One of Orange County’s top auditor is calling on county leaders to implement a new centralized, standard process for reviewing contracts after a former supervisor pleaded guilty to accepting bribes in exchange for contracts.
But county CEO Michelle Aguirre and other top county staff pushed back on that idea in their response to his report on Feb. 5, saying the recommendation was outside of his purview and saying they’ve already got oversight covered.
It’s the first public review of hundreds of millions of federal relief funds county leaders spent during the COVID-19 pandemic, large portions of which were approved by supervisors without any public discussion.
Those dollars have been pushed under a microscope after former county Supervisor Andrew Do pleaded guilty last year to bribery after directing over $10 million to a nonprofit his daughter worked for.
[Read: Former OC Supervisor Andrew Do Pleads Guilty to Bribery Scheme]
Aggie Alonso, the county’s internal-auditor, said that while he found no evidence more money was misspent in his initial review of nearly 60 “high risk expenditures,” he did have recommendations for how the county could increase oversight for future contracts.
To review a copy of his report, click here.
He also directed two contracts to District Attorney Todd Spitzer for further review, worth over $2 million.
One was from Do’s office with a firm called DTN Tech for $25,000, and the other was a $2 million contract that included the Perfume River Lounge as a subcontractor, a restaurant that federal prosecutors say was part of the bribery scheme involving Do.
Auditors also mentioned former Supervisor Michelle Steel’s contract with DTN Tech for over $1.2 million to provide meals in their report, saying that while it was not audited they did note it because of the company’s connections to Do’s contract.
“We noted that former Supervisor Michelle Steel awarded $1.2 million in Coronavirus Aid, Relief, and Economic Security Act (CARES) funds to DTN Tech to provide meals to needy seniors,” auditors wrote. “We referred this agreement to the District Attorney and County Counsel for further review.”
After publication of this article, Gabriela Cabrera, an administrative services manager for the internal audit department, clarified that Steel’s contract was just included for context and was not referred to the DA, like Do’s was.
Recommendations included adding new rules on when county staff could approve contracts without going out for a bid and implementing a new system that would help track whether contractors were delivering on their work.
“These enhancements will strengthen County oversight to ensure entities use funds properly and in accordance with their contract/agreement,” Alonso wrote in his letter to supervisors on Feb. 5.
Alonso declined an interview to talk about the audit.
But county CEO Aguirre pushed back on some of those recommendations, alongside OC Community Resources Director Dylan Wright and Healthcare Agency Director Veronica Kelley, saying the recommendations were outside Alonso’s jurisdiction or already done in a letter.
They “strongly disagreed,” with both recommendations to limit sole source procurement and establish a centralized system, saying they fell outside his purview and that they were already working to upgrade their procurement system.
Alonso fired back, saying that it was his job to highlight potential problems.
“We must have the flexibility to make changes to the objectives and scope of any assurance engagement when the audit work identifies the need to do so, such as when we determine relevant risks should be addressed,” Alonso wrote.
Alonso’s review is just the first of several audits ordered by county supervisors, who asked for an outside auditing firm to be brought in to review several years worth of spending.
The average size of the contracts staff reviewed were less than $1 million, and largely focused on nonprofits helping the homeless, other government agencies and nonprofits offering emergency food or housing vouchers, along with programs run by individual county supervisors.
The report did not touch on the contracts highlighted by the FBI, or review the Othena contracts that supervisors asked county staff to look into in November amidst concerns it didn’t measure up to what the county was asking for.
[Read: Orange County Leaders Ramp Up Questioning Of Another Major Pandemic Contract]
Noah Biesiada is a Voice of OC reporter and corps member with Report for America, a GroundTruth initiative. Contact him at nbiesiada@voiceofoc.org.
