Roache Puts Limits on Special Fund : Law Enforcement: The sheriff’s use of the money for office furniture and travel had come under scrutiny.

Sheriff Jim Roache has placed new constraints on a pool of money reserved primarily for undercover operations that came under scrutiny after it was learned that Roache had misused $12,800 in the fund for office furniture, other equipment and travel expenses.

The new guidelines were issued Dec. 3, the day before Roache publicly conceded he had misappropriated money out of a special fund normally used for informants and to make undercover drug buys. Among other expenses, Undersheriff Jay LaSuer authorized $3,000 for a set of oak wall cabinets for himself and Roache.

Under the new guidelines, obtained Thursday, an investigative case number is to be assigned in every instance the special fund is used. The money is to be used “only for emergency purchases” or when purchases “must be kept confidential due to the nature of an investigation.”

The original policy on special funds allows the purchase of “investigative equipment” to be used “to a very limited degree” if it is used “in the preservation of peace or the suppression of crime.”

The new restrictions state that any time a fixed asset, such as furniture, is purchased through the special fund, the auditor and controller must be notified by memo within 30 days so that the transaction is properly inventoried by the county.

If the item is bought for a “highly sensitive and confidential investigation,” the sheriff may waive the notification to the auditor-controller until after the investigation is completed.

Acting Auditor-Controller William J. Kelly, who has ordered a full-scale review of the special fund and other money collected in drug raids, said he was encouraged by the new restrictions, but added, “That should have been happening in the first place.”

Roache has insisted the improper spending was discovered during a routine audit.

But The Times made a public-records request to see the documentation 10 days before Roache made his announcement. On the day the documents were legally due the newspaper, Roache released a statement saying he had already conducted an internal inquiry and had already made corrections to his policy on special funds. Sheriff’s spokesman Dan Greenblat said the timing was coincidence.

Interviewed this week, Roache said George Lejeck, director of support services who oversees the special fund, had noticed the misspending and advised that it be corrected. Greenblat said the internal audit was routine and began in October, reviewing expenditures back to January, 1991, when Roache became sheriff.

However, problems over misspending--which date back a year when Undersheriff LaSuer bought himself a $572 graphite chair out of special funds and continued until September--were never relayed to the sheriff until now, Greenblat said.

According to the department’s own policy, Lejeck must make an annual review of expenditures in August or September and relay any problems to an assistant sheriff by Oct. 15. An assistant sheriff was supposed to mention the misspending to LaSuer by Oct. 15. And LaSuer was to make a report to Roache by Oct. 31 of this year.

Roache said Lejeck alone warned him about the expenditures in November.

In a note last July, however, Lejeck approved a $147 expenditure LaSuer authorized to repair, clean, strip, restain and “Scotch-guard” his chair. That expenditure was one of several that Roache admitted was improper and should have been paid out of a different account.

According to a note accompanying the bill, Lejeck asked Harold Donahoo, the finance manager, to approve “a special fund check for this please” with a notation that the expense was “For U/S (undersheriff’s) chair.”

Donahoo declined to comment on the note this week or about the controversy surrounding the sheriff’s special fund, saying he was under instruction to forward all calls to Greenblat. Lejeck has not returned several calls from The Times.

Kelly said his audit was prompted by The Times’ reports on the special fund and a $650,000 purchase of helicopters that included an expensive desk, credenza set and other furniture.

Charles E. Otterman, who owned U.S. Oceanography of Alpine, liquidated his company and sold three UH-1E “Huey” helicopters--two assembled and one disassembled--as well as dozens of other pieces of helicopter equipment. The deal included a cherrywood desk, credenza, conference table and chairs, sofa and projection television system.

The acting auditor-controller also questioned an $1,800 donation of synthetic marble from a Santee marble shop.

In an October letter, Kelly warned Roache that he could not accept gifts without county supervisors accepting them first. Roache assured Kelly that the helicopters and furniture were included in the $650,000 purchase price approved by the Board of Supervisors. The marble donation also was accepted by supervisors, Roache said.

Kelly did not conduct his audit until this week--six weeks after he first raised concerns--when new reports surfaced in The Times on Saturday.

He said the audit will include a review of $3.76 million in drug funds and special funds. Kelly said he will pay particular attention to whether expenses for furniture at the sheriff’s headquarters were specifically authorized by county supervisors.