The Orange County Board of Supervisors selected Jan Grimes, a Democrat, as the new Orange County Auditor-Controller, according to Orange County Supervisor Todd Spitzer, who announced this tonight on his Facebook page.
“Supervisors Pat Bates and Janet Nguyen both initially voted against appointing Grimes because she told supervisors during public interviews it is unlikely she will run for the office when it’s current term is up on 2014,” according to the Voice of OC.
The Voice of OC also reported that Moolrach credited Grimes as doing a great job for the county and that Supervisor Shawn Nelson seconded that saying Grimes in the post offered continuity for the office employees, key software upgrades and for the state’s pending lawsuit against the county over vehicle license fees.
Grimes was ripped by the Republican blog OC Political, earlier this week, when Chris Emami wrote that “Under Jan Grimes’ leadership, three departments named in this report were collectively short on revenue totaling $13.5 million at the half-year point this year. This is very concerning to taxpayers as we rely on the Auditor-Controller to ensure public monies are spent wisely. It looks like the Auditor-Controller’s office has been lax in their oversight duties and it costs the county money that could have gone to public safety, infrastructure or job creation, this is beyond a major problem. It is bad Governance and the BOS has a chance to fix this.”
Emami based a number of his observations about Grimes on an internal audit report titled Audit Alert 1250 Auditor-Controller Opportunity to Clarify County Revenue Policy, by Peter Hughes, the director of the Orange County Internal Audit Department, as follows:
- 1st Observation: The Auditor-Controller is not documenting their limited reviews because they wanted to “avoid giving assurance that a more detailed review was completed.” What I think this means is that the BOS thinks certain areas are being audited, but the internal auditors are just doing a cursory look. This strikes me as a very odd and a somewhat deceptive approach since the current policy of the Board of Supervisors requires a documented audit. This leads me to my second observation.
- 2nd Observation: Since the current Board of Supervisors has requested an audit of revenue items and the Auditor-Controller is doing only a limited review there is a possibility of an expectation gap between what the Board thinks is being done and what the Auditor-Controller is actually doing. I hope that Ms. Grimes has effectively communicated that to the Board.
- 3rd Observation: It seems to me that the Board of Supervisors was cut out of a major political and policy decision again. This time, according to Peter Hughes, it is in regards to the fees charged by the Health Care Agency (HCA) by the Auditor-Controller and CEO. HCA made the policy decision for the BOS when they decided that the “political and economic environment was sensitive to raising county fees” so they did not inform the Board that the fee structure did not cover their costs. The Auditor-Controller with the CEO agreed that since HCA was not raising fees the Board did not need to know. My knowledge of county finances are limited but I do know if you don’t charge enough to cover your costs the taxpayers will be paying the difference. The problem here I see is the Board never got to make that choice, and now the county will be faced with more budget shortfalls.
- 4th Observation: The report also states the “limited reviews” for OC Public Works and OC Waste and Recycling were riddled with errors. One of the errors documented in Dr. Hughes’ audit report stated that the checklist indicated that an item was reviewed in the audit but it was actually missing from the financial report. According to my CPA, the staff performing these reviews where failing in their duty of professional care, he also contrasted that if he had performed work with errors like this he would probably be disciplined by the State Board of Accountancy.
- 5th Observation: I reviewed the website and org chart of the Auditor-Controller’s office to better understand what they are doing and how they approached their work. I was a little surprised to see that the satellite accounting operations of the Auditor-Controller performs the accounting work for the Health Care Agency, OC Public works and OC Waste and Recycling. According to their org chart, the Central Operations of the Auditor-Controller’s office reviews the countywide cost plan to maximize county revenues. So one branch of the Auditor-Controller’s office creates the revenue fees and the other reviews it. So the Auditor-Controller had two opportunities to get these revenue fees correct but it took the Internal Audit Department to find it?
Did the Supervisors pick the right candidate for Auditor-Controller? Time will tell…