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Extracted from Consolidated Report

This investigation was originally published as part of a larger consolidated report containing multiple investigations. View the consolidated PDF for the complete document.

Shasta County Grand Jury • 2001-2002

Shasta County Auditor-controller Reason for Investigation:

Published: September 11, 2001 24 pages

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⚠️ Translation Notice: This content has been automatically translated. The original English text is the official version. Translation may contain errors.

⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.

Findings 16 findings

F1 Page 14

Shasta County Ordinance No. 477, enacted May 12, 1969, and still in effect, made California Government Code Section 26945 apply to Shasta County, but that ordinance has not been amended to reflect any of the subsequent changes to Government Code 26945.

F2 Page 14

When first elected in 1998, the current Shasta County Auditor-Controller met the minimum qualification criterion of Ordinance No. 477 (Government Code Section 26945(d)), that of continuous employment in a county deputy-auditor position for three years. While the Shasta County Auditor-Controller attended a California State University, majoring in business, he did not earn a degree.

F3 Page 14

The current Auditor-Controller does not possess a certification of public accountancy and is not authorized to sign official audits. The Shasta County Auditor-Controller’s office has only one Certified Public Accountant (CPA) on staff.

F4 Page 14

California Government Code Section 26945.1, if adopted by a county, requires that any person serving in the capacity of county auditor must complete at least 40 hours of qualifying continuing education for each two-year period in office. The Shasta County Board of Supervisors has not adopted this section.

F5 Page 14

California Government Code Section 25303 provides that the board of supervisors shall supervise the official conduct of all county officers and see that all county officers faithfully perform their duties. However, the Board of Supervisors cannot direct the specific manner in which these duties are performed.

F6 Page 14

For the past 20 years, incumbents running for re-election to the office of Auditor- Controller have run unopposed.

F7 Page 14

A board of supervisors has more control over an appointed department head than an elected one. Under state law, a board of supervisors may establish an office of Director of Finance (which would consolidate the offices of Auditor-Controller and Treasurer-Tax Collector) if approved by a majority vote of the electorate. The voters could designate that the Director of Finance would be appointed rather than elected. State law also allows the elective position of Auditor to be made appointive, without the consolidation with another office, again by majority vote.

F8 Page 15

California Penal Code Section 927 provides that the grand jury may, and when requested by the board of supervisors shall, investigate and report upon the needs for increase or decrease in salaries of county-elected officials.

F9 Page 15

The Board of Supervisors is the sole authority to approve budget reviews and salary adjustments for the office of Auditor-Controller. Since the 1998 election of the current Auditor-Controller, the Board of Supervisors has approved eight salary increases for Shasta County’s elected officials in four separate packages, with the raises for the Auditor-Controller through January 12, 2003, reflected in the following chart: Approved by Effective Date Annual Salary Percentage Board of Supervisors Auditor-Controller Increase November 10, 1998 January 3, 1999 $75,348 3.50% November 10, 1998 July 4, 1999 77,580 2.50% November 10, 1998 September 26, 1999 79,580 2.50% January 11, 2000 January 16, 2000 81,864 3.00% December 19, 2000 January 14, 2001 84,300 3.00% December 19, 2000 January 13, 2002 88,524 5.00% January 15, 2002 January 13, 2002 91,152 3.00% December 19, 2000 January 12, 2003 94,800 4.00%

F10 Page 15

While investigating this department, it was reported to the Grand Jury during numerous interviews that the Auditor-Controller spends an insufficient amount of time in his office. This makes him unavailable to supervise his staff or respond immediately to needs of departments or districts.

F11 Page 15

The current Auditor-Controller has reported on his Statement of Economic Interests (California Form 700) that he holds outside employment.

F12 Page 15

The Office of Auditor-Controller has had a personnel turnover rate of over 60 percent during the past three years, which is twice the county average of 10% per year. In 1999, four new employees were hired and six left the office. In 2000, seven new employees were hired and six left the office. In 2001, four new employees were hired and three left the office. This does not include those who transferred to other county departments. Of the 26 staff members who were in this department in 1999, only nine remain.

F13 Page 15

The Auditor-Controller’s office has failed to process claims for payment for numerous departments and individuals in a timely manner. The Accounting Procedure Manual of the Shasta County Auditor-Controller, page CH-7, issued in 2002, states, “Orders for Payment forwarded to the Auditor-Controller will be processed for payment within three to four days of receipt”.

F14 Page 15

During the course of this investigation, the Grand Jury found that there has been a lack of communication and cooperation between the Auditor-Controller and at least six county departments and agencies. County departments/staff have indicated the Auditor-Controller does not sufficiently communicate in writing with departments regarding fiscal decisions and accounting procedures.

F15 Page 15

The Auditor-Controller has made decisions that unnecessarily conflict with departmental needs and has not resolved issues in a timely or efficient manner. These decisions have resulted in adverse financial consequences to the departments’ budgets. Some of the Auditor-Controller’s accounting policies have had an adverse effect on fiscal operations of county departments and agencies. In one example, the Auditor-Controller failed to resolve two accounting issues in the Fleet Management Division of the Department of Support Services. In 1994 and subsequent years, the California State Controller made a finding that the co- mingled funds for vehicle replacement and vehicle maintenance in Shasta County needed to be separated. As of March 30, 2002, neither the previous Auditor- Controller nor the current Auditor-Controller had separated the funds. The second issue has to do with how rates are established to charge the various departments for vehicle maintenance. Because of the lack of resolution of these issues, as of February 28, 2002, the Auditor-Controller had not processed any of the billings from the Fleet Management Division to the county departments for vehicle maintenance for the fiscal year which began July 1, 2001. The lack of resolution of these issues by the Auditor-Controller has been detrimental to the fiscal health of Shasta County because it resulted in unbilled expenses that were not being reimbursed by Federal and state agencies.

F16 Page 16

California Government Code 26883 provides that the board of supervisors “…shall have the power to require that the county auditor-controller shall audit the accounts and records of any department…” in the county. This option has not been exercised by the Shasta County Auditor’s Office during the current auditor’s term.

Recommendations 16

R1
Page 12

Shasta County Ordinance No. 477, enacted May 12, 1969, and still in effect, made California Government Code Section 26945 apply to Shasta County, but that ordinance has not been amended to reflect any of the subsequent changes to Government Code 26945.
R2
Page 12

When first elected in 1998, the current Shasta County Auditor-Controller met the minimum qualification criterion of Ordinance No. 477 (Government Code Section 26945(d)), that of continuous employment in a county deputy-auditor position for three years. While the Shasta County Auditor-Controller attended a California State University, majoring in business, he did not earn a degree.
R3
Page 12

The current Auditor-Controller does not possess a certification of public accountancy and is not authorized to sign official audits. The Shasta County Auditor-Controller’s office has only one Certified Public Accountant (CPA) on staff.
R4
Page 12

California Government Code Section 26945.1, if adopted by a county, requires that any person serving in the capacity of county auditor must complete at least 40 hours of qualifying continuing education for each two-year period in office. The Shasta County Board of Supervisors has not adopted this section.
R5
Page 12

California Government Code Section 25303 provides that the board of supervisors shall supervise the official conduct of all county officers and see that all county officers faithfully perform their duties. However, the Board of Supervisors cannot direct the specific manner in which these duties are performed.
R6
Page 12

For the past 20 years, incumbents running for re-election to the office of Auditor- Controller have run unopposed.
R7
Page 12

A board of supervisors has more control over an appointed department head than an elected one. Under state law, a board of supervisors may establish an office of Director of Finance (which would consolidate the offices of Auditor-Controller and Treasurer-Tax Collector) if approved by a majority vote of the electorate. The voters could designate that the Director of Finance would be appointed rather than elected. State law also allows the elective position of Auditor to be made appointive, without the consolidation with another office, again by majority vote.
R8
Page 13

California Penal Code Section 927 provides that the grand jury may, and when requested by the board of supervisors shall, investigate and report upon the needs for increase or decrease in salaries of county-elected officials.
R9
Page 13

The Board of Supervisors is the sole authority to approve budget reviews and salary adjustments for the office of Auditor-Controller. Since the 1998 election of the current Auditor-Controller, the Board of Supervisors has approved eight salary increases for Shasta County’s elected officials in four separate packages, with the raises for the Auditor-Controller through January 12, 2003, reflected in the following chart: Approved by Effective Date Annual Salary Percentage Board of Supervisors Auditor-Controller Increase November 10, 1998 January 3, 1999 $75,348 3.50% November 10, 1998 July 4, 1999 77,580 2.50% November 10, 1998 September 26, 1999 79,580 2.50% January 11, 2000 January 16, 2000 81,864 3.00% December 19, 2000 January 14, 2001 84,300 3.00% December 19, 2000 January 13, 2002 88,524 5.00% January 15, 2002 January 13, 2002 91,152 3.00% December 19, 2000 January 12, 2003 94,800 4.00%
R10
Page 13

While investigating this department, it was reported to the Grand Jury during numerous interviews that the Auditor-Controller spends an insufficient amount of time in his office. This makes him unavailable to supervise his staff or respond immediately to needs of departments or districts.
R11
Page 13

The current Auditor-Controller has reported on his Statement of Economic Interests (California Form 700) that he holds outside employment.
R12
Page 13

The Office of Auditor-Controller has had a personnel turnover rate of over 60 percent during the past three years, which is twice the county average of 10% per year. In 1999, four new employees were hired and six left the office. In 2000, seven new employees were hired and six left the office. In 2001, four new employees were hired and three left the office. This does not include those who transferred to other county departments. Of the 26 staff members who were in this department in 1999, only nine remain.
R13
Page 14

The Auditor-Controller’s office has failed to process claims for payment for numerous departments and individuals in a timely manner. The Accounting Procedure Manual of the Shasta County Auditor-Controller, page CH-7, issued in 2002, states, “Orders for Payment forwarded to the Auditor-Controller will be processed for payment within three to four days of receipt”.
R14
Page 14

During the course of this investigation, the Grand Jury found that there has been a lack of communication and cooperation between the Auditor-Controller and at least six county departments and agencies. County departments/staff have indicated the Auditor-Controller does not sufficiently communicate in writing with departments regarding fiscal decisions and accounting procedures.
R15
Page 14

The Auditor-Controller has made decisions that unnecessarily conflict with departmental needs and has not resolved issues in a timely or efficient manner. These decisions have resulted in adverse financial consequences to the departments’ budgets. Some of the Auditor-Controller’s accounting policies have had an adverse effect on fiscal operations of county departments and agencies. In one example, the Auditor-Controller failed to resolve two accounting issues in the Fleet Management Division of the Department of Support Services. In 1994 and subsequent years, the California State Controller made a finding that the co- mingled funds for vehicle replacement and vehicle maintenance in Shasta County needed to be separated. As of March 30, 2002, neither the previous Auditor- Controller nor the current Auditor-Controller had separated the funds. The second issue has to do with how rates are established to charge the various departments for vehicle maintenance. Because of the lack of resolution of these issues, as of February 28, 2002, the Auditor-Controller had not processed any of the billings from the Fleet Management Division to the county departments for vehicle maintenance for the fiscal year which began July 1, 2001. The lack of resolution of these issues by the Auditor-Controller has been detrimental to the fiscal health of Shasta County because it resulted in unbilled expenses that were not being reimbursed by Federal and state agencies.
R16
Page 14

California Government Code 26883 provides that the board of supervisors “…shall have the power to require that the county auditor-controller shall audit the accounts and records of any department…” in the county. This option has not been exercised by the Shasta County Auditor’s Office during the current auditor’s term. RECOMMENDATIONS: