Daly Tries Again to Strip Audit Power from County Supervisors

State Assemblyman Tom Daly (D-Anaheim) has again introduced a last-minute bill to scale back auditing authority from Orange County supervisors and shift responsibilities to the county’s elected auditor-controller, according to county officials.

County supervisors see the move as payback for a report by the county’s internal auditor, who reports to them, which found that a restricted fund at the county’s clerk-recorder’s office was badly mismanaged under Daly’s tenure before he took office in the Assembly in late 2012.

“This is obviously very targeted to us,” said supervisors’ Chairman Todd Spitzer during last week’s board meeting, noting the critical audit of Fund 12D.

The bill, he added, would be “single-handedly wiping out a tremendous amount of oversight.”

Supervisors unanimously decided to officially oppose the legislation.

What particularly frustrated them was that Daly’s office apparently didn’t notify the county to let them know about the bill.  County staff didn’t find out until last Tuesday, they said.

“It’s shocking to me he wouldn’t call somebody,” said Supervisor Shawn Nelson.  “It’s really inappropriate for a legislator to represent a county and be doing something like this, and not tell anybody.”

Daly’s office has yet to publicly respond to the critique.  His spokesman, David Miller, didn’t return a message seeking comment.

The exact language of Daly’s proposal is unclear; the state’s bill search website doesn’t list the measure when searching for Daly.

But Daly introduced a similar budget trailer bill last year, which called for repealing an auditing-delegating power of county supervisors.

The county’s internal audit centered on Fund 12D, which is financed by document recording fees and under state law can only be used for specific expenses, such as modernizing birth, death and marriage record systems.

Under Daly’s term as clerk-recorder, accounting of the fund was so bad that a record trail couldn’t be generated to legally justify nearly $7 million in spending over a two-year period, the audit found.

At the time, Daly criticized the audit as a political witch-hunt.

He then introduced last year’s budget trailer bill to shift supervisors’ auditing authority to the auditor-controller.

Supervisors had similar frustrations then regarding a lack of notification from Daly.

“The decision to insert this language without consultation with the County did a disservice to the Board of Supervisors and to our relationship with your office,” Nelson wrote in a letter to the assemblyman last June. “We would have preferred working with you on the policy implications of repealing this Government Code section before it was dropped upon us without notice.”

Daly wrote in response that the repealed code section was an outdated remnant of the 1994 county bankruptcy – during which supervisors lost faith in the oversight of county offices like the auditor-controller – and was only meant to be temporary.

Daly also noted that no other county in the state can “completely bypass an elected County Auditor-Controller.”

Although not stated outright, Daly’s response indicates that audits demanded by supervisors are at risk of being politically compromised.

“In my view, it’s clearly preferable for any necessary audits to be conducted by the independent directly-elected County Auditor-Controller, rather than a county employee who reports directly to the Board of Supervisors,” Daly wrote in his response letter.

“My proposed language supports transparency, good governance and proven checks and balances for our county government.”

Daly’s latest measure could be up for a vote as soon as Tuesday, according to county staff.

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