money w«s paid to a school district with directions to the district to pass the money along to a private company. Peter Yasitis, assistant superintendent of business for the Fremont Unified School District, had never seen the department fund a school employee to work for a private corporation. The defendant not only ordered these contracts for the benefit of QEP, he also solicited private funding for QEP, which he did not do for QEP’s competitors. The evidence is clear the defendant used his position to issue contracts in favor of QEP and then collected income from QEP. As did the money launderers in Parlavecchio, the defendant set in motion masked expenditures of public money which inured eventually to his personal benefit.
Whenever public funds are to be expended, there are substantive and procedural requirements that must be scrupulously honored. These include statutory or regulatory authorization for the expenditure and compliance with procedural requisites such as competitive bidding and advertisement and invitation to apply for funds pursuant to legally established grant programs. In the case of federal funds, expenditures must be made under the auspices of the State Board of Control pursuant to regulations established by that board. (Ed. Code, § 12000 et seq.) Any transaction by which a local school district acquires federal funds must be made pursuant to regulations established by the Superintendent of Public Instruction. (Ed. Code, §§ 33113-33114.) Here, that did not happen. Instead, over the objections of his staff, the defendant knowingly expended public funds without authority, *365ignored mandatory legal procedures, and utilized illegal contracts crafted carefully to conceal their true nature. Our law considers such behavior a misappropriation of public funds and attaches felony consequences. (Pen. Code, §§ 424-425; People v. Battin (1978) 77 Cal.App.3d 635, 650-651 [143 Cal.Rptr. 731, 95 A.L.R.3d 248].)
Just as Government Code sections 1090 and 1097 were designed to ensure absolute and undivided loyalty by public officials, these constitutional and statutory provisions, and others, were designed to ensure absolute protection of the public fisc. Public funds can be expended only pursuant to duly established authority and only in a manner that will ensure public control and accountability over the expenditure. While the defendant asserts the state received some benefits from the expenditures, the state is not in a position to ascertain or measure any asserted benefits because the defendant arranged and executed these contracts with the intent to preclude any form of public accountability. He succeeded for a time. When public funds are expended by a public official in an unauthorized manner and without complying with procedural requisites designed to ensure public control and accountability over the expenditure, then the expenditure must be considered a loss to the state. Accordingly, substantial evidence supports the trial court’s finding that the state suffered financial loss as a result of the defendant’s behavior.
I would uphold the trial court’s restitution order as an appropriate application of former Penal Code section 1203.04.
Even accepting, for the purpose of argument, the majority’s conclusion that restitution is not mandated by former Penal Code section 1203.04 and the trial court did not exercise its discretion to order restitution under Penal Code section 1203.1, any procedural error was harmless.
“No judgment shall be set aside ... for any error as to any matter of procedure, unless, after an examination of the entire cause, including the evidence, the court shall be of the opinion that the error complained of has resulted in a miscarriage of justice.” (Cal. Const., art. VI, § 13.) Despite this constitutional mandate, the majority fails to perform a harmless error analysis.
In ordering restitution, the trial court relied on former Penal Code section 1203.04, which makes restitution mandatory, regardless of the purpose of restitution. When imposing restitution under former Penal Code section 1203.04, there is no reason to consider the purpose of restitution because it must be imposed, absent compelling and extraordinary circumstances. Yet, the court continued: “Furthermore, in [People v. Narron (1987) 192 *366Cal.App.3d 724 (237 Cal.Rptr. 693)], the Court stated that restitution has value beyond victim recovery of actual losses. Restitution additionally serves the purpose of deterring future criminality and rehabilitating the criminal. All of these aims are effectively served when the government is compensated for its actual losses through the receipt of Penal Code section 1203.04 restitution. [Citation.] The Court finds that all three purposes will be served by ordering the defendant to pay restitution to the state in this case.”
The primary aims of a restitution order under Penal Code section 1203.1 are (1) compensation to the victim, (2) deterrence of future criminality, and (3) rehabilitation of the criminal. (People v. Narron (1987) 192 Cal.App.3d 724, 732 [237 Cal.Rptr. 693].) Accordingly, these are the three considerations that go into the trial court’s decision concerning whether to order probation.
During the hearing on restitution, the court commented: “[T]he law is perfectly clear that a court for reformation and for deterrence can, in fact, order restitution.” Despite the trial court’s statements that restitution was mandatory under former Penal Code section 1203.04, it went beyond those statements in its order to note the purposes for restitution would be served.
Furthermore, the trial court was aware of the mandate contained in California Constitution, article I, section 28, subdivision (b) giving victims the right to restitution. It stated: “California law requires that the Court order restitution for the actual loss experienced by the state. Restitution shall be ordered from convicted felons in every case in which the victim suffers loss, unless compelling and extraordinary reasons exist to the contrary. (See Cal. Const., art. I, § 28 (b).)”
A review of the entire case reveals no reasonable doubt the trial court would have ordered restitution under Penal Code section 1203.1 if it believed such an order was not appropriate under former Penal Code section 1203.04. There is no reasonable probability of an outcome more favorable to the defendant on remand. (See People v. Watson (1956) 46 Cal.2d 818, 836 [299 P.2d 243].) Therefore, the restitution order should be affirmed.
A petition for a rehearing was denied September 4, 1996.