American River Flood Control District

REASON FOR INVESTIGATION

The Grand Jury received complaints that alleged that property and personnel of the American River Flood Control District had and were being used for personal gain and, after these acts were reported, management and the Board of Trustees failed to take appropriate action. The complaints alleged that:

1. District equipment and supplies were used by a District employee for his personal business.
2. District equipment and personnel were used during regular business hours to cut-up and deliver firewood for sale to non-District individuals.
3. District equipment in working order was given away.
4. District employee kept, for personal use, gift certificates given by a supplier for purchases made by the District.
5. District employee sold has vacation time to other employees and falsified attendance records.
6. Money from the sale of District scrap metal was not turned over to the District.
7. District employee charged District residents for work that ordinarily is done by the District at no charge.
8. Training records (related to hazardous materials) were falsified.

BACKGROUND

Created by act of the California legislature in 1927, the American River Flood Control District operates and maintains just over 36 miles of levees, from Discovery Park to Mayhew Canal on the American River and levees on Magpie and Arcade Creeks.

The District is governed by five elected trustees and funded by an assessment of land and improvements on property located within the District. The annual budget is approximately $2 million. Operation and maintenance of the District is handled by the general manager/engineer, the district superintendent, the crew foreman, a six-person crew (a sixth person was recently added), and one part-time administrative assistant.

District personnel are responsible for all levee maintenance. They also build and maintain stairs, gates and other barriers on District property.

PROCEDURES FOLLOWED

The Grand Jury interviewed employees of the District, District management, and outside interested parties. The Grand Jury received advice and assistance from the Office of the District Attorney. The Grand Jury also reviewed pertinent District records and other documents.

FINDINGS

1. District employees complained to management alleging improper employee conduct.
2. An internal investigation by District Management undertaken in response to the allegations, concluded March 1996 that some of the allegations were true.
3. District management reported to the Board that no disciplinary action would be taken, that the problems had been resolved, and that an employee handbook would be developed and presented for board approval in April 1996.
4. The District had not developed or approved an employee handbook as of April 1997.
5. Draft sections of the employee handbook given to the Grand Jury do address some of the concerns raised in the original complaint.
6. No inventory controls are in place for monitoring use of District equipment, supplies or materials.
7. An independent, verifiable time reporting system does not exist in the District.
8. Employees charged the District overtime (time and a half) for metal gates fabricated under agreement with the Sacramento Area Flood Control Agency (SAFCA) on a "piece-work" basis rather than actual hours worked.

CONCLUSIONS

1. The Board and Management provided only minimal oversight and supervision of the operation of the District.
2. Management failed to operate the District in a business-like manner which would include adequate safeguards for District property and supplies, written policies and procedures, as well as verifiable time reporting.
3. The practice of allowing all employees to be paid the same amount of overtime hours based on the "estimated" time it took to fabricate a metal gate pursuant to an agreement with SAFCA, rather than actual hours worked by each employee on the fabrication, is inappropriate.
4. Management and the Board failed to comply with rules and laws that apply to special districts, and failed to obtain assistance to avoid these problems and similar problems that might occur in the future.

RECOMMENDATIONS

The Grand Jury recommends the following:

1. Complete, adopt and distribute an employee manual
2. Develop and implement inventory control measures
3. Develop and implement a verifiable time keeping/management system
4. Board members and Management should attend at least a two-day seminar on the management of special districts, such as that provided by The Special District Board Management Institute.