The California State Controller’s office this week notified San Benito County officials that its Local Government Oversight Team will conduct a full audit of the county’s finances.
County officials said in a press release that the audit is expected to begin promptly and the controller will provide the board of supervisors with its findings and conclusions, along with recommendations to reform the county’s internal controls for detecting and preventing fraud.
The controller’s report will be presented to the board at a future meeting, where the supervisors will consider the findings and take action on recommendations, says the press release.
The board of supervisors on Oct. 21 formally requested that the state controller conduct an audit in response to multiple failures by the county auditor’s office. Those failures collectively resulted in a loss of more than $1 million in taxpayer dollars due to fraud.
The recent losses resulted from two recent high profile incidents. Between 2019-23, former San Benito County Library employees Erin Baxter and Mary Alvarez embezzled more than $360,000 of county funds from the library. Baxter and Alvarez were convicted and sentenced for the embezzlement earlier this year.
On Oct. 15, a thief or thieves posing as a representative of a contractor doing business with the county was able to convince county staff to send a payment of $696,602. The funds were recovered weeks later, but no suspects in the theft have been publicly identified.
In both cases, the fraudsters stole from the county by falsely representing themselves or their expenses directly to the county auditor’s office.
“The Board of Supervisors is committed to identifying any deficient internal controls and taking all actions necessary to protect taxpayer dollars,” says the press release. “Most importantly, this action by the State Controller is necessary to restore trust and confidence in our government.”
The board is concerned that there may have been other instances of fraud that supervisors are unaware of, and is hopeful that an audit by the state controller will determine whether any additional theft or loss has occurred, county staff said.
The county auditor’s office is managed by County Auditor-Controller Joe Paul Gonzalez, who is a countywide elected official and is not overseen, directed or managed by the administrative officer or by the board of supervisors.
