Plumas County Auditor/Controller Martee Graham delivered a commitment to teamwork and the promise of progress to the Plumas County Board of Supervisors at its April 2 meeting. Her impassioned plea for patience was in response to a proposal that the county disclose its financial shortcomings and missed deadlines to the California state controller as a preemptive strike against possible state penalties.
Board of Supervisors Chairman Greg Hagwood raised the prospect of baring its books to the state “for discussion purposes only.” His hope is that transparency might demonstrate the efforts that have been undertaken to bring the county into compliance with state reporting requirements. Reaching out to the comptroller’s office might win the county guidance, support and understanding, he said.
“Are we at a place where it might be prudent or advisable to reach out and demonstrate to the comptroller’s office the circumstances that brought us to where we are?” Hagwood said.
“Our county is not broken. We are behind.”
Martee Graham, Plumas County auditor/controlled
Graham’s response was an unequivocal no.
“Our county is not broken. We are behind,” she said.
Graham enumerated the factors that put Plumas County in a precarious position that could invoke state scrutiny and action: The COVID-19 pandemic hit just as county officials were starting to transition from one payroll system to another, and the 2021 Dixie Fire “plagued our county” for over three months, displacing county employees, she said. The combination took a toll on workforce morale, including the resignation of more than a dozen department heads over a two-year period.
“We lost key personnel during these times and the knowledge that was lost was very hard to replace overnight,” she said.
Her arguments in favor of continuing to handle the issues internally focused on improved interdepartmental cooperation and teamwork, following recent controversies. In the last year the auditor and treasurer’s offices have “made great strides … achieved by setting past differences aside and by working together as a team,” Graham said.
She cited significant milestones, including completing the 2021-22 fiscal year audit, expected to be presented to the supervisors April 16, and transitioning the county payroll system from one that is obsolete and no longer supported.
“We are behind, yes,” Graham said, “but we’re starting to get momentum … starting to see light at the end of the tunnel.”
Plumas County Treasurer/Tax Collector Julie White agreed. Despite her disputes with county supervisors and the county administrator, she said she was “excited” by the recent progress in bringing reports up to date and working with the auditor’s office. White said she does not favor sending a letter to the state comptroller’s office.
“I don’t want a giant red flag out there <just> when we’ve been working as a team,” White said.
What are Plumas County’s regulatory shortcomings?
The proposal to share the county’s fiscal issues was prompted by an accumulation of missed deadlines and backlog of late reports, outlined by County Administrative Officer Debra Lucero in a six-page memo April 2 prepared at the request of the board of supervisors.
The last county audit was for fiscal year 2020-21, filed nearly two years after the deadline in November 2022. The audit for fiscal year 2021-22, due March 31, 2023, is 734 days overdue. There is no time estimate for completion of the 2022-23 audit, which was due March 31, 2024.
In addition, the county has amassed a backlog of journal entries transferring funds from one account to another, failed to reconcile cash and investments, failed to apportion interest, and has not updated fiscal policies and procedures, Lucero’s report states.
To address and remedy these problems, the county has allocated $1,412,000 over two to three years.
Humboldt County’s fiscal failures haunt Plumas officials
Hanging over the hour-long discussion April 2 was the specter of Humboldt County. Following investigations reported in July 2022 and December 2022, State Controller Betty Yee cited the county with failing to reconcile its bank balances and county treasury accounting records; amassing a backlog of journal entries required to finalize financial statements; incorrectly calculating tax revenue, educational revenue and vehicle license fees; and insufficient staff to complete its financial responsibilities.
“We are at a point where we are Humboldt County 2.0.”
Greg Hagwood, Plumas County Board of Supervisors chairman
The investigation found more than $7.25 billion in waste, fraud and abuse of public funds since January 2015. In May 2022, the State Attorney General’s Office filed a complaint, on behalf of the State Controller’s Office, against the county government and its auditor-controller over delinquent financial reports. Under a settlement reached in August 2022, Humboldt County agreed to pay $12,000 in forfeitures.
The comparisons are obvious, said Hagwood. “We are at a point where we are Humboldt County 2.0. I’m concerned,” said Hagwood.
Action could come April 16
Graham did not cite Humboldt County directly but stressed that Plumas County has processes in place to address its fiscal shortcomings. “We just need to set all our differences aside and work as a team,” she said. “We are the solution.”
“I want to hear solutions.”
Tom McGowan, Plumas County supervisor
Supervisor Tom McGowan said he welcomed the testimonies of teamwork but remained skeptical. “I’m encouraged that it seems like now everybody is willing to work together but I haven’t seen that,” he said.
“So if I’m to take this seriously and agree and accept that everybody’s working together, I personally do not want to hear any more accusations of wrongdoing. I want to hear solutions,” said McGowan.
McGowan and Hagwood recused themselves March 5 after White’s attorney accused them of conflicts of interest. They did not participate in the vote on White’s request that the county pay her attorney fees.
Supervisor Kevin Goss noted that the controller’s office proposal was placed on the agenda for discussion only. He suggested moving the discussion to April 16 as an action item.
Hagwood agreed to continue the discussion for possible action. “I just wanted to have an opening conversation about the merits or the risks of doing that which is before us,” he said.
