SLO County DA investigation of IWMA finds ‘lack of transparency’ but not widespread fraud
Following a three-year investigation, the San Luis Obispo County District Attorney’s Office found former officials at the Integrated Waste Management Authority (IWMA) violated internal rules, kept poor financial records and displayed a “lack of transparency” — but didn’t commit large-scale fraud.
The investigation looked into potential criminal behavior at the IWMA, a countywide agency that manages compliance with state waste disposal regulations and operates using a joint-powers agreement between the county, its seven cities and special districts.
It resulted in the DA’s Office indicting Carolyn Goodrich, former IWMA board secretary, for embezzlement and document destruction in August. But the investigation did not find any reason to pursue criminal charges against Bill Worrell, the agency’s former general manager.
Some members of the county Board of Supervisors have cited reports of fraud and mismanagement as reasons to leave the agency, which they see as broken beyond repair. The board in August voted 3-2 to begin the process of pulling the county out of the IWMA.
On Sept. 14, the board again voted 3-2 to formally leave the agency in November.
But the DA’s investigation found no additional criminal cases it could prosecute, other than the one against Goodrich.
And the investigation report noted the IWMA has, since 2018, instituted a series of reforms “leading to greater transparency and oversight,” and staff now provides the agency’s board with “substantially more information about IWMA operations than it had in the past.”
IWMA investigation spurred by private investigator’s report
The DA’s office initiated its investigation into the IWMA in 2018, following a report from private investigator Carl Knudson.
Knudson looked into the agency’s finances at the behest of a group of private residents. He primarily focused on “misconduct by employees and mismanagement” at the IWMA, as well as the relationship between Worrell and Charles Tenborg, a former hazardous waste contractor, the investigation report said.
After Knudson released his investigation report, the IWMA board placed Worrell on administrative leave until his scheduled retirement later that year.
The Worrell-Tenborg relationship was the subject of a Cal Coast News article that claimed it had resulted in fraudulent criminal behavior. The story claimed Tenborg illegally received a no-bid contract with the IWMA, among other allegations.
Cal Coast lost a 2017 libel case filed by Tenborg against the website after the story’s publication.
The libel case — which Cal Coast lost again on appeal — prompted friends of the website to pay for Knudson’s investigation.
The DA’s Office investigation hewed closely to the allegations in Knudson’s report, although it looked only at possible criminal conduct. It didn’t delve into some of the possible mismanagement issues Knudson identified because they didn’t give rise to offenses the DA’s Office could prosecute.
Perjury, document destruction allegations
The DA’s Office investigated Knudson’s allegations that Tenborg lied during the libel trial. It also looked at record-keeping policies and the improper use of an agency credit card to pay bills and make purchases.
Bu the DA’s Office didn’t corroborate Knudson’s assertions that Tenborg committed perjury during the Cal Coast libel trial.
Knudson’s report also looked at possible IWMA document destruction. The DA’s Office investigation found there was no evidence that Worrell “improperly destroyed documents.”
The investigation showed some missing records may have been the result of “a conflict of sorts” between the IWMA and the county Auditor-Controller’s Office regarding who kept financial records.
Worrell told DA investigators that the auditor-controller “was the custodian of ‘official’ (accounting) records, that the copies maintained by the IWMA were copies of the official records.”
But the auditor-controller kept only records dealing with payments the office issued on the IWMA’s behalf.
“... The IWMA, as an independent agency, is not an office of the County and the Auditor did not provide the same level of oversight,” the investigation report said. “Rather, the Auditor’s Office functioned more like a bank: It would issue payment if the authorizations to draw warrants appeared to be in order. Auditor staff did not audit invoices that accompany warrant requests. Rather, internal controls were left to independent agencies such as the IWMA.”
The IWMA also had a policy stating that it could destroy some documents after two years. In one case, the agency shredded some documents that had developed black mold after staff stored them in a seatrain container.
The document destruction charges Goodrich is facing are related to a separate instance of shredding that occurred in 2018, the investigation report said.
The IWMA in November 2018 adopted a policy that mandates staff retain accounting files for five years and stipulates that originals be kept in the office and scanned to the agency’s server.
The auditor-controller in 2019 prepared a report with seven recommendations to strengthen IWMA financial controls. By February 2021, the agency had adopted five of the recommendations and was in the process of implementing the final two.
Potential credit card misuse
The DA’s Office investigation also looked at Worrell’s use of IWMA US Bank credit cards and found no basis to file criminal charges against him.
The investigation found the IWMA violated its internal policies by giving Goodrich a card connected to the agency’s account, as only the manager was supposed to have access.
Worrell also used the card to pay bills and make purchases that should have gone through the Auditor-Controller’s Office.
In addition, he used the card to make a series of small personal purchases on the IWMA’s Amazon Prime account.
“In reviewing the Amazon account, there were a number of items charged to the IWMA credit card in 2016 that are plainly personal and were shipped to William Worrell’s home address,” the investigation report said. “These include a Lego set, a girl’s toy and four advent calendars. In addition, there were also five purchases in November and December 2016 which were either returned or credited back to the IWMA credit card. These included a book, a surge protector, underwear and an electronic device.”
In a 2018 memo, Worrell claimed he mistakenly used the US Bank card to make the purchases when he intended to use his personal credit card, which was also connected to the account.
Worrell said he tried to get the charges reversed and later wrote checks totaling $534.13 to the IWMA to pay for personal items he’d bought since 2000.
“While the timing of his memorandum — several months after media attention had been placed on him and the IWMA for financial irregularities and one month before he was placed on administrative leave — is suspect, a charge of embezzlement cannot be proven under these circumstances,” the investigation report said. “A charge of embezzlement — as with any other criminal charge — must be proven beyond a reasonable doubt.”
The IWMA changed its credit card policy in January 2020. Employees now must sign a credit card use agreement that includes limitations on its use and requires those who use it to obtain supervisor approval for purchases and to keep and submit receipts.
“In addition, far more information has been made available to the Board of Directors about spending,” the investigation report said. “For example, included within the board agenda packet for the February 10, 2021, is an expense report itemizing each credit card purchase, including the date, the merchants, the amount of the purchase, the name on the card, and an explanation for the purchase.”
To read the full investigation report, visit slocounty.ca.gov/Departments/District-Attorney/Latest-News.
This story was originally published September 27, 2021 at 9:00 AM.
