A long-awaited forensic audit of a single year of the Fresno Economic Opportunities Commission\u2019s finances uncovered numerous examples of sloppy recordkeeping and budget overspending, but there were no signs of wrongful activity, a consultant told the board Monday night.<\/p>\n
Mark Courey, director of forensic services at Wipfli LLC, outlined the report\u2019s findings during a 75-minute presentation and subsequent discussion that painted an organization where overspending was rampant and budgets ignored.<\/p>\n
The forensic audit was requested by Assemblymember Joaquin Arambula, D-Fresno, in November 2024 after he made public for the first time that the organization was \u201chemorrhaging\u201d money and had spent down its reserves, leaving it on the verge of having to shut down. Arambula had taken the seat on the commission formerly held by his mother, Amy Arambula.<\/p>\n
Fresno EOC operates a number of social service programs, including Head Start, WIC, the Local Conservation Corps, and food and transit services. The organization was founded in the 1960s as part of President Lyndon Johnson\u2019s War on Poverty.<\/p>\n
The EOC board voted in December 2024 not to renew the contract of chief executive officer Emilia Reyes and in early 2025 to hire Wipfli for the audit.<\/p>\n
Budgets Ignored<\/p>\n
According to the Wipfli\u00a0 presentation Monday, \u201cTesting revealed no evidence of abuse,\u201d while \u201cpockets of the organization didn\u2019t understand or weren\u2019t mindful of budgets.\u201d<\/p>\n
The audit reported that \u201cthere was no budget consideration for administrative purchases\u201d in the finance, executive, and administration divisions. Some employees told auditors that they were unaware of what their budget was, or if there even was a budget.<\/p>\n
Officials in food services, one of several areas where expenses exceeded revenues, were told not to worry about overspending, said Salam Nalia, a former administrator who was rehired after five years of retirement to help turn the organization around.<\/p>\n
\u201cSome programs, specifically food services, were just overspending,\u201d he told the board. \u201cAnd we were told that the instructions to the food director was to \u2018go ahead and spend. We\u2019ll manage it somehow.\u2019 So I don\u2019t know what happened in those five years beyond the fact that the spending was out of control.\u201d<\/p>\n
After Reyes\u2019 departure, Nalia and former CEO Brian Angus were hired in 2025 to restructure the organization. Fresno EOC had already shifted $3 million from its health plan reserves and also needed a $5 million loan to keep the doors open.<\/p>\n
Fresno EOC burned through $10 million in reserves over a three-year period starting in 2022, said Nalia, now the interim deputy CEO.<\/p>\n
If Fresno EOC had not been able to tap the $3 million from the health plan reserves, no bank would have loaned it additional money \u2014 not even Self Help Credit Union, the only bank to agree to a bailout, Nalia said.<\/p>\n
\u201cIf we had not borrowed funds in 2025 from Self Help, after six banks refused us, we would not be in this building because it would have been sold by now,\u201d he said. \u201cSo we were in a pretty precarious situation. I don\u2019t know how we got to it, but we were in that situation.\u201d<\/p>\n
Nalia said he and Angus were shocked after their return to discover that the Finance Committee no longer existed and that \u201cthe budget, especially for admin, was out of control.\u201d<\/p>\n
After its financial crisis became public, Fresno EOC underwent significant changes in 2025: Dozens of jobs were cut, benefits trimmed, and there was a tighter focus on spending and accountability.<\/p>\n
Arambula: Who Was Responsible for Key Decisions?<\/p>\n
While the audit presentation reported on where the organization fell short with its financial oversight, it lacked specifics of who was responsible for the overspending, poor recordkeeping, and for disbanding the Finance Committee.<\/p>\n
Arambula also sought to discover why in 2024, when the Fresno EOC\u2019s financial hole was growing ever deeper, a decision was made to disband the Finance Committee, and who made that decision.<\/p>\n
Reyes was not named in the audit but reportedly played a large role, including in poor recordkeeping. Former staffers told GV Wire last year that she had refused to provide them requested receipts for her credit card purchases. And as CEO from 2020 through 2024, she would have been responsible for the organization\u2019s budgets and spending.<\/p>\n