County Audit Shows $1 Million Missing From Defunct Agency

Los Angeles County auditors are searching for nearly $1 million that appears to be missing from the tangled records of a San Gabriel Valley employment agency that closed recently because of alleged mismanagement.

County officials have hired an independent accounting firm to review the records of the Mid San Gabriel Valley Consortium and determine what happened to the money. A final report is not expected before February, officials said.

“The county will perform a 100% fiscal and program review,” said Adine Forman, a county spokeswoman.

In response to this and other alleged accounting irregularities, the county in November terminated its contracts with the El Monte-based consortium, stripping away its more than $4-million annual budget. The move, which forced the consortium’s board to fire the 42-member staff and end its job-training services, became effective Nov. 30. Employment assistance is being handled by Career Partners, an agency tapped by the county to take over the consortium’s contracts and headquarters.

The consortium was founded 26 years ago to help people prepare for jobs and find work. Last year, more than 17,000 residents of Baldwin Park, El Monte and South El Monte walked through its doors looking for help, according to county documents. The agency’s six-member board is made up of city council members from the three cities, who are, in turn, responsible for appointing an executive director.

The county unearthed several problems during a routine annual audit of the consortium’s financial records last spring, Forman said.

Looking through the fiscal 2000-01 books, investigators discovered that the county had been overbilled by $979,018. Consortium managers padded their ledgers from month to month as a safety net, the organization’s officials explained at the time. Consortium administrators returned the money in August.

The county then examined the fiscal 2001-02 records to see if the same overbilling practice had been repeated, Forman said. That’s when investigators were unable to locate the nearly $1 million, a development that led to the pending independent audit, she said.

Investigators also found that the consortium had not been paying its bills, Forman said. The consortium had an outstanding balance totaling $443,831 owed to more than 75 vendors, according to county documents.

Investigators found that alleged problems were not restricted to the handling of money, the county documents show. In a Nov. 14 letter critical of the consortium, the county’s head of Community and Senior Services, Josie Marquez, wrote that “services claimed were not provided. Clients were served at unapproved sites. Clients were dissatisfied with services provided or with lack of services provided.”

The consortium has had four executive directors during the last year. None could be reached for comment. Officials from the cities once served by the consortium are waiting for the audit results, hoping to find out what went wrong.

“As far as the million dollars, I can’t see someone putting it in their pocket and walking out,” said Manuel Lozano, Baldwin Park’s mayor and a former president of the consortium board.

El Monte Mayor Rachel Montes said she is glad that local residents who had turned to the consortium for help will continue to have a place to go for job training despite the problems. “I’m disappointed, like everybody else,” said Montes, a consortium board member. “My first priority is serving our communities with job resources.”