Who watches the watchers?
Humboldt County’s Board of Supervisors approved the formation of an eight-person audit advisory committee on Tuesday. Supervisors hashed out the details and expectations of the committee and appointed 3rd District Supervisor Mike Wilson and 4th District Supervisor Virginia Bass to serve as board representatives.
The call for an audit committee came after months of backand-forth talk between supervisors, the County Administrative Office and the Auditor-Controller’s Office regarding delays in payments, transfers, and reconciliations of accounts.
During a Tuesday presentation to the board, Humboldt County Administrative Officer Amy Nilsen said the committee would consist of herself, Auditor-Controller Karen Paz Dominguez and Treasurer-Tax Collector John Bartholomew to serve as non-voting members, as well as two supervisors, two qualified citizens and a school or special district representative.
“As proposed, the committee would review the annual audits and work plans to address findings. The committee would also have authority to conduct or authorize investigations into complaints regarding accounting, internal controls, or auditing matters. Annually the committee would be required to provide a written report to the board of supervisors regarding its actions and how it has fulfilled its responsibilities,” according to the staff report.
“When done well, an audit committee brings independence, transparency and accountability to critical financial management practices,” Nilsen said. “An audit committee also provides a forum separate for management in which auditors and other interested parties can candidly discuss concerns. The ultimate objective is to ensure that county management properly develops and adheres to a sound system of internal controls, procedures in place to objectively assess management’s practices and allows independent auditors to objectively assess the county’s financial reporting process.”
Nilsen noted that oversight and advisory committees “are normal for county processes for both appointed and elected officials.”
Though auditor-controller is an elected position, Nilsen said the Board of Supervisors assigns the auditor-controller’s duties and has direct supervision of all officers of the county.
“Your board carries significant responsibility and supervisorial authority as it relates to the conduct of officials, even elected officials, who carry out those functions,” she said.
Paz Dominguez said she is “fully supportive” of an audit committee but raised concern that the committee would “impact the statutory authority of the independently elected auditor-controller.”
“Please note that some of the government codes referenced during this presentation are interpreted differently by several people across the state,” Paz Dominguez said. “The question of independence (of my office) was settled by the voters of this county in 2016 and in 2018. To further clarify, I am an elected official which is different from a county-appointed officer. I think that distinction is important to make.”
Paz Dominguez added that she looks forward to working alongside the board and the audit committee.
“I’m happy to be here and I’m happy to keep the wheels turning,” she said.
As supervisors sussed out the particulars, Wilson suggested that the two supervisors serving on the committee should be the chair and vice-chair. This sentiment was echoed by the board as a whole.
Only one member of the public weighed in during public comment. Michael Evenson, county employee and government accounting specialist, voiced his enthusiastic support for an audit committee.
“As an analyst in one of the departments, I’m actually very excited to hear about this audit committee,” he said. “If we were a private sector firm that was traded on a stock exchange, we would have to have one, the (U.S. Securities and Exchange Commission) mandates it. This is a very positive move for the county as a whole. It’ll create stronger, better internal controls and processes.”
Supervisors ultimately passed staff’s recommendation 5-0.
“When done well, an audit committee brings independence, transparency and accountability to critical financial management practices.” — Amy Nilsen, Humboldt County administrative officer