Sutter County Supervisor Mike Ziegenmeyer speaks during a Board of Supervisors meeting on Tuesday, Sept. 10, 2024, in Yuba City. Supervisors on Tuesday begrudgingly agreed to return $80 million to the state after an apparent spreadsheet error earlier this year.
Paul Kitagaki Jr.
pkitagaki@sacbee.com
None of the Sutter County supervisors wanted to make the motion.
To do so was to send $80 million back to California coffers, rectifying a mistake made by the state controller’s office that mixed up the monthly K-12 education payments sent to 11 counties.
Some counties were, at least temporarily, short-changed by tens of millions of dollars. Others, such as Sutter County, earned interest on an extra $80 million for about a month, netting more than $200,000, county officials estimated, funds the county could use.
Ultimately, the dumbfounded supervisors complied with the state’s request, begrudgingly voting Tuesday to return the bread.
“With one caveat,” said supervisor Mike Ziegenmeyer. “Put a note in there that says, ‘Do a better job.’”
‘This is a weird one’
Sutter County, which normally receives a monthly payment of about $25.8 million to distribute to its schools and districts, received nearly $106 million for that purpose in late January.
That funding was intended for Stanislaus County, said Nicholas Valencia, Sutter County treasurer-tax collector. In turn, Stanislaus County received funding meant for Sonoma County, causing it to have a roughly $60 million shortfall, Valencia said.
Hundreds of millions of dollars were erroneously wired across the state, apparently due to a subtle technical error.
“This is a weird one,” Sutter County auditor-controller Nathan Black told supervisors. “The state controller’s office accidentally added a row in their distribution work sheet, which meant that a bunch of counties got other counties’ monies.”
The apparent spreadsheet error caused an alphabetical payment shift, with counties receiving the monthly payment intended for the county before it alphabetically.
The mistaken payments involved San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Shasta, Sierra, Siskiyou, Solano, Sonoma, Stanislaus and Sutter counties, Bismarck Obando, a controller’s office spokesperson, said in a statement received after this story first published.
“I just wonder how many mistakes like this the state is making across the board. Very concerning,” Dan Flores, Sutter County supervisor, said. “I know that’s going into the record, but I want it to be there, because it’s embarrassing, honestly. I mean, great for us, for a while, but what if they’re doing this with other counties?”
Sutter County Supervisor Dan Flores listens during a Board of Supervisors meeting on Tuesday, Sept. 10, 2024, in Yuba City. Paul Kitagaki Jr. pkitagaki@sacbee.com
The state controller’s office said the payment issue was identified Jan. 28, and underpaid counties received their correct amounts Jan. 30.
The state controller’s office, in a letter dated Feb. 19, acknowledged the mistake and asked for the money back.
“As a result of a bank account misalignment in our payment system, Sutter County received an overpayment of $80,073,372.70,” reads the letter to the Sutter County superintendent of schools.
The letter requested the funds be returned by check to the state controller’s office. Black, the county auditor-controller, flagged the transaction, a nontax refund, as needing approval from supervisors.
“Can you imagine that? $80 million on a warrant, on a check,” Black said.
Sutter County to keep the interest
The county will send back the money via secured ACH transfer, rather than check or wire transfer, he added.
Sutter County officials plan to keep the more than $200,000 of interest accrued on the $80 million while the mistake was sorted out. The county has maintained a lean budget for years, cutting costs and freezing positions while paying some of its workers below the median rate compared to similar counties.
Soon to no longer collect interest on the unexpected windfall, supervisor Jeff Boone made a cheeky request before initiating the eight-figure payment back to the state.
“Can we make payments?” he said.
To guard against the mistake happening again, the state fund distributor made internal changes, such as strengthening its review and approval processes, and updating procedures to “strengthen payment safeguards,” Obando said.
“The SCO views the relationship with our county partners as one grounded in collaboration, transparency, and mutual respect and we look forward to continuing our partnership so that we can move California forward,” Obando said.
This story was originally published March 11, 2026 at 11:10 AM.
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Jake Goodrick covers Sutter County for The Sacramento Bee as part of the California Local News Fellowship Program through UC Berkeley. He previously reported and edited for the Gillette News Record in northeast Wyoming.