Jul 8, 2017   SOURCE: BusinessWire

State Lawmakers Order Audit of South Orange County Wastewater Authority

A bipartisan panel of state lawmakers has ordered an independent audit of the South Orange County Wastewater Authority (SOCWA), after a broad-based coalition representing hundreds of thousands of Orange County taxpayers raised concerns about the agency’s questionable accounting and fiscal mismanagement.

At its June 28th meeting, the Joint Legislative Audit Committee unanimously approved a request by State Senator Pat Bates, R-Laguna Niguel, and Assemblyman Bill Brough, R-Dana Point, to conduct a state audit of the joint powers authority known as SOCWA. The state audit will examine SOCWA’s financial records to ensure accountability and transparency.

“We thank the Joint Legislative Audit Committee for its bipartisan support of our request to ensure that Orange County taxpayer dollars are spent properly,” Senator Bates and Assemblyman Brough said in a joint statement. “An independent audit will help explain inconsistencies in SOCWA's financial records and provide greater transparency to the public.”

The audit, which is estimated to take up to 6 months to complete, comes on the heels of concerns raised from community leaders from Mission Viejo, Laguna Niguel, Aliso Viejo, Laguna Hills, Dana Point and Ladera Ranch, along with Orange County Coastkeeper and the Orange County Employees Association. SOCWA’s financial irregularities include:

  • No Accounting for $1 Million: SOCWA failed to account for $1 million in funds.
  • Basic Errors: Monthly financial reports contained basic errors.
  • Missing Records: A former SOCWA employee deleted invoices prior to July 2014.
  • Late Audit Reports: SOCWA’s last two annual audits have been submitted late to the relevant monitoring agencies -- with one in violation of state law.

Orange County’s leading clean water non-profit and trusted steward of local water ecosystems believes state lawmakers will help force accountability at SOCWA.

“The Joint Legislative Audit Committee has a track record of restoring public accountability to wayward agencies,” Garry Brown, founder and executive director of Orange County Coastkeeper, wrote in support of the SOCWA audit.

Laguna Niguel Council Member Elaine Gennawey said that SOCWA’s lack of transparency and accountability justified the audit.

“I was dismayed at SOCWA’s responses to questions about the amount and proportionality of services received by their ratepayers,” Gennawey wrote in a letter of support. “When I attended the May 12, 2017 SOCWA meeting, which was a public meeting under the Brown Act, I was barred access to the meeting by a locked gate across the front of the property… context for what may be a culture of non-transparency and unaccountability.”

SOCWA has been plagued by financial irregularities, which include two consecutive audit reports with qualified opinions. Orange County Auditor-Controller Eric Woolery, who testified in support of the audit, has offered to assist SOCWA in rectifying these issues, but his offers have been rebuffed.

“Our members are concerned about serious questions that have been raised related to SOCWA’s handling of public funds,” Jennifer Muir Beuthin, general manager of the Orange County Employees Association, wrote in a letter of support for the audit.

Comprised of ten public agencies, SOCWA was formed to acquire federal funding to address regional wastewater treatment needs. Over the last several years, one of its ten member agencies, Moulton Niguel Water District has raised concerns about the financial inconsistencies in SOCWA’s records, in addition to highlighting SOCWA’s troubling pattern of conducting business behind closed doors.

“While the audit was met with ardent opposition by SOCWA, we are very pleased to see that the audit is moving forward,” said Joone Lopez, General Manager of the Moulton Niguel Water District. “We appreciate the tremendous support from Senator Bates, Assemblyman Brough and all of the JLAC members in advancing public transparency, fiscal accountability, and effective governance.”

About Moulton Niguel Water District

Moulton Niguel Water District (MNWD) is a public agency that provides drinking water, recycled water, wastewater service and conservation programs to more than 170,000 customers in Laguna Niguel, Aliso Viejo, Laguna Hills, Mission Viejo, and Dana Point. Approximately 75 percent of MNWD’s water is imported from the Metropolitan Water District of Southern California and 25 percent is provided through local water recycling programs. MNWD is committed to ensuring that its communities have a reliable, sustainable and economical water supply for the future. For more information about the District, visit www.mnwd.com.