Balancing
the County Budget Deficits
on the Backs of Children
Editor’s
Note: We want to thank all our readers for following the multi-part
series “Balancing the County Budget Deficit on the Backs of Children.”
Part 31 concludes the series, but we will return in a few days with
more on the subject of the county’s $20 million misappropriation of
the treasury.
Part 31 -- The Final
Today
Summing it Up, An analysis
In this series based on official public records we have shown an inflexible Modoc County Children and Families Commission, one unwilling to accept and follow the advice of its executive director and a lone commissioner, that Prop. 10 Trust Fund moneys be removed from the county treasury.
In fact, it’s been detailed that the commission knew its money was being spent to cover other county department debts, including the Modoc Medical Center -- especially when Treasurer Cheryl Knoch routinely revealed that was the case in 2002 -- seven years before then-CAO Mark Charlton exposed the on-going treasury misappropriation and put Modoc County into a financial spin.
Knoch’s admission apparently was not enough to motivate the commission to move the money out of the treasury, even though there were strong implications from Auditor Judi Stevens that she also was using Prop. 10 money for purposes other than the state-mandated use -- all against state law.
The commission understood that Prop. 10 was new and it required certain duties and responsibilities. Could the meetings have been conducted more professionally? Was there a list of requirements and internal controls set by Prop. 10 law?
They all knew the law and the proper procedures in following it because the executive director and other commission members contacted various counties with inquiries. These other counties all offered to help and apparently provided Modoc County with their processes and procedures for the commission and programs.
In 2001, before Michelson was fired, Modoc County was not in compliance with the state and Prop. 10 requirements. The commission knew this, it had the opportunity and access to do it right, and it did not take action to correct the problems.
Within this background there is the discussion with Knoch at the commission’s Feb. 13, 2002 meeting, following the firing of Donna Michelson. Knoch’s comments should have sent up two red flags -- one red flag for illegal use of county treasury funds and another for illegal Prop. 10 accounts and management.This alone was sufficient justification for a qualified audit.
Because Executive Director Donna Michelson and apparently other commission members had contacted various counties, the commission had knowledge of the key issues needed to run a Modoc County Children and Families Commission program and for receiving and managing Prop. 10 funds. Someone, in addition to Michelson, should have taken action.
The question begs to be asked, did Knoch know, or should she have known, that even in 2001 and 2002 that she was apparently wrongly managing county funds, and particularly the Prop.10 funds, considering the state had provided specific guidelines and laws for the use of those funds?
The questions pile up, and for now some remain unanswered.
Why was Modoc County Supt. of Schools Carol Harbaugh so consistently adamant about keeping the Prop. 10 funds in the treasury even when she acknowledged in her April 2, 2002 memo that the state wanted those funds -- in every county -- to be kept separate?
And when there was pressure to remove the funds from the treasury why did Harbaugh suggest they reside in her office?
Why did Harbaugh want Executive Director Donna Michelson directly under her control, and why was she allowed to operate on behalf of the commission without direction or authorization?
Did Cantrall, who has maintained an apologetic innocence of the misappropriation ever since its disclosure, read the minutes of the Feb. 13, 2002 -- as she should have -- which would have made her aware of the misappropriation? It’s been established that she wanted the funds to remain with the county treasury, even in face of violating the law.
By osmosis alone, if not directly aware, Cantrall’s successor on the commission, then-supervisor Mike Dunn, should have been acutely aware that the misappropriation was taking place -- at one point he was chair of the commission.
When in 2001, Modoc County CAO Mike Maxwell and Auditor Judi Stevens did not want to sign an MOU with the Children and Families Commission, members of the commission had a great opportunity to operate independent of the county. They missed it.
The Modoc County Children and Families Commission of 1999-2002 was a group of individuals serving a purpose directed by state law that they apparently did not have the training and knowledge to perform effectively -- and to do it as required by state law and code.
But there were sufficient safety nets among them to prompt them and provide them with correct processes and actions. In all due respect, they were not as dumb as they appeared to be.
In fact, it’s been detailed that the commission knew its money was being spent to cover other county department debts, including the Modoc Medical Center -- especially when Treasurer Cheryl Knoch routinely revealed that was the case in 2002 -- seven years before then-CAO Mark Charlton exposed the on-going treasury misappropriation and put Modoc County into a financial spin.
Knoch’s admission apparently was not enough to motivate the commission to move the money out of the treasury, even though there were strong implications from Auditor Judi Stevens that she also was using Prop. 10 money for purposes other than the state-mandated use -- all against state law.
The commission understood that Prop. 10 was new and it required certain duties and responsibilities. Could the meetings have been conducted more professionally? Was there a list of requirements and internal controls set by Prop. 10 law?
They all knew the law and the proper procedures in following it because the executive director and other commission members contacted various counties with inquiries. These other counties all offered to help and apparently provided Modoc County with their processes and procedures for the commission and programs.
In 2001, before Michelson was fired, Modoc County was not in compliance with the state and Prop. 10 requirements. The commission knew this, it had the opportunity and access to do it right, and it did not take action to correct the problems.
Within this background there is the discussion with Knoch at the commission’s Feb. 13, 2002 meeting, following the firing of Donna Michelson. Knoch’s comments should have sent up two red flags -- one red flag for illegal use of county treasury funds and another for illegal Prop. 10 accounts and management.This alone was sufficient justification for a qualified audit.
Because Executive Director Donna Michelson and apparently other commission members had contacted various counties, the commission had knowledge of the key issues needed to run a Modoc County Children and Families Commission program and for receiving and managing Prop. 10 funds. Someone, in addition to Michelson, should have taken action.
The question begs to be asked, did Knoch know, or should she have known, that even in 2001 and 2002 that she was apparently wrongly managing county funds, and particularly the Prop.10 funds, considering the state had provided specific guidelines and laws for the use of those funds?
The questions pile up, and for now some remain unanswered.
Why was Modoc County Supt. of Schools Carol Harbaugh so consistently adamant about keeping the Prop. 10 funds in the treasury even when she acknowledged in her April 2, 2002 memo that the state wanted those funds -- in every county -- to be kept separate?
And when there was pressure to remove the funds from the treasury why did Harbaugh suggest they reside in her office?
Why did Harbaugh want Executive Director Donna Michelson directly under her control, and why was she allowed to operate on behalf of the commission without direction or authorization?
Did Cantrall, who has maintained an apologetic innocence of the misappropriation ever since its disclosure, read the minutes of the Feb. 13, 2002 -- as she should have -- which would have made her aware of the misappropriation? It’s been established that she wanted the funds to remain with the county treasury, even in face of violating the law.
By osmosis alone, if not directly aware, Cantrall’s successor on the commission, then-supervisor Mike Dunn, should have been acutely aware that the misappropriation was taking place -- at one point he was chair of the commission.
When in 2001, Modoc County CAO Mike Maxwell and Auditor Judi Stevens did not want to sign an MOU with the Children and Families Commission, members of the commission had a great opportunity to operate independent of the county. They missed it.
The Modoc County Children and Families Commission of 1999-2002 was a group of individuals serving a purpose directed by state law that they apparently did not have the training and knowledge to perform effectively -- and to do it as required by state law and code.
But there were sufficient safety nets among them to prompt them and provide them with correct processes and actions. In all due respect, they were not as dumb as they appeared to be.
