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|Community members packed the Indian Valley Community Services District board meeting to express their frustration with the lack of oversight provided by the board of directors. THe district's general manager has been arrested for embezzeling over $380,000 of district funds.|
Several people asked the Indian Valley Community Services District’s board of directors to resign last week.
About 30 Indian Valley residents, including several business owners, packed the small IVCSD office during the board’s Wednesday, Jan. 8, meeting.
Nearly a dozen people took turns blasting the board, saying the district failed to supervise its former general manager, Leanna May Moore.
Moore, who was the GM from 2006 to 2012, was arrested Nov. 21, 2013, on felony charges of forgery and embezzlement. She is accused of stealing $381,841 from the district during her tenure.
Moore, 41, who lives in Winnemucca, Nev., is free on $100,000 bail. No trial date has been set.
Moore is scheduled to be back in Plumas County Superior Court on Feb. 7. Her case was continued to that date because the court is waiting for the results of a second audit. The second audit reportedly covers time during Moore’s tenure that wasn’t investigated in the initial fraud audit.
Some residents who spoke during the public comment portion of meeting said the board members didn’t deserve blame. But most who spoke said the board members were at least partially responsible for the scandal.
“I don’t know how a board can have financial meetings monthly and not sit down and take a look at what the finances really are,” said resident Suzanne Hamar. “It isn’t just because we were embezzled for $380,000, it’s because you were blind to it. You are blind to what the community needs.
“All but one person who sits on this board should put your tail between your legs and go hide under a rock. You have done this community a huge disservice to allow this to happen.”
Resident Tamara Talent, who said she urged people to attend the meeting, was just as blunt.
“I’m here to ask you to resign,” she said. “I don’t want to wait until the end of Ms. Moore’s trial. Something needs to be done sooner. Things need to get better and we need a new board. … Leanna Moore was out of control. … It was so blatant.”
Resident John Hall called the board members arrogant.
“We need people of conscience and with ethics. People with substance and not just status,” Hall said. “The last thing this valley needs is more condescending, above-the-law arrogance. We have enough of that already.
“I think some of you should resign — and do everything possible to make sure you get some money back to this community.”
Longtime Indian Valley businessman John Papenhausen became emotional when he asked the board, “How could this possibly happen? If there is a loss (in my business), I’m right on top of it. If there is a $100 loss a day, it’s devastating to us.”
Several people who were critical of the board acknowledged that it is a volunteer job that few people are willing to do.
Before the public comment portion of the meeting, three board members (Chairman Brad Smith, Vice Chairwoman Judi Yocum and Blake Shelters) were sworn in for another term. All three ran unopposed.
“Obviously there’s nobody knocking on the door to try to fill these positions,” said resident Anna Lawson. “So what would happen if the board did resign and nobody was willing to fill the positions?”
Indian Valley Supervisor Kevin Goss, who attended the meeting, told the audience it would be his job to appoint new board members until there were at least three — enough for a quorum.
“It would be an unenviable task,” Goss said.
By rule, the board members were not allowed to respond to the public’s comments. After quietly listening to a half-hour of criticism from the audience, none of the board members offered to resign.
Two people who voiced support for the board chided community members for not coming to meetings.
“I totally support the board. You have been through a rough time finding out about what has gone on,” said Tanya Henrich. “You’ve got the best learning curve of all. … So I can’t imagine having a better board because of what you’ve experienced.”
CPA Clay Singleton, whose firm did the fraud audit that led to the district attorney filing charges against Moore, announced his firm’s findings for the board during the meeting.
Singleton said the audit of the IVCSD has been difficult because so many records were destroyed.
“During the 2010 fiscal year, the district’s control over finances deteriorated to the point that many activities and transactions had little to no supporting documentation, or were ignored entirely,” Singleton said. “The predominant factor in this deterioration was the domination by the general manager over district operations.”
Singleton said records for three years, beginning in 2009, have been “rebuilt” as best as they could be. He added those records might not be entirely accurate. He said he hoped to have the district up to date by sometime this spring.
“I think we got the finances to a point where you can start and go forward,” Singleton said.
Among Singleton’s findings was the fact that, because of its small size, the district hasn’t adequately separated duties to ensure that no fraud can occur.
He said the lack of segregation of duties is common for small districts. He warned the IVCSD to be aware of the problem going forward.
Singleton said it doesn’t take much for the few checks and balances in the system to deteriorate.
“The former general manager overwrote the controls in place at the district,” he said. “The general manager, I think, was creative and was deceptive, from what I can ascertain from my position.”
General Manager Jesse Lawson said he and the board are making sure that more people are involved in the finances.
“The way things are done now, is (office manager) Jeff (Titcomb) is involved, I’m involved, a third-party bookkeeper is involved and then two board members on the finance committee,” Lawson said.
“We need two board member signatures on a check. And then there is a finance committee, where everything is presented by the third-party accountant.”
Lawson added that bank statements are only opened by the finance committee.
“Nobody here has any interest in anything like this ever happening again,” he said.
Singleton said he would be mapping out the district’s new structure to look for holes. He said he felt the district was on the right track.
The financial loss
Although the current amount reportedly lost by the district between 2006 and 2012 stands at $381,841, that figure doesn’t include the costs associated with the investigation.
Director Jane Braxton Little, who heads the district’s finance committee, said the district spent $61,000 on professional services to help uncover the alleged fraud. Those services include payments to the auditor, bookkeeper and an attorney.
That brings the total cost to date to $442,841. That figure does not include interest and fees for late payment.
Full-time office manager
Lawson reported that he plans to make the IVCSD’s office manager job a full-time position.
Lawson said expanding the office manager’s hours would free him to do more work in the field.
When a resident at the meeting asked if the position would be advertised, Lawson said he hadn’t planned on doing that. But he said he would check with counsel to see if that was a requirement.
Titcomb is the part-time office manager.
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