When Oxnard City Manager Greg Nyhoff instigated audits of the city’s finances in 2014, little did he know that the process would take so long that an audit of the auditors would commence. California State Controller Betty Yee on Tuesday, July 12, issued a statement saying that her office would conduct a “quality control review” of the city’s independent auditors beginning in August. The city’s independent auditors had failed to meet the March deadline to file the single audit, filing instead in July, which put them in the spotlight for scrutiny.
The review gives Oxnard the distinction of being just one of two cities in the state to receive such an audit in the past five years, the other being Bell, which had been embroiled in drama involving the misappropriation of city funds since the late 2000s.
Yee added that the review does not necessarily indicate wrongdoing, but problems in a report given to the city by the independent auditing firm Eadie & Payne LLP for the 2014-2015 fiscal year were described as “huge.” A 50-page report presented to the city’s Fiscal Police Task Force headed by Councilmen Bryan MacDonald and Bert Perello outlined 107 findings described as “material weaknesses” or “significant deficiency,” which require corrective action. Now, Eadie & Payne LLP are being audited by the controller.
Recommendation of the independent auditor range from holding fiscal literacy courses for employees to an inventory on the city’s capital assets.
An anonymous letter began circulating on Saturday, July 16, alleging that there are ongoing investigations by the Ventura County District Attorney’s Office, “State of California’s Attorney’s Office” (perhaps meaning the office of the Attorney General) and other investigatory bodies.
According to Michael Schwartz, Special Assistant Ventura County District Attorney, there is no such investigation either underway or pending. California Attorney General’s Press Secretary Brenda Gonzalez was unable to confirm or deny that there was any investigation, ongoing or potential.
“I can understand frustration from employees and the uncertainty that we have gone through the last 12 months,” said Oxnard City Manager Greg Nyhoff. “For now, we have seen an audit, the auditors had gone so far back into records and they came out to show — what we have been saying for past year plus — it is what it is. Now we have stabilized, let’s move forward.”
Nyhoff noted that regardless of negative feedback, he is dedicated to the city of Oxnard.
“This is too good of a place. They [the residents] deserve far better than what they have had when it comes to a well-managed government.”
As for the allegations made in the anonymous letter, Oxnard Mayor Pro Tem Carmen Ramirez says that it is an “old smear tactic.”
“It is very cowardly to send an anonymous letter, which doesn’t give anyone the ability to assess the credibility of the sender,” wrote Ramirez in response to our inquiry. “It does a lot of harm as people are cynical about government everywhere. In Oxnard, the city manager and his staff are trying to undo decades of poor management. Give him a chance. “
The city’s financial issues were first brought to the attention of the state by members of the firefighters union, with which the city has had rocky relations over contract negotiations. Members of the union have questioned whether the city’s financial situation is or was as dire as Nyhoff suggested. Budget cuts resulted in sidelining a two-man fire truck despite the union’s protest, among other things.
In a statement, Yee said that she is “concerned about Oxnard’s failure to timely file its single audit report, and others in the community have sounded alarms about the potentially precarious financial condition of the city.” The review, set to begin on Aug. 15, will examine whether or not “internal financial controls are in place and functioning in accordance with state law.”