Money going under the microscope

In light of a disorganized accounting system, members of the Oceano Community Services District’s board have ordered a forensic audit of the prior fiscal year.

The five-member board voted unanimously on Wednesday to move forward with the audit — which is to examine individual payments and receipts of money from July 1, 2008, through June 30, 2009.

District board member Jim Hill led the questioning of an accounting system that makes it difficult to determine whether checks have been paid appropriately.

Hill is concerned that payments of bills in cash, such as for water service, by community members, also haven’t been handled appropriately.

Hill said that part of the problem lies with a discrepancy in the check number used by the bank to clear a payment and the number used by the district to account for a check.

“It’s extremely difficult to determine where the money is going,” Hill said. “The vast majority of the checks are correctly paid, it appears, but I’m concerned about a small percentage that we’re just not sure about.”

The district’s annual budget is about $3.3 million, he said.

District General Manager Raffaele Montemurro — who was hired about two months ago — said a forensic audit for the prior fiscal year would cost $14,000 to $20,000. But district officials are still looking into the total amount it would cost.

He noted that no wrongdoing on the part of any current or past district staff member has been proven at this point.

Montemurro said the district will first seek to contract Moss, Levy & Hartzheim — an accounting firm with a Santa Maria office.

The firm is already contracted by the district to conduct less-intensive audits annually, using samples of payments and receipts. A forensic audit is a more detailed, intensive process that tracks each individual payment and movement of funds.

“Part of the problem may be that we have an old tractor-feed printer that can mess up the consistency with our numbers and the bank’s clearing number,” Montemurro said. “But we’ve worked very hard to make sure they’re the same number from here on out.”

Montemurro also confirmed that he is communicating with the federal Internal Revenue Service about any overpayments of taxes that were applied to fines in the past.

Hill cited one IRS letter sent to the district office in September than applied $384.10 from a tax overpayment of $473.96 from district staff.