AgdaPkt 2013-09-23 Closed and Regular

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7. 1. E. - Page 4 September 23, 2013 Honorable Richard C. Livermore Judge of the Superior Court c/o Charlene Kresevich Hall of Justice 400 County Center; 2nd Floor Redwood City, CA 94063-1655 Dear Judge Livermore: On behalf of the City Council of the City of Redwood City, thank you for the opportunity to respond to the San Mateo County Civil Grand Jury Report, dated July 18, 2013, titled "San Mateo County Special Districts: Who is Really in Charge of the Taxpayer's Money? The Mosquito District Embezzlement: Is it the Tip of the Iceberg?" The City has reviewed the report and is supportive of improvements in the Mosquito and Vector Control Abatement District's (District) oversight and management practices in order to better safeguard the public's resources and trust in the District and the effectiveness of this important service to our community. The following responses to the Grand Jury's Findings and Recommendations were considered and approved by the City Council at its meeting of September 23, 2013. The City Council has authorized me to present the City's responses to the Court as set forth below. The Grand Jury report contained the following 14 findings: F1. The Board and the Manager share in responsibility for the lack of oversight that was instrumental in allowing the embezzlement to occur. F2. The Manager and the Board's finance committee did not recognize red flags in the financial reports that could have revealed the embezzlement far sooner. F3. The insurance company's denial of the District's embezzlement loss claim reinforces the conclusion that there were inadequate management practices, insufficient accountability, and inadequate oversight of the District. F4. The District's Manager did not follow policies and procedures in the hiring of one of the employees subsequently charged with embezzlement. F5. The District did not have adequate internal financial controls in place to prevent the embezzlement or lead to its early discovery. F6. Trustees and senior District staff should receive monthly financial reports. F7. The Board in general and its finance committee in particular did an inadequate job of overseeing the District's operations. F8. The Board's evaluation of the Manager revealed significant differences in the levels of confidence in the Manager's ability to manage the District. F9. The District would benefit from a redesigned Manager evaluation process. F10. Trustees are confused about their responsibilities, some feeling their only role is to make district policy, while others feel they have more oversight responsibility. F11. Even though LAFCo Commissioners rejected the recommendation to dissolve the District and transfer its functions to the CEHD, this issue needs further evaluation. F12. Cost savings could possibly be achieved with a transfer of the District's functions to the CEHD.