An Orange County audit of pandemic-era contracts found the county waived key oversight on how tens of millions in public money was spent. The findings, issued late Wednesday, came after county supervisors ordered an inquiry in September spurred by LAist’s reporting on millions of taxpayer funds that officials said they could not account for.
Auditors have referred two contracts to the O.C. district attorney and county counsel for further investigation:
- A $1.2 million contract former representative and then-Supervisor Michelle Steel gave her campaign mail printer.
- A $2 million contract with a company that made payments to a restaurant at the center of a wider corruption scandal.
Among other findings of the internal audit:
- Only four out of 15 beneficiary agreements funded by American Rescue Plan Act (ARPA) dollars — which went to cities and nonprofits to address pandemic costs — included oversight to check if taxpayer dollars were used as intended.
- Around $850,000 of ARPA dollars were used by the county to fund gift cards during the pandemic. Auditors recommended that departments should implement a system matching signatures with recipients to ensure that those who needed them got them.
Auditors said more broadly that county leaders, including the chief executive’s office, should take steps to strengthen the current guidelines for monitoring contracts, including having a process to evaluate risks. In response, the CEO’s office said numerous changes have been made to address shortfalls, including processes to check if contractors or vendors are in good standing. The CEO’s office also said that the county has implemented measures requiring that contractors report and document that dollars are spent according to the contract.
What the auditors reviewed
The review covered contracts, beneficiary agreements and gift card expenditures that auditors deemed to be high risk. Those contracts comprised more than $200 million — or 78% of the county’s federal COVID dollars. In those instances, auditors determined the county complied with federal accounting and monitoring rules — keeping in mind that during the pandemic many rules were waived, including procurement rules.
The audit, however, did not include four payments to Viet-America Society and Hand to Hand Relief Organization totaling $8.2 million. Both of those nonprofits are at the center of an unfolding corruption probe that forced longtime O.C. Supervisor Andrew Do to resign in disgrace in October and plead guilty to a federal bribery charge …