All expenses must be approved and coded to the department from which the expense is allocated. The City of Beaumont shows their Check Register with the Council Agenda, but they have the accounting codes blocked out. When I requested a copy of the check registers with the accounting codes their reply was: “We don't have Check Registers with Accounting Codes”.
My first thought was: “ You Lie” because coding the expenses to the individual department is a major component in the check writing process. But now that I've reviewed their books I believe that they are writing checks without Accounting Codes.
I have received a copy of the General Ledger because the City has stated this is the only documentation showing Accounting Codes. There are payouts of over $1,000,000 with no explanation and there are purchases for $1.00 with the memo 'candy bar'. There are utilities coded to 'contract services' and contract services coded to 'telephone'.
For example: 09/20/12 - $55.00. This entry is allocated to '6100' – which is a department that is not on the budget, coded to 'Utilities' with the memo: 'Beaumont Unique Flowers'.
Below is a Summary of my Preliminary Findings.
Forging The Check Warrants: Council Agenda Item 3.a.3 list the Check Warrants for the City of Beaumont. These check numbers are five digits - '80876', but there is another set of checks that are six digits - '51142' that being drawn from the same Bank Account, but do not appear on the Check Register.
This is called Forging the Check Warrants and it is a Violation of State and Federal laws. Council ratifies the check warrants, but the law states they don't actually have to view the checks before they are ratified. The ones legally responsible are the Finance Director, City Manager, and City Clerk who has an extra duty of care to certify all is true and accurate.
Per Department: These are irregularities I've found. A more detailed audit will follow.
1350-Community Development: This department budgets $80,000/yr for Contract Services, but spends over $100,000/yr.
01-1410: This Department Code is not on the Budget. An account entry that doesn't hit the budget is called a 'Ghost Account' because the expense is there, but you can't see it. There is one entry dated 05/27/11 for $3,216.00 coded to 'Utilities' with the memo 'Southern California Association'. The other five entries in the last two years totaling $15,135.00 have the memo 'Joe Gonsalves & Son'. This is a lobbyist group.
1550-Community Services: This Department is budgeted $50,000 budgeted for 'Maintenance & Operations, but has a $75,000 entry to 'M & M Group' as well as many others.
2150-Building & Safety: This Budget lists Personnel Services expenses at $475,000, but the State Controller's Office lists the maximum these four (4) employees can make is $303,160.
01-3350: This Code is not on the Budget. There was a salary was hidden in this account with the last paycheck dated 06/17/11. There are several hundred thousands of dollars in entries, most are listed under 'Contract Services'.
6050-Maintenance: This Personnel Budget is projected at $1,683,000, but the State has the budget limits at $1,000,000.
01-6060: This Code is not on the Budget. There was a salary listed FYE 2011 and is still used for fuel.
Personal Use of Government Funds: Tax Payer Dollars and City Time is Never for Personal Use.
Notes Receivable – Beaumont Shooting Range: The City has fronted this private sector business $81,169.00 since the 1st of the year, but has only received one (1) payment for $1,630.70 on 08/31/12
Urtiaga Gibbs – Resource Director: 08/13/12 wrote a hot check for $3,242.16. On 08/15/12 the amount was credited with the memo: 'loan', but there is no loan account set up or payments being made.
Personal Loans: There are several personal loans being floated through the City books – Eight (8) of which are the Upper Ranks of Law Enforcement. Some of these loans are over $10,000. This is absolutely unacceptable.
Ronald Morning: This person received 8,857.70 in loans from 01/07/11 – 04/20/12. but has only paid $4,805.77. This person is no longer on the Employee Rooster.
Jeffery Fox: This Councilman receives $100 - $250 loans every month and the City even gave his son Jeffery Fox Jr. a $200 loan on 10/18/12.
Diners' Club Card: This card is coded to every department in many different accounts and with amounts ranging from a few dollars to a few thousand. This does seem to be the only credit card hitting the accounts and will need its own audit to verify the transactions.
That is the overview, now I will start to dissect the parts. Every penny of tax payer money is accountable. Every transaction must be documented. All government documents are a matter of public record.