Federal Law Requires the Auditing Firm to First Notify Council/Board then Notify the SEC within One Business Day.
SEC; meet the Auditing Firm of Van Lant & Fankhanel. The Auditing Firm of Moss Levy Hartzheim audited the City of Beaumont’s Financial Statements for 20 years; conspiring with Former Finance Director William Aylward and former Risk Manager James Gregg to falsify Assets in order to appear solvent and acquire bond debt.
The Auditing Firm of Van Lant & Fankhanel was hired in April, 2015, after the 2013/2014 Audit performed by Moss Levy was rejected by Council because of the numerous fraudulent statements. Beaumont City Council refuses to submit the City’s 2013/2014 financial statements to Van Lant & Fankhanel The City submitted Fiscal Year 2014/2015 sometime last Autumn, but is attempting to carry the same forged Assets.
An Email from Onyx Jones, former Finance Director that was brought in by Urban Futures, stated that the ‘Financial Advisors’ [Urban Futures] have given direction to “delay the audit” because ‘disclaiming an opinion due to scope limitations and /or GAAP(GASB) departures’. They explained that this can affect future and current bond ratings for the City and possibly affect our ability to issue new debt.”
On May 17, 2016, the Auditing Firm of Van Lant & Fankhanel was presented with Beaumont’s General Ledger and Bond Fund Accounts from 2009-2012 showing that the money recorded as ‘Sewer Machinery & Equipment’ on the City’s Financial Statements was paid to Urban Logic Consultants either thru the Mello Roos Bond Fund Accounts or paid from the Check Warrants.
On July 5, 2016 the Beaumont City Council Approved Agenda Item 3.C. Beaumont Utility Authority Financial Report: http://www.ci.beaumont.ca.us/D…
The Financial Report contained the same forged Machinery & Equipment numbers that former Finance Director William Aylward plugged. Current Finance Director Melana Taylor included in the definition of Capital Assets: “..engineering, anything else that may have been considered a capital asset”.
Melana Taylor is a CPA and knows the definition of ‘machinery and equipment’ does not include phony engineering invoices. Taylor was given the documentation showing that the money classified as ‘machinery and equipment on Beaumont’s Financial Statements was actually paid to Urban Logic through the Check Warrants and through the Mello Roos Bond Fund Accounts.
Beaumont Finance Director, City Manager, City Treasurer, every Member of the Beaumont City Council, every Member of the Audit & Finance Committee, and every Member of the Planning Commission has been provided copies of the City’s Documents proving that the City funneled the money to Urban Logic instead of purchasing machinery and equipment.
Every Elected and Appointed Official in Beaumont was also provided documentation showing that the $21.5 Million IOU and the $200 Million Bond Ownership are also Material Misstatements illegally forged to inflate Assets.
On July 29, 2016, the Santa Ana Regional Quality Control Board Staff submitted a Report regarding the City’s Sewer Plant including the fact that the City: http://www.waterboards.ca.gov/santaana/board_info/agendas/2016/07_22/Item_9.pdf
The Water Board Report lists numerous violations including submitting forged documents claiming to have no Industry in order to circumvent Federal NPDES Regulations.
The August 2, 2016, Beaumont City Council Agenda Item 3.a: Title 22 Report: http://www.ci.beaumont.ca.us/DocumentCenter/View/27897
The ‘Report’ is a list of about millions in Sewer Machinery & Equipment that is needed BEFORE the City can become Title 22 Compliant. The $70 Million acquired over the last 20 years was embezzled and the Sewer Machinery & Equipment were never purchased.
Beaumont City Treasurer Nancy Carroll has removed discussion of the 2014 Audit from both her Report to City Council and from the Audit & Finance Committee Agenda with no explanation. At the August 1, 2016 Finance & Audit Committee it was stated that Van Fankhanel were still working on the 2014/2015 Audit.
Federal Law requires the Auditing Firm to Resign when asked to Audit forged Financial Statements. The City claims that Van Lant & Fankhanel has not Resigned. At the August 1, 2016 Finance & Audit Committee it was stated that Van Lant & Fankhanel were still working on the 2014/2015 Audit.
Federal Law also requires that the Auditing Firm notify and submit a Report to the SEC.
Securities and Exchange 1934
SEC. 10A. AUDIT REQUIREMENTS.
(a) IN GENERAL.—Each audit required pursuant to this title of the financial statements of an issuer by a registered public accounting firm shall include, in accordance with generally accepted auditing standards, as may be modified or supplemented from time to time by the Commission—
(1) procedures designed to provide reasonable assurance of detecting illegal acts that would have a direct and material effect on the determination of financial statement amounts;
(2) procedures designed to identify related party transactions that are material to the financial statements or otherwise require disclosure therein; and
(3) an evaluation of whether there is substantial doubt about the ability of the issuer to continue as a going concern during the ensuing fiscal year.
(b) REQUIRED RESPONSE TO AUDIT DISCOVERIES .—
(1) INVESTIGATION AND REPORT TO MANAGEMENT .—If, in the course of conducting an audit pursuant to this title to which subsection (a) applies, the registered public accounting firm detects or otherwise becomes aware of information indicating that an illegal act (whether or not perceived to have a material effect on the financial statements of the issuer) has or may have occurred, the firm shall, in accordance with generally accepted auditing standards, as may be modified or supplemented from time to time by the Commission—
(A)(i) determine whether it is likely that an illegal act has occurred; and
(ii) if so, determine and consider the possible effect of the illegal act on the financial statements of the issuer, including any contingent monetary effects, such as fines, penalties, and damages; and
(B) as soon as practicable, inform the appropriate level of the management of the issuer and assure that the audit committee of the issuer, or the board of directors of the issuer in the absence of such a committee, is adequately informed with respect to illegal acts that have been detected or have otherwise come to the attention of such firm in the course of the audit, unless the illegal act is clearly inconsequential.
(2) RESPONSE TO FAILURE TO TAKE REMEDIAL ACTION .—If, after determining that the audit committee of the board of directors of the issuer, or the board of directors of the issuer in the absence of an audit committee, is adequately informed with respect to illegal acts that have been detected or have otherwise come to the attention of the firm in the course of the audit of such accountant, the registered public accounting firm concludes that—
(A) the illegal act has a material effect on the financial statements of the issuer;
(B) the senior management has not taken, and the board of directors has not caused senior management to take, timely and appropriate remedial actions with respect to the illegal act; and
(C) the failure to take remedial action is reasonably expected to warrant departure from a standard report of the auditor, when made, or warrant resignation from the audit engagement; the registered public accounting firm shall, as soon as practicable, directly report its conclusions to the board of directors.
(3) NOTICE TO COMMISSION ; RESPONSE TO FAILURE TO NOTIFY .—
An issuer whose board of directors receives a report under paragraph (2) shall inform the Commission by notice not later than 1 business day after the receipt of such report and shall furnish the registered public accounting firm making such report with a copy of the notice furnished to the Commission. If the registered public accounting firm fails to receive a copy of the notice before the expiration of the required 1-business-day period, the registered public accounting firm shall—
(A) resign from the engagement; or
(B) furnish to the Commission a copy of its report (or the documentation of any oral report given) not later than 1 business day following such failure to receive notice.
(4) REPORT AFTER RESIGNATION .—If a registered public accounting firm resigns from an engagement under paragraph (3)(A), the firm shall, not later than 1 business day following the failure by the issuer to notify the Commission under para graph (3), furnish to the Commission a copy of the report of the firm (or the documentation of any oral report given).
(d) CIVIL PENALTIES IN CEASE -AND -DESIST PROCEEDINGS .—
If the Commission finds, after notice and opportunity for hearing in a proceeding instituted pursuant to section 21C, that a registered public accounting firm has willfully violated paragraph (3) or (4) of subsection (b), the Commission may, in addition to entering an order under section 21C, impose a civil penalty against the registered public accounting firm and any other person that the Commission finds was a cause of such violation. The determination to impose a civil penalty and the amount of the penalty shall be governed by the standards set forth in section 21B.
(f) DEFINITIONS .—As used in this section, the term ‘‘illegal act’’ means an act or omission that violates any law, or any rule or regulation having the force of law. As used in this section, the term
‘‘issuer’’ means an issuer (as defined in section 3), the securities of which are registered under section 12, or that is required to file reports pursuant to section 15(d), or that files or has filed a registration statement that has not yet become effective under the Securities Act of 1933 (15 U.S.C. 77a et seq.), and that it has not withdrawn.