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Monday, December 10 , 2018, 8:48 pm | Fair 53º


County Grand Jury Slams City of Lompoc for Not Adopting Audit Recommendations for Nonprofits

The Santa Barbara County Grand Jury issued a stern report on Monday, chiding the City of Lompoc for not adopting an audit policy for nonprofit organizations, as the jury recommended last year.

The lack of an adoptive policy means that citizens of the city were "poorly served" by the inaction and could be at more risk for financial harm, members of the jury stated.

The initial report issued by the jury in 2012 shed light on the city failing to properly monitor millions of dollars in loans given to the nonprofit Lompoc Housing and Community Development Corporation.

The loss to city taxpayers as a result of LHCDC’s financial failure was estimated in the report to be $1.8 million.

Adopting an audit policy would "would help protect its citizens from financial loss," the jury stated, and possibly prevent another loss of taxpayer money.

The report, called "A Failure of Oversight," was issued in 2012, and the Lompoc City Council agreed with the jury's recommendation to institute an audit policy.

Specifically, all nonprofits receiving loans and grants from the city exceeding $50,000 in any fiscal year would be required to file an annual audit prepared by an independent auditor.

But the grand jury maintains that the city has not adopted the changes in a timely manner, and outlined a back-and-forth timeline documenting the grand jury asking for updates and the city stating it needed more time to work on the changes in response.

"Despite the critical nature of the jury's report and the clear recommendations given to the city to correct the situation, now, more than 18 months later, no nonprofit audit policy is in place," the report stated.

One official from the city said the policy is on its way but has taken time to craft.

Lompoc Mayor John Linn told Noozhawk that the city sent a response to the grand jury on Monday.

"The grand jury keeps sending us letters, in a less than friendly tone," he said. "We keep telling them we're working on it. It's a time-consuming process."

Linn said the policy has been broadened to deal with any funding going to nonprofits, and a combination of community meetings for input and changes along the way have slowed down the process.

A vacant Community Development Block Grant coordinator position, which would have been in charge of the process, also been part of the problem, he said.

"There are a lot of things going on," he said, adding that only the Lompoc Valley Chamber of Commerce would be covered by the ordinance because the city does not have Redevelopment Agency money or community development block grants.

"We're just putting something in place for the future," he said. "There's an obligation that we have to do something, but it's in our time frame, not theirs."

In the meantime, the grand jury stated that Lompoc's citizens "deserve the protection of an effective audit policy applicable to any nonprofit organization receiving taxpayer fund."

In the jury's opinion, the Lompoc City Council has "engaged in a course of conduct detrimental to its citizens' best interests. Lompoc citizens are poorly served by this governmental inaction. Until the city adopts an effective nonprofit audit policy, taxpayers will continue to be at risk of further financial harm."

Noozhawk staff writer Lara Cooper can be reached at [email protected]. Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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