Analyzing the Modoc-gate Trail
The County’s Been to the State With
Its Payback Plan, Now Where Does It Go?
By Ray A. March
Considering the debate over whether or not county officials -- who don’t have the most shining reputation in Sacramento -- should reveal their “paying-ourselves-back“ financial plan to the State Controller’s Office, the final outcome was virtually anticlimactic.
At least it would appear so in reading a press release dispatch from CAO Chester Robertson’s office a week following May 14 when six county officials, including Modoc County Board of Supervisors Chair Patricia Cantrall, met with five representatives of the SCO.
From Robertson’s press release, possibly his first:
“It was emphasized that the controller’s office role is not to instruct the county on how to restore the deficit the county is facing, but to play a compliance role to ensure the county has a plan to deal with the deficit.”
It should be noted that county officials, including those responsible for raiding the treasury and causing a $13 million debt that must be repaid, have known the state’s enforcement role since late 2009.
To refresh memories: Various county officials and department heads have for a decade or more been fully aware of the fiscal musical chairs that caused the treasury deficit. These include former CAO Mike Maxwell, former Auditor Judi Stevens, Treasurer Cheryl Knoch, Supervisor Patricia Cantrall and past supervisor Dave Bradshaw and the heads of the library, social services and First 5 departments -- as alleged in the performance bond claim filed by the Board of Supervisors and Modoc Independent News coverage using the California Public Records Act.
“The controller’s office inquired about the current amount of the hospital enterprise fund deficit, and how the enterprise fund will be handled now that a hospital district has been formed. The county responded that we have currently been operating under annual inter-fund borrowing resolutions, and that we will work towards assigning the debt in upcoming financial statements."
No where in Robertson’s 378 -word statement is there any hint of which departments or districts will be “assigned the debt” that goes with “paying ourselves back.”
This raises the question, isn’t there the possibility that by assigning debt to various departments that it will reveal that the Modoc Medical Center was not the only department being floated by the illegal use of the treasury, and that it will expose other departments that were complicit in the treasury misappropriation?
Robertson did not respond to several e-mail messages left with his office, so Auditor Darcy Locken was asked the same questions.
“The intent is only to assign the debt owned by the hospital fund,” Locken explained. “Yes, there are other funds with deficit balances, but they have receivables against those balances.
“When we record inter-fund (inter-treasury) payables and receivables we would show a receivable in the positive funds and a payable in the hospital fund. There’s no mystery as to which fund owes the money. Assigning the debt really doesn’t bring any new surprises.”
These options do not rule out the possibility, as suggested by Robertson, to sell county-owned assets such as official buildings and to continue pursuing legal remedies.
Reference to “legal remedies” can be interpreted as an outside chance the county can collect from it previous auditor for costs it incurred when the state ordered a new audit, and an insurance settlement of some form on the performance bond claim.