News

The State Controller’s Office has clarified that the final demand letter sent from the Attorney General’s Office to Humboldt County Auditor-Controller Karen Paz Dominguez threatening to fine her $5,000 if she failed to turn in a long-overdue 2019-2020 financial report was not, in fact, a mistake, as Paz Dominguez suggested at the March 1 meeting of the Board of Supervisors.

Rather, the letter came at the express request of Controller Betty Yee, her press secretary Jennifer Hanson informed the Journal and other media outlets.

Despite several requests from the state and missed deadlines for the document, which is statutorily required to be filed with the state annually, Paz Dominguez said she had been under the impression state demands for the document to be turned in were on hold pending an ongoing investigation by the SCO into the county’s financial reporting that began in December.

“What I shared on Tuesday was what we understood at the time after speaking with the SCO team who is performing our review,” she said.

The final demand letter arrived Feb. 25 and pointed to repeated efforts by the state to get Paz Dominguez to file the county’s 2019-2020 financial report — the first being a notice sent Feb. 26, 2021, after the county missed the initial Jan. 31 deadline — setting a hard March 16 deadline for the document and threatening to pursue legal actions, including a $5,000 fine, against Paz Dominguez if it isn’t met.

On Tuesday, Paz Dominguez read a lengthy statement to the board in response to the state’s final demand letter in which she shared numerous “findings” from her review of the county’s finances and detailed a host of perceived irregularities, including an allegation that the County Administrative Office had “forged” a document sent to the state. The board asked Paz Dominguez to return March 15 with documentation and evidence of her claims.

What was seemingly missing from Paz Dominguez’s comments on March 1, however, was an explanation as to why the 2019-2020 report remains overdue despite the state’s request that it be filed with unaudited figures that could be amended as needed if discrepancies were found. Failure to file the report has already resulted in the state freezing allocations of workforce development and transportation funds, while other county departments and outside agencies have warned of further cascading impacts.

The county has contracted with outside firm CliftonLarsonAllen to help complete the report, which the firm has pledged to do by March 31. Asked whether the report could now be completed by the state’s hard March 16 deadline, Paz Dominguez wrote in an email to the Journal yesterday she would be meeting today with her office’s team “to discuss a realignment of our tasks to free up an accountant to complete the report with the information we have available to us.” The County Administrative Office had also offered to send an extra help employee to aide the effort, Paz Dominguez wrote.

“The A-C Office is resilient and we will address this urgency,” she wrote.

This morning, County Administrative Officer Elishia Hayes said in an email to the Journal that while she had offered an extra help employee to the Auditor-Controller’s Office that employee “does not feel well suited to do this work.” Instead, she said, the county has now offered a vendor who could help and to engage CliftonLarsonAllen about completing under the new deadline.

Responding to a follow up email, Hayes said it’s unclear whether Paz Dominguez will take either of those options.

“The auditor would need to provide that direction,” Hayes wrote. “I have asked her to confirm if she would like me to proceed with procuring a consultant for that engagement.”