Thursday, July 1, 2010
Ho-Hum Grand Jury Report
Modoc-gate Gets Reprieve
In what has to be regarded as anti-climactic, the Modoc County grand jury released its annual report today, giving the Board of Supervisors a mild slap on the wrist for its illegal misappropriation of an estimated $20 million from the treasury.
The same report also found that former county auditor Judith Stevens and present treasurer Cheryl Knoch were fiscally irresponsible with county funds -- related to the misappropriation -- for a five-year period that spanned 2003 to 2008.
There was no mention of any role former CAO Mike Maxwell might have played in the misappropriation although his name was linked to both Stevens and Knoch when the misappropriation was first revealed more than a year ago.
With an entire year to investigate the most infamous scandal involving public officials to ever hit the county -- one that has attracted the attention of the State Attorney General and State Controller’s Office -- the grand jury failed to disclose anything in its findings that wasn’t already known to the general public.
In its investigation of the Board of Supervisors, the grand jury, which is presided over by Superior Court Judge Francis W. Barclay, arrived at only five conclusions.
1. “Restricted school and road department funds were used to support Modoc Medical Center.”
2. “Paper trail verified misuse of restricted funds began at least two years ago.”
3. “Board of Supervisors stated they were unaware of the use of restricted funds.”
4. “Any borrowed funds must be repaid no later than June 30 of that fiscal year with accrued interest paid at that time.”
5. “Modoc County Government fiscal year ends June 30 and starts new July 1 of each year.”
After investigating Stevens and Knoch the grand jury concluded the two had power to refuse to pay warrants, but were intimidated to make payments for the Modoc Medical Center.
The report did not reveal who intimidated Stevens and Knoch to make illegal payments to cover the MMC on-going debt during the 2003-2008 period.
The grand jury report stated that Stevens and Knoch had advised the Board of Supervisors that there was a shortage of funds, but the report also stated the supervisors were unaware that restricted funds were being used.
In recommending how the Board of Supervisors and Knoch should take responsibility for protecting public monies in the future the grand jury resorted to elementary precautions such as the board’s becoming more knowledgeable about budgetary items such as restricted funds, and in the case of Knoch and the auditor’s office, that they “take fiduciary responsibility.”
-- Ray A. March
Modoc-gate Gets Reprieve
In what has to be regarded as anti-climactic, the Modoc County grand jury released its annual report today, giving the Board of Supervisors a mild slap on the wrist for its illegal misappropriation of an estimated $20 million from the treasury.
The same report also found that former county auditor Judith Stevens and present treasurer Cheryl Knoch were fiscally irresponsible with county funds -- related to the misappropriation -- for a five-year period that spanned 2003 to 2008.
There was no mention of any role former CAO Mike Maxwell might have played in the misappropriation although his name was linked to both Stevens and Knoch when the misappropriation was first revealed more than a year ago.
With an entire year to investigate the most infamous scandal involving public officials to ever hit the county -- one that has attracted the attention of the State Attorney General and State Controller’s Office -- the grand jury failed to disclose anything in its findings that wasn’t already known to the general public.
In its investigation of the Board of Supervisors, the grand jury, which is presided over by Superior Court Judge Francis W. Barclay, arrived at only five conclusions.
1. “Restricted school and road department funds were used to support Modoc Medical Center.”
2. “Paper trail verified misuse of restricted funds began at least two years ago.”
3. “Board of Supervisors stated they were unaware of the use of restricted funds.”
4. “Any borrowed funds must be repaid no later than June 30 of that fiscal year with accrued interest paid at that time.”
5. “Modoc County Government fiscal year ends June 30 and starts new July 1 of each year.”
After investigating Stevens and Knoch the grand jury concluded the two had power to refuse to pay warrants, but were intimidated to make payments for the Modoc Medical Center.
The report did not reveal who intimidated Stevens and Knoch to make illegal payments to cover the MMC on-going debt during the 2003-2008 period.
The grand jury report stated that Stevens and Knoch had advised the Board of Supervisors that there was a shortage of funds, but the report also stated the supervisors were unaware that restricted funds were being used.
In recommending how the Board of Supervisors and Knoch should take responsibility for protecting public monies in the future the grand jury resorted to elementary precautions such as the board’s becoming more knowledgeable about budgetary items such as restricted funds, and in the case of Knoch and the auditor’s office, that they “take fiduciary responsibility.”
-- Ray A. March
Wednesday, June 30, 2010
BULLETIN
Yes, Critical Audits Delayed Again
Release of the along awaited audits of Modoc County’s financial practices, ordered by the State Controller’s Office late last year, has been delayed once more.
The delay was confirmed today (June 30) by Darcy Locken, who takes over as county auditor July 1 after the resignation of Auditor Alice Marrs. Locken said the audits are not expected to be released for at least another month.
“We’re looking at the beginning of August,” she said, explaining the county was “still working on cleaning up some of the funds.” The last release date was to be July 12.
The audits, which are critical to the county’s attempt for a credit rating by Fitch Rating Service in order to sell $15 million in bonds, began last December when the state mandated the county undergo an outside inspection of its books after it was revealed an estimated $20 million had been misappropriated from the treasury by the Board of Supervisors and other county officials.
The first audit, for 2007-08 was due last April. The second audit for 2008-09 was expected about a month later. Because of poor internal auditing practices by the county, including no written procedures, the two audits have repeatedly been overdue.
Yes, Critical Audits Delayed Again
Release of the along awaited audits of Modoc County’s financial practices, ordered by the State Controller’s Office late last year, has been delayed once more.
The delay was confirmed today (June 30) by Darcy Locken, who takes over as county auditor July 1 after the resignation of Auditor Alice Marrs. Locken said the audits are not expected to be released for at least another month.
“We’re looking at the beginning of August,” she said, explaining the county was “still working on cleaning up some of the funds.” The last release date was to be July 12.
The audits, which are critical to the county’s attempt for a credit rating by Fitch Rating Service in order to sell $15 million in bonds, began last December when the state mandated the county undergo an outside inspection of its books after it was revealed an estimated $20 million had been misappropriated from the treasury by the Board of Supervisors and other county officials.
The first audit, for 2007-08 was due last April. The second audit for 2008-09 was expected about a month later. Because of poor internal auditing practices by the county, including no written procedures, the two audits have repeatedly been overdue.
Monica Derner, formerly CFO of Modoc Medical Center, was been named interim CEO by the Board of Supervisors at their June 28 meeting. Derner was appointed after the board failed to renew the contract of Robert Duncan.
“I recommended to the board that they appoint Monica CEO,” Duncan said prior to his departure from Modoc County.
Derner told the Modoc Independent News that her first priorities are to work on physician recruiting, to work with managers to make sure their budgets are in line with cash flow and to cut costs where ever feasible.
She said she is also going to pursue the installation of an electronic medical records system. “There’s the potential of $2.8 million in federal stimulus funding over three years out there if we implement electronic medical records. But first we have to spend the money up front to install it,” she said. “To avoid financial penalty we’ll need to be up and running with this by the middle of next year.”
Monday Night Group
Editor’s Note: The following letter was written by Dan Macsay, chair of the Modoc County Board of Supervisors, and sent via e-mail to the Monday Night Group. While it apparently was not intended for publication on the Modoc Daily News Blog we managed to obtain a copy and reprint it here in its unedited entirety.
A few months ago I was contacted by three individuals who were concerned about the County’s financial dilemma. They expressed a real concern about the county indenturing itself to a bond that would have to be paid back over a number of years and for other reasons that are associated with the payback. I must admit that I myself shared their concerns and I felt that working with these folks would be in the best interest of the county by sharing ideas, strategies and knowledge. During this time the group evolved into the Monday Night Group (MNG) and has since been very active as concerned citizens.
Over the past couple of months I have watched the MNG turn from an organization that I thought was civil in its approach, meaningful in its concerns and dedicated to helping the county through its dilemma to a group that is ignoble, antagonistic, and spiteful. I want the MNG to know that I am speaking for myself and no others. I have heard lies come out of the mouth of certain individuals and venom spewed to the board members. I am really disappointed because although I did not know everyone on the MNG personally I knew that you all were highly respected and well thought of in the community. I am sorry to say my views have changed. I think your group is driving a stake into the county and alienating the community as a whole. Your bravado in the board meetings has caused tensions to run high in the audience creating a scene that has to be constantly controlled. This type of atmosphere serves no purpose at all. The MNG attitude seems to be our way or the highway. I hate to say it but some of us are not as dumb or as ignorant as you make us out to be.
I have watched the MNG swing 180 degrees on issues during the course of a week. I was told by members that the MNG was not in favor of the bond but would support us if that is the way we went. That support is out the window! Your group clamored for the county to declare bankruptcy which would also take down MMC as it is a county entity. Then next week you tell the board that you are going to file a restraining order to keep the MMC open. How are we going to keep the hospital open when there is no money? Mr. Mike Tedrick has openly stated in a board meeting, “that the county has been operating illegally for so long why stop now”? The purpose of getting the bond is to allow the county to start operating legally once again by not having negative fund balances. So, what does the MNG do? The MNG goes to the State Attorney General claiming county officials are unwilling to govern the county in compliance with state law. Even in your letter to the AG you can’t get the facts straight. But why tell the truth when it is better to make the county look bad and the MNG shine in the eyes of the community.
Mr. Tedrick’s statement makes me wonder if there were not fund balances in the red when he was the Auditor; a question to be answered if a criminal investigation is held. Also how far back should we go on this investigation? A member of the MNG who was a former county supervisor was privy to at least three funds that were in the red during his term that I know of. What did he do to correct the situation? I can tell you what was done and that was nothing. Obviously, money had to be borrowed from other funds to keep those funds in the red solvent. One of those entities was the MMC which was close to two million dollars in debt at that time. Another Illegality? How about the MNG member that was on the Grand Jury for three terms and Foreman for one of those terms? One of the functions of the Grand Jury is to provide oversight on county operations and the Board of Supervisors. It is part of the checks and balances needed in government. Why wasn’t action taken by him to bring the problems to light when he was on the Grand Jury? As far as I am concerned it’s three at bats and three strikes. Obviously borrowing of funds has been going on for well over a decade, possibly two. Everyone knew MMC was in debt and going deeper. That should have flashed some red lights well before I came on the board but I believe politics played a major role in keeping the hospital afloat.
MMC has been an untouchable commodity over the years. Even Mr. Zandstra can attest to that. When I suggested that the hospital close I thought I was going to be flogged on the spot. I didn’t want to see it close then and I don’t want to see it close now. I was trying to make a point and wake people up which I believe it did but we also have to face reality. The county cannot afford to keep funding MMC even though it is the life blood of the community. MMC has brought the county to where it is now. Politics can no longer play a role in its health. I applaud the MNG for putting it on your radar screen and taking an interest in it. Passing the district will take a lot of effort by a lot a people. In the long run I believe it will be worth it.
Mr. Lowry’s answer to some of our problems is to fire people. Great idea, only it is a little hard to fire a Department Head that is being protected by one of the MNG members. Over the years this Department Head has cost the county tens of thousands of dollars in lost revenue and possibly more because he hasn’t done his job. Why fire people who won’t do their job, let’s fire the ones who are busting their butt trying to make this county work.
It is no secret the MNG would like to see Mr. Rudometkin removed from the CAO position. It is easy enough to read between the lines. Mr. Rudometkin has stepped up to the plate in doing the CAO job and has taken a lot heat in doing so. The MNG would like us to go out and hire a CAO with the cost be damned. Well, where are we going to get the money? We can borrow it from restricted funds but then that isn’t legal, is it? Mr. Rudometkin took the job as CAO on a temporary basis. Considering the circumstances I think he has done an excellent job. Mr. Rudometkin’s ultimate goal is to go back to being the Transportation Director, a job in which he did extremely well. I agree that we do need to hire a full time CAO but now is not the time to do it. When we hired Mr. Beck who turned the hospital around financially we took a tremendous amount of flack for what we paid him. He was a strong manager who knew his job and turned the hospital staff into a cohesive operating unit. So, the next best thing to do was run him out of town by a group of individuals who wouldn’t let him do his job because they thought they knew how to do his job better than he did.
Mr. Zandstra stated to me that nothing the MNG says should be looked upon as a personal attack. I am sorry as I have to strongly disagree. It may not have started out that way but it sure has ended up that way. What is the old saying, “Don’t throw rocks if you live in a glass house”? Well that is my take on the MNG. In fact when Mr. Zandstra has the time I would appreciate it if he would be kind enough to enlighten me on how he handled the public when he was supervisor during preliminary budget hearing meetings. I am sure he has plenty of experience and why reinvent the wheel when there is no need too.
Tell me; in the above paragraphs do you detect a hint of hypocrisy going on here? I do.
I apologize if I have offended anyone but I am mad. I served this great country of ours for twenty plus years in the United States Marine Corps. Nine of those years were spent overseas of which thirty months were in Vietnam. I did whatever the Marine Corps asked me to do and I did it to the best of my ability. I have given numerous years to community service from little league to school functions. Once again I gave it my all and walked away proud of what I had done to help make a difference in the lives of others. When I ran for supervisor I went into the job with the same attitude and willingness to do whatever needed to be done to help the county and community. I believe I have given more than my fair share and have contributed more than others. I have asked for nothing in return nor will I. It is my job! Until my time is up in December I will continue to do my best with pride, honor, integrity and dignity.
Modoc County is our county. I urge the MNG to work together with us as a team. As a team we can accomplish many good things and put this county back on track again. What happened throughout the past years is long gone history. We need to look to the future in a positive way. This fighting match that has occurred will solve nothing but create more hate and discontent that will only pull the county further apart. We may not agree on everything but we can surely sit down like the professionals we are and come up with a viable solution. The board room is not the place to put people on trial or create an atmosphere of discontent. I am open to suggestions at any time to resolve our differences and move ahead.
I would ask that this email be distributed to all the members of the MNG. I will also be sending it to Mr. Rick Holloway to do with as he sees fit. Publish it or can it.
Thank you,
Dan Macsay
Alturas …David McMaster has been appointed the Fire Management Officer for the Modoc National Forest. David is a career wildland firefighter with over 32 years of experience; five of those years were as the Modoc National Forest Fire Planner and Deputy Fire Management Officer.
FMO McMaster is a long-time resident of Modoc County having moved here with his family to Davis Creek, California when he was twelve-years-old. He began his fire career on the Modoc in 1978 as a seasonal wildland firefighter and over the years he has developed a unique understanding of the Modoc Plateau ecosystem and the challenges to fighting fire here.
Tuesday, June 29, 2010
Behind Finacorp’s Folding
There is an ironic similarity between the financial plight of the Modoc County Board of Supervisors and Finacorp Securities, the brokerage firm the county retained to pull it out of debt just before Finacorp went out of business.
In each case their expenses out-paced their revenues.
The Board of Supervisors, in following advice of both elected and appointed officials, illegally took money from the treasury to off-set costs in the face of weak revenues. This has been confirmed by the State Controller’s Office.
While legal in its actions, Finacorp Securities closed its doors June 4 because it also had expenses that exceeded its revenues, according to a source who spoke on the condition of anonymity because she was not authorized to speak for Finacorp.
“When the market calmed down there were not such large commissions, and they built themselves out too big and tried to do too many things,” the source said in explaining Finacorp’s demise. She added that Modoc County should hire an independent financial consultant.
“Modoc County needs an independent consultant,” she said. “If you rely solely on the underwriter for statistics you are playing in his casino. You need someone who knows the bond market and who can give you a second opinion. This is a way to keep them honest.”
Ken Hedrick, head of public finance for Finacorp at the time of its demise and the brokerage’s liaison underwriter to Modoc County, substantiated the report that Finacorp was financially thin.
“The reason the firm folded is because of the departure of the president of the firm, and his contract called for a payout for more than the firm had capital,” Hedrick told the Modoc Independent News.
Hedrick had the task of informing the Board of Supervisors on June 8 that he no longer had an employer. The board has yet to act on whether to continue with Hedrick’s services.
As of June 29 Hedrick remained unattached to a brokerage firm, but said he was considering two offers.
Finacorp, founded in 1994 according to an Internet source, reportedly had an up and down existence before quietly folding.
“Their costs out-stripped revenues and as revenues went down they found themselves unable to fund themselves to such an expensive operation,” the anonymous source said.
“In 2008 business was great and they attracted bond traders,” the source explained. “2008 was an excellent year and Finacorp made $1 million, but in 2009 they lost $1 million. They needed capital to pay salaries until the bond market picked up, but no one provided it.”
Hedrick gave a different version of Finacorp’s finances.
“The firm doubled in size, revenues and personnel in 2009 and was on track to do so in 2010,” Hedrick said, admitting he never saw the company’s financials, just its quarterly focus reports. “Finacorp was a privately-owned firm,” Hedrick said.
While Finacorp’s financials were apparently kept private, it appears the firm did not have adequate capital to continue.
“They had smart and talented people,” the source told the Modoc Independent News, “but too little capital, so they ran too thin. They had too many people to pay. Finacorp hired good people for the most part. They paid everybody their last week. They may not have been the best businessmen in the world, but that’s not a crime.”
-- Ray A. March
There is an ironic similarity between the financial plight of the Modoc County Board of Supervisors and Finacorp Securities, the brokerage firm the county retained to pull it out of debt just before Finacorp went out of business.
In each case their expenses out-paced their revenues.
The Board of Supervisors, in following advice of both elected and appointed officials, illegally took money from the treasury to off-set costs in the face of weak revenues. This has been confirmed by the State Controller’s Office.
While legal in its actions, Finacorp Securities closed its doors June 4 because it also had expenses that exceeded its revenues, according to a source who spoke on the condition of anonymity because she was not authorized to speak for Finacorp.
“When the market calmed down there were not such large commissions, and they built themselves out too big and tried to do too many things,” the source said in explaining Finacorp’s demise. She added that Modoc County should hire an independent financial consultant.
“Modoc County needs an independent consultant,” she said. “If you rely solely on the underwriter for statistics you are playing in his casino. You need someone who knows the bond market and who can give you a second opinion. This is a way to keep them honest.”
Ken Hedrick, head of public finance for Finacorp at the time of its demise and the brokerage’s liaison underwriter to Modoc County, substantiated the report that Finacorp was financially thin.
“The reason the firm folded is because of the departure of the president of the firm, and his contract called for a payout for more than the firm had capital,” Hedrick told the Modoc Independent News.
Hedrick had the task of informing the Board of Supervisors on June 8 that he no longer had an employer. The board has yet to act on whether to continue with Hedrick’s services.
As of June 29 Hedrick remained unattached to a brokerage firm, but said he was considering two offers.
Finacorp, founded in 1994 according to an Internet source, reportedly had an up and down existence before quietly folding.
“Their costs out-stripped revenues and as revenues went down they found themselves unable to fund themselves to such an expensive operation,” the anonymous source said.
“In 2008 business was great and they attracted bond traders,” the source explained. “2008 was an excellent year and Finacorp made $1 million, but in 2009 they lost $1 million. They needed capital to pay salaries until the bond market picked up, but no one provided it.”
Hedrick gave a different version of Finacorp’s finances.
“The firm doubled in size, revenues and personnel in 2009 and was on track to do so in 2010,” Hedrick said, admitting he never saw the company’s financials, just its quarterly focus reports. “Finacorp was a privately-owned firm,” Hedrick said.
While Finacorp’s financials were apparently kept private, it appears the firm did not have adequate capital to continue.
“They had smart and talented people,” the source told the Modoc Independent News, “but too little capital, so they ran too thin. They had too many people to pay. Finacorp hired good people for the most part. They paid everybody their last week. They may not have been the best businessmen in the world, but that’s not a crime.”
-- Ray A. March
Monday, June 28, 2010
31,272 Bloggers And Counting
The Modoc Daily News Blog was officially launched on November 9, 2009. In that month 1,410 individual visitors viewed 4,136 pages of blog articles on the emerging Modoc County financial emergency. As the months went by and the action continued to escalate, visits and page views increased.
“It became apparent to us immediately that the Modoc Daily News Blog was filling a two-fold need,” said publisher Barbara March. “The need of Modoc County citizens to be informed about the fiscal crisis their county is facing and their need to have a place to voice their unedited opinions without fear of reprisal.”
The response has been overwhelming. As of the close of business on June 27, there have been a total of 31,272 individual visitors to the blog, who have read 71,462 pages. The average length of time they spend is 2.4 minutes. June visits total 7,752.
Most blog readers are Modoc County residents or live in the surrounding counties. But a surprisingly large number of regular visitors live across the nation. Blog statistics indicate that the Modoc Daily News Blog is regularly viewed by people in the states of Oregon, Washington, North Carolina, Georgia, Indiana, Arizona, Montana, Pennsylvania, New York and Nevada. A high percentage of visits are logged from the state capitol in Sacramento.
“It’s been nearly eight months since we first started the blog,” said March, "and at first the comments posted by readers were emotional and distressed. But as the months have gone by our readers are asking well informed questions and offering solutions. It appears they are beginning to feel more empowered and entitled to demand accountability from their elected officials.”
The blog is edited daily by the Modoc Independent News publisher and editor, Barbara and Ray March. All posted comments are reviewed prior to posting. “We have rejected less than six posts over the past eight months for inappropriate content and have edited none,” said Barbara March. “People need to know they can express themselves freely on this blog.”
The Modoc Independent Daily News Blog is produced and maintained as a public service by the Modoc Independent News.
The Modoc Daily News Blog was officially launched on November 9, 2009. In that month 1,410 individual visitors viewed 4,136 pages of blog articles on the emerging Modoc County financial emergency. As the months went by and the action continued to escalate, visits and page views increased.
“It became apparent to us immediately that the Modoc Daily News Blog was filling a two-fold need,” said publisher Barbara March. “The need of Modoc County citizens to be informed about the fiscal crisis their county is facing and their need to have a place to voice their unedited opinions without fear of reprisal.”
The response has been overwhelming. As of the close of business on June 27, there have been a total of 31,272 individual visitors to the blog, who have read 71,462 pages. The average length of time they spend is 2.4 minutes. June visits total 7,752.
Most blog readers are Modoc County residents or live in the surrounding counties. But a surprisingly large number of regular visitors live across the nation. Blog statistics indicate that the Modoc Daily News Blog is regularly viewed by people in the states of Oregon, Washington, North Carolina, Georgia, Indiana, Arizona, Montana, Pennsylvania, New York and Nevada. A high percentage of visits are logged from the state capitol in Sacramento.
“It’s been nearly eight months since we first started the blog,” said March, "and at first the comments posted by readers were emotional and distressed. But as the months have gone by our readers are asking well informed questions and offering solutions. It appears they are beginning to feel more empowered and entitled to demand accountability from their elected officials.”
The blog is edited daily by the Modoc Independent News publisher and editor, Barbara and Ray March. All posted comments are reviewed prior to posting. “We have rejected less than six posts over the past eight months for inappropriate content and have edited none,” said Barbara March. “People need to know they can express themselves freely on this blog.”
The Modoc Independent Daily News Blog is produced and maintained as a public service by the Modoc Independent News.
Alturas resident Gordon Dick, coordinator of the campaign to recall District Two Supervisor Jeff Bullock, (pictured, right), started circulating recall petitions June 27. Recall organizers must turn in 410 qualified signatures by July 15.
Dick told the Modoc Daily News Blog he is confident that with the help of volunteers, they will collect the target number of names.
“The voter registration rolls haven’t been purged for a long time,” Dick said, “they currently show 1,627 registered voters in District Two.”
Based on that number, the recall committee will need 25 percent of the registered voters to sign the petition or 410 signatures, but Dick and his volunteers will collect between 460 and 470 to allow for some unqualified signers.
“Volunteers in the communities of New Pine Creek, Davis Creek, Modoc Estates and from the eastern portion of Alturas are circulating petitions and collecting signatures now,” Dick said. “I’m confident we’ll put it on the ballot in November. Then people can decide whether they want to recall Jeff Bullock or not.”
* * *
Editor's Note: Following is the response Supervisor Jeff Bullock filed with the county election office in response to the recall petition.
“I wanted to make a positive difference in Modoc. I wanted to improve on the issues that were facing the county from loss of jobs to the impact on the state and federal legislation in the county.
“When taking (the) office of Board of Supervisors I had noticed some discrepancies with MMC that needed to be addressed. When discussing with the prior CEO I was discouraged from asking questions that came to me from the public. I felt I was representing the public’s well-being at the time.
“Since I have been on the MMC Finance committee. I have observed a gradual improvement towards their financial situation. Mr. Beck chose to leave MMC for a better personal opportunity and for no other reason.
“I was asked to form the Long and Short Term Finance Committee. This was accomplished in November of 2009. I am still actively involved in working with others to solve Modoc County’s financial issues through the committee.
“I have been part of the Board of Supervisors who have explored any and all options to solve the current financial crisis we are in. I feel the only legal way at this time to solve this problem is the bond.”
Jeff Bullock
Modoc County Supervisor, District 2
BOS Faces Personal Liability
If It Misses June 30 Deadline
With the June 30 deadline for balancing its books less than two days off, the Modoc County Board of Supervisors appears to be on the verge of breaking the law -- again.
Facing potential personal liability for missing the June 30 deadline are the supervisors, auditor and treasurer.
The last time the board went against a government code requiring a balanced budget at the end of the fiscal year, June 30, was in 2009 when the it was discovered the board and other county officials illegally misappropriated an estimated $20 million from the county treasury, leaving the books in the red.
Since then the Board of Supervisors has been under a mandate from the State Controller’s Office to repay all the money it took from the treasury “as soon as possible,” but the board has failed to come up with an estimated $15 million needed to replace the misappropriated funds.
The county treasury is subject to the same government codes as the annual county budget, according to Paul McIntosh, executive director of the California State Association of Counties in Sacramento.
“The restrictions are found in the government code under section 29000, which is commonly known as the County Budget Act,” McIntosh explained. “Specifically, Section 29120 - 29122 prohibit the expenditure of funds beyond those appropriated (the budget) and makes it a personal liability of the person who overspent the budget. Under this section then, a county could not end the fiscal year ‘in the red’ as the expenditure beyond the budget would have been illegal.”
Asked if the county treasury comes under the state law governing balanced budgets and who is ultimately responsible, McIntosh said the law covers all county funds.
“Yes, it is not specific to the county general fund but to all funds controlled by the Board of Supervisors, Auditor-Controller and Treasurer-Tax Collector,” McIntosh explained.
Editor’s Note: For our blogger’s interpretation this is Section 29122 in full:
29122. The board shall approve no claim and the auditor shall issue no warrant for any obligation in excess of that authorized therefor (sic) in the budget appropriation, except upon an order of a court of competent jurisdiction, for an emergency, or as otherwise provided by law. Provided, further, with respect to a newly created special district or county service area, whenever it is desired to commence operations prior to the time for adoption of a budget for such district or service area, the amount of any money advanced or transferred to such district or service area under authority of law may be made available to meet the financing requirements of the district or service area under the provisions of Section 29130.
If It Misses June 30 Deadline
With the June 30 deadline for balancing its books less than two days off, the Modoc County Board of Supervisors appears to be on the verge of breaking the law -- again.
Facing potential personal liability for missing the June 30 deadline are the supervisors, auditor and treasurer.
The last time the board went against a government code requiring a balanced budget at the end of the fiscal year, June 30, was in 2009 when the it was discovered the board and other county officials illegally misappropriated an estimated $20 million from the county treasury, leaving the books in the red.
Since then the Board of Supervisors has been under a mandate from the State Controller’s Office to repay all the money it took from the treasury “as soon as possible,” but the board has failed to come up with an estimated $15 million needed to replace the misappropriated funds.
The county treasury is subject to the same government codes as the annual county budget, according to Paul McIntosh, executive director of the California State Association of Counties in Sacramento.
“The restrictions are found in the government code under section 29000, which is commonly known as the County Budget Act,” McIntosh explained. “Specifically, Section 29120 - 29122 prohibit the expenditure of funds beyond those appropriated (the budget) and makes it a personal liability of the person who overspent the budget. Under this section then, a county could not end the fiscal year ‘in the red’ as the expenditure beyond the budget would have been illegal.”
Asked if the county treasury comes under the state law governing balanced budgets and who is ultimately responsible, McIntosh said the law covers all county funds.
“Yes, it is not specific to the county general fund but to all funds controlled by the Board of Supervisors, Auditor-Controller and Treasurer-Tax Collector,” McIntosh explained.
Editor’s Note: For our blogger’s interpretation this is Section 29122 in full:
29122. The board shall approve no claim and the auditor shall issue no warrant for any obligation in excess of that authorized therefor (sic) in the budget appropriation, except upon an order of a court of competent jurisdiction, for an emergency, or as otherwise provided by law. Provided, further, with respect to a newly created special district or county service area, whenever it is desired to commence operations prior to the time for adoption of a budget for such district or service area, the amount of any money advanced or transferred to such district or service area under authority of law may be made available to meet the financing requirements of the district or service area under the provisions of Section 29130.
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