Sanitation district board hires former IRS investigator for audit
May 7, 2015
By KAREN VELIE
The South San Luis Obispo County Sanitation District Board voted 3-0 on Wednesday to hire Knudson and Associates to pursue a financial and past managerial review of the last 12 years.
After several years of voting against an audit, in January, the district board agreed to allot $40,000 for an audit of the district’s finances. On Wednesday, the board elected to pay $55,500 for a two phase investigation.
In the first phase of the investigation, Knudson and Associates will analyze financial statements, QuickBook accounting records and district files in an attempt to isolate anomalies. In phase two, the investigators will interview former staffers and district board members before producing a final report.
In January, sanitation district staff spoke of the importance of an audit in order to put into place policies to prevent future financial discreations. Staff said that under Wallace’s administration, chemical costs ran about $600,000 a year and under the current management, chemical costs have fallen to $240,000 a year.
Under Wallace’s administration, former staffers at the plant said the company Wallace purchased chlorine from also provided top management perks such as inclusion in a yearly boar hunting trip.
In 2013, amid allegations of mismanagement, Wallace stepped down. Within months, the plant was operating cleaner at less than 50 percent the cost, according to financial reports obtained from the district.
After voting for an audit, the district board selected nine people as members of a proposal review committee which reviewed candidates. In the end, the committee recommended the hiring of Knudson and Associates. Carl Knudson was a special agent to the IRS who conducted investigations into city government maleficence.
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