Oxnard’s Financial Consultants Lied to Public

By Phillip Molina

We were told during the city’s financial consultants’ presentation that a transfer of approximately $15 million should have been posted before June 30, 2014, but that it wasn’t posted until later after the year end audit was completed. This was done supposedly to postpone the bad financial news until after staff could retire with their golden handshakes.

Assuming what we were told was correct, the question is when were we lied to? You see, the consultants claimed that the prior audit numbers are incorrect and therefore cannot be trusted(*). The reason we need to find out the truth, is because if the consultants are correct, last year period ending June 30, 2014 the “unrestricted” fund balance in the general fund according to the consultants was a negative <$4,000,000> instead of the positive $8,226,160. And that change also means the city was technically bankrupt since it didn’t have enough available unrestricted general fund money to cover ongoing needs. Recall the numbers shown in the chart below, which come from the June 2014 audit.(**)

Statement of Net Position General government Fund balances :
pg 21 fixed assets $ 1,400,890,107.00
pg 21 debt $ 3,707,764.00
pg 21 housing $ 2,154,736.00
pg 21 safety retirement $ 3,023,577.00
pg 21 develop $ 15,797,398.00
pg 21 other ? $ 21,117,920.00
pg 21 unrestricted $ 8,226,160.00

$ 1,454,917,662.00

If, on the other hand, the consultant’s $15 million transfer was not required to be posted before June 2014 then it is not the previous staff who caused this bad turn of events, but rather it is the current staff and executive consultants who are responsible.

The public needs to have a detailed review of that transaction, and I intend to ask last year’s auditors to look at the city’s tape of last night’s consultant presentation to determine who is responsible for the claimed number errors in the audit they reviewed.
(*)The numbers are generated, prepared and posted by city staff, and the auditors review the numbers they are given to determine whether in their opinion the numbers are substantiated by facts. (If the staff does not provide the auditors with completed transactions the staff is responsible for the errors, and indeed staff is obligated to notify the auditors of errors in the numbers.)
(**) Last night the consultants did not provide enough evidence to establish the exact amount of the transfer they claim should have been posted but they stated the amount of the transfer was $15 million that should have been completed. They also stated the resulting balance should have been a negative <$4,000,000.> but didn’t explain how to get to that number.

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Phil Molina is an Oxnard resident, former Oxnard Finance Director and “whistleblower,” who exposed alleged corruption, and was fired. He sued and won a large award, after many years of litigation.