Report finds issues with internal audits, turnover rates in Riverside County auditor-controller's office

The Riverside County auditor-controller’s office has struggled with high turnover rates, “dysfunctional” relationships among county and department leaders and internal audits being "marginalized and, in many cases, just ignored" in recent years, according to a civil grand jury report.

The report's findings, which were posted publicly this week, came almost a year after a Riverside County Civil Grand Jury began its investigation into the office’s auditing processes in August 2021. The report also found the county’s Internal Audit Unit members “lack professional certifications and experience in critical areas, which in turn exposes the County to potential financial and operational risks.”

The report was released just a few days before the June 7 election to decide whether Riverside County Auditor-Controller Paul Angulo will keep his seat for a fourth consecutive term. Angulo faces a pair of challengers: Wildomar Mayor Ben Benoit, who has received endorsements from a bevy of local officials, including all five county supervisors, and public accountant Marshall Campbell.

In an emailed statement, Angulo criticized the report as a “political hit piece,” adding that his office’s response to the report — which is due within 90 days — “will provide solid evidence that demonstrates much of the findings to be wholly inaccurate.”

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“It is concerning that the Grand Jury would make public a one-sided report … days before an election, turning it into a political document,” Angulo said. “One would think that in the United States one would have the opportunity to respond before such a report is issued by a court entity.”

Benoit, the son of the late county supervisor and state lawmaker John Benoit, said the report “makes one thing very clear — we need to restore accountability in the Auditor-Controller's office.”

“I find it deeply disturbing and concerning that the current Auditor-Controller is recklessly spending taxpayer dollars and failing to meet the minimum requirements of the office,” Benoit said in a statement. “Although I didn’t initiate or request this report, it clearly identifies some of the multiple failures that I have found myself when looking into the office of the Auditor-Controller.”

The report, which mainly focuses on the auditor-controller’s office, also mentions the county’s executive office and Board of Supervisors, stating they “have known about the issues surrounding internal audits for many years.”

“Riverside County has changed dramatically in the past decade,” the report states. “However, the County appears to be content with the status quo.”

County spokesperson Brooke Federico said county officials “appreciate” the grand jury’s report and plan to have a formal response within 90 days.

Civil grand juries are comprised of 19 county residents, who are selected by the county's Superior Court and serve year-long terms as jurors, and they are allowed to investigate local governments by reviewing documents and conducting interviews. A grand jury foreperson did not respond to a request for comment on the report.

The grand jury report — which reflects interviews with more than 30 county officials, including 12 department leaders — includes a dozen findings regarding areas of concern within the auditor-controller’s office, which is responsible for preparing the county’s financial statements, accounting for the county’s assets and liabilities and conducting internal audits, among other duties.

Internal auditing process under fire

The office’s internal auditing process was the focus of much of the report, which highlighted issues regarding staffing levels and the internal auditors' levels of expertise.

For example, in the 2007-08 fiscal year, Riverside County had 22 internal audit positions filled. By the 2021-22 fiscal year, staffing levels had fallen 59%, with nine positions filled out of 11 that were authorized, according to the report.

The nine filled positions in Riverside County are below the staffing levels of San Diego, San Bernardino and San Diego counties, all of which had at least 13 internal auditors. Riverside County also has far fewer professional certifications among its internal auditors than its neighboring counties.

Angulo said he disagrees with the notion that his team lacks adequate credentials or experience, noting his five-member team reviewing audits has a combined 111 years of auditing experience. He also noted five other internal auditors with the county are in the process of completing their professional certifications.

Angulo also pointed to the large disparities between public and private sector pay as the primary cause of the office's high turnover rate, an issue that is widespread across Riverside County government.

“For example, a senior auditor might earn $65,000 annually in the auditor controller office where other agencies and private industry pay more than $100,000 annually,” Angulo said. “This huge deficit is the primary cause of employee turnover.”

The report also notes that Riverside County, in contrast with some nearby counties, lacks an audit oversight committee, which “has resulted in some high-risk areas missed by internal audits for several years.” For example, the county’s Public Guardian Division has not received a new audit since 2014.

“In the 2014 audit, the ACO wrote, ‘We will follow-up in one year to determine if actions were taken to correct the findings noted,’” the report states. “The follow-up audit did not occur until 2017.”

Another issue identified in the report was “dysfunctional working relationships among the ACO and many other County leaders,” with some viewing the office as “hypocritical." The report noted the auditor-controller's office has spent $89,000 on professional development opportunities at Harvard University, UC Berkeley and the University of Southern California.

“The appearance of the ACO’s hypocrisy results in mistrust of the ACO,” the report states. “This is demonstrated by six specific County departments that have openly questioned the integrity and value of internal audits.”

“These departments question the competence of those conducting internal audits and, at times, provide minimal cooperation with internal auditors because they mistrust how the information will be used,” the report continues.

Angulo disputed the suggestion that departments ignore internal audits, and he defended the travel expenses, arguing he take his job “serious enough to seek out the best training to be able to deliver the best results for the citizens.”

“I do not claim to be omniscient,” Angulo said. “However, I engage experts who write the books on governmental operations. I wish they were local however they reside in Cambridge and DC.”

The report includes a total of 13 recommendations for the Board of Supervisors to consider, including establishing an audit oversight committee, mandating internal audits of all departments every two years and requiring the office to have at least one internal auditor with a certified fraud examiner certification and another with expertise in information technology.

Tom Coulter covers politics and can be reached at thomas.coulter@desertsun.com.

This article originally appeared on Palm Springs Desert Sun: Report finds issues with Riverside County auditor-controller's office