O.C. Supervisors order external audit of county contracts following bribery case

The Orange County Board of Supervisors voted to green-light an external audit of select county contracts following former Supervisor Andrew Do’s conviction on bribery charges in October.

Supervisors resumed discussion on the size and scope of a potential independent investigation during Tuesday’s meeting after an initial debate at the Nov. 19 board meeting mulled over the latest transparency effort.

“These are efforts made to make sure that we not only take an internal view of what we’re doing but also an external view,” Supervisor Vicente Sarmiento said. “You can’t legislate good conduct, but you can certainly create checks and balances and better guardrails.”

In his guilty plea, Do admitted to steering more than $10 million in federal pandemic relief funds through contracts with a nonprofit connected to his daughter, Rhiannon, for personal gain. He admitted to receiving more than $550,000 in bribes diverted from assistance meant to provide meals for elderly and needy residents during the pandemic.

A federal prosecutor dubbed Do a “Robin Hood in reverse.”

In response, Sarmiento, who has championed the need for an external audit, came back before his colleagues with a retooled proposal to have external auditors scrutinize county contracts inked between January 2019 and August 2024.

The audit originally sought to cover all county contracts within the prescribed time period but was changed to focus on the County Executive Office, Health Care Agency, O.C. Community Resources and Social Services Agency contracts, particularly those funded by federal pandemic relief funds, the county’s general fund and the state’s Mental Health Services Act.

Board Chairman Donald Wagner, who voted against the audit, questioned the timeline.

“What’s the relevance to the January 2019 start date?” he asked. “Supervisor Do, in his plea agreement, gives a 2020 date. I’m just curious where this one comes from?”

Michelle Aguirre, the county’s interim chief executive, noted that the starting point was her idea to net COVID-related contracts while giving external auditors the ability to scrutinize agreements made a year before the pandemic.

Sarmiento also backed the broad timeline.

“There are some contracts that are not COVID-related that came out of Supervisor Do’s office that could be suspect and worth looking into,” he said. “We tried to narrow it to those COVID dollars and to make sure that we captured those that may have been ramping up in advance.”

Supervisor Katrina Foley asked how many potential contracts could fall under a forensic audit, given the direction. Aggie Alonso, the county’s internal audit director, estimated that it could number in the hundreds, if not thousands.

His department’s first step would be taking an inventory of relevant contracts for a future forensic audit.

Alonso advocated for any outside investigation to take a phased approach where contracts thought to run the highest risk for potential irregularities or fraud would be assessed first before being audited, instead of casting a wide net from the onset.

Sarmiento disagreed with Alonso’s suggestion and claimed that if supervisors did not act, legislators in Sacramento could step in with a state audit of county contracts.

After the board meeting, Assemblyman Avelino Valencia signaled support for such an effort, citing a need to “go further” than the external audit ordered by supervisors.

“Transparency and accountability are the bedrock of good governance,” Valencia told TimesOC. “I am committed to restoring the public’s trust in their government and will consider requesting a comprehensive state audit of all contracts handled by the Orange County Board of Supervisors.”

When serving on Anaheim City Council in 2022, Valencia supported an independent investigation that scrutinized city contracts going back 10 years in the wake of former Mayor Harry Sidhu’s indictment and conviction on political corruption chargers.

Anaheim paid $1.5 million for the outside probe.

The cost of the county’s external audit is still to be determined. With forensic audits known to be expensive, estimates ranged between $1 million and $2 million at the meeting, but firms would provide their own forecasts when submitting bids.

Supervisors also don’t have a firm timetable in place for when an independent report would be publicly brought back before the board, but they agreed the effort needs to proceed in a timely manner.

“I would hope that it could be a reasonable period of time because otherwise it’s not going to do us any good,” Foley said.

“I don’t think it should be out there indefinitely,” Sarmiento added.

On Tuesday, supervisors also approved an updated ethics policy that leverages censure or referral for criminal prosecution against any county staff or elected officials found in violation.

Contractors could also face contract terminations.

“What we’re trying to do is put in one simple place, a strong statement of where we stand and what our duties are and what our consequences may be if we don’t follow that,” said Supervisor Doug Chaffee, who spearheaded the effort.

In September, supervisors also directed Alonso’s department to carry out a risk assessment of American Rescue Plan Act funded contracts.

Recommendations based on a sample of more than 2,000 contracts is due before the board later this month.