The general manager of the Oceano Community Services District recently started investigating the history of several accounts containing more than $367,000 in district money that he says few people knew existed.
However, one Oceano board member said she was aware of the accounts and that information on the money had been included in an investment report given by a former general manager and in a district audit. Another board member said he knew of the largest of the accounts.
General Manager Raffaele Montemurro said he found out about the money by accident when he received a letter in July about one of the accounts.
He later learned that five accounts had been opened at Rabobank — then Mid-State Bank and Trust — between 1991 and 2005, containing from $4,572 to more than $294,292.
On Aug. 11, the board voted 4-0-1 to report the inquiry’s findings to the county District Attorney’s Office and the state Attorney General’s Office for further investigation.
Board member Pamela Dean abstained, saying Tuesday that she did so because she thought information on the accounts could be located, and that she was able to locate at least some of the money in a past audit with the help of a district auditor.
“We’ve either got gross mismanagement or somebody is doing something they’re not supposed to,” said board member Jim Hill, who said he knew of the largest account.
Dean said that board members should now receive more information about how the deposits work and how the money is supposed to be spent.
Meanwhile, board member Mary Lucey said Tuesday that the money never showed up on an annual budget or in an audit.
“There’s not a file, not a statement, nothing,” she said. “We’ll turn it over to the proper authorities. Obviously there’s something going wrong with the taxpayers’ money.”
The accounts, called time deposits, are savings accounts or certificates of deposits held for a fixed-term, in which funds cannot be withdrawn before maturity without giving notice.
Such accounts normally pay a fixed rate of interest and have maturities of seven days to seven years or longer.
The largest of the five accounts matured Aug. 3, and Montemurro plans to use half of the money in it — $164,276 — to pay Oceano’s share for the Five Cities Fire Authority, a joint fire protection agency with Arroyo Grande and Grover Beach.
The rest of the money, along with $4,572 from a second account that matured on Aug. 5, was put into a government fund at the bank, he said.
Montemurro now plans to look into whether any money had been withdrawn from any of the accounts over the years.
He said information on one of the accounts showed up on a 2005 audit, but he did not see any information about the other four.
“I was just extremely concerned when I was at the bank and digging up this information,” Montemurro said.
At their Wednesday meeting, district board members will discuss changing the signature card for the three remaining Rabobank accounts to add the names of several board members, so only they and Montemurro have access to them.
Those accounts, opened in 2001 and 2002, contain about $69,000.
Montemurro said the signature card at the bank, allowing access to the accounts, had only the name of a former district employee, who ended her long tenure with the district in June after funding for her position was excluded from the 2010-11 fiscal year budget.
Montemurro did not identify the former employee by name, but said, “I suspected that something was going on. I just couldn’t tell what it was.”
Former administrative assistant Gina Davis, who worked for the district for nearly three decades until her position was cut, said Tuesday that the agency’s leaders should have known about the money.
“If they can read a financial statement, they should have known that (the accounts) were there,” said Davis, who was a district employee from its formation in 1981 and its general manager from 1996 through 1999.
Davis said the accounts were created over the years with fees levied on developers. The largest account was created with a portion of fees the county receives from building permits and is collected specifically for fire protection, she said.
Davis said she was on the bank’s signature cards because she set up the accounts.
Reach Cynthia Lambert at 781-7929. Stay updated on Twitter by following @SouthCountyBeat.