Sausalito City Hall made $1.37 million in unauthorized expenditures last fiscal year, an auditor has found.<\/p>\n
The spending, which could have been approved by City Council budget adjustments, occurred in 14 funds. The pattern led to a \u201csignificant deficiency\u201d finding, sparking tensions at the council meeting on Feb. 17.<\/p>\n
\u201cWe expect our clients to go back to the council and say we need to approve some change orders,\u201d said auditor Ahmed Badawi. \u201cWhat we don\u2019t want our clients to do is go forward first and then go back to the council and say: We went forward, can we get authorization?\u201d<\/p>\n
The finding in the draft audit report stood out in an otherwise healthy review of the $21.6 million budget. During the last fiscal year, which ended in June, revenues exceeded projections by $1.5 million.<\/p>\n
More than half of the unauthorized spending was in the public works and community development departments.<\/p>\n
The council heard the draft audit report, asked what led to the deficiency finding, debated its significance and welcomed the auditor\u2019s suggested remedies.<\/p>\n
\u201cWe\u2019re a small city. This is not acceptable,\u201d Mayor Steven Woodside said of the unauthorized spending. \u201cI have every confidence it will not be ongoing.\u201d<\/p>\n
\u201cWe had three different finance directors during the period, and it\u2019s pretty clear the controls were not as rigid as they should have been,\u201d he said. \u201cI don\u2019t want to blame anybody for that. I just think that\u2019s a fact. It\u2019s been uncovered by the auditor and let\u2019s fix it.\u201d<\/p>\n
\u201cThe buck stops with me,\u201d said City Manager Chris Zapata, who said he has begun to implement new controls suggested by the auditor.<\/p>\n
Materials submitted by Angeline Loeffler, whom the city appointed finance director last August, after the fiscal year in question, include a response to the audit.<\/p>\n
\u201cManagement acknowledges the finding and recognizes the importance of compliance with appropriation limits as required by applicable laws and regulations,\u201d it said. \u201cThe over-expenditure resulted from unbudgeted operational expenditures, such as the housing element project, business improvement district projects, emergency repair and maintenance expenditures, or timing delays in processing budget amendments. While these circumstances were addressed operationally, management recognizes the need for stronger controls to prevent recurrence.\u201d<\/p>\n
Vice Mayor Melissa Blaustein, Councilmember Ian Sobieski and Councilmember Joan Cox noted the audit found no evidence of fraud or missing money.<\/p>\n
\u201cI appreciate how seriously our city staff is taking the fact that there is a finding in the audit,\u201d Blaustein said. \u201cThere\u2019s always room for improvement and I think we are in good fiscal standing.\u201d<\/p>\n
But Councilmember Jill Hoffman said the council and city staff were minimizing the issues.<\/p>\n
\u201cI do want to reiterate that it wasn\u2019t just one or two funds. It was 14 funds,\u201d she said. \u201cThese aren\u2019t small amounts of money. Together it\u2019s $1.3 million.\u201d<\/p>\n
\u201cAt the time, there was a significant amount of residents, and myself included, were requesting that we do a forensic audit for various reasons,\u201d Hoffman said. \u201cRed flags were flown about what was going on in our finance department.\u201d<\/p>\n
Hoffman said the city needs a\u00a0forensic audit.<\/p>\n
\u201cIf nothing comes up, fantastic,\u201d she said. \u201cThen that\u2019s a good finding.\u201d<\/p>\n
\u201cI\u2019m going to say something now that I may regret,\u201d Woodside said. \u201cAll five of us know there\u2019s no evidence of fraud; not just from the auditor, but from what we learned from an intense independent investigation that was conducted contemporaneously that we\u2019re not at liberty to discuss, except to say there was no evidence of fraud.\u201d<\/p>\n
\u201cTo suggest anything to the contrary now is just flat-out wrong,\u201d he said. \u201cA forensic audit is an audit when there is some evidence of fraud and you\u2019re trying to find the evidence of the canceled check, etc. I\u2019ve done that kind of litigation. I know what a forensic audit is. It is not warranted here.\u201d<\/p>\n
\u201cI\u2019ve done those investigations, too, and we didn\u2019t do that investigation,\u201d Hoffman replied.<\/p>\n
\u201cThis issue has been brought up year after year after year by many of the same people claiming there must be fraud and abuse,\u201d Woodside said. \u201cLet\u2019s have a forensic audit. Let\u2019s go crazy. Let\u2019s spend hundreds of thousands of dollars to look at every canceled check, because somebody must have stolen something.\u201d<\/p>\n
\u201cWe have an independent auditor who said no, nothing\u2019s been stolen,\u201d he continued. \u201cThere is a failure to have adequate checks and balances so that at the end of the fiscal year you don\u2019t exceed the department budget. \u2026 We can fix that and it should be fixed.\u201d<\/p>\n
Hoffman said that \u201cforensic audits are to detect fraud as well.\u201d<\/p>\n
\u201cYou don\u2019t do a forensic audit when you know there\u2019s been fraud,\u201d she said. \u201cYou do a forensic audit to detect fraud when you suspect something\u2019s amiss.\u201d<\/p>\n
The final audit report will be presented at a future meeting.<\/p>\n","protected":false},"excerpt":{"rendered":"Sausalito City Hall made $1.37 million in unauthorized expenditures last fiscal year, an auditor has found. The spending,…\n","protected":false},"author":2,"featured_media":102578,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[30],"tags":[7,181,23,992,100,180,993,266,101,103,102,3624,3625,104,106,105],"class_list":{"0":"post-203837","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-san-francisco","8":"tag-california","9":"tag-latest-headlines","10":"tag-local-news","11":"tag-marin-county","12":"tag-news","13":"tag-newsletter","14":"tag-north-bay","15":"tag-northern-california","16":"tag-san-francisco","17":"tag-san-francisco-headlines","18":"tag-san-francisco-news","19":"tag-sausalito","20":"tag-sausalito-city-council","21":"tag-sf","22":"tag-sf-headlines","23":"tag-sf-news"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/203837","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=203837"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/203837\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/102578"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=203837"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=203837"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=203837"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}