Humboldt County Auditor-Controller Karen Paz Dominguez. | Screenshot from a March 1 Board of Supervisors meeting.


Humboldt County Auditor-Controller Karen Paz Dominguez had been given a firm deadline of March 16 to submit a long-overdue Financial Transactions Report (FTR) to the State Controller’s Office, and with legal repercussions hanging in the balance, she and her staff appear to have made it — barely.

“It was after 10 [p.m.] when we finished the FTR,” Paz Dominguez told the Outpost via text this morning, “but it’s finished and submitted.” 

The State Controller’s Office confirmed via email this morning that the county submitted financial data last night, though Jennifer Hanson, press secretary for the agency, added, “I cannot confirm if this [submittal] constitutes a complete and correct submission until SCO completes its review.”

A “Final Demand Letter” sent by the Attorney General’s Office on Feb. 24 said the county’s 2019/20 Financial Transactions Report was more than a year past due, even though Paz Dominguez had told the state last June “that the data was collected and being processed, and completion of the report was an ‘urgent priority.’”

At a March 1 meeting of the Humboldt County Board of Supervisors, Paz Dominguez said she believed the “Final Demand Letter” may have been sent in error because a visiting team of auditors from the State Controller’s Office knew nothing about it. However, both the State Controller’s Office and the Attorney General’s Office later confirmed that there had been no error.

Meeting canceled

That March 1 meeting was also notable because Paz Dominguez went on the offensive, listing a series of alleged fiscal misdeeds from several county departments. Her accusations ranged from relatively minor infractions, such as departments not submitting invoices in a timely fashion, to serious charges that suggest possible criminality. 

For example, she accused the County Administrative Office of forging an actuarial report and sending it to the State Controller’s Office. She said the Department of Health and Human Services and the County Administrative Office have “manipulated information” on invoices. And she accused First District Supervisor Rex Bohn of pressuring departments to perform tasks for him or his friends.

At one point, Board Chair and Fourth District Supervisor Virginia Bass interjected to ask Paz Dominguez whether she has proof to back up these allegations, and the auditor-controller assured her that she does. The supervisors wound up voting unanimously to have Paz Dominguez return at the March 15 meeting with a written report offering evidence for her accusations.

However, that didn’t take place. Nor did a subsequently scheduled special meeting come to fruition. Here’s what happened:

On Thursday, March 10, nine days after she made the accusations, Paz Dominguez emailed Clerk of the Board Kathy Hayes saying she had not opened an item in Legistar, the county’s agenda management system, in time to have that item reviewed and placed on the agenda for the March 15 meeting. 

“This was my oversight and I apologize,” she wrote, and she asked whether a special meeting could be scheduled, or an item added to an already-scheduled meeting.

Shortly before 1 p.m., Hayes sent a reply, saying neither option would be possible given the board’s heavily loaded schedule this month, though she added that it still wasn’t too late: If Paz Dominguez could upload her item to the system before 5 p.m., staff could still manage to get it on the March 15 agenda.

Paz Dominguez replied at 10:46 p.m., saying she’d been busy working on payroll, which she had just completed. 

“I will explore alternative options for sharing this information with the public and will provide the information to the Board via e-mail,” she wrote.

But the next morning, Friday, Hayes responded with an alternative solution. “I have gone back and revisited the Board Members calendars and we were able to schedule a Special Meeting of the Board of Supervisors on Monday, March 21st at 9:00 a.m. to accommodate your agenda item,” she wrote. “In order to have sufficient time for review, we will need to have your agenda item uploaded and routing in workflow by Monday, March 14th at noon.”

Later that morning, County Administrative Officer Elishia Hayes also emailed Paz Dominguez. “Department Heads asked about this in yesterday’s meeting,” she said. “I would suggest you update them on the timeline and also forward a draft to them with ample time to respond.”

That didn’t happen either. Instead, at noon on March 15, Paz Dominguez appeared on the steps of the county courthouse to announce her re-election campaign and level more accusations against county department heads, supervisors and staff. The county’s fiscal management system is sick, she said, “and the illness is caused by the continuing decentralization of accounting functions.”

In response to the calls for proof, Paz Dominguez directed people to an online trove of (primarily) email exchanges between herself and county staffers, department heads and supervisors. These records were evidently obtained (and the files headlined) by Thomas Edrington, a cannabis industry consultant who has been volunteering on behalf of Paz Dominguez. (He has offered to work for her re-election campaign, she told the Outpost, adding that she has yet to officially form one.)

The Outpost reviewed the emails and will report on them in more depth soon. They date from November 2017 through November 2021, and while several of the accusations Paz Dominguez made at the March 1 Board of Supervisors meeting are also made in her emails, there doesn’t appear, on first reading, to be much in the way of proof documenting “confirmed cases” of fraud or forgery, which were among her March 1 allegations.

We emailed Paz Dominguez this morning asking for any additional documentation she may have to support the allegation that the County Administrative Office forged an actuarial report. (There is a “Pension Analysis” report reproduced in the emails, from September 2019, that says the information it contains was “reviewed by a credential actuary,” but it doesn’t claim to be an actuarial report.) We’ll report about any such documentation if and when we hear back.

As for the special meeting scheduled for March 21, Kathy Hayes sent an email yesterday morning to supervisors, department heads and a few staffers announcing that the meeting had been canceled. 

“The AC has not responded to numerous emails related to the Special Meeting she requested on Monday, March 21st,” Hayes wrote. “Therefore, I am cancelling the meeting and removing it from your calendars. Thank you.”

A few minutes later, Paz Dominguez replied-all, telling Hayes that she (Hayes) had only emailed “once to say that you scheduled the meeting but before I could confirm, you notified others it was happening. You emailed me a second time yesterday when I wasn’t available and I haven’t had a chance to respond. Now, you’re cancelling a meeting I didn’t even get a chance to confirm.”

She continued: “The BOS/CAO has scheduled several meetings about the A-C without the A-C in the past and I’m not sure why that can’t be done now given you all control the agendas. If you’ve already scheduled the meeting, then I think you should keep it. Or, at least, communicate that it was scheduled without A-C confirmation and is now being cancelled by BOS choice. I can make myself available if you leave it scheduled.”

Reached by phone this morning, Hayes said the meeting had to be canceled because nobody initiated a meeting by uploading an item to the county’s electronic workflow module. The agenda management system requires departments to upload their items and documentation several days ahead of time for review by county counsel, the CAO and, if it’s related to county finances, the auditor-controller.

In this case, Hayes said, the onus was on the auditor-controller, “because that was a request out of a live board meeting. [Paz Dominguez] indicated to [the board] that she would bring that item with backup documentation to support some of the assertions. She agreed to do that, and that never happened.”

Cash hold

One other development from this week to report: On Tuesday night, Humboldt County Economic Development Director Scott Adair received an email from Veronica Champayne, a regional advisor with the California Employment Development Department.

She was notifying him that, because the county’s 2019/20 Single Audit has not yet been submitted to the state, our Local Workforce Development Area has been placed on a “cash hold,” restricting the county from drawing down federal grant funds that pass through the agency. The effective date was March 4.

Adair explained that this sanction prevents the county from seeking reimbursement for any expenditures stemming from programs funded through the federal Workforce Innovation and Opportunity Act (WIOA). In the long term, he added, it could impact the county’s ability to secure new grants.

Reached by phone Wednesday, Paz Dominguez said the overdue 2019/20 Single Audit is being completed by outside accounting firm CliftonLarsenAllen (CLA), and they’ve set a target completion date of March 31. 

As for the “cash hold” sanction, Paz Dominguez said, “I can’t speak to how this impacts us in the present because it’s not clear from the email whether this is funding that was expected last week, this week or next month. This is another example of the challenge of decentralization because the A-C Office does not see the grant claims Economic Development is submitting or know how often it is occurring.”