Humboldt County Auditor-Controller Karen Paz Dominguez. | File photo.

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At a special meeting on Monday, the Humboldt County Board of Supervisors will consider taking a vote of “no confidence” in Auditor-Controller Karen Paz Dominguez, who has often been at the center of controversy since her election in 2018, with the pressure increasing markedly over the past couple of weeks. (See links to previous coverage at the bottom of this post.)

Should the board choose to pass the vote of “no confidence,” it will not have any immediate organizational impact on Paz Dominguez. As an independently elected official, she can only be removed from office via a recall election or a regular election that she fails to win.

An agenda published around 4:30 p.m. Friday includes a staff report with a looong list of Paz Dominguez’s alleged failures:

Karen Paz Dominguez’s tenure as Auditor-Controller has been marred with deficiencies in the following ways:
  • Interest apportionment has not taken place for the entirety of Fiscal Year (FY) 2020-21 or 2021- 22;
  • Cash has not been reconciled since FY 2018-19 (currently Macias, Gini & O’Connell [MGO] is bringing this work up to date);
  • As reported by Fortuna Union High School, statutory deadlines for reporting property taxes are not being met;
    • On Nov. 10, 2021, the Board of Supervisors was notified that the Fortuna Union High School District passed a vote of non-confidence in the county Auditor-Controller, Karen Paz Dominguez
  • FY 2019-20 single audit is two months past due, following a six-month extension. This has significant impacts on Workforce Innovation and Opportunity Act (WIOA) funding, the Department of Child Support Services, California Development Block Grant (CDBG) funds, Roads funding, First 5 and has made the county ineligible for United States Department of Agriculture (USDA) grants and potentially other competitive state and federal programs;
    • The Workforce Development Board passed a Vote of No Confidence in the county Auditor-Controller, Karen Paz Dominguez at their Nov. 19, 2021 Board meeting.
    • First 5’s legal counsel has contacted the county regarding the county’s failure to comply with the Memorandum of Understanding between the county and First 5, specific to fiscal services through the county Auditor-Controller
  • The FY 2020-21 cost plan was due Dec. 2019; it was not approved by the State Controller until June 2021 and still remains unposted;
  • The FY 2021-22 cost plan was due Dec. 2020 and is still not completed;
    • Due to delays, the FY 2021-22 budget was developed using FY 2019-20 costs as an estimate, it is likely there will be large deviations and thereby creating significant budgetary impacts
  • The Auditor-Controller failed to respond to correspondence from the IRS regarding payroll tax discrepancies, causing $173,022 in penalties, assessments, and liens;
  • The Financial Transactions Report is due to the State Controller’s Office by the end of January, following the close of the fiscal year. The Financial Transactions report has not been submitted for FY 2019-20 and the county can be penalized up to $5,000 for the failure to meet this statutory deadline;
  • Lobbyist reports have not been submitted timely, $14,000 in penalties have been assessed;
  • The Chart of Accounts has not been finalized yet and object codes continue to be closed;
    • Departments are struggling to obtain from the Auditor-Controller tools such as the setup of funds, budget units, ten-digit org keys and job ledger codes to effectively manage their budgets
  • Delays in posting journals, supplemental budgets and appropriation transfers, often times more than eight months after submittal, are limiting the ability of departments to effectively manage budgets and expenditures;
    • Failure to post these transactions timely forces staff to conduct extensive manual tracking
    • Failure to post transactions resulted in delinquent CARES Act reporting and other mandated financial reporting
  • Failure to pay vendors timely, resulting in late fees, inflated cost proposals, lost discounts and the elimination of credits accounts; · Failure to pay employee expense claims timely;
  • Failure to pay child support payments timely;
  • Failure to promptly settle employees;
  • Failure to timely post daily deposits to the general ledger;
  • Failure to effectively transition and manage payroll;
  • CalCard penalties for failure to process payments timely;
  • Delayed payment of Election/Poll Worker’s stipends;
  • Refusal to post interest apportionment from non-general funds to the general fund as allowed by Government Code. This has eliminated more than $1 million in interest that is rightfully due to the general fund as discretionary revenue;
  • The Auditor-Contoller has publicly misrepresented status of the single audit;
  • Budget blocks have been removed, making it difficult to manage appropriations;
    • Government Code §29122 The board shall not approve a claim and the auditor shall not issue payment for any obligation in excess of that authorized in the budget unit appropriation, except upon an order of a court, for an emergency, or as otherwise provided by law
  • FY 2020-21 Adopted Budget has not been finalized or submitted to the State Controller Office as actuals for FY 2019-20 are not yet available;
    • The deadline was Dec. 1, 2020
  • Failure to adhere to the Board of Supervisors request for written Board reports detailing operational impacts associated to the payroll transfer and other county operations;
  • Failure to participate in meetings, collaborate or communicate with departments or external agencies regarding financial transaction activities;
  • Refusal to update budget reports and participation in the budget process; and
  • Failure to take responsibility for her actions.

The county has allocated substantial resources to assist the Auditor-Controller, to no avail. These resources included consultants to assist with year-end and payroll process, additional staffing, and leadership training and coaching.

The action before you today is a Vote of No Confidence and adoption of a No Confidence Resolution. The Vote of No Confidence is a vote that your Board no longer has confidence in the job performance of Karen Paz Dominguez, Humboldt County Auditor-Controller. Adoption of the resolution along with the Vote of No Confidence will direct that the Auditor-Controller to act with all speed and diligence to remedy all items detailed in today’s agenda item, and to faithfully fulfill the duties of her office.

Partway down that list you may have noticed this item: “First 5’s legal counsel has contacted the county regarding the county’s failure to comply with the Memorandum of Understanding between the county and First 5 … .”

The Outpost has obtained a copy of a letter from First 5 Humboldt’s attorney, sent earlier today. You can read it here.

The other item on the above list that we’ll call your attention to is this:

“The Workforce Development Board passed a Vote of No Confidence in the county Auditor-Controller, Karen Paz Dominguez, at their Nov. 19, 2021 Board meeting.”

Scott Adair, the county’s economic development director, told the Outpost earlier today that the 26-member committee, which includes representatives from education, labor, county government and the private sector, passed the “no confidence” vote with two “nays” and one abstention. 

Monday’s meeting has one other agenda item for consideration during open session, and (surprise!) it’s also related to Paz Dominguez. The board will consider a resolution that would direct her to comply with Government Code 53647 by making quarterly interest payments to the county’s General Fund.

A staff report says that since the second quarter of fiscal year 2018-19, Paz Dominguez has failed to redirect these payments to the General Fund, thereby shorting the county more than $1 million in interest.

The meeting is set to begin at 9 a.m. Monday, though it will start in closed session, so it’s hard to say when the public drama will begin. A livestream of the meeting should be available at the county’s agenda center webpage once the meeting gets underway.

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