The OC Board of Supervisors directed the county’s internal auditor to check out any contracts paid for with federal COVID relief funding and will start requiring a majority board vote when discretionary funds are going to be awarded.
Those reforms and others the supervisors discussed Tuesday, Sept. 24, and said they are committed to making, are in response to allegations the county is now making in lawsuits against Viet America Society and Hand to Hand Relief Organization Inc., two nonprofits First District Supervisor Andrew Do allocated millions in discretionary funds to for meals programs to help seniors and the disabled during the pandemic. Do was absent from Tuesday’s meeting.
Read also: OC Board of Supervisors censures Supervisor Andrew Do
The organizations have not produced required audits or requested full accounting of their efforts, OC officials have said, and the county is now alleging in its lawsuits that the groups’ leaders embezzled the public funds for personal gain. Representatives for Viet America Society have said their organization produced the meals, but their documentation is lacking.
Fifth District Supervisor Katrina Foley and Second District Supervisor Vicente Sarmiento proposed a package of steps for the board to take to tighten up the county’s oversight of spending.
“This item has essentially four parts, and is a step toward restoring public trust in our county governance and our Board of Supervisors,” Foley said. “I think these four items are a beginning that will help us to get some tighter controls over county contracting, over oversight and notice to the board when there is a problem. Also it will, I think, hopefully, create more efficiencies.”
The board directed the county’s internal auditor to conduct risk assessments of all federal American Rescue Plan Act-funded contracts within 90 days to make sure contract audit and monitoring requirements are being met. Foley said the county’s internal auditor has confirmed that is sufficient time to look through all the ARPA contracts. Each of the five supervisors received $10 million in COVID relief funds to spend at their discretion within the communities they represent.
Interim CEO Michelle Aguirre was also directed to create a policy for the board’s consideration that would require all future discretionary fund contracts be reviewed and approved by the county’s procurement office.
“The reason for this item is because right now, what we saw was different contracts going out of different departments, and no centralized location for county or supervisor contracts so that there could be compliance,” Foley said. “This will help to centralize those contracts and have better light on any problematic contracts.”
The supervisors also want Aguirre to provide them with quarterly reports on all contract disputes within the county.
“We know that the county staff had identified compliance issues regarding Viet America Society that were raised nearly two years ago now, and the board offices … we don’t get copied on every contract,” Foley said. “So we have to be informed if there’s an issue, we were not informed until rather late in the process, more than a year, if I recall.
“We can’t keep learning about these things from the press. It’s great that the press is on it, but we have to have more light on this,” Foley added.
Aguirre was also directed by the board to review all county contracts and subcontracts to find out if familial connections need to be disclosed in accordance with a new state law.
Do allocated millions of dollars from his discretionary fund to Viet America Society without disclosing that his daughter held leadership roles at the nonprofit. Though not against state law or county policy at the time, a new state law that goes into effect in January will require disclosure of family ties with any contractor, and another bill will make it illegal in California for elected officials to knowingly be involved in awarding contracts to organizations if their child is an officer or director of the vendor, or owns at least 10% of the group.
Changes to the county’s contract policy manual, recommended by Aguirre, were also approved by the four supervisors on Tuesday. Most of the changes bring county policies into accordance with new state laws, including AB 2946, which requires a majority vote from the OC Board of Supervisors before awarding discretionary funds and mandating that agreement details be posted online.
“I don’t think there’s any deliberate intent to create a set of circumstances that would allow for abuse like this, but we know reflecting back,” Sarmiento said, “we can be more circumspect and see what protections we can embed in our process.”
During an earlier agenda item on Tuesday, while discussing and eventually unanimously approving to censure Do, Chaffee said he would like to see even more measures taken to improve county spending oversight, as well as the code of ethics. The Office of Independent Review, Chaffee said, could be tapped in conversations regarding the actions of board members.
Congresswoman Katie Porter said the reforms were “an essential step toward adopting measures that will hold Orange County officials to higher ethical standards,” in a letter addressed to the board.
“I was proud to support the ARPA, which delivered much-needed funding to help Orange County communities through the COVID-19 pandemic,” Porter said. “This item would require important oversight of existing ARPA contracts, confirm compliance with new California anti-corruption laws, and begin an important policymaking process regarding increased transparency safeguards in board discretionary contracts.”
