Oceano Community Center an Old Fable -- Revisited

Observations 7

• OB1
  Prior to the April, 2005, Grant and Construction Management Agreement, there was no evidence of a requirement for regular financial reporting from OCCI to OCSD.
• OB2
  In acting as a “pass-thru” agent for State grant funds, OCSD did establish a separate account for the grant monies received. They also required appropriate documentation from OCCI prior to releasing those funds to OCCI. However, a review of OCSD Audit Reports submitted to the County could find no evidence of this activity. A memo from the SLO County Auditor’s staff commented “It is possible that the funds were deposited in a special general ledger account and disbursed directly from that account in which case the activity would not appear on their balance sheet or income statement. This method would not be considered GAAP (generally accepted accounting practice) but it is not illegal to account for funds in this manner.” OCCI From its formation in 1997 until the sale of the Community Center building in 2008, OCCI was a major force behind the Community Center project. Credit should be given for the completion of a difficult project utilizing a workforce of volunteers and a single paid employee. At the same time, the Grand Jury wonders if the single-minded attitude of OCCI might not have been a contributor to some of the problems experienced by the project. During interviews, OCCI _____________________________________________________________________________ 2008-2009 San Luis Obispo County Grand Jury 15 personnel contended that its operations were conducted in an open format and that communication was always a priority. Complaints from the Vocal Community, however, painted a different picture. The Grand Jury believes that the reality is somewhere in between the opposing viewpoints, but found few specific examples of outgoing communications on the part of OCCI. Due to time and resource constraints, the Grand Jury was unable to fully review the accounting and recordkeeping procedures utilized by OCCI. We did, however, review and have in our files, OCCI Internal Revenue Service filings for 1998 through 2008. Additionally, we have obtained copies of independent audit reports for the years 2000 through 2006. OCCI appears to have made timely filings of all required financial documentation. Much of the information contained in the attached Summary of Funding Sources was either obtained from, or verified with, these financial records. While the Grand Jury found no faults with the recordkeeping process, the financial forecasting capabilities of OCCI varied from weak to very questionable. An OCSD staff report, referring to OCCI financial input, states that “It is unclear whether this document is the old outdated project cost estimate, or an updated one. In any case, it is so brief that it prevents any reasonable analysis of the items covered and it does not cover the entire project so it is impossible to analyze…” Later in the same report when discussing specific cost items “This tends to indicate that the numbers were simply ‘plugged’ to make sure the budget balanced.” When reviewing income forecasts by OCCI, the same report states “There is nothing to indicate that any of these funds have been secured yet, or the basis for the expectations.” In a 2002 grant application submitted to the State, OCCI says “… it was determined [by OCCI] that Page Youth Center in Goleta’s operations and facility were most comparable to the Oceano Community Center, and its operational budget provided the basis for the Community Center’s plan.” The Grand Jury has difficulty accepting a Goleta to Oceano comparison, and notes that the Goleta facility is 50% larger than the Oceano Community Center. In the same grant application, OCCI shows additional anticipated funds of $1,141,463 from “individual and corporate/business donors.” _____________________________________________________________________________ 2008-2009 San Luis Obispo County Grand Jury 16 There is no breakdown of those donors, nor is there any evidence of the $1,141,463 ever being received. LMUSD The Grand Jury believes that the June 2008 sale of the Oceano Community Center to the LMUSD was a very positive event for all parties associated with the project. In support of this belief:
• OB3
  County – The County’s investment in time and money is safe. LMUSD is the largest school district within the county and is uniquely qualified to operate and maintain a facility the size of the Oceano Community Center.
• OB4
  HUD and the State – In the purchase documents, LMUSD has accepted the conditions placed on the funds, which were provided and has indicated that they will operate the facility in compliance with those conditions.
• OB5
  OCSD – The Oceano Community Center is a facility of which Oceano can be proud. The Grand Jury would encourage OCSD to take the initiative to establish communications with LMUSD and to become involved in plans for use of the facility.
• OB6
  OCCI – Your job is done.
• OB7
  Vocal Community – The Oceano Community Center is in good hands. One should be proud of it, support it, and take advantage of what it has to offer.

Agency Responses 1

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No Responses Found 3

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