Ag. district suspends buy-back program until new audit made public

By Joe Tash


A program under which Del Mar Fairgrounds employees could cash in paid leave, which has drawn criticism from state auditors, has been suspended until a new audit of the state-owned facility’s operations is made public.

Adam Day, president of the nine-member volunteer board that oversees the fairgrounds, said he has instructed fairgrounds staff to temporarily suspend the buy-back program for paid leave until an audit covering 2009 through 2010 is released by the California Department of Food and Agriculture, possibly in time for the fair board’s scheduled meeting on Nov. 8. Day said he also wants a review of the rules related to such leave buy-backs.

“Obviously, all applicable rules and regulations need to be adhered to. And if they haven’t (been), we need to understand why and we need to address them publicly,” said Day.

Attention was focused on the upcoming audit, and a previous audit released to the public in January 2010, at the fair board’s meeting on Tuesday, Oct. 11. Newly appointed board member Tom Chino requested that both the current and past audits be placed on the fair board’s November agenda for discussion.

Chino, who declined to comment before the next board meeting, submitted a statement to the board noting that he had reviewed an audit report for 2007, and also a draft report for a 2008-09 audit. (Day said the new audit will cover 2009-10.)

“The contents of these reports causes me great concern over allegations that the district has not complied with governing laws and regulations in several important areas and that large amounts of money are at issue,” said Chino’s statement.

A spokesman with the California Department of Food and Agriculture wrote in an email to this newspaper that, “The current audit is in draft form and will be available when final.”

The 2007 audit report, which was posted on a state public records website in January 2010, listed four areas of “reportable conditions that are considered weaknesses in the fair’s operations.”

“Over a three-year period, the Fair improperly allowed its employees to cash out more than $244,000 of compensated leave hours, such as vacation and annual leave,” said the report. The 22nd District Agricultural Association, the public agency that runs the fairgrounds for the state, allowed managers, supervisors and certain other classes of employees to cash out a maximum of 80 hours of leave each year, even though state policy only allowed a maximum of 40 hours under a one-time program.

Further, the report said the fairgrounds hadn’t followed its own policy, allowing employees to cash out more than 80 hours annually. During one calendar year, the audit report said, one employee cashed out 508 hours and one employee cashed out 344 hours.

In a response signed by fairgrounds general manager Tim Fennell and then-board president Kelly Burt, the officials defended the practice.

“Because the District has sufficient cash to fund this liability, management believes that it is prudent to pay out leave on a case by case basis. This helps employees who face financial hardships, and decreases the financial liability of the District,” the response said.

“We strongly believe this is in the best interest of the employer and the employee who faces financial hardships including the loss of the job of their spouse, threat of loss of their home, or health issues to name just a few examples,” said the response.

The other three “reportable conditions” listed in the state audit report were: Board member benefits during fairtime, courtesy pass limitation, and temporary employees.

The report noted that the fair provided board members with some $12,460 in concert tickets, and $42,641 in catered dinners to board members and their guests during the fair, without proper documentation for the dinners.

In their response, fair officials cited a new ticket policy designed to meet Fair Political Practices Commission regulations, and wrote that the buffet dinners were provided not only for board members, but for fair sponsors, local, county and state representatives, promoters, livestock judges, visiting fair managers, Western Fairs Association members, and even underprivileged families.

Day said any audit will uncover issues that may need further review, but that he does not believe there are significant problems in the way the fairgrounds is run. Each year, he said, the fairgrounds has two audits — one a financial audit by an outside accounting firm, and an operational audit by state agriculture officials.

“The overall financial health of the district and the management practices of the district are very solid,” Day said.

Chino is one of five new board members appointed by Gov. Jerry Brown in August. The five new board members replace five others appointed by previous governors who were dismissed by Brown over the summer. According to the fairgrounds, another pre-Brown appointee, director Michael Alpert, resigned Oct. 11, leaving the board one member short of its full complement.