Lake County Grand Jury • 2008-2009

Final Report Table of Contents

Published: April 17, 2008 257 pages Consolidated Report
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Note: Missing finding numbers detected: F37, F38, F39, F40, F41, F42, F43, F44, F45, F46, F47, F48, F49, F50, F51, F52, F53, F54, F55, F56, F57, F58, F59, F60, F61, F62, F63, F64, F65, F66, F67, F68, F69, F70, F71, F72, F73, F74, F75, F76, F77, F78, F79, F80, F81, F82, F83, F84, F85, F86, F87, F88, F89, F90, F91, F92, F93, F94, F95, F96, F97, F98, F99, F100, F101, F102, F103, F104, F105, F106, F107, F108, F109, F110, F111, F112, F113, F114, F115, F116, F117, F118, F119, F120, F121, F122, F123, F124, F125, F126, F127, F128, F129, F130, F131, F132, F133, F134, F135, F136, F137, F138, F139, F140, F141, F142, F143, F144, F145, F146, F147, F148, F149, F150, F151, F152, F153, F154, F155, F156, F157, F158, F159, F160, F161, F162, F163, F164, F165, F166, F167, F168, F169, F170, F171, F172, F173, F174, F175, F176, F177, F178, F179, F180, F181, F182, F183, F184, F185, F186, F187, F188, F189, F190, F191, F192, F193, F194, F195, F196, F197, F198, F199, F200, F201, F202, F203, F204, F205, F206, F207, F208, F209, F210, F211, F212, F213, F214, F215, F216, F217, F218, F219, F220, F221, F222, F223, F224, F225, F226, F227, F228, F229, F230, F231, F232, F233, F234, F235, F236, F237, F238, F239, F240, F241, F242, F243, F244, F245, F246, F247, F248, F249, F250, F251, F252, F253, F254, F255, F256, F257, F258, F259, F260, F261, F262, F263, F264, F265, F266, F267, F268, F269, F270, F271, F272, F273, F274, F275, F276, F277, F278, F279, F280, F281, F282, F283, F284, F285, F286, F287, F288, F289, F290, F291, F292, F293, F294, F295, F296, F297, F298, F299, F300, F301, F302, F303, F304, F305, F306, F307, F308, F309, F310, F311, F312, F313, F314, F315, F316, F317, F318, F319, F320, F321, F322, F323, F324, F325, F326, F327, F328, F329, F330, F331, F332, F333, F334, F335, F336, F337, F338, F339, F340, F341, F342, F343, F344, F345, F346, F347, F348, F349, F350, F351, F352, F353, F354, F355, F356, F357, F358, F359, F360, F361, F362, F363, F364, F365, F366, F367, F368, F369, F370, F371, F372, F373, F374, F375, F376, F377, F378, F379, F380, F381, F382, F383, F384, F385, F386, F387, F388, F389, F390, F391, F392, F393, F394, F395, F396, F397, F398, F399, F400, F401, F402, F403, F404, F405, F406, F407, F408, F409, F410, F411, F412, F413, F414, F415, F416, F417, F418, F419, F420, F421, F422, F423, F424, F425, F426, F427, F428, F429, F430, F431, F432, F433, F434, F435, F436, F437, F438, F439, F440, F441, F442, F443, F444, F445, F446, F447, F448, F449, F450, F451, F452, F453, F454, F455, F456, F457, F458, F459, F460, F461, F462, F463, F464, F465, F466, F467, F468, F469, F470, F471, F472, F473, F474, F475, F476, F477, F478, F479, F480, F481, F482, F483, F484, F485, F486, F487, F488, F489, F490, F491, F492, F493, F494, F495, F496, F497, F498, F499, F500, F501, F502, F503, F504, F505, F506, F507, F508, F509, F510, F511, F512, F513, F514, F515, F516, F517, F518, F519, F520, F521, F522, F523, F524, F525, F526, F527, F528, F529, F530, F531, F532, F533, F534, F535, F536, F537, F538, F539, F540, F541, F542, F543, F544, F545, F546, F547, F548, F549, F550, F551, F552, F553, F554, F555, F556, F557, F558, F559, F560, F561, F562, F563, F564, F565, F566, F567, F568, F569, F570, F571, F572, F573, F574, F575, F576, F577, F578, F579, F580, F581, F582, F583, F584, F585, F586, F587, F588, F589, F590, F591, F592, F593, F594, F595, F596, F597, F598, F599, F600, F601, F602, F603, F604, F605, F606, F607, F608, F609, F610, F611, F612, F613, F614, F615, F616, F617, F618, F619, F620, F621, F622, F623, F624, F625, F626, F627, F628, F629, F630, F631, F632, F633, F634, F635, F636, F637, F638, F639, F640, F641, F642, F643, F644, F645, F646, F647, F648, F649, F650, F651, F652, F653, F654, F655, F656, F657, F658, F659, F660, F661, F662, F663, F664, F665, F666, F667, F668, F669, F670, F671, F672, F673, F674, F675, F676, F677, F678, F679, F680, F681, F682, F683, F684, F685, F686, F687, F688, F689, F690, F691, F692, F693, F694, F695, F696, F697, F698, F699, F700, F701, F702, F703, F704, F705, F706, F707, F708, F709, F710, F711, F712, F713, F714, F715, F716, F717, F718, F719, F720, F721, F722, F723, F724, F725, F726, F727, F728, F729, F730, F731, F732, F733, F734, F735, F736, F737, F738, F739, F740, F741, F742, F743, F744, F745, F746, F747, F748, F749, F750, F751, F752, F753, F754, F755, F756, F757, F758, F759, F760, F761, F762, F763, F764, F765, F766, F767, F768, F769, F770, F771, F772, F773, F774, F775, F776, F777, F778, F779, F780, F781, F782, F783, F784, F785, F786, F787, F788, F789, F790, F791, F792, F793, F794, F795, F796, F797, F798, F799, F800, F801, F802, F803, F804, F805, F806, F807, F808, F809, F810, F811, F812, F813, F814, F815, F816, F817, F818, F819, F820, F821, F822, F823, F824, F825, F826, F827, F828, F829, F830, F831, F832, F833, F834, F835, F836, F837, F838, F839, F840, F841, F842, F843, F844, F845, F846, F847, F848, F849, F850, F851, F852, F853, F854, F855, F856, F857, F858, F859, F860, F861, F862, F863, F864, F865, F866, F867, F868, F869, F870, F871, F872, F873, F874, F875, F876, F877, F878, F879, F880, F881, F882, F883, F884, F885, F886, F887, F888, F889, F890, F891, F892, F893, F894, F895, F896, F897, F898, F899, F900, F901, F902, F903, F904, F905, F906, F907, F908, F909, F910, F911, F912, F913, F914, F915, F916, F917, F918, F919, F920, F921, F922, F923, F924, F925, F926, F927, F928, F929, F930, F931, F932, F933, F934, F935, F936, F937, F938, F939, F940, F941, F942, F943, F944, F945, F946, F947, F948, F949, F950, F951, F952, F953, F954, F955, F956, F957, F958, F959, F960, F961, F962, F963, F964, F965, F966, F967, F968, F969, F970, F971, F972, F973, F974, F975, F976, F977, F978, F979, F980, F981, F982, F983, F984, F985, F986, F987, F988, F989, F990, F991, F992, F993, F994, F995, F996, F997, F998, F999, F1000, F1001, F1002, F1003, F1004, F1005, F1006, F1007, F1008, F1009, F1010, F1011, F1012, F1013, F1014, F1015, F1016, F1017, F1018, F1019, F1020, F1021, F1022, F1023, F1024, F1025, F1026, F1027, F1028, F1029, F1030, F1031, F1032, F1033, F1034, F1035, F1036, F1037, F1038, F1039, F1040, F1041, F1042, F1043, F1044, F1045, F1046, F1047, F1048, F1049, F1050, F1051, F1052, F1053, F1054, F1055, F1056, F1057, F1058, F1059, F1060, F1061, F1062, F1063, F1064, F1065, F1066, F1067, F1068, F1069, F1070, F1071, F1072, F1073, F1074, F1075, F1076, F1077, F1078, F1079, F1080, F1081, F1082, F1083, F1084, F1085, F1086, F1087, F1088, F1089, F1090, F1091, F1092, F1093, F1094, F1095, F1096, F1097, F1098, F1099, F1100, F1101, F1102, F1103, F1104, F1105, F1106, F1107, F1108, F1109, F1110, F1111, F1112, F1113, F1114, F1115, F1116, F1117, F1118, F1119, F1120, F1121, F1122, F1123, F1124, F1125, F1126, F1127, F1128, F1129, F1130, F1131, F1132, F1133, F1134, F1135, F1136, F1137, F1138, F1139, F1140, F1141, F1142, F1143, F1144, F1145, F1146, F1147, F1148, F1149, F1150, F1151, F1152, F1153, F1154, F1155, F1156, F1157, F1158, F1159, F1160, F1161, F1162, F1163, F1164, F1165, F1166, F1167, F1168, F1169, F1170, F1171, F1172, F1173, F1174, F1175, F1176, F1177, F1178, F1179, F1180, F1181, F1182, F1183, F1184, F1185, F1186, F1187, F1188, F1189, F1190, F1191, F1192, F1193, F1194, F1195, F1196, F1197, F1198, F1199, F1200, F1201, F1202, F1203, F1204, F1205, F1206, F1207, F1208, F1209, F1210, F1211, F1212, F1213, F1214, F1215, F1216, F1217, F1218, F1219, F1220, F1221, F1222, F1223, F1224, F1225, F1226, F1227, F1228, F1229, F1230, F1231, F1232, F1233, F1234, F1235, F1236, F1237, F1238, F1239, F1240, F1241, F1242, F1243, F1244, F1245, F1246, F1247, F1248, F1249, F1250, F1251, F1252, F1253, F1254, F1255, F1256, F1257, F1258, F1259, F1260, F1261, F1262, F1263, F1264, F1265, F1266, F1267, F1268, F1269, F1270, F1271, F1272, F1273, F1274, F1275, F1276, F1277, F1278, F1279, F1280, F1281, F1282, F1283, F1284, F1285, F1286, F1287, F1288, F1289, F1290, F1291, F1292, F1293, F1294, F1295, F1296, F1297, F1298, F1299, F1300, F1301, F1302, F1303, F1304, F1305, F1306, F1307, F1308, F1309, F1310, F1311, F1312, F1313, F1314, F1315, F1316, F1317, F1318, F1319, F1320, F1321, F1322, F1323, F1324, F1325, F1326, F1327, F1328, F1329, F1330, F1331, F1332, F1333, F1334, F1335, F1336, F1337, F1338, F1339, F1340, F1341, F1342, F1343, F1344, F1345, F1346, F1347, F1348, F1349, F1350, F1351, F1352, F1353, F1354, F1355, F1356, F1357, F1358, F1359, F1360, F1361, F1362, F1363, F1364, F1365, F1366, F1367, F1368, F1369, F1370, F1371, F1372, F1373, F1374, F1375, F1376, F1377, F1378, F1379, F1380, F1381, F1382, F1383, F1384, F1385, F1386, F1387, F1388, F1389, F1390, F1391, F1392, F1393, F1394, F1395, F1396, F1397, F1398, F1399, F1400, F1401, F1402, F1403, F1404, F1405, F1406, F1407, F1408, F1409, F1410, F1411, F1412, F1413, F1414, F1415, F1416, F1417, F1418, F1419, F1420, F1421, F1422, F1423, F1424, F1425, F1426, F1427, F1428, F1429, F1430, F1431, F1432, F1433, F1434, F1435, F1436, F1437, F1438, F1439, F1440, F1441, F1442, F1443, F1444, F1445, F1446, F1447, F1448, F1449, F1450, F1451, F1452, F1453, F1454, F1455, F1456, F1457, F1458, F1459, F1460, F1461, F1462, F1463, F1464, F1465, F1466, F1467, F1468, F1469, F1470, F1471, F1472, F1473, F1474, F1475, F1476, F1477, F1478, F1479, F1480, F1481, F1482, F1483, F1484, F1485, F1486, F1487, F1488, F1489, F1490, F1491, F1492, F1493, F1494, F1495, F1496, F1497, F1498, F1499, F1500, F1501, F1502, F1503, F1504, F1505, F1506, F1507, F1508, F1509, F1510, F1511, F1512, F1513, F1514, F1515, F1516, F1517, F1518, F1519, F1520, F1521, F1522, F1523, F1524, F1525, F1526, F1527, F1528, F1529, F1530, F1531, F1532, F1533, F1534, F1535, F1536, F1537, F1538, F1539, F1540, F1541, F1542, F1543, F1544, F1545, F1546, F1547, F1548, F1549, F1550, F1551, F1552, F1553, F1554, F1555, F1556, F1557, F1558, F1559, F1560, F1561, F1562, F1563, F1564, F1565, F1566, F1567, F1568, F1569, F1570, F1571, F1572, F1573, F1574, F1575, F1576, F1577, F1578, F1579, F1580, F1581, F1582, F1583, F1584, F1585, F1586, F1587, F1588, F1589, F1590, F1591, F1592, F1593, F1594, F1595, F1596, F1597, F1598, F1599, F1600, F1601, F1602, F1603, F1604, F1605, F1606, F1607, F1608, F1609, F1610, F1611, F1612, F1613, F1614, F1615, F1616, F1617, F1618, F1619, F1620, F1621, F1622, F1623, F1624, F1625, F1626, F1627, F1628, F1629, F1630, F1631, F1632, F1633, F1634, F1635, F1636, F1637, F1638, F1639, F1640, F1641, F1642, F1643, F1644, F1645, F1646, F1647, F1648, F1649, F1650, F1651, F1652, F1653, F1654, F1655, F1656, F1657, F1658, F1659, F1660, F1661, F1662, F1663, F1664, F1665, F1666, F1667, F1668, F1669, F1670, F1671, F1672, F1673, F1674, F1675, F1676, F1677, F1678, F1679, F1680, F1681, F1682, F1683, F1684, F1685, F1686, F1687, F1688, F1689, F1690, F1691, F1692, F1693, F1694, F1695, F1696, F1697, F1698, F1699, F1700, F1701, F1702, F1703, F1704, F1705, F1706, F1707, F1708, F1709, F1710, F1711, F1712, F1713, F1714, F1715, F1716, F1717, F1718, F1719, F1720, F1721, F1722, F1723, F1724, F1725, F1726, F1727, F1728, F1729, F1730, F1731, F1732, F1733, F1734, F1735, F1736, F1737, F1738, F1739, F1740, F1741, F1742, F1743, F1744, F1745, F1746, F1747, F1748, F1749, F1750, F1751, F1752, F1753, F1754, F1755, F1756, F1757, F1758, F1759, F1760, F1761, F1762, F1763, F1764, F1765, F1766, F1767, F1768, F1769, F1770, F1771, F1772, F1773, F1774, F1775, F1776, F1777, F1778, F1779, F1780, F1781, F1782, F1783, F1784, F1785, F1786, F1787, F1788, F1789, F1790, F1791, F1792, F1793, F1794, F1795, F1796, F1797, F1798, F1799, F1800, F1801, F1802, F1803, F1804, F1805, F1806, F1807, F1808, F1809, F1810, F1811, F1812, F1813, F1814, F1815, F1816, F1817, F1818, F1819, F1820, F1821, F1822, F1823, F1824, F1825, F1826, F1827, F1828, F1829, F1830, F1831, F1832, F1833, F1834, F1835, F1836, F1837, F1838, F1839, F1840, F1841, F1842, F1843, F1844, F1845, F1846, F1847, F1848, F1849, F1850, F1851, F1852, F1853, F1854, F1855, F1856, F1857, F1858, F1859, F1860, F1861, F1862, F1863, F1864, F1865, F1866, F1867, F1868, F1869, F1870, F1871, F1872, F1873, F1874, F1875, F1876, F1877, F1878, F1879, F1880, F1881, F1882, F1883, F1884, F1885, F1886, F1887, F1888, F1889, F1890, F1891, F1892, F1893, F1894, F1895, F1896, F1897, F1898, F1899, F1900, F1901, F1902, F1903, F1904, F1905, F1906, F1907, F1908, F1909, F1910, F1911, F1912, F1913, F1914, F1915, F1916, F1917, F1918, F1919, F1920, F1921, F1922, F1923, F1924, F1925, F1926, F1927, F1928, F1929, F1930, F1931, F1932, F1933, F1934, F1935, F1936, F1937, F1938, F1939, F1941, F1942, F1943, F1944, F1945, F1946, F1947, F1948, F1949, F1950, F1951, F1952, F1953, F1954, F1955, F1956, F1957, F1958, F1959, F1960, F1961, F1962, F1963, F1964, F1965, F1966, F1967, F1968, F1969, F1970, F1971, F1972, F1973, F1974, F1975, F1976, F1977, F1978, F1979, F1980, F1981, F1982, F1983, F1984, F1985, F1986, F1987, F1988, F1989, F1990, F1991, F1992, F1993, F1994, F1995, F1996, F1997, F1998, F1999, F2000, F2001, F2002, F2003, F2004, F2005, F2006, F2007, F2008

Findings and Recommendations 38 findings

F1 Page 1
In 2008, the LCNTF reported seizing drugs with a street value of $25,430,587, 16 weapons and $1,991,157 in currency.
No recommendations for this finding
F2 Page 1
For several months in 2008, the District Attorney’s Office did not have a person working the asset forfeiture and disbursement process. As a result, assets seized were not forfeited and were returned to the alleged violators. According to testimony received, if forfeiture processing is not started within 12 months of seizure, property is returned by default. The County Auditor logged $85,259 of returned assets for 2008. Toward the end of 2008, an Assistant District Attorney was assigned and trained. The Assistant District Attorney began executing the process in 2009.
No recommendations for this finding
F3 Page 1
The reports received by the committee showed dramatically different values. The committee was not able to determine what the accurate value was. The reports for 2008 listed the money seized as: Agency 2008 Seized Comment assets LCNTF $1,991,156.57 All currency or bank accounts District Attorney $494,290.08 All currency plus some property County Auditor $16,733.00 All currency Sheriff’s Office via DEA $37,059.00 All currency
No recommendations for this finding
F4 Page 1
During all of 2008, the District Attorney reported only $2,016 of seized assets actually forfeited and disbursed to the agencies, whereas the County Auditor- Controller reported $14,454 of seized assets forfeited and disbursed for the same period. Budget and Finance Committee
No recommendations for this finding
F5 Page 1
The records provided to the committee by the District Attorney for 2008 do not reconcile. The following table shows the discrepancy: Item 2008 Opening Balance $233,110.74 Plus Assets Seized $494,290.08 Less Assets Forfeited $2,015.66 Ending Balance $637,660.83 Note that these numbers do not add properly. If the opening balance, seized amount and forfeited amount are correct, then the ending balance should be $725,385.166
No recommendations for this finding
F6 Page 1
Due to the lack of personnel assigned to asset forfeiture in the District Attorney’s office and the resultant lack of action on seized assets, communication between seizing organizations and the District Attorney’s office was minimal at best and antagonistic at worst. According to testimony, morale of the officers on the street deteriorated when seized assets were returned because of inaction by the District Attorney’s Office.
No recommendations for this finding
F7 Page 1
Seized assets are held as evidence and, depending on the agency doing the prosecution, are held in different funds/accounts. For example, if the Lake County Sheriff’s Office utilizes the Federal Drug Enforcement Administration (DEA) to seize a large asset, then the DEA holds the assets in Federal accounts until the Federal courts declare the assets forfeited and then the Sheriff’s Office receives a percentage-based disbursement. If the Lakeport PD seizes an asset, then the District Attorney’s Office places the asset in a separate County Treasury account, with the County Auditor-Controller, until the local courts declare the assets forfeited. Once the assets are forfeited, the results are disbursed amongst the participating agencies accordingly.
No recommendations for this finding
F8 Page 1
Most of the seizures in Lake County were done by the LCNTF and seized cash was deposited and maintained in the separate fund in the County’s treasury. However, in 2008, inaction by the District Attorney’s Office caused the LCNTF to set up a separate bank account to hold seizures. As of the end of 2008, the LCNTF account totaled $474,157 that should have been held in the County’s treasury. Even considering the $85,259 logged as returned by the Auditor, the total is still off by $2,465. 8 2008-2009 Lake County Civil Grand Jury Budget and Finance Committee
No recommendations for this finding
F9 Page 1
The District Attorney did not accept responsibility for seized assets being returned to alleged violators because the forfeiture proceedings had not begun within 12 months.
No recommendations for this finding
F10 Page 1
The District Attorney was unable to provide evidence of a set of policies and procedures except for two cash handling procedures that appeared to have been generated subsequent to the committee’s request for information on asset forfeiture.
No recommendations for this finding
F11 Page 1
The City Police Chiefs, the Sheriff7, and the District Attorney did not have a manual or set of policies and procedures readily available as required by law. This is likely because virtually all of the seizures were done by the LCNTF. Personnel, asked about the manual, said that the LCNTF was using the Los Angeles District Attorney’s Manual or referred to the State Code. The committee could not locate a Lake County Manual, although the Sheriff had some forms for officers to use and a list of items subject to forfeiture. If a manual exists with the contents required by law, it is not readily available for use.
No recommendations for this finding
F12 Page 1
The minutes of the August 15, 2008, LCNTF Executive Board Meeting revealed that even though asset forfeiture and the opening of a separate bank account were listed on the agenda under “old business”, the District Attorney was not in attendance. All other LCNTF Executive Board members and advisors were present.
No recommendations for this finding
F13 Page 1
The City requires that every check be signed by two authorized individuals as a control over misappropriation of funds. The two signatures required are the City Clerk (or the clerk’s deputy) and the Mayor. The Mayor’s signature was on a rubber stamp that was maintained and used by the City Clerk. As a result, the two-signature control was circumvented. Bypassing/ignoring established internal controls is a very serious matter.
No recommendations for this finding
F14 Page 1
The Finance Director stated that approximately 20 of the 55 City employees, including Council members, had City credit cards. The Finance Director explained that monthly bills are provided to the cardholder, who reviews the bill, signs the bill, attaches support documentation, and returns the bill to Finance for payment. However, a cursory review by the committee found credit card bills that were not signed by the user and not supported by itemized receipts. For example, the committee found unsupported charges for airfare, lodging, gasoline, and a $191 charge for pizza.
No recommendations for this finding
F15 Page 1
The City maintains one petty cash fund and two change funds.
No recommendations for this finding
F16 Page 1
Even though approximately 20 employees had City credit cards, the City still maintained a $300 petty cash fund to reimburse employees for out-of-pocket expenditures.
No recommendations for this finding
F17 Page 1
The committee observed a cash count of the petty cash fund. Although petty cash was found to be in balance, the committee was told that management does not conduct unannounced cash counts of the fund.
No recommendations for this finding
F18 Page 1
The City lacked written policies and procedures. For example, some employees were allowed to take City vehicles home if they lived in Lake County, not just the City of Lakeport. The committee found no document that addressed this policy. The committee was advised that there were no written policies or procedures regarding credit cards, petty cash, change funds, time and attendance, overtime, billing, and customer payments.
No recommendations for this finding
F19 Page 1
With the exception of payroll, CLOCWD paid no bills during the entire month of November 2007.
No recommendations for this finding
F20 Page 1
Following the former General Manager’s demotion to Bookkeeper, CLOCWD issued a check to the deferred-compensation holding company for considerably more than was contributed by participating employees. In fact, during the period January 2006 through March 2008, it appeared that payments made to the holding company exceeded employee contributions by more than 11 percent. Not only was the committee unable to match employee deductions to transfers, but also unable to determine which employee accounts may have benefited from the overpayments.
No recommendations for this finding
F21 Page 1
Employee contributions to the deferred compensation program were sometimes not deposited for several pay periods after the money was withheld from the employees’ paychecks. This deprived the employees of a potential gain on investments.
No recommendations for this finding
F22 Page 1
The former General Manager sold back sick leave contrary to CLOCWD published policy. Specifically, CLOCWD allowed compensation for sick leave hours only when an employee exceeded the established maximum sick leave balance of 200 hours. At the time the former General Manager sold sick leave, there was a balance of eight hours. The committee also learned that on at least three occasions the former General Manager sold vacation leave contrary to district policy.
No recommendations for this finding
F23 Page 1
There were no documented procedures for the petty cash and change funds and management never performed a “spot audit” of the funds, which is a recommended control procedure. CLOCWD management was unable to locate documentation to identify which amount was correct. The check was cashed for $5,500. 28 2008-2009 Lake County Civil Grand Jury Budget and Finance Committee
No recommendations for this finding
F24 Page 1
The petty cash and change funds were not routinely reconciled. Evidence indicated the amount in the change fund sometimes grew to several times its established amount while at other times the total fell considerably below the established amount.
No recommendations for this finding
F25 Page 1
Five individuals, who had official knowledge of the petty cash fund and should have known the value of the fund, gave four different amounts in the fund ranging from “I don’t know” to $350. In limited review, the committee found instances where Petty Cash was reimbursed for significantly more than the highest estimated value of $350. For example, on December 7, 2007, Petty Cash was reimbursed for $548. No one employee was actually responsible for the fund. The committee heard testimony that every member of the office staff had access to petty cash, and whoever was available when monies were needed accessed the fund and prepared the paperwork.
No recommendations for this finding
F26 Page 1
Purchases made with petty cash were not always appropriately or adequately documented. For example, petty cash was used to pay recurring bills, make payroll adjustments, and provide travel advances.
No recommendations for this finding
F27 Page 1
The committee heard testimony that petty cash was used to make personal loans and to cash checks. In one case, petty cash was used to reimburse a customer for work accomplished. The resulting $125 cash reimbursement (in lieu of a check) was sent to the customer through the U.S. mail system. In addition, amounts paid out were not always supported by an itemized receipt or differed from the amount reflected on the receipt.
No recommendations for this finding
F28 Page 1
In February 2008, the Internal Revenue Service (IRS) placed a $48,891 levy on CLOCWD for delinquent taxes and penalties for the tax period ending December 31, 2006. Board members testified that neither the delinquent taxes nor the levy, were brought to the Board’s attention until March 2008, subsequent to the former General Manager’s termination of employment.
No recommendations for this finding
F29 Page 1
In November 2007, the IRS assessed penalties and interest totaling more than $1,850 for CLOCWD filing a late return and for 10 delinquent tax deposits made during the tax period ended June 30, 2007. The delinquent tax payments were late from between 3 to 20 days. There was no evidence the Board of Directors was made aware of this problem.
No recommendations for this finding
F30 Page 1
The former General Manager and a former Auditor/Bookkeeper revised payroll accounts resulting in no federal or state income taxes being withheld from either.
No recommendations for this finding
F31 Page 1
Between 2001 and 2006, CLOCWD received at least four letters from the Franchise Tax Board identifying delinquent taxes owed by the former General Manager and directing the district to garnish the former General Manager’s Budget and Finance Committee wages.6 Although the directed garnishments totaled more than $15,000, the committee found evidence of only $614 being withheld from the individual’s wages. The committee was unable to determine if district funds were used to pay the remaining indebtedness or if the garnishments were ever satisfied.
No recommendations for this finding
F32 Page 1
When reviewing and approving monthly payments, the Board of Directors did not verify the proper account classification of expenditures. As a result, the former General Manager caused capital assets to be recorded as construction in progress, thereby causing significant misstatement of depreciation expense and resultant profitability.
No recommendations for this finding
F33 Page 1
The Auditor/Bookkeeper reported to the former General Manager for an extended period thereby eliminating significant checks and balances.
No recommendations for this finding
F34 Page 1
A rate increase was implemented in the fall of 2008 causing CLOCWD customers to bear the cost of the district’s financial mismanagement.
No recommendations for this finding
F35 Page 1
In comparing documentary evidence to sworn testimony by the former General Manager, the committee found the following discrepancies: o According to LLCWW Board Minutes from August 2007, the former General Manager was in attendance from 7:03 p.m. until 10:04 p.m. In reviewing the former General Manager’s timesheets from CLOCWD, the General Manager claimed to be conducting CLOCWD business from 8:00 p.m. through 12:00 a.m. that same night. o The former General Manager testified, under oath, that CLOCWD did not authorize payment for attending LLCWW meetings and that all submitted CLOCWD timesheets accurately reflected time worked for CLOCWD. o According to CLOCWD records, 160 checks with a total value of over $480,000 were returned due to insufficient funds in 2007. o The former General Manager testified, under oath, that there was one instance where a check was returned. o According to card statements, the former General Manager and the auditor/bookkeeper charged personal expenses to the District’s credit cards in excess of $16,000. The General Manager’s average unpaid monthly balance over a twelve-month period was $1,200. o The former General Manager testified, under oath, that the balance was paid in full every month prior to the bill being due. A fifth garnishment letter for more than $14,000 was received after the former General Manager was terminated. 30 2008-2009 Lake County Civil Grand Jury Budget and Finance Committee o According to records, the General Manager’s paycheck was garnished on four different occasions. o The former General Manager testified, under oath, that there was one garnishment occasion that was never instituted before she left the employment of CLOCWD. o The committee discovered evidence proving that on at least one occasion, a former director signed a blank check. o The former General Manager testified, under oath, that there was no occasion when anyone signed a blank check. o CLOCWD received FEMA grants for work that was not completed. Review of these grants revealed that at least two bids were submitted to perform the work outlined in the grants. o The former General Manager testified, under oath, that there was no time to receive bids for the work.
No recommendations for this finding
F36 Page 1
The citizens of Lakeport deserve the opportunity to watch broadcasts of the City Council meetings from home.
No recommendations for this finding
F1940 Page 1
The Middle Creek Project involves rerouting the creek into a more natural path and eliminating the levees. This is a long-term project scheduled over a period of 10 – 20 years at a projected cost of between 40 and 60 million dollars. American Lung Association 2009 State of the Air report as quoted in the Lake County News on May 2, 2009 170 Planning and Public Works Committee
No recommendations for this finding
F2009 Page 1
3. Explain why the administrator in question was permitted to retain the administrative position for nearly two months after the CTC invalidated the administrator’s credentials.
No recommendations for this finding