Grand Jury: Should Orange County auditor-controller be strictly an accountant – or also a watchdog?

An Orange County Grand Jury report is asking the Board of Supervisors to justify its choice to run the county’s internal audit function differently than every other county in the state.

For decades, the elected auditor-controller served as a check on county finances by overseeing spending and investigating policies and controls. To regain the trust of the public and Wall Street after the county’s devastating 1994 bankruptcy, supervisors separated the accounting and internal audit functions.

In 2015, Auditor-Controller Eric Woolery resumed handling both jobs. But on the heels of his 2018 reelection, Woolery was stripped by the supervisors of the internal audit responsibility.

The county has until Sept. 30 to respond to the report, which was issued June 18.

In an emailed statement Monday, Woolery said he appreciates the grand jury’s efforts and plans to work with county officials on the response.

“I believe the report illuminates some key changes that would be in the best interest of the county; if the board chooses to make those changes I will support them,” he said.

Through a spokeswoman, Supervisor Lisa Bartlett, the board chairwoman, declined on Monday to comment on the grand jury findings.

In other counties, internal auditing is one of multiple duties the auditor-controller’s office manages. The office also provides accounting services, handles employee payroll and payments to vendors, and calculates property taxes owed and disburses those tax payments.

In 2015, with the newly elected Woolery on board, supervisors gave his office back the task of monitoring – and sometimes questioning – internal spending decisions. But Woolery ran into criticism for styling himself as a watchdog, investigating supervisors’ use of constituent mailers during election season, and in a few cases withholding payment of expenses he thought might be improper, the grand jury report said.

About a year ago, supervisors again voted to separate internal auditing from Woolery’s office and hire someone else for that job. They also cut the auditor-controller’s budget by $1 million, with “no reasons given and no discussion,” the report said.

In the 2019-20 budget – which supervisors are set to vote on Tuesday – Woolery is expected to get $16.57 million to run his office, slightly less than he got in 2015-16; the internal audit office will receive $2.29 million, a bit less than its budget five years ago.

By contrast, the auditor-controller’s 2018-19 budget, when internal auditing was included, was $19.74 million, several hundred thousand dollars more than the total the two offices will receive next fiscal year.

The grand jury probe “could find no noticeable improvements in efficiency or effectiveness” in running the two functions separately, nor any evidence that the auditor-controller’s office had been inefficient or incompetent, the report said.

The report asks that the county look again at the impact of separating the internal audit function from the auditor-controller, consider restoring the money stripped from Woolery’s budget in 2018, and publicly explain the justification for being the state’s only county with a separate internal audit division.

One other grand jury recommendation may prove the most challenging: supervisors and Woolery “should discuss and resolve differing opinions in a constructive and professional manner, without airing disagreements in a public forum.”