State Auditor Blasts Bay Area Sanitation District

     (CN) – A Bay Area sanitation district mismanaged public funds, inflated salaries and didn’t put its contracts up for bid, a state audit report says.
     A five-year external audit by the California State Auditor of the Ross Valley Sanitary District revealed a series of administrative and financial flaws, most of which occurred while Brett Richards was the district’s general manager.
     Richards was arrested in the Philippines in 2013 and faces embezzlement and misappropriation of public funds charges stemming from a $350,000 housing loan he received from the district.
     Richards was also given a one-time bonus of $9,850 as well as student debt relief, according to the report.
     The Ross Valley Sanitary District is located north of San Francisco in Marin County and serves approximately 55,000 people, including the towns of Larkspur and Sleepy Hollow. It is funded by wastewater collection fees and property taxes, and is governed by a five-member board of directors.
     The audit released Thursday found the district was overpaying its top executives by 18 percent when compared to similar sanitary districts and that it paid employees excessive cost-of-living adjustments.
     “We do not believe that the district’s practice of offering excessive compensation to its employees is an appropriate use of revenue generated from fees and taxes paid by its ratepayers,” the audit stated.
     Along with bloated salaries, the district implemented lax financial controls which could have easily allowed employees to create fraudulent statements. The audit found there was just one employee responsible for receiving invoices, cutting checks for the invoices and then reconciling bank statements with the district’s records without any supervision.
     The audit was initiated by the district as it looked to recover from the mess left by its former general manager.
     Aside from the financial controls, the audit lambasted the district for its feeble human resources department, which didn’t follow state law by requiring supervisors to undergo proper sexual harassment training or enforce annual performance evaluations.
     In a letter to the California State Auditors Office, the district said it agrees with the issues raised by the report and that it is already complying with many of the audit’s recommendations.
     The audit recommends clarifying the roles of the district’s board members, reducing the salaries of all positions and implementing a stricter process for contracting services and bids for projects. These changes should be made by June 30 and the process has already begun, says Rep. Marc Levine, D-San Rafael.
     “This district board has a fiduciary duty to its rate payers,” Levine said in a statement. “In implementing audit recommendations, district roles and responsibilities to protect that duty must be clearly documented and continually monitored. I have met with the state auditor and am assured that the district will be reporting back to the state auditor on immediate steps they are taking to address and resolve audit findings and recommendations.”

%d bloggers like this: