2 Two Years Later: The County Has Yet to Implement the 2022 Grand Jury Recommendation Regarding the Fire Safe Council
The June 22, 2022, Grand Jury report, ‘Fire Safe Council, Growing Pains and Best Practices.'
GRAND JURY RECOMMENDATION
R1: The Jury recommends that the County engage an independent forensic accountant to review and report FSC financial records and processes.
In the April 26th Union article, co-authored by Gina Wills, Auditor-Controller and Supervisor Hardy Bullock, it states: "In response to the Grand Jury’s 2022 recommendation that the County engage an independent forensic accountant, the County Auditor-Controller at that time, Marcia Salter, brought on the audit team of CliftonLarsonAllen LLP (CLA) to inspect the records of the Fire Safe Council of Nevada County for two County contracts."
In the Sept. 20th 2022 response to the Grand Jury, former Auditor-Controller, Marcia Salter refused the Grand Jury recommendation and wrote,
DISAGREE
The County does not have operational oversight of Non-Profit Organizations such as the Fire Safe Council of Nevada County and nor does the Auditor-Controller. The County does have a responsibility to ensure those entities, with whom they have executed a contract for services, meet the contractual terms as agreed upon. Under those contractual terms, the County does have the ability to audit the books and records of the entity as related to the contract when deemed necessary.
THIS RECOMMENDATION HAS NOT BEEN IMPLEMENTED
Despite Hardy and Gina’s April. 26th statement referring to an independent forensic audit, no independent forensic audit of Fire Safe Council has ever been performed.
On July 12, 2022, Kit Elliot, County Council, and Rick Poole, Risk Management, signed a ‘Contract Approval Routing Form’ for the contract with CLA for “inspection of the books for the Fire Safe Council for their contracts in an effort to obtain information about the processes, controls, and procedures in place to discharge the requirements of the contracts. Contractor will assist the County with review of the following contracts: Winter Storm Support & Green Waste Mitigation, Fuels Reduction Services-Ponderosa West Grass Valley Defense Zone Project”.
The County engaged CLA to perform an Agreed Upon Procedures (AUP), not a forensic audit. With an AUP there is ‘no fraud risk assessment’.
On July 21, 2022, Marcia Salter and Gina Will, of the Auditor-Controller’s Office, signed the CLA Contract.
Per County purchasing policy, contracts exceeding $50,000 require Board of Supervisors approval.
The amount of the contract shall not exceed Forty Thousand Dollars. ($40,000).
Subsequent invoices submitted to the Auditor-Controller’s Office totaled $66,000, exceeding the $50,000 threshold for BOS approval.
Setting the price under the approval threshold indicates potential collusion to raise contract prices later in order to avoid the required BOS approval, and subsequently knowledge of the contract from the public and Grand Jury.
The contract awarded to CLA did not solicit competitive bids. The underbid of $40,000 was designed to escape public oversight and BOS approval. The Contract Approval Routing form, filled out by Marcia Salter and Gina Will, answered ‘no’ to the question, “was the contract put out to bid”? To the question, “if not, what is the exception from the competitive bid”?—no reason is given.
On August 24, 2022, a screenshot of metadata indicates that CEO Alison Lehman created the response to the Grand Jury that was subsequently signed by Marcia Salter on Sept. 20. Why is Alison Lehman writing the response to the Grand Jury and giving direction to a supposedly elected official?
There is no record of the Lehman/Salter response on the Grand Jury website for the June, 22, 2022 Fire Safe Report. Why not?
Just prior to the Feb. 23rd 2023 Board of Supervisors meeting, the Auditor-Controller pulled the following Contract Amendment from the Consent Calendar. Thus, the Board of Supervisors may never have been aware of the original contract or the invoiced overruns.
4. SR 23-0257: Resolution approving Amendment 1 to the contract between the County of Nevada and Clifton Larsen Allen LLP (CLA) for review of Fire Safe Council's contract processes, controls, and procedures, increasing the contract by $26,000 for a total amount not to exceed $66,000, authorizing the Chair of the Board of Supervisors to execute the amendment, and directing the Auditor-Controller to amend the Auditor-Controller's Fiscal Year 2022/2023 budget. (4/5 affirmative vote required)
To date, nothing has been done to correct the record or amend the contract that was subject to the county’s Purchasing Policy. These were $66,000 of public funds, coming out of the yearly budget, with no Board approval.
These questionable actions suggest that Alison Lehman and Kit Elliot, with complicity of the Auditor-Controller, are still seeking to avoid conducting a true and independent forensic audit of Fire Safe Council. Why would the County want to avoid the Grand Jury recommendation of an independent forensic audit?
It seems apparent that Kit Elliot, Marcia Salter, and Gina Will, with the knowledge of Alison Lehman, contracted with CliftonLarsonAllen in a manner that violated County procurement protocols. For two years they have refused to comply with Grand Jury recommendations.
RECOMMENDATION
The County should implement the actual recommendations of the Grand Jury. An ‘independent’ forensic audit should be performed. The contract must be open to competitive bids and be administered in compliance with County procurement requirements, to avoid the appearance of impropriety that currently exists.
The Board of Supervisors has a duty to investigate the internal protocols with staff which led to these problems. Furthermore, they need to advise staff to respect the Grand Jury recommendations. Lastly, there needs to be a firewall between the CEO’s Office and elected officials. The ‘elected’ Auditor-Controller has an Oath to the People.
Erin Regan
District 5
SOURCES:
Professional Services Contract with CliftonLarsonAllen LLP
Engagement Contract signed by Kit Elliot and Rick Poole
Copy of email indicating Marcia knew the contract would exceed 40K;
Auditor-Controller Response to Grand Jury Report
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