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The Grand Jury learned that Trustees requested financial information from the Manager during <br />the embezzlement period but the request was not honored. The Trustees did not heed warnings <br />from senior District employees about financial irregularities. The Trustees put total trust in the <br />Manager to fulfill the mission of the District and seemed oblivious to the business operations and <br />its problems." Statements by Trustees in earlier reviews of the Manager showed confusion <br />among the Trustees regarding the Manager's general performance capabilities. One Trustee told <br />the Grand Jury that the evaluation process was inadequate and should be reviewed by a qualified <br />human resources consultant. <br />LAFCo <br />Local agency formation commissions were established by the State of California in 1963 to <br />oversee the formation, expansion, dissolution, and reorganization of all special districts. LAFCo <br />is an independent seven -member commission with jurisdiction over the boundaries of the <br />County's 20 cities, 22 independent special districts, and many of the 35 County -governed special <br />districts. LAFCo is composed of two members of the County Board of Supervisors, two <br />members of city councils, two board members of independent special districts, a public member, <br />and four alternate members (County, city, special district, and public). <br />Local agency formation commissions oversee districts but have limited powers. The Cortese - <br />Knox -Hertzberg Act of 2000 requires that they conduct Service Reviews every five <br />years. 12 LAFCo's executive officer, with the help of a part-time administrative assistant, conducts <br />the Service Reviews. LAFCo's current staffing level makes it difficult to conduct Service <br />Reviews in a timely manner as required by law. The 2002-2003 Grand Jury recommended that <br />the Board of Supervisors provide additional resources to LAFCo, but the recommendation has <br />not been implemented. <br />Service Reviews provide the public with information about the special district including <br />"[a]ccountability for community service needs, including governmental structure and operational <br />efficiencies. "'3 They can also recommend whether a special district should be merged with <br />another district or dissolved and services transferred to another agency. If LAFCo recommends <br />that a district be dissolved or merged with another district, generally speaking, the approval of <br />75% of the voters in the special district is required. LAFCo's authority is thus limited. <br />Recommendations made by LAFCo are usually the result of a Service Review. <br />Subsequent to the Service Review of the District, the LAFCo executive officer recommended <br />that the District be dissolved and incorporated into the CEHD, which might result in a cost <br />savings, from the sharing financial services, laboratories, and other facilities. It should also be <br />noted that LAFCo's executive officer recommended dissolution of both special districts where <br />embezzlements occurred, but the LAFCo Commissioners did not approve these <br />recommendations. <br />n <br />Grand Jury interview and evaluation document. <br />12 <br />LAFCo website. <br />is <br />Government Code Section 56430. <br />9 � abed - .3. � V <br />