The board vote was 3-1, with Supervisor Anthony Farrington wanting to have an outside forensic accountant take over the investigation. Supervisor Jeff Smith was absent.
Following a crash landing in June, it came to the board's attention that then-Lt. David Garzoli was taking helicopter flying lessons under the auspices of a federal Drug Enforcement Administration (DEA) grant given to the Lake County Sheriff's Office, as Lake County News has reported.
Specifically, Garzoli was training for his commercial pilot's license while flying with Cutting Edge Helicopters, a company that has a lease agreement for helicopters with the county, when he had a forced landing while en route back to the county from Ukiah.
With the board concerned about the county's liability during the flights as well as the potential for having to pay back portions of the grant if it wasn't spent properly, last month the board directed County Counsel Anita Grant to look into hiring an investigator and a forensic accountant to go through flight logs and determine how it was spent.
Grant told the board Tuesday, “It is not quite as simple to find a forensic accountant in Northern California as you might think.”
She searched with the help of the California State Association of Counties and the state county counsel association, and came up with only three names, two of which responded.
But, given that the costs run between $150 and $175 an hour, plus expenses, and taking into account the potential breadth of the documents, Grant suggested the county might want to begin with an in-house examination, assisted by County Administrative Officer Kelly Cox's office and the sheriff's office.
If additional questions and issues arose, Grant suggested they could then call in a forensic accountant for a more focused look.
Supervisor Rob Brown was concerned about the perception.
“I have no problem with Kelly's office doing what you've recommended here, but I don't think that the sheriff's fiscal department should be involved in, basically, investigating themselves or auditing themselves,” he said.
“I like the idea of saving money but we also have to make sure that whatever objectives we have are met,” said Board Chair Denise Rushing.
She said the will need to make sure that Cox's office gets the access they need to records in order to complete the task.
Grant's report to the board also suggested some future actions the board can take “to ensure that the issues which have arisen here in regard to the administration of grant monies do not occur again.”
Those suggestions included preventing anyone who is in charge of a grant operationally from administrating it, that operational plans are provided to the board and that annual audits of all expenditures be conducted by the department administering the grant.
Rushing said the suggestions “make a lot of sense for any grant application, not just this one,” by adding in checks and balances, plus an extra measure of transparency.
Farrington said even though the county could save significant funds by going in-house, he wanted an outside expert in the interests of the community's perception and the public trust.
He said there remains a question over the disparity in statements made by Sheriff Rod Mitchell, who said the flight lessons were not allowed, and Garzoli, who maintains they were. That conflict needs to be resolved, Farrington said.
Rushing suggested that Farrington was looking for something different than an accounting investigation.
She asked Grant if there was a “hybrid” possibility of starting with county staff and then partnering with the outside forensic accountants for reduced fees in exchange for a reduced workload. Grant said she could look into that.
Rushing said Grant has given the board good information. “There's enough information to know that there is some opaqueness to a piece of this that a forensic audit probably isn't going to get much further into,” she said.
Cox said that he believed his office could do the work and stay independent. Rushing said she thinks his office is well trusted.
“If the board wants us to do it, we'll do it,” said Cox.
Brown worried that Cox's office already has enough on its plate. Cox said this is the best time of year to take on the extra work, rather than the spring when budget time is nearing.
Cox told the board that, “Whatever we find, we find, and that's it.”
Brown said it needed to be done soon. “I just want to get this resolved. I just want to get it done.”
Lucerne resident Donna Christopher asked if the DEA requires any audits. Cox said the grants are audited; the county also has an independent auditing firm and he's disclosed his concerns about this grant to them.
Grant said the county is still trying to set up a phone conference with the DEA over questions about the flight training. Brown said he wanted Cox to contact the DEA about the situation, and Cox guaranteed he would.
“If we're put in charge of doing this work, that will happen,” Cox said.
Rushing asked Farrington how he felt about the hybrid approach she suggested.
He said he appreciated the idea, but felt there were bigger issues. “I think we need to turn every stone possible” in order to fulfill its fiduciary responsibilities to the taxpayers. He said that was only his first step.
Cox said it will cost more than $10,000 to send the work outside, and that his staff can do the same work as an outside investigator.
Brown said that concern resonated with him. “Perception is important but results are more important.”
Farrington felt an outside auditor could focus solely on the matter.
“I don't think you're going to get what you're hoping to get,” Cox told him.
Rushing told Farrington, “I think you're asking for an investigation more than an audit.”
Supervisor Jim Comstock, who said he had faith that Cox's office could handle the assignment, moved to have the County Administrative Office begin with the work, with the board to assess its progress in a month. Brown seconded, and the vote was 3-1.
As a result of the discussion and conditions on grants, Rushing also pulled for more consideration an item on the consent agenda, the approval of the California Emergency Management Agency Fiscal Year 2009 Grant Assurances for Homeland Security Grant funding for the sheriff's office.
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