In 54 of California’s 58 counties, the auditor-controller is elected by the voters. They are responsible for the checkbook of their counties and the accounting of the transactions that occurred during the year. They are accountants. We lovingly call them bean counters. You know, the green eyeshade types of individuals who you usually never have to worry about.
Yet five of California’s 58 counties were more than a year behind in releasing their Annual Comprehensive Financial Reports (ACFRs). And I’m talking about the year that ended June 30, 2021!
Humboldt County was the last ACFR to arrive, with the retained auditors dating their report on August 31, 2023, and the county releasing it a month later. Eureka!
“The county has been struggling for years to get the Auditor to complete some of our most basic financial reports, and the Board this year sued the Auditor to mandate that she complete those tasks in response to a state suit on the same issues.
“Timely and accurate financial recordkeeping is critical to the county’s ability to secure state and federal funding and ultimately to provide services to the most vulnerable members of our community. Accordingly, we have come to a tentative mutual agreement with the Auditor regarding the lawsuits filed by the Board and the State Controller wherein she will end her term early. Auditor-Controller-elect Cheryl Dillingham will assume the role of interim Auditor-Controller until her term officially begins in January. We appreciate Ms. Paz Dominguez’s cooperation with this transition.
“The Board has always been focused on ensuring the county can continue serving our community - providing public safety services, housing, road repairs, trails, workforce and economic development and other critical services. The Board has full confidence that Cheryl Dillingham will be successful as Auditor-Controller and serve the people of Humboldt County well.”
Tuolumne’s ACFR was dated April 26, Inyo’s Jan. 13, and Lassen’s was Sept. 29 of 2022. The tardiness has been frustrating as we’re in the autumn of 2023, when all the June 30, 2022, ACFRs should be online and available.
Now that we finally have all of the audited financial statements for all of California’s 58 counties for the year ending June 30, 2021, what can we learn from the chart below?
The next thing one observes is that the coronavirus year of July 1, 2020, to June 30, 2021, did not seem to negatively impact the counties.
Humboldt and Tuolumne did not move much in the rankings over the missing years. But it shows you why it’s critical to receive current data. Financial statements are a management tool, and a lack of fiscal reports reflects a lack of proper administrative management. It pains me to share this embarrassing activity for a state that includes Silicon Valley within its borders.
Let’s discuss the other four counties that also had significant movements. Sonoma County moved up 14 places to 10th place. An increase in total revenues of $259 million, more than 90 percent of it from governmental sources related to the pandemic, provided for the decrease in its unrestricted net deficit.
San Joaquin County had a similar story, but also converted $291 million from restricted to unrestricted, helping to cut its unrestricted net deficit by nearly one-half, jumping up 15 places.
San Diego County increased their restricted net assets by $246 billion, with 83 percent going to a new category titled “Health and Human Services Agency programs.” But having a pension liability increase by $685 million doesn’t help. The word “pension” is used 229 times in their entire ACFR report. These two components make up most of the increase in the county’s unrestricted net deficit, moving it down six places and out of the top ten.
Stanislaus County saw a $135 million increase in liabilities for other post-employment benefits and pension liabilities, now owing $732 million, or $1,306 per resident. This county dropped seven places.
Orange County stayed in the mid-20s after being in 46th place back in 2010, thanks to its massive investment pool losses of some $1.7 billion in 1994. Financial policies for pensions and other post-employment benefits helped Orange County’s rise in the rankings. And its ACFR was issued on time.
Orange County also has minimum qualifications for its auditor-controller. Let’s hope the California State Association of Auditor-Controllers can consider implementing the same requirements statewide, step up their game, and issue their June 30, 2022, and future ACFRs on a timely basis. Amateur hour is over, folks.
