California Controller Finds Failure to Reconcile Accounts & Record Journal Entries Hampers Reporting in Humboldt CO.
Seal of the California State Controller
Press release from the California State Controller’s Office:
State Controller Betty T. Yee today published her team’s detailed review of Humboldt County’s internal financial controls, which found a backlog of journal entries and lack of bank reconciliations contributed to the county’s inability to complete timely financial reports — compounded by insufficient staffing, inadequate training, and a lack of updated policies and procedures.
Established in 1853, Humboldt County covers more than 4,000 square miles of California’s North Coast and had a population of more than 136,000 at the last census. Among the State Controller’s most significant findings:
- The county does not reconcile its bank balances and the county treasurer’s accounting records, nor does it reconcile cash and investment accounts pursuant to GC 26905. Timely reconciliations allow an entity to ensure cash transactions have been recorded properly, assist in monitoring cash flows, and detect errors and fraud.
- The county amassed a backlog of journal entries required to finalize financial statements. In addition to delaying reports, the backlog rendered county accounting data unreliable. For example, in September and October 2021, Auditor-Controller’s Office (ACO) staff posted journal entries totaling $106 million to the FY 2019-20 general ledger. As a result, county management may have made financial decisions based on outdated data throughout FY 2019-20.
- Insufficient staffing has kept ACO from fulfilling its duties and responsibilities. With only 13 full-time positions, the fiscal team has had an average of three vacancies throughout the review period, even as a realignment of payroll functions to ACO increased its workload.
The report emphasized that an organization’s commitment to competence is a key principle of an effective internal control system. While staff interviewed during the review expressed eagerness to successfully complete their assigned duties, they felt sufficient training had not been provided. Additionally, the ACO Department Policy & Procedure Manual has not been updated since 2012 and does not reflect current processes.
The report includes county responses to SCO findings and SCO recommendations for improvement. Controller Yee has requested a progress update in six months.
With a commitment to government transparency and accountability, Controller Yee and her Audits team have identified more than $7.25 billion in waste, fraud, and abuse of public funds since January 2015.
As the chief fiscal officer of California, Controller Yee is responsible for accountability and disbursement of the state’s financial resources. The Controller has independent auditing authority over government agencies that spend state funds. She is a member of numerous financing authorities, and fiscal and financial oversight entities including the Franchise Tax Board. She also serves on the boards for the nation’s two largest public pension funds. Elected in 2014 and reelected in 2018, Controller Yee is the tenth woman elected to a statewide office in California’s history. Follow the Controller on Twitter at @CAController and on Facebook at California State Controller’s Office.
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“The county does not reconcile its bank balances and the county treasurer’s accounting records, nor does it reconcile cash and investment accounts pursuant to GC 26905. Timely reconciliations allow an entity to ensure cash transactions have been recorded properly, assist in monitoring cash flows, and detect errors and fraud.”
“With a commitment to government transparency and accountability, Controller Yee and her Audits team have identified more than $7.25 billion in waste, fraud, and abuse of public funds since January 2015.”
Sounds like KPD was onto something and set up to fail
Exactly, ?.
Exactly what?
Exactly 100 Percent
Maybe reread it, and really focus.
exactly , …” While staff interviewed during the review expressed eagerness to successfully complete their assigned duties, they felt sufficient training had not been provided. ” aka; a ship without a captain
More like a Captain with a bunch of disloyal, cutthroat, scurvy dogs, for a crew.
Exhibit A)
From SCO Report
(see screenshot)
Elishia Hayes obviously was prejudiced, with the objective of scapegoating only Karen Paz-Dominguez, for the entire, widespread incompetence of all the County Departments, to submit acceptable financial reports.
As if it was all Karen Paz-Dominguez’s fault, for problems that far pre-dated her term.
It’s actually very unnerving that Elishia Hayes is currently in charge of our finances, in the interim, until Cheryl Dillingham, our actual elected official, can officially take charge.
This should not be allowed, as Elishia Hayes clearly has an inability to act in a responsible manner, for difficulties that she is clearly responsible for, and is clearly a backstabbing, narcissistic, ego-centric, cutthroat.
And quite possibly, if not quite probably, an unapologetic racist.
There is an obvious, long-term, widespread, lack of professionalism and competence, and likely multiple instances of corruption and fraud, throughout many, or most of all of the County Departments.
For Elishia Hayes to suggest, let alone actually report in writing to the SCO, that the entire County’s ineptitude and incompetence lies at the feet of Karen Paz-Dominguez, is pure denial and insanity.
Elishia Hayes’s employment should be terminated immediately, as she is clearly incapable of properly accepting and evenly distributing, the burden of shouldering the blame.
She admits nor implies, shortcomings to any, beyond only those with which she scapegoats Karen Paz-Dominguez.
That is entirely preposterous, and just by that professional inadequacy, alone, she should be disqualified from her position, immediately.
If she can’t even see, or grasp, how widespread the problem clearly is, she is incapable of correcting it.
Remove her now.
some heavy handed accusations there. The attachment is an eye opener, and true.
That figure was the amount for the whole State, not Humboldt Co alone, that was identified as possible and justifying the Office’s existence, which usually means the various governments couldn’t prove their accounting- not necessarily waste or fraud actually existed, for the whole state. Nothing is said that Humboldt Co had fraud, waste or even errors. Just incompetence in accounting. Which is always rationalized by talking about understaffding but never resolved.
Basically the press release was on a report saying the county has backlogs that prevented the county from having an up-to-date accounting to make financial decisions. Backlogs that one article indicates were not that hard to resolve and were a matter of persistence. A persistence that apparently did not happen even with outside help.
“If you’re just tuning in, the county’s payroll function has been a source of problems and controversy for years now. In late 2018, shortly before Paz Dominguez assumed office, the county moved payroll out of her office and over to the Human Resources Department. Problems ensued, and in 2020 the board briefly outsourced payroll responsibilities to private firm Automatic Data Processing (ADP), only to find — after paying the firm $146,000 — that the company couldn’t get its systems to work with the county’s systems.”
https://lostcoastoutpost.com/2020/mar/2/county-looks-outsource-payroll-sheriffs-deputies-s/#:~:text=As%20the%20county%20looks%20to%20outsource%20its%20payroll,their%20paychecks%20have%20been%20riddled%20with%20errors%20lately.
https://lostcoastoutpost.com/2021/aug/25/county-moves-payroll-back-under-auditor-controller/
This wasn’t about payroll.
Sorry that you can’t see the part payroll played in creating a backlog. Here is a link to another article with Paz-Dominguez own take on it- ““These two projects were the now-failed project to outsource payroll to ADP and the forced upgrade of the county’s financial software. Both projects required a heavy time investment from the A-C Office that pulled it away from its state-mandated duties and its essential functions.””
https://www.msn.com/en-us/news/us/state-controller-e2-80-99s-office-says-understaffing-lack-of-training-delayed-completion-of-financial-reports/ar-AAZSqS7
Much of this is Why the HCCAO and HCBOS wanted KDP out of there. She wanted them all to clean up their acts responsibly and they do not want to.
I’m still smarting the people of Hmboldt were so dupped to vote in one the good ol’ boy system workers to help them keep on keeping on in their unaccounted for financial practices.
I’m also unclear why they have not demanded an annual Independent Audit from an outside source. Oh, right, I actually know why they haven’t….
Thank You Betty Yee. I’m only sorry you didn’t speak up a few months ago.
Actually they did. Twice.
they county a c has been under a microscope for atleast six months
” According to county staff members, the policy changes were abrupt, and the departments were provided inadequate notice and explanations of the changes. County staff members also complained that the new policies were confusing because they were not formalized and documented countywide and were inconsistently applied. For example, departments were directed to provide to ACO “all” of the documentation that supports every journal entry. The types and extent of documentation required are not standard for all the different departments, business processes, and accounting entry types within the county. The required documentation may be brief or consist of hundreds of pages. ”
it helps when goal posts remain stationary and expectations reasonable, with lines of communication available . All to often none of these were in play while Putz Dominguez was in control.
You need to look at the press release again. The 7.25 billion is for the entire state, not for Humboldt County. Everything after the solid line below the paragraph stating Yee wants a update in 6 months. This report does not validate “KPD”s performace, it only states the county has problems, including her department. She is responsible for the training of her staff and the policy and procedure manuals.
BTW section GC 26905 ways “Not later than the last day of each month, the auditor shall reconcile the cash and investment accounts as stated on the auditor’s books with the cash and investment accounts as stated on the treasurer’s books as of the close of business of the preceding month to determine that the amounts in those accounts as stated on the books of the treasurer are in agreement with the amounts in those accounts as stated on the books of the auditor.” The auditor is responsible for the reconciling.
Treasurer. Nice try.
“the auditor shall reconcile the cash and investment accounts as stated on the auditor’s books with the cash and investment accounts as stated on the treasurer’s books “. The auditor …
$7.25B statewide, not just Humboldt. We don’t have that kind of money around here
We knew you were on top of it Karen! Too bad this report didn’t come out 2 months ago! 7.25 billion dollars of our money gone, from waste, fraud and abuse. Not only was she set up to fail. Sounds like some people need to be held accountable and do some jail time! Unfortunately they will get a slap on the damn wrist! Corrupt sons a bitches!
Makes me so mad! You’ll all tried to make her look incompetent because she was on to your shit! We need an immediate replacement on these positions! Then the county needs reimbursement of their funds! Clearly!
Humboldt Lady,
$7.25 billion is a statewide figure, I’m pretty sure.
That 7.25 billion is about the entire state, not just Humboldt. That little grey line above the last two paragraphs ends the Humboldt specific info.
Can anyone here actually read? That 7.5 billion was not Humboldt Co funds. It was talking about the State auditor. And there was no mention of any waste, fraud or errors in Humboldt Co except for general failure to be timely and keep staffing up. Which is no surprise in any county department ever.
You can’t seem to read, either. Try reading the actual report.
Well the report is not in the press release. The press release makes it clear that the billions mentioned is from the State Auditor. Not Humboldt Co. So that rhetorical question about reading is clearly answered as “no.”
Humboldt Lady is still spun out that Dominguez lost the election.
Putz Dominguez doesn’t need our help to look incompetent. This crap came about while she was in office
wow, better call …
So Karen Paz Dominguez was right about a lot of things
She may have been right about somethings but made them worse herself rather than fixed them.
you didn’t Know That??
not so much, read the state controllers report
The bottom portion of the press release looks like a bit of agency publicity and is worded poorly – I am pretty sure that is $7.25b statewide since 2015.
It looks like Fraud was involved with ousting KPD, which means the settlement is toast. I would expect she can easily get 2.5 million in a new settlement. about half the people in this county are and have been aware of what has been going on for decades. welcome to the 21st century.
Nothing of the kind. Just ineptitude in both the Board and Humboldt Co citizens posting here who share the common attribute that blaming their usual list of villains is more important than fixing problems.
so you are saying that every board since the mid 80s has had the same problem. i smell fear. its called corruption and it doesn’t end well, and the end is near. and for the record its not the board, its the staff.
One can’t exist without the other.
Nonsense. I never said any such thing. As for the miasma that surrounds you, I can not tell.
And we the taxpayers will foot the bill. Thank the BoS for that one. They are responsible for this mess.
always looking to blame BoS, when no other department heads have a problem with reporting to the BoS.
Well, that explains why those of us who worked the election have not been paid. I suspect that our board of supervisors isn’t very sharp when it comes to money.
we’ll get paid. As soon as they figure out how much money the county has or has not.
“With a commitment to government transparency and accountability, Controller Yee and her Audits team have identified more than $7.25 billion in waste, fraud, and abuse of public funds since January 2015.“
Betty Yee is the State Controller and her team has found more than $7.25B in waste, fraud and abuse of public funds STATEWIDE… not only in Humboldt County.
Same shit, Different city, county, state, country.
This is the biggest scam in human history.
Convincing the Fleeced that they Are part of something special
does a magnet stick to a stainless steel refrigerator ?
Here is a link to the report… It’s a download.
https://disq.us/url?url=https%3A%2F%2Fwww.sco.ca.gov%2FFiles-AUD%2F07-2022_lga-lgo_HumboldtCounty.pdf%3Aoj3-XAM5k9m3ZF_ZwretOCEL1iA&cuid=3369909
Is that guy in the emblem image digging his own grave? Looks like it!
Yes. And the government is represented by the person in the headdress with the spear. They are there to make sure he digs it to code…