SignOn San Diego – The San Diego Union Tribune
February 19, 2010
County second-guessed auditor’s qualifications – Inquiries followed criticism of tax office
By Craig Gustafson
The credentials of an outside auditor from New York who discovered problems in San Diego County’s tax office were checked by county officials – but only after he submitted his report finding a failure to return $8 million to taxpayers.
The auditing firm had been vetted before it was hired. But auditor Michael Kessler objected to after-the-fact personal inquiries about his credentials, according to e-mails obtained by The San Diego Union-Tribune under the state Public Records Act.
“If you would like to verify any of my credentials, please feel free to ask me directly and I will be happy to provide a copy of my certificates to you,” Kessler wrote.
He implied that as county officials made their checks, they pretended they hadn’t yet retained him.
“There is no need to send out e-mails indicating that you are contemplating hiring me for a project,” he wrote.
Kessler’s audit, completed in March, found that Treasurer-Tax Collector Dan McAllister’s office failed to return taxpayer overpayments and persistently failed to address major deficiencies in its operating practices.
County officials have distanced themselves from the $73,000 audit, which was requested by and performed for McAllister, an independent elected official.
But it was officials who report to Walt Ekard, the county’s chief administrative officer, who checked Kessler’s credentials after the audit was delivered.
One thing that concerned county officials was Kessler’s use of emotive words such as “failed.”
James Pelletier, who became the county’s chief of audits in November, said the prior chief, Ken Mory, who no longer works for the county, didn’t like how Kessler’s final report was written.
“The prior chief had some concerns with the style and language and decided just to do a little extra due diligence” by checking Kessler’s certificates, Pelletier said.
Asked whether it was an attempt to discredit Kessler, Pelletier said, “I can see where folks might think that, but I don’t think anything that we’ve done has ever gone against any of the findings that they had. … We validated them.”
The audit was not released by the county until this month and then only in response to a public-records request from the Union-Tribune. It found that office records were altered and deleted without explanation, computer systems were not properly secured, and transactions were wrongly recorded or not logged.
Three members of the county Board of Supervisors have said they were troubled and disappointed that the audit was not released for nearly a year.
Bruce Wilbat, who works in the county’s Office of Audits and Advisory Services, made the inquiries about the authenticity of Kessler’s professional certificates as a fraud examiner and an internal controls auditor.
Kessler’s firm, Kessler International, had been checked out as part of the hiring process a year earlier. The inquiries after the audit were aimed at Kessler personally.
He objected to the questions from county officials on March 18, and Wilbat responded a few hours later via e-mail, saying he was aware that Kessler’s firm was qualified but that it was unclear whether Kessler’s personal credentials had been confirmed.
“You may be glad to know that both (organizations) confirmed your credentials,” Wilbat wrote.
Wilbat was on vacation yesterday and couldn’t be reached for comment.
Other e-mails from February and March of last year show that Kessler, founder and principal of the New York forensic auditing firm, grew increasingly frustrated with county officials as he finalized his report.
Kessler complained in a Feb. 25 dispatch that the audit had been dragging on for months because of the county’s record-keeping problems.
“I have never once asked you to increase the budget because of these delays and the lack of documents which should have been readily available to us during the engagement,” he wrote. “We went beyond the call of duty for you spending much more time on this project then (sic) budgeted to get accurate information so that the taxpayers of San Diego County know accurately what occurred to their property overpayments.”
Kessler did not respond to an interview request yesterday.
McAllister, who is running unopposed for re-election in June, said he wasn’t aware that other county officials checked Kessler’s background after the audit was finished. He also said Kessler’s complaints about delays had more to do with the county’s information technology firm than his office.
“We had nothing to do with that,” McAllister said.
“But yet it suggests that there was something untoward or that we were trying to effectively squelch information, but that’s not true.”
Craig Gustafson: (619) 293-1399; email@example.com