Audit Reveals Forged Check Warrants, Personal Use of Government Funds by City Officials, Personal Loans to City Officials, Payments of Over $1 Million with No Explanation, and Various Other Irregularities
For Immediate Release – January 24th, 2013
(Beaumont, CA) In a letter sent last week to the Riverside County Grand Jury by independent auditor Libi Uremovic, the financial practices of the City of Beaumont have been called into question.
The letter, which summarizes results of an audit of the City’s books covering the period of May through October, 2012, requests immediate action on the part of the Grand Jury as these issues involve “Tax Payer Funds, Insurance Fraud, and Employee Benefits.”
One example cited in the letter is that “The City is falsifying employee expenses and funneling the money for other uses.” When comparing the City’s General Ledger with bank statements and check warrants, the audit found that the General Ledger had $1.7 million more expenses attached to employee payroll than the automatic deposits documented in the bank statement. In addition, the audit found another $515,801 attached to employee expenses coded to a worker’s comp expense.
The audit, which began in November of last year, is ongoing and has thus far identified numerous and specific instances of forged check warrants, personal use of government funds by City officials, personal loans to City officials, payments of over $1 million with no explanation, and various other irregularities.
In the audit’s preliminary findings, which were made public on December 13th, 2012, some of the City’s more egregious violations were revealed. For instance:
Forging The Check Warrants: Council Agenda Item 3.a.3 list the Check Warrants for the City of Beaumont. These check numbers are five digits – ’80876′, but there is another set of checks that are six digits – ’51142′ that being drawn from the same Bank Account, but do not appear on the Check Register.
This is called Forging the Check Warrants and it is a Violation of State and Federal laws. Council ratifies the check warrants, but the law states they don’t actually have to view the checks before they are ratified. The ones legally responsible are the Finance Director, City Manager, and City Clerk who has an extra duty of care to certify all is true and accurate.
Personal Use of Government Funds: Tax Payer Dollars and City Time is Never for Personal Use.
Notes Receivable – Beaumont Shooting Range: The City has fronted this private sector business $81,169.00 since the 1st of the year, but has only received one (1) payment for $1,630.70 on 08/31/12.
Urtiaga Gibbs – Resource Director: 08/13/12 wrote a hot check for $3,242.16. On 08/15/12 the amount was credited with the memo: ‘loan’, but there is no loan account set up or payments being made.
Personal Loans: There are several personal loans being floated through the City books – Eight (8) of which are the Upper Ranks of Law Enforcement. Some of these loans are over $10,000. This is absolutely unacceptable.
Ronald Morning: This person received 8,857.70 in loans from 01/07/11 – 04/20/12. but has only paid $4,805.77. This person is no longer on the Employee Rooster.
Jeffery Fox: This Councilman receives $100 – $250 loans every month and the City even gave his son Jeffery Fox Jr. a $200 loan on 10/18/12.
In addition to the Grand Jury, the information discovered thus far by the audit has been sent to the following government agencies for investigation:
- Riverside County District Attorney’s Office
- FBI
- State Controller’s Office
- Riverside County Auditor-Controller’s Office
- State Board of Accountancy, and
- California Department of Industrial Relations – Division of Workers’ Compensation (DWC) Medical Unit.