With 4th District Supervisor Joni Gray recusing herself from the discussion, the remaining county supervisors showed an eagerness on Tuesday to improve the county’s oversight of the outside organizations Santa Barbara government gives money to, despite inherent difficulties in doing so. The board responded this week to a Grand Jury report on the Lompoc Housing and Community Development Corporation (LHCDC), which gave a damning look at oversight failures by several groups. “There were ample signs of trouble,” the report — issued in June — said. “Initiative was not taken and too many opportunities were missed.” Because of that, the Grand Jury concluded, financial mismanagement of the LHCDC, which was Lompoc’s biggest provider of affordable housing, wasn’t caught until quite late.
One of the big issues with the LHCDC was that the county had not received any financial statements from the organization for a number of years. The Grand Jury recommended the county withhold funding for organizations that don’t provide records for annual audits or don’t comply with the requirements of existing contracts. But one of the difficulties, Auditor-Controller Bob Geis told the board, is that, because of federal rules, the county might not be able to withhold a HUD grant if an organization is slightly out of compliance.
The Grand Jury recommended that the Auditor-Controller’s Office conduct an annual audit of every organization that receives more than $100,000 from the county, but the supervisors said this was not feasible. The county makes vendor payments in excess of $100,000 to roughly 365 different groups, and it would simply cost too much money to do that many audits. The board instead said that Geis should provide them a report of annual expenditures of more than $100,000, and as funding allows, the Auditor-Controller could review organizations for compliance efforts. (Geis did say that all audits his office performed are reported to the Board of Supervisors.) County CEO Chandra Wallar said staff is organizing a contract compliance committee to help with such efforts.