Supervisors Fire County’s Top Performance Auditor

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In a move that had come to be expected, Orange County supervisors fired Performance Audit Director Philip Cheng on Tuesday, with the supervisors’ chairman citing ongoing frustrations with what he described as a lack of aggressiveness from Cheng.

The Board of Supervisors voted unanimously on the firing during the closed session of Tuesday’s regular meeting, and during the same session voted to appoint Internal Audit Director Peter Hughes as his temporary replacement.

In an interview with Voice of OC, supervisors’ Chairman Todd Spitzer called Cheng “a very, very nice man,” but indicated that he no longer trusted Cheng to do the type of due diligence that is expected from a performance auditor.

In particular, Spitzer pointed to last year’s upbeat audit of the county Housing Authority, which left out any mention of widespread problems discovered by a DA investigation or an internal investigation taking place at the time that ultimately led to the firing of several employees.

“That was an error. Instead he just said everything was hunky dory,” Spitzer said. “That’s where a performance auditor should say, ‘I need to look at all these issues and wrap it up together.’ ”

The only other supervisor to comment in response to calls from Voice of OC was Supervisor Michelle Steele, who said in an email: “I look forward to working with my colleagues to find the best candidate to be the county’s next Performance Audit Director.”

Cheng could not be reached for comment. As an at-will employee, supervisors were able to fire Cheng without “good cause.” Under his original March 2013 employment contract, Cheng is entitled to three months’ salary, which amounts to $41,000. He’s also entitled to a payout of unused annual leave.

Supervisors haven’t yet decided how to conduct the search for Cheng’s replacement, Spitzer said. The performance auditor is tasked with reviewing operations at the $5.4 billion county government and making recommendations to improve efficiency and effectiveness.

Increasingly in recent months, Cheng has been criticized for producing audits that some say are too few and far between and not aggressive enough.

In his audit of the Housing Authority, Cheng’s review gave the agency high marks, calling it “a well-run organization.” But he failed to mention that a year-long DA investigation of the agency revealed widespread misconduct at the agency.

When the audit came before supervisors in September, most declined to formally receive Cheng’s largely upbeat findings until a personnel investigation was finished.

Cheng’s characterizations “would seem to be a good housekeeping seal of approval…but we have an ongoing investigation that could reveal other issues,” Spitzer said at the time.

But Cheng stood by his characterization of the Housing Authority, saying the complaints that led to a personnel investigation were more than two years old.

“It was clear right from the beginning that was not our focus, and we intentionally [were] not trying to duplicate what the outside attorney was doing” in investigating personnel issues, Cheng told supervisors.

The personnel investigation ended up leading to the firing of five employees late last month, sources have told Voice of OC.

Employees were caught doing personal business on the job, such as sleeping at home, exercising, and taking their children to school while on the clock, sometimes working as little as two hours in a nine-hour shift.

Cheng’s firing also comes amid delays in a planned audit of the office of District Attorney Tony Rackauckas – a political foe of Spitzer.

The audit was scheduled to start in August, but after DA officials wouldn’t cooperate with the probe, Cheng let Rackauckas hire his own auditor to conduct the review.

The auditor hired by the DA, Altmayer Consulting, told Cheng in December that the audit would be finished by February.

But, according to Cheng, that didn’t end up being the case, with the consultant saying in early February that neither the audit’s scope of work nor the first round of interviews had been finished.

At that time, Altmayer gave a new target of “beginning of March for a final,” according to Cheng. But as of Tuesday – well into April – the report has yet to be presented to county supervisors.

Cheng’s firing is the second announced departure this month of a high-ranking county executive. On April 8, county CEO Mike Giancola revealed plans to retire later this year, citing health reasons.

You can contact Nick Gerda at ngerda@gmail.com, and follow him on Twitter: @nicholasgerda.

  • John Claxton

    Now they appoint Dr. Hughes the master of fluff reports. This is the guy who said John Williams, the disgraced ex-Public administrator/Guardian, couldn’t be held accountable because filling out two timesheets (one for PA and one for PG) was just too darn complex! Are you serious?

  • Kathleen Tahilramani

    Mr, Cheng lacked the protection of several prior BOS members that was provided to the prior Performance Auditor. The guy was doomed. I have to ask what happened to the Housing managers/executives that oversaw the mess there? Where they fired? If that mess happened two years ago what exactly did anyone expect Cheng to do? And, when was the last time a non-elected department head go up against an elected (as in the DA) and come out whole? Answer: Never gonna happen.

  • Paul Lucas

    This guy was stuck in the middle of critiquing his own employer. There is no good way this could have ended for Mr. Cheng. He got royally screwed.

  • Trudy White

    He should be glad to get out of the Orange Cesspool. They gave him a job and then tied his hands to prevent him from doing it. Todd Spitzer is so corrupt, but he postures and poses like he actually cares. Who does he think he is fooling?