Audit catches $36,000 in overpayments to fired Oceano manager

July 29, 2013

By KAREN VELIE

Tom Geaslen, recently terminated for cause as Oceano Community Services District general manager, paid himself more than $162,000 a year even though he was only contracted to make $126,000 a year, an audit of the district’s finances discovered. The audit also detailed significant increases in spending at the district under Geaslen’s leadership.

Shortly after the overpayments were discovered during the audit, board officials reported the payments to law enforcement, sources close to the investigation said.

Geaslen’s contract places his base salary at $126,000 a year. He should have written himself checks for $10,500 a month but instead paid himself a salary of approximately $13,500 a month. The extra payments were not discovered because Geaslen stopped placing payroll disbursements details in the board packages, the audit noted.

The district had made such disbursements public for years, but Gealsen stopped the practice, which helped to hide the overpayments.

Geaslen did not request or receive board approval to increase his salary above his contracted rate. Because Geaslen’s budget for the district “was not presented in sufficient detail,” the board did not know when “resources have been overspent in certain areas, thus not being available as needed in other areas,” the audit says.

The district is a multipurpose special district with a focus on water, sewer, garbage and lighting. The San Luis Obispo County Board of Supervisors makes planning and development decisions for the district.

Under Geaslen’s management, spending increased because of higher consultant costs, salary overpayments, the creation of two new positions bringing the staff from seven to nine employees, and additional spending on items such as shirts for staff and office painting.

In the fiscal year ending June 2012, the district had $1,360,558 in operating expenses, an almost $100,000 increase in spending from 2011.

During his almost two-year tenure, Geaslen, repeatedly told the board that the district was in great financial shape and that the district’s previous manager Raffaele Montemurro’s claims of impending financial shortfalls were inaccurate. However, under Montemurro’s leadership the district had almost $100,000 a year in excess revenue. Even with an increase in water and sewer rates in 2012, under Geaslen’s management the district had only $8,600 in excess revenue in the fiscal year ending June 2012.

The yearly audit completed by Caliber Audit& Attest, LLP notes that the inaccurate reports of financial health were attributable to Geaslen’s “understatements of liabilities and overstatements of assets.”

On April 16, the district board voted to fire Geaslen for cause.

As part of a settlement agreement, Geaslen paid the district back $36,962 shortly after he was fired. The board and Geaslen also agreed to not discuss the nature of the dispute or make disparaging comments about the other party. Board officials have not returned requests for comment.

Geaslen first started working for the district in June 2011, a month after his predecessor Montemurro was terminated without cause and provided a severance package.

In his application for employment, Geaslen said he was the head of Titan Lending and also a tax preparer with an IRS enrolled agent status. That credential indicates special skills in tax matters. He boasted that because of his financial background, he could help the district reach financial health and finish three out-of-date audits.