State Controller’s Office Report on Mendocino County Finances and Criminal Investigation: A Closer Look

State Controller’s Office Blames Mendocino County Board of Supervisors for Financial Chaos

The state Controller’s Office has pointed fingers at the Mendocino County Board of Supervisors for the financial turmoil gripping the county. According to state auditors, the board’s failure to conduct a risk assessment of the consolidation of two key county finance offices, despite opposition from senior county finance officials, is a significant factor contributing to the chaos.

The state report highlighted internal control deficiencies and other challenges that led to the county’s inability to prepare and submit its annual financial reports promptly. The report did not draw conclusions on the ongoing criminal investigation into the county’s suspended Auditor and former payroll manager, who face charges of felony use of public funds.

Elected Auditor Chamise Cubbison and former county Payroll Manager Paula June Kennedy deny any criminal wrongdoing and are set for a preliminary hearing in Mendocino County Superior Court. The state report supports contentions made by Cubbison and other former senior county financial staff who warned about the disruptive effects of the forced consolidation of the two financial offices.

The Board of Supervisors, including Chair Mo Mulheren and Supervisors Ted Williams and Glenn McGourty, did not respond to requests for comment on the state report. The report also highlighted the lack of internal controls over the county’s payroll system, leading to potential unallowable payments to a former payroll supervisor.

The state review concluded that the controversial consolidation and understaffing in the financial offices exacerbated the situation. Despite warnings from senior officials, the board failed to conduct a risk assessment of the merger and collaborate with department heads to address concerns.

The state report recommended maintaining an adequate level of competent staffing to ensure effective internal controls in critical offices like the Auditor-Controller and Treasurer-Tax Collector. The county board’s decision to consolidate the financial offices without proper planning and assessment has led to financial reporting delays and operational disruptions.

With the state Legislature authorizing a broader audit of all county functions, including finances, contracts, and elections, taxpayers are expected to bear the cost of $800,000 over an 18-month period. The state report sheds light on the complexities and challenges facing Mendocino County’s financial management, with public court hearings on the horizon to address the ongoing issues.