For Immediate Release                                                                                                                                                                                                                                                                                                                                         Contact: Naseem Farooqi

June 11, 2020                                                                                                                                                                                                                                                                                                                                                Public Affairs Manager

 

WEST VALLEY WATER DISTRICT RECEIVES CONTROLLER REVIEW FOR 2016, 2017 & 2018, WORKS TO ADDRESS & CORRECT SHORTFALLS IN 2020

 

 

RIALTO, CA –  Today, the West Valley Water District (WVWD) received a document from the State Controller’s Office outlining shortfalls in controls for operations, financial reports, assets and proper use of public funds from July 1, 2016 to June 30, 2018.

 

Prior to the release of the report, the new administration worked with the State Controller’s Office, to conduct the report and correct many of the issues detailed in the Controller’s report. Since December 19, 2019, WVWD worked extensively with a number of independent and nationally-recognized firms and organizations, including Liebert Cassidy Whitmore and the Special District Leadership Foundation (SDLF), to help improve and conduct unbiased investigations and assessments of the WVWD operations. Many of these efforts led to the organization receiving SDLF’s District Transparency Certificate of Excellence, which was also announced earlier today. The award recognizes outstanding efforts to promote transparency and good governance.

 

WVWD Board President Channing Hawkins stated, “Our future is certainly much brighter, but there is still so much more to do. This report represents a very dark time for the Water District, but I’ve heard our community loud and clear and that is why we’re making significant improvements. From day one, since being sworn in December 2019,  the West Valley Water District has taken swift and decisive action to increase accountability and transparency for our ratepayers.

 

Chief Financial Officer Rickey S. Manbahal, MPA stated, “Our Water District has seen its turning point to ensuring financial responsibility and accountability. We are taking all the necessary steps to ensure ratepayer funds are invested responsibly. As directed by the board, I will hold our board, management and staff accountable for their actions because it’s what our ratepayers deserve.”

 

The State Controller’s Office used the Standards for Internal Control in the Federal Government (Green Book), established by the U.S. Government Accountability Office, to assess various aspects of the Water District’s previous internal control system from fiscal year (FY) 2016-2017  and FY 2017-2018. The Green Book outlines fundamental components, principles and attributes of effective internal control systems. Since 2020, WVWD worked with the State of California and other independent firms and organizations to identify and address these shortfalls. Below, WVWD lists each of the issues identified in the report and remedies provided by the WVWD.

 

Finding 1: District officials overrode established process for hiring and promoting employees.

• On December 19, 2019, WVWD Board of Directors voted to halt all hiring due to suspected irregularities.
• On January 16, 2020, the board hired an interim human resources and risk manager, Martin Piñon. During this meeting, the board unanimously approved a temporary hiring freeze resolution.
• On January 16, 2020, the board informed the public that Mr. Piñon will manage all recruitments, internal transfers, promotions, salary changes and performance evaluations until new policies and procedures are implemented.
• On January 16, 2020, the board ordered all documentation related to the recruitment process be retained in the human resources department.

 

Finding 2: A costly board meeting was held outside of district boundaries.

• On April 16, 2020, the board decided to cancel future meetings of this magnitude and is currently researching options that will provide the same or greater results within district boundaries.

 

Finding 3: The District paid directors’ questionable compensation for meetings.

• On March 5, 2020, President Hawkins introduced the following directives:
  • Board members and employees must complete expense reimbursement forms with receipts attached for all travel, conference, meals, expenses, etc. and submit them to the chief financial officer (CFO) for reimbursement.
  • Board members must attach a meeting agenda to each reimbursement or stipend form for every meeting for which they request reimbursement.

 

Finding 4: The district incurred expenditures that are excessive and questionable, and lacked proper approval.

• On March 5, 2020, Board President Hawkins introduced the following directives:
  • Board members and employees must complete expense reimbursement forms with receipts attached for all travel, conference, meals, expenses, etc. and submit them to the CFO for reimbursement.
  • Board members must attach a meeting agenda to each reimbursement or stipend form for every meeting for which they request reimbursement.
  • All employees must attach receipts to each expense reimbursement form, which includes all incurred expenses (including credit card purchases). These forms must be submitted to the accounting department on a monthly basis.
  • The CFO must prepare new travel and reimbursement policies and a new reimbursement request form that requires supporting documents for all reimbursement requests.
  • The CFO, human resources director and legal counsel will develop a new reimbursement policy for board of directors’ paid long-term care.

 

Finding 5: The District’s credit card practices are highly susceptible to fraud, waste, and abuse.

• On March 5, 2020, the board approved the following directives:
  • The purchasing department and all purchasing functions will report to the CFO.
  • Board members and employees must complete expense reimbursement forms with receipts attached for all travel, conference, meals, expenses, etc. and submit them to the CFO for reimbursement.
  • Board members must attach a meeting agenda to each reimbursement or stipend form for every meeting for which they request reimbursement.
  • All employees must attach receipts to expense reimbursement forms from all incurred expenses (including credit card purchases) and submit them to accounting on a monthly basis.

 

Finding 6: District officials failed to comply with contracting requirements and purchasing procedures.

• On December 19, 2019, Board President Hawkins called a special meeting on January 9, 2020 to review professional services contracts.
• The board reviewed all of these contracts on January 9 and January 25, 2020.
• On March 5, 2020, the board approved an agreement with a certified public accounting firm to prepare a new manual that includes new accounting and purchasing policies and procedures.

 

Finding 7: Employees might not have been paid correctly because of inaccurate timesheets and excessive paid holidays.

• This finding occurred when timesheets were processed manually, which was conducive to human error. Since then, WVWD implemented an electronic time entry and management approval process, which corrects inaccurate timesheets and excessive pay.
• On March 5, 2020, the board approved an agreement with a certified public accounting firm to prepare a new manual, which includes new accounting, purchasing, time-entry and payroll policies and procedures.
• Flex-time holiday excessive pay is a result of the addition of a 4/10 schedule. This schedule is designed to pay an employee for holiday pay based on their work schedule. If an employee is on the 4/10 schedule, they are paid 10 hours for district observed holidays instead of 8 hours. This policy was changed under the new human resources policies.

 

Finding 9: High turnover and lack of consistent leadership have hindered operational stability.

• On December 19, 2019, the board ordered the general manager to halt all hiring until a resolution is adopted.
• On January 16, 2020, the board hired an interim human resources and risk manager, Martin Piñon. During this meeting, the board unanimously approved a temporary hiring freeze resolution.
• On January 16, 2020, the board informed the public that Mr. Piñon will manage all recruitments, internal transfers, promotions, salary changes and performance evaluations until new policies and procedures are implemented.
• On January 16, 2020, the board ordered all documentation related to the recruitment process be retained in the human resources department.

 

Finding 10: The district’s directors did not complete required ethics training.

• On June 6, 2020, WVWD announced that it obtained a District Transparency Certificate of Excellence via the Special District Leadership Foundation, which requires all board members to complete ethics trainings and submit a certificate of completion to the foundation.

 

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