Posted on 08/01/2006 9:27:26 AM PDT by NormsRevenge
The state attorney general has joined the many agencies investigating San Diego's financial practices, drawn in by questions about the city's handling of special departments that raise revenue through fees charged to residents.
State officials met with City Attorney Michael Aguirre yesterday, three days after Aguirre acknowledged that employees in the office, when under the supervision of former City Attorney Casey Gwinn, falsified timecards to charge expenses to different departments.
The state will handle the investigation, said Gary Schons, a senior assistant attorney general, to avoid a conflict of interest because Gwinn now works for District Attorney Bonnie Dumanis. Gwinn served as city attorney from 1996 to 2004.
For now, Schons said, the probe is confined to billing practices in the City Attorney's Office. He said no one has been identified as a subject of the investigation.
The potential violations include misapplication of public funds and falsifying or altering public records, both felonies. A third possible charge is making fraudulent claims to a public agency, which could be a misdemeanor or felony.
During the meeting, the group sorted out the details of what Aguirre called an “independent, but cooperative” investigation. Aguirre plans to seek information from other departments to see if the problem is more widespread, although Schons said the state must conduct its own probe.
Aguirre said his inquiry must continue despite the state's work, because the city needs “to police our own house.”
Gwinn did not return a call seeking comment.
The City Attorney's Office, along with 38 other city departments, is funded through proceeds from sales, property and other taxes.
Still other departments, known as enterprise funds, raise money through fees for services, such as water and wastewater maintenance and the issuing of development permits.
Money from those sources is intended to be spent only on the functions of those individual departments, not on general city operations, which include public safety, parks and recreation, and planning.
As the city has dealt with a raft of fiscal woes, enterprise-fund spending has come under increasing scrutiny, particularly the use of contracts called service-level agreements. Those contracts detail work that city employees from one department perform for another and at what price.
The county grand jury reported in April that tax-supported departments had drained millions from the city's two largest enterprise funds, water and wastewater, via use of the agreements.
Earlier that month, The San Diego Union-Tribune found the city lacked a system for tracking use of the agreements, checking whether the money was spent as intended, and determining if the annual pacts were still necessary. Many were renewed annually with few, if any, changes.
Mayor Jerry Sanders called for an audit of the water and wastewater departments after the release of the grand jury report. Results are due tomorrow, but the mayor's spokesman has acknowledged that the auditor's findings mirror some of Aguirre's conclusions.
Aguirre issued a report Friday admitting that employees were asked to fill out timecards in pencil so analysts could later change them so enterprise funds were billed rather than the general fund.
Accounts from more than 30 current and former city employees are included in the report. Some staffers confirmed that timecards had been changed or said they had altered the records themselves.
The state joins three federal agencies – the U.S. Attorney's Office, the Securities and Exchange Commission and the FBI – and one local agency, the county District Attorney's Office, in examining financial transactions at City Hall.
The inquiries initially focused on the city's handling of its pension system and the preparation of financial disclosures to support the sales of bonds. They expanded to include the water and wastewater systems one year ago, when the SEC and a federal grand jury issued new subpoenas.
Americas Finest City
I wish the Attorney General would investigate Long Beach. That would keep him busy for awhile.
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