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Shortly after two former San Benito County Free Library employees were sentenced to jail for embezzling more than $360,000, the San Benito County Board of Supervisors unanimously approved an external audit of county procedures to determine how the theft went unchecked and how to prevent it from happening again.
Supervisors authorized County Administrative Officer Esperanza Colio Warren to seek bids for outside auditors, following recommendations from both her office and County Counsel Gregory Priamos.
Priamos told the supervisors that an external audit was important, not only to “demonstrate the county’s commitment to ethical governance” and strengthen public trust, but to guide policy reforms, budgeting decisions and oversight strategies across departments.
“The underlying criminal investigation did not bear on the issue on how San Benito County can and should improve its internal controls,” said Priamos. “The audit may reveal weaknesses in financial oversight, procurement processes or reporting systems in the library department that may have wider county application.”
The proposal was opposed by members of the public, as well as District Attorney Joel Buckingham and Auditor-Controller Joe Paul Gonzalez. They argued that since former supervising librarian Erin Baxter had already been sentenced, and the criminal investigation had determined what happened, there was no need to spend scarce county funds on an external audit, especially amid a financial crisis.
“It just feels like a setback with the county in the financial situation it’s in,” said Tami Aviles of the nonprofit Friends of the San Benito County Free Library. “Bringing in another consultant is going to cost money, which I’m sure is of concern to you. We just want to put this behind us and move forward.”
Gonzalez and Buckingham said they could present a report to the board’s Audit Committee, which consists of Supervisors Dom Zanger and Ignacio Velazquez, and that if the committee still had questions they could hire external auditors.
“Pretty much the horse has left the barn,” Gonzalez said. “At this point, you want to close the door to the barn. And to be honest with you, we have already done that by improving our internal controls and doing the best that we can to ensure that this never happens again.”
Buckingham, who prosecuted the case, told the board there was not “a ton of mystery” about what went wrong, and argued the county could save the money that would be spent on an external audit. Any review, he said, would point to the same conclusion: inadequate supervision.
“There was a loss of separation of duties between the individual who did the action and the person who was supposed to be supervising and approving the processes,” Buckingham said. “As a result, that person [Baxter] could send invoices up to the auditor and say the department heads approved them.”
He argued the problem stemmed from semi-retired employees still having key roles in the county. He pointed to two supervisors who failed in their oversight roles, including former librarian Nora Conte and former County Administrative Officer Ray Espinosa, who still works for the county as executive assistant to the CAO.
“I don’t know that a financial accounting firm is going to be able to give you much more information, other than inadequate supervision and loss of internal controls due to non-segregation of duties,” Buckingham said. “We’ve had the FBI look, the Sheriff’s Office involved, even the auditor’s office went through a bunch of emails.”
The supervisors disagreed, preferring instead to commission its own independent investigation to figure out what went wrong and prevent future fraud.
“We’re not doing another criminal investigation. We’re not repeating what the DA did,” said Supervisor Kollin Kosmicki. “We’re trying to figure out what happened internally to stop it from happening again. Any credible organization would be doing what we’re doing.”
Supervisor Angela Curro noted the Board of Supervisors had wanted to do this review since the fraud was first unveiled, but was told to wait until the criminal case concluded. She said it was essential “to win the public’s trust,” particularly as the county weighs steep budget cuts.
“If we’re going to have to go back to our constituents and ask for a raise in sales tax,” she said. “There is no way in my opinion we’re going to win our constituents over if we cannot identify and address (what happened to keep it) from happening again.”
She added that because the county is preparing to cut more than 25% of its budget, it was critical to ensure “internal controls are locked down.”
Also in the meeting, supervisors gave preliminary approval for a new policy prioritizing local residents for affordable housing, known as the Local Tenant Preference ordinance.
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