Council Must Either Fire their Staff or Admit that Council Gave the Directive to Forge Audit with Intent to Defraud Banking Institutions.
The City of Beaumont has Forged a version of their 2014/2015 Audit by re-added the City’s Bonds as Assets. Bonds are Debt, not Assets. The City never had any money to buy bonds. The City Forged their 2015 Audit to Defraud Banking Institutions.
Beaumont violated California State Laws and Forged their Financial Statements to Illegally form two Joint Powers’ Authorities; Beaumont Financing Authority (BFA) and the Community Facility District (CFD). The BFA acquired bond debt then ‘sold’ the bond debt to the CFD which allowed the Lawyers and Consultants to double-dip fees from the Bonds, but that doesn’t make it an asset for the City.
When a city acquires a bond the money received is recorded as an asset. When the city spends the money building infrastructure; the bond asset is reduced and an infrastructure asset is created or increased. Beaumont acquired bonds, but embezzled and/or misused all the money and never constructed any infrastructure to record as assets.
The bonds listed as assets were removed from the City of Beaumont’s Approved 2015 Financial Statements. The City still received a ‘Disclaimer of Opinion’ because the City refused to remove the forged $60 Million Sewer Machinery & Equipment. The Forged Assets were added to the 2015 Financial Statements six weeks after the Audit was Approved by Council.
The Auditing Firm of Van Lant Fankhanel was hand selected by former Finance Director William Aylward and Councilman Nancy Carroll who was City Treasurer at the time. The Auditing Firm’s ‘business address’ is a house in a residential neighborhood.
The Beaumont City Council unanimously Approved another no-bid Contract for Van Lant Fankhanel to Audit the Financial Statements ending June 30, 2016 before the 2015 Audit was released.
The City of Beaumont has produced thee (3) different versions of their Audited Financial Statements by the Auditing Firm of Van Lant Fankhanel for Fiscal Year Ending June 30, 2015.
The First FYE 2014/2015 Audit was presented to the Beaumont Finance and Audit Committee on December 19, 2016. Finance Director Melana Taylor removed the Auditor’s Report and Internal Controls Report. Download Audit (PDF beaumontgate.org-first-fye-2014-2015-audit.pdf). Original Source: http://www.ci.beaumont.ca.us/D…
The Second City of Beaumont 2014/2015 Audit was Approved by Council on February 7, 2017, Agenda Item 24. Download Audit (PDF beaumontgate.org-second-fye-2014-2015-audit.pdf). Original Source: https://beaumont.civicweb.net/document/4666/Item%2024.pdf?handle=7B3A421F6D924673AC50317411507BF8
The Third City of Beaumont 2014/2015 Audit dated March 28, 2017 re-adds the Forged Assets that were previously removed from the Approved 2015 Audit. Download Audit (PDF beaumontgate.org-third-fye-2014-2015-audit.pdf). Original Source: http://www.ci.beaumont.ca.us/DocumentCenter/View/29489
To quote the Auditing Firm of Van Lant Fankhanel at the December 19, 2016, Beaumont Finance & Audit Committee: “Anyway, it was your own Debt, your own ‘investments’ in Bonds that was being reported, so it wasn’t appropriate to show your own Bonds as an Asset.”
Below is a Comparison Audit of the FYE June 30, 2015 Audit Approved by Council and the Forged 2015 Audit.
Approved Audit Pg. 28/Forged Audit Pg. 29: Statement of Fiduciary Net Position
$216,072,925 ‘Investment in CFD Bonds’ added to forged Statements
Total Assets increased from $42,936,558 to $259,009,483
Approved Audit Pg. 39/Forged Audit Pg. 41: Notes to Financial Statements 2) Cash and Investments
$216,072,925 ‘Investment in CFD Bonds’ added to forged Statements
Total Cash and Investments increased from $66,513,179 to $282,586,104
‘Cash and Investments as of June 30, 2015 consist of the following’ changes:
Approved Audit:
$37,421,771 Investments for $65,513,179 Total Cash and Investments
Investments Added to the Forged Audit:
$7,638,419 City Investments
$29,783,352 Investments Held by Bond Trustee
$216,072,925 Investments Held in Fiduciary Capacity
Forged Audit Total Cash and Investments = $282,586,104
Approved Audit Pg. 40/Forged Audit Pg. 42: 2) Cash and Investments
Forged Audit added $216,072,925 to ‘More Than 60 Months’ to change total from $37,421,771 to $253,494,696.
$29,003,352 Money Market Mutual Funds listed on both 2015 Audits is the Bonds’ Reserve. The Funds are not accessible by the City and is not an Asset that will Mature within 12 Months.
Approved 2015 Audit Pg. 41/Forged Audit Pg. 43: Concentration of Credit Risk
The Approved 2015 states: “At June 30, 2015, the City has no investments in any one issuer that represented 5% or more of total City investments.”
Forged 2015 Audit states: “The investment policy of the City contains limitations on the amount that can be invested in any one issuer. Investments in any one issuer (other than U.S. Treasury Securities, mutual funds, and external investment pools) that represent 5% of more of total City investments are as follows:
Issuer: Beaumont CFD’s
Investment Type: Community Facilities Districts Bonds
Reported Amount: $216,072,925
Approved 2015 Audit Pg. 42/Forged Audit Pg. 44: Investment in CFD Bonds
The Forged 2015 Audit has added the following paragraph that was not in the Approve 2015 Audit:
“The Beaumont Financing Authority (BFA) has purchased Community Facilities District (CFD) Bonds from the proceeds of local agency revenue bonds. The CFD Bonds are secured solely by assessments on property owners within the CFD. The Local Agency Bonds are secured solely by the repayment of the CFD bonds to the BFA. The repayment schedules of the bonds, and interest thereon, to the BFA; are concurrent and sufficient to satisfy the debt service requirements of the respective revenue bonds.”
Approved 2015 Audit Pg. 70/Forged Audit Pg. 73: 15) Related Party Transactions
The Forged 2015 Audit has added Note 15 and the following paragraph that was not in the Approve 2015 Audit: “The City contracted with Urban Logic Consultants to provide staffing for the City’s Public Works Director, Economic Development Director, and City Planner positions. The individuals serving as the Public Works Director, Economic Development Director, and City Planner for the City were executives with Urban Logic Consultants. The City owed Urban Logic Consultants $225,972 at June 30, 2015. In addition, the City incurred $1,897,518 in costs related to the services provided by Urban Logic Consultants during the year ended June 30, 2015.”
Approved 2015 Audit Pg. 75 & 76, Moved to pages 82 & 83 in Forged 2015 Audit: Schedule of Revenues, Expenditures, and Changes in Fund Balances; Budget and Actual CFD Capital Projects Fund
Approved 2015 Audit Pg. 87/Forged Audit Pg. 90: Combining Statement of Fiduciary Assets and Liabilities Agency Funds
$216,072,925 Investment in CFD Bonds added to Forged 2015 Audit increasing Assets from $39,492,995 to $255,565,920
Liabilities Due to Bondholders changed from $39,205,996 on the Approved Audit to $225,278,921 Due to Bondholders on the Forged Audit.
Approved 2015 Audit Pg. 89/Forged Audit Pg. 92: Combining Statement of Changes in Fiduciary Assets and Liabilities Agency Funds
Investment in CFD Bonds Removed from the Approved Audit were Added to the Forged Audit bringing the Total Assets from $39,492,995 to $255,565,920.
Approved 2015 Audit Pg. 90/Forged Audit Pg. 93: Combining Statement of Changes in Fiduciary Assets and Liabilities Agency Funds
$4,080,000 Investment in CFD Bonds added to Forged Audit
$216,046,830 Removed from Approved Audit back on Forged Audit
Total Assets changed from $42,936,558 on Approved Audit to $259,009,483.