A Series of Books Too Many – The Ukiah Daily Journal

By now, most people are probably aware that CEO Ted Williams made a seemingly startling statement at the last board meeting on Aug. 2 about the county keeping “three separate books.”

That’s at least one set of books too many.

Here’s the gist of Williams’ comment: “I would like to ask my colleagues for assistance in contacting the CEO’s office to reach the State Controller’s office so we can get our books in order. … I’m three and a half years into a term. I worry I’m getting to the point where I can’t use the “I’m new here” excuse anymore. And yet in the three and a half years I was not able to get a credible financial report. As far as I know we have three different book series. They are all different. Why? … So how much accumulated error is there and over how many years? ten years? Is it thirty years? So do we have different books with different numbers? Because we never include the results of the external audit? I think we have a financial crisis here and we just don’t know how bad it is.”

In terms of the various editions of the book, I can tell you that my career has been split between roughly the first half when I was international president of an airline industry union and now as manager of a rural public water company. I have always kept two books, ie two accounting systems: the cash basis and the accrual basis. My organizations always used accruals as the official method or format for financial reporting to state and federal agencies, but cash basis was a handy tool to quickly determine real-time income and expenses.

But that wasn’t what Williams was talking about.

Darcie Antle, who was recently promoted from acting CEO to CEO, replied to Williams: “I would agree with you. I am not really sure. I think a big part of the reason we asked for a break in labor negotiations is because we don’t know. We don’t have a clear idea of ​​what the books are and where the finances are. And these discussions need to continue with the new auditor-controller.”

Third District Supervisor John Haschak was most apt when he explained, “The district budget has been the focus of most discussions. People have asked me many questions. Are we really as broke as reported? How did it happen that we were supposedly full of reserves? Why can’t the county hire more staff or at least pay the current staff decently? How did the $7 million deficit for the health plan come about? What will happen to the combined Treasurer/Tax Collector/Certified Accountant position? What is the supervisory board doing about this mess? … According to the money people, the budget is bleak. There is little money left… The county’s health plan is self-funded. The costs increase due to the experience and expenses of our employees. Medical costs in Mendocino County are high. The health plan had deficits of $3.6 and $4.0 million over the past two years. This was only fully reported a few months ago… The combined Auditor/Controller/Treasurer/Tax Collector (ACTTC) positions were not recommended by the people in these offices. I voted against, but the BOS accepted it. So the question is how do we get it working now that that is the plan. The board appointed Chamise Cubbison to the position since she was elected in the June election, although she would normally not take office until January. There have been staffing issues, problems with technology, loss of institutional knowledge, and lack of time for a full review of how the combined offices are structured… I propose that we hold a dedicated board meeting to work out these communication and differentiation issues and the books. If we’re not all on the same page, then we’re in real trouble and the public deserves better. The Board needs to sit down with the Executive Office and ACTTC staff to determine where we are financially, how we got here and the path forward.”

Norm Thurston, CPA and House Manager to former Sheriff Tom Allman, echoed Haschak’s sensible approach to dealing with this quasi-alarming development and offered this online advice:

“A message to the Board of Directors: If you want factual information about the county’s financial systems, you should speak to the person who is most knowledgeable about those systems — Chamise Cubbison. Whoever is providing you with financial information now is not doing a very good job. To Chamise, I suggest you go to the boardrooms when they discuss tax matters. Your presence can motivate our 5 managers to be more thoughtful before making unfounded comments.”

Finally, the person who should have been contacted first but never had the courtesy to speak at the August 2 BOS meeting is Chamise Cubbison, CPA/Treasurer and Tax Collector. Incidentally, it was a grave mistake for the overseers (with the exception of Haschak) to consolidate the previously independent offices of auditor-controller and treasurer-tax collector. One of the basic tenets of financial management is that internal financial controls are never eliminated, which was the case when the board merged the two offices. If you do this, you weaken financial controls. As I said before, it was a monumental mistake by the BOS that helped create the current financial mess they are in.

Here are excerpts from Cubbison’s memo to the BOS:

“It has been brought to my attention that the board has directed staff to contact the State Controller’s Office regarding the county’s financial systems and that several false statements were made during today’s meeting [Tuesday’s] meeting. I respectfully request that employees defer contacting the State pending a presentation to the Board on the Annual Comprehensive Financial Report (ACFR) for fiscal year 2020-21 and the Individual Review for fiscal year 2020-21, which is currently being finalized. Such a presentation should be scheduled as soon as the individual review is released… Since I became Acting Comptroller-Controller or Comptroller-Controller/Treasurer, there has been no request to discuss the relationship between the county financial system, the ACFR, and the budgets and tax collectors until this week. No specific questions were raised other than calling for a discussion about these areas of the financial system and why they do not all present information in exactly the same way. It seems very premature to sound the alarm and turn to the state when it is likely that those raising concerns simply do not understand how things are being presented and when they have the opportunity to hear from the audit firm , maybe understand better… Also, there was a lot of misinformation discussed at today’s session and no opportunity for rebuttal or open discussion. I would hope that the board would seek information directly before spreading rumours… The office of the CEO is responsible for administering the health plan, approving the payment of all health plan liabilities and reviewing various reports. It is unfortunate that the CEO’s office and Health Plan advisors did not sound the alarm earlier about the growing deficit, but it is not because the information was unavailable… In closing, I respectfully request a discussion and further enlightenment on financial systems , before the county turns to the state to request help in these areas.”

I learned a long time ago that problems just don’t happen, people make them happen.

And since humans make them happen, humans can undo them.

Haschak, Thurston and Cubbison all say the same thing. It’s time for everyone to get in the same room and solve this problem.

Jim Shields is Editor and Publisher of the Mendocino County Observer, Observer@pacific.net, longtime Laytonville County Water District Superintendent, and also Chair of the Laytonville Area Municipal Advisory Council. Hear his radio show “This and That” every Saturday noon on KPFN 105.1 FM, also streamed live: http://www.kpfn.org

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