OES Fails to Oversee Grants to Fire Safe Council

Still no independent forensic audit of OES grant contracts and Fire Safe books

The elephant in the room the Grand Jury keeps missing is that neither Nevada County Office of Emergency Services (“OES”) nor Fire Safe Council ever ordered an independent forensic audit of their books. The buck stops with OES to manage grant contracts and account for the funds. Amazingly, the Grand Jury failed to investigate OES to see if they were managing the contracts and had accounted for every dollar.

County Completes a Draft Audit Report of County Procedures

On September 20, 2021, Marcia Salter, Auditor-Controller, sent a “draft audit report” for interim examination of controls and procedures, to Steve Monaghan, Chief Information Officer, and Elise Strickler, Administrative Services Officer of OES. The Grand Jury may not be aware of this document.

We performed an interim examination of the Office of Emergency Services controls and procedures relating to the BMS-19419 Fire Safe Council of Nevada County contract. This Findings and Recommendations Report only includes comments and recommendations on matters observed during our examination where we believe improvements can be affected. This interim examination is not intended to reflect on the integrity of any employee, but rather to assist you in strengthening controls and procedures. 

It is the responsibility of each County officer and department head to provide for the proper control of contracts as set forth in Resolution 98-479 adopted by the Nevada County Board of Supervisors and in accordance with the contract procedures issued by the Auditor-Controller and good internal control practices.

The “draft audit report” was written by Andrew Copeland, in the Auditor-Controller’s Office.

Who Was Overseeing Fire Safe Council Grant Money?

This was just one of the recommendations in the Findings and Recommendations: 

We suggest the Department (OES) re-evaluate its practice of providing significant advances to vendors due to the risk it presents to the County. In instances where these advances are needed to alleviate initial vendor cash flow shortages to begin larger projects, we suggest a risk assessment be performed on the vendor to determine financial stability and the benefit assuming the risk will have for the County. In addition, these necessary advances should be limited in size and frequency, and the County should be provided reasonable and timely documentation to justify the need for additional advances. We suggest the Department and project coordinator work with the vendor to determine all expenses not yet reported to the County, up to a date of no less than the 45 days after the close of each month, in order to assist the County in tracking these actual vendor expenses on a timely basis and limit the County’s exposure to the risk stated above. Along with these suggestions, the additional recommendation of regular documented review from a person familiar with the project will aid in reducing this risk exposure.

Based on the “draft report,” on October 12, 2021, Steve Monaghan lobbied the Board of Supervisors to renew the Fire Safe contract through June 30, 2022. Monaghan assured the Board that he would take personal responsibility for overseeing Fire Safe. As late as December of 2023, Craig Greisbach, OES Director, was still writing reimbursement checks for Fire Safe invoices.

Nevada County Auditor Signs No-Bid Contract for Additional Report - No Official Audit of Grant Money

In July of 2022, County Auditor-Controllers, Marcia Salter and Gina Will signed a contract with CliftonLarsonAllen LLP, (CLA) for a report (not an audit). This contract did not go out for bid; the auditors, instead, used CLA, a company with whom the County has had a long relationship. The Grand Jury was unaware of this contract at the time.

On February 8, 2023, CliftonAllenLarson submitted its “review” (not an audit), which says, “While our work may have involved the analysis of accounting records, our engagement did not include an audit in accordance with generally accepted auditing standards or any other attest function. It is our understanding that the primary intent of engaging our services is for the benefit of management of the County” (emphasis added). 

CLA also noted, “It is also important that the County have adequate oversight and monitoring of the grants administered by grantees such as Fire Safe. An inadequate control environment coupled with a lack of monitoring can create an opportunity for fraud or errors in the administration of the grant funds and lower the chance that they will be identified by the County.”

“CLA did not perform an internal control review or internal audit, and this engagement was not intended to identify all internal control weaknesses. However, for those areas where a control weakness was identified, we have included a recommendation.”

Why Didn’t the Grand Jury Recommend an Independent Forensic Audit from OES Auditing Grant Funds to Fire Safe Council?

The Grand Jury focus was only on Fire Safe. Without a forensic audit, we will never get to the bottom of this.

As Alison Lehman stated, “The county has a duty to oversee the funds contracted with the Fire Safe Council and account for every dollar.” It has failed to do this for three years.