The South Orange County Wastewater Authority, which provides services to more than 500,000 homes and businesses across the region, has become the target of an audit from the nonpartisan State Auditor’s office.
The audit was announced on Wednesday, June 28, after the Joint Legislative Audit Committee unanimously approved an audit request from state Sen. Pat Bates of Laguna Niguel and state Assemblyman Bill Brough, the former mayor of Dana Point.
“We thank the Joint Legislative Audit Committee for its bipartisan support of our request to ensure that Orange County taxpayer dollars are spent properly,” the two said in a joint statement. “An independent audit will help explain inconsistencies in SOCWA’s financial records and provide greater transparency to the public.”
In a letter addressed to the committee chair, Bates and Brough outlined concerns regarding the wastewater authority.
According to the letter, SOCWA has “been unable to account for each member agency’s contribution of cash on hand.”
Moreover, SOCWA’s 2014-15 fiscal year audit was submitted late to the county’s auditor-controller and its 2015-16 audit, due on Dec. 31, 2016, has not been finished, according to the letter.
“SOCWA is fielding significant operational and capital projects to address the region’s wastewater, watershed, water quality and environmental needs,” the letter read. “An independent audit by state officials will be critical and necessary to ensure that ratepayer and taxpayer funds are being properly managed.”
Steve Greyshock, a spokesman for SOCWA, said the agency is “absolutely happy to comply” with the audit.
“This is a good thing,” he said. “We’re happy to work with the state in showing our finances. We know that they are strong. We know that (the audit) will confirm that.”
Greyshock said the state estimates the audit will cost taxpayers approximately $270,000 and require 2,200 hours of staff time.
The request to audit the wastewater authority comes about a week after Laguna Hills Mayor Don Sedgwick wrote in support of an audit in the Orange County Register.
In his commentary, Sedgwick outlined issues with the wastewater authority.
“The past two annual audits have been submitted late to the relevant monitoring agencies, with one in violation of state law,” he wrote.
“Instead of addressing the concerns, SOCWA has shunned public scrutiny and refused to comply with multiple public records requests for key budget materials…