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Following embezzlement and attempted fraud incidents which together could have cost San Benito County more than $1 million, the California State Controller’s Office is sending a team of auditors to scrutinize the county’s internal financial procedures.
In a Dec. 10 news release, the San Benito County Board of Supervisors, which requested the audit in October, said the review aims to address what it called “multiple failures by the auditor’s office.”
“The Board of Supervisors is committed to identifying any deficient internal controls and taking all actions necessary to protect taxpayer dollars,” the release reads, adding that the state controller’s intervention is needed “to restore trust and confidence in our government.”
The request for a state audit, approved unanimously by the board on Oct. 21, followed two major financial breaches. The first was the 2023 embezzlement of more than $360,000 from the San Benito County Free Library, for which two former employees were convicted. The second occurred earlier in October when someone posing as a contractor convinced the county to pay nearly $700,000. The fraud was detected and the bank ultimately returned the money.
The supervisors also raised the possibility that other frauds may have gone unnoticed, saying the state’s review will determine whether this is true. “The Community of San Benito County needs to know if there have been other incidents,” the release states.
San Benito County Auditor-Controller Joe Paul Gonzalez told BenitoLink he welcomes the review. He said the audit will focus on internal controls over purchasing, accounts payable and information security controls.
“Auditors will come with an independent perspective and they will be objective,” Gonzalez said. “We look forward to using the recommendations resulting from that audit to further strengthen our internal control environment and to ensure continued compliance with state standards.”
However, Gonzalez disagreed with how the news release was written. He said describing both financial mishaps as failures of his office doesn’t reflect how the county functions.
“The county is a team and we all are supposed to work together,” he said. “In my management style, I don’t use finger-pointing. I think the State Controller’s Office will show that statement [that it was a failure] is false.”
Back in October, the county sought bids from consulting firms to conduct the audit. But County Counsel Gregory Priamos told BenitoLink that the effort was suspended following the state’s decision to conduct its own review.
“Once we have the state controller’s report,” Priamos said. “We will be able to determine whether there is a need to audit other operations of the auditor’s office.”
The board said the state audit will begin “promptly” and conclude with a report presented at a future meeting.
County officials did not respond to questions regarding when the state controller responded to the county’s request for the state audit, nor to a request for a copy of the state controller’s response.
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