Auditor Lewis May Get Deal to Keep His Job : County: Compromise would strip most powers from official--who refuses to quit--but let him keep full salary. Supervisors will consider it.

Besieged Auditor-Controller Steve E. Lewis, who has been under pressure to resign because of his role in the county’s bankruptcy, would keep his job but relinquish most of his internal auditing responsibilities under a proposed agreement reached Friday.

The deal, which was brokered by Orange County Supervisor Jim Silva, reduces Lewis’ duties to mostly bookkeeping and check-writing functions, but allows him to still receive his annual salary of $104,582.

Under the plan, which is scheduled to be discussed and considered at Tuesday night’s Board of Supervisors meeting, an internal auditing unit--independent of Lewis’ office--would handle Lewis’ auditing responsibilities. Lewis, however, would still be part of an oversight committee that would review the work of the new auditors.

Lewis, 52, who has worked for the county since his graduation from college in 1965, has drawn the ire of at least two supervisors and County Chief Executive Officer William J. Popejoy, who has been on a crusade to pressure Lewis out of office.

Popejoy and Supervisors Roger R. Stanton and Gaddi H. Vasquez criticized Lewis’ competence for failing to detect and sound the alarm over then-Treasurer-Tax Collector Robert L. Citron’s risky investment practices, which eventually caused the worst municipal bankruptcy in U.S. history.

Although Lewis did note problems with the treasurer’s office in two previous audits, the supervisors and Popejoy blasted him for his failure to bring the problems to light, and for approving improper transfers within the now-failed investment pool.

Popejoy went so far as to threaten to boycott Lewis’ office for future county audits, cut his budget and lay off his staff if he did not resign.

Lewis, an elected official who can’t be forced to resign, had vowed to fight attempts to oust him. On Friday, he said Silva’s proposal was a “workable” plan.

“It addresses the board’s and Mr. Popejoy’s concerns, and allows me to fulfill my mandated responsibilities,” Lewis said in a prepared statement. “While I believe the current internal audit program is excellent, I am a realist and believe that, due to the present situation, this change is best for the county.”

Popejoy said if Silva’s plan is approved by the Board of Supervisors, he will stop calling for Lewis’ resignation.

“The proposal makes sense for the county and will put the problem behind us,” Popejoy said.

Silva said he negotiated the compromise because he “felt there was a leadership void” and the standoff between Lewis and Popejoy was not being resolved. He said conflict was “creating a logjam in the county.”

Silva said his proposal was intended to “restore integrity” to the county’s auditing process and “assure residents that county money is being watched closely.”

Supervisor William G. Steiner said he was pleased that the situation appeared to be resolved.

“The auditor’s staff is not going to have to pay the bitter price of losing their jobs because of the test of wills between the CEO and the auditor’s office,” he said. “Supervisor Silva found a compromise that maintains the audit integrity of the county while protecting the auditing staff. I think it takes Steve Lewis out of a no-win situation.”

Silva’s compromise allowing Lewis to keep his position was not received well by some county residents who are still critical of the auditor’s job performance.

Carole Walters, a member of the citizen watchdog group Committees of Correspondence, said she was troubled that Lewis would keep his job and salary while giving up his major responsibilities.

“We are paying someone to sit around,” Walters complained. “That doesn’t seem right that he still gets full pay if he’s not doing the job. He should just quit.”

Walters and other members of the group have called for Lewis’ ouster.

“He doesn’t have any credibility,” Walters said. “He needs to get out of office.”

Popejoy acknowledged that Lewis’ being paid his full salary may be troublesome to some, but he said “it’s awfully hard to move him aside.” Furthermore, he said, the alternative was a continuation of the standoff, which did nobody any good.

“We were facing the possibility of laying off many of his employees. That certainly wasn’t an approach that we wished to pursue,” Popejoy said. “And even if we did that, he could have stayed in office anyway.”

As proposed by Silva, the new internal audit unit would consist of 12 auditors, be managed by a director of internal audits and report directly to the Board of Supervisors. The same number of positions that go to the new unit would be eliminated from Lewis’ office. Funding for the new unit would be covered by transfers from the auditor’s budget.

The new auditors would assume Lewis’ legal responsibility to conduct annual audits of the Orange County Employees Retirement System, biennial audits of Superior and Municipal courts and annual or biennial audits of the Probation Department.

Times correspondent Shelby Grad contributed to this report.