Tulare Public Cemetery District board of trustees continue to fight over personnel, accounting issues dating back more than three years ago
TULARE – The Tulare Public Cemetery District has a long history of digging up dirt, mostly on its own employees and board members.
This year was no different as the Tulare County Grand Jury released its 2019-2020 annual report. Much of the 48-page report was a collection of broad overviews of issues in the county but the jury’s primary investigatory focus was on the cemetery district. The Grand Jury reported receiving at least three citizen complaints about the cemetery’s board of trustees and alleged violations of the district’s own policies as well as state regulations.
The chief finding of the investigation was that antiquated bookkeeping practices had led to inaccurate and lost payroll documents and poor accounting of its endowment care fund. At its Nov. 20 meeting, the cemetery district board of trustees voted to “disagree partially” with Finding 1.
The board admitted to using a non-computerized system to calculate payroll prior to 2018-19 but said it “provided an accurate financial picture of the district.” The response pointed to the district’s June 30, 2017 audit which stated “the financial statements present fairly” and the district’s financial position was “in conformity with accounting principles generally accepted.”
“This is the highest rating that an auditor can give an organization,” the board stated in its response.
The response was narrowly passed on a 3-2 vote by the board with chair Stephen Presant, vice chair Xavier Avila and Secretery James Pennington passing the motion in an effort to bury the past. Trustees Alberto Aguilar and Vicki Gilson voted against the “disagree partially” and were pushing to “agree” with the finding to exhume the skeletons and address them once and for all.
The primary disagreement between the two factions of the board about the Grand Jury report dates back to the resignation of three district employees in September 2017. District manager Marilyn Correia tendered her resignation to the board on Sept. 15, 2017 with an effective date of Sept. 8, 2017. In the letter, Correia wrote she gave notice of her resignation to then board president Patricia Colson on Sept. 7 after reading a news article about issues at the cemetery. More specifically, she said Trustee Gilson “bullied” her at the cemetery office on two occasions on June 30, 2017. Correia wrote she was retiring because she didn’t trust trustees Gilson and Deal, saying they had violated privacy laws by sharing personnel issues with the public in relation to the article.
Correia’s husband, Stephen Cunningham, also submitted his letter of resignation on Sept. 15, 2017. Cunningham had worked as the grounds manager since 1996 and had been a cemetery employee since 1980. Cunningham cited similar reasons for retiring and also claimed Gilson and Deal indicated they were going to terminate he and his wife.
On Sept. 7, 2017, Correia submitted an order to disburse funds to the Tulare County Treasurer/Auditor/Controller’s office in the amount of $4,192.62 for herself and $5,175.63 for her husband for a total of $9,368.25 for unused vacation and sick leave as part of their last checks with the district. The order was signed by board members Patricia Colson, Antonia Chavez and Phillip Deal and clearly states it had been “audited,” meaning verified by the district board. But the amounts could not be audited because the district could not find its payroll records, a fact that was noted by Tulare County Counsel, the attorney for County of Tulare, in a Sept. 20, 2017 letter to Correia and Cunningham stating, “If you have any of these records in your possession, or any other District records, you must return them to the District office immediately.”
In its official response, the cemetery district claims it was a board member and not Correia who removed payroll documents from the office in late 2017 and were later returned. It also stated current office staff reported payroll documents were still missing from January to October 2017.
Correia also submitted a payment voucher to the Treasurer/Auditor/Controller’s office on Sept. 7, 2017 for net payroll from Sept. 1, 2017 through Sept. 30, 2017. The voucher was for a net pay of $2,830.96 for herself and $2,964.39 for her husband. According to the cemetery district’s September 2017 Payroll Report, which is compiled by Correia, her gross pay for September was $3,703 and her husband’s was $3,937. When divided by their hourly wage ($21.36 for Correia and $22.71 for Cunningham), the couple was paid for 173 hours of work even though there was a total of just 48 hours before Correia resigned on Sept. 8, 92 hours by the time Cunningham resigned on Sept. 15 and a total of 168 working hours in the entire month. Aguilar, Gilson and Deal also confirmed the order to disburse funds and payroll vouchers never came before the board prior to being submitted to the county.
Aguilar claims Correia’s actions were tantamount to embezzlement, but the majority of the board, and the Tulare County District Attorney’s Office, disagrees. Aguilar submitted his evidence for the alleged embezzlement to the District Attorney’s Office in a Sept. 29, 2017 letter claiming “The financial data submitted to the county treasure[er] for payment of these checks and for payment of other financial payments were done without board approval and through the submission of fraudulent records by Marilyn Correia.”
On Dec. 15, 2017, Assistant District Attorney David Alavezos wrote a letter notifying the cemetery board “no criminal activity can be proved based on the witness interviews and evidence provided, therefore our investigation is closed.” Alavezos went on to state Correia deducted the hours she was paid from her accrued vacation/sick leave balance before paying herself what remained on the books. The letter did note “unexplained erasure marks” on attendance records which would “call into question the validity and trustworthiness of those records.”
Alavezos’ letter concluded by stating if an audit uncovered evidence of embezzlement or other criminal conduct his office “would be happy to reopen the investigation.” Aguilar and Gilson agree a forensic audit was the only way to be sure if a crime had occurred, but the rest of the board was unsure if the expense of an audit was justified, given the alleged payroll embezzlement could be as low as $10,000.
Topping the list of the Grand Jury’s recommendations was a forensic audit for the last five years, from fiscal years 2015-16 through 2019-20. The board agreed to partial implementation to explore options for a forensic audit but only for calendar year of 2017 due to the cost of a five-year audit. The motion narrowly passed on a 3-2 vote with Presant opposing so that the district could move on and Aguilar opposing because it was not the full five years.
The board unanimously accepted the other three recommendations for greater transparency, restructuring its policies and procedures and to regularly transfer interest earned on its endowment to maintain and improve the cemetery. In his response to the Grand Jury, Presant said the board has already implemented the recommendation to post its agenda 72 hours in advance of meetings in compliance with the Brown Act and is currently working with two certified public accountants, one for annual audits and the second for reviewing quarterly financials.
“These financial experts provide advice to improve our fiscal procedures and internal controls,” the letter stated.
The cemetery district has been contentious since 2017, and the camps are not easily defined as former allies became enemies and former enemies found common ground. Gilson was appointed to the board, along with Phillip Deal, in 2017 in the wake of board resignations under pressure from the public about the poor conditions of the grounds. A year earlier, concerned citizen Elaine Hollingsworth started a Facebook site titled “Caring Cause—Stop Neglect at Tulare Public Cemetery District” over the dreadful conditions of the cemetery grounds. Gilson, Deal and Caring Cause were initially aligned in their criticisms of the board and concerns about the grounds, but just four months later the Facebook group, which has grown to 1,700 members, called for Gilson’s resignation at the board’s Feb. 21, 2018 meeting.
The Facebook page became a forum for mudslinging between members of the board and members of the public. The Grand Jury report described Caring Cause as a “volunteer group which is disruptive to Board Meetings,” but in reality it is simply the online message board for those who want to continue verbally assaulting each other after marathon meetings with more of the same. The cemetery board ultimately agreed with the grand jury’s finding on a 3-2 vote, with Gilson and Aguilar dissenting.
Aguilar had been a vocal member of the public attending meetings in 2017, when he also raised issues about the competency of the cemetery board and staff. One of those contentious meetings, on July 12, 2017, led to the resignation of board member Antonia Chavez. Aguilar would later replace Chavez when he was appointed to the cemetery board on Sept. 19, 2017 by the Board of Supervisors, just in time to maintain a quorum as two other board members resigned the week prior. Long-time board member Patricia Colson submitted her letter of resignation on Sept. 8, 2017 followed by Phil Vandergrift on Sept. 11, 2017. They were later replaced by current chair Stephen Presant, who was appointed to the board on June 12, 2018, and current vice chair Xavier Avila, who was appointed to the board on Nov. 6, 2018. Secretary James Pennington was appointed on Dec. 17, 2019.
Both Aguilar and Gilson have threatened to sue the district. Gilson did so in a July 3 letter to board chair Steve Presant regarding his unplanned visit to her property and Aguilar told the Board of Supervisors on Nov. 2 he had retained an attorney to sue the county over its refusal to require a five-year forensic audit of the district finances. As of press time, neither had filed anything in Tulare County Superior Court.
While the final paychecks of former employees may only reach a total of $14,500 in questionable costs, the bigger issue for Gilson and Aguilar is dramatic fluctuations in the cemetery’s endowment, an issue that spans personnel changes from 2017-2019.
Cemeteries are allowed to create endowment care funds, separate, irrevocable trust account where the district deposits funds from selling interment space. The fund ensures that income will always be available for the continued maintenance and upkeep of the cemetery, even when all the interment spaces are sold.
In June 2017, the income report compiled by Correia listed the Endowment Care Fund at $1.5 million but by June 2018 had fallen to just over $1.4 million in the income report compiled by current manager Leonor Castaneda. Aguilar notes there were no income reports produced for the year in between, leaving $87,767.54 unaccounted for. This amount also differed from the June 2018 audit report, compiled by district’s audit committee, which listed the fund at more than $1.7 million, $387,000 more than the income report.
The fund’s income report was then $372,000 less than the September 2018 audit and $365,000 less than the October 2018 audit. In June 2019, the endowment fund was listed at more than $1.8 million but had fallen to $1.5 million by June 2020, a loss of more than $288,000.
“There has been no explanation for the ongoing loss of revenues as noted on these financial reports compiled by Leonor Castaneda,” Aguilar wrote in a statement he submitted to the board at the Nov. 20 meeting.
In May, cemetery manager Leonor Castaneda had to remind board members it was their duty to set a policy but not to give directions to staff on how to perform their job at the direction of a single board members who stopped by the office “to be the boss for that moment.” In addition to Castaneda, the district employs a secretary, foreman and five grounds keepers.
Gilson pointed out only interest income can be transferred out of the endowment. Under California’s Health and Safety Code section 7826, “The principal of all funds for endowment care shall be invested and the income [such as interest, dividends and rents] only may be used for the care, maintenance, and embellishment of the cemetery.”
In 2017, the Endowment Care Interest Fund stood at nearly $137,000 but the 2018 financials showed the previous year’s balance at just under $70,000 yet expenditures in that time period only totaled $14,000. Nearly all of the interest fund was transferred to general fund in September 2018.
The Grand Jury reported in August 2019, $389,147 of accumulated interest was authorized to be transferred from the Endowment Care Fund to the County to be invested with 2% going to maintenance of the cemetery. The amount was computed by a private outside accounting firm employed by TPCD.
The Grand Jury recommended transferring the interest from the endowment for district operations on an ongoing basis. The board unanimously agreed this had already been done. In his formal response to the Grand Jury, Presant said interest monies from the endowment fund for fiscal year 2019-20 were transferred in September and the board has made a policy to continue the practice annually.
As of Aug. 31, financial records show the cemetery district had nearly $6,000 in its checking account, $328,292 in reserves, and nearly $2 million in its endowment.
Even before the Grand Jury completed its investigation, Aguilar took his concerns to the man who nominated him for his position on the board—Supervisor Pete Vander Poel. Aguilar approached the District 2 representative in January 2019 and presented him with the same evidence given to the DA’s office in 2017 and the Grand Jury last year.
When Aguilar did not hear back from Vander Poel, he waited for the Grand Jury to make his case for him. The Grand Jury’s findings fell in line with Aguilar’s claims and also called on the Supervisors to take action.
“I urge all of you to support and comply with recommendations of 2019-2020 TC Grand Jury report regarding Tulare Public Cemetery District,” Aguilar told the supervisors at their Oct. 20 meeting. “We need to ensure the money of the public is being spent in the way that it should be.”
The July 1, 2020 report pointed out the supervisors not only had the authority to intervene but also a responsibility to do so.
“The [Board of Supervisors] has neglected to provide essential oversight to ensure that the public interest is served,” Finding 6 of the report reads. “They continue to reappoint trustees who have demonstrated an inability/unwillingness to adhere to accepted practices as they relate to conduct of Cemetery District board meetings.”
The supervisors unanimously approved a response to the report’s findings and recommendations at their Nov. 3 meeting. The board disagreed with finding 6 saying Aguilar and Gilson’s willingness to dig into the financial and operational details of the district, their requests for documentation were signs of a passionate board, not a dysfunctional one.
“From all appearances, the District is in sound financial shape and the cemetery grounds have never looked better,” the supervisors wrote in their official response. “In the view of the Board of Supervisors, this shows that the public interest is being served by the appointed Cemetery District board.”
Gilson approached the Board of Supervisors just as the Grand Jury report was being released with a proposition that could solve all of the cemetery’s leadership issues without taking sides between the factions of the board.
“My recommendation, I’m asking the board [of supervisors] to remove all five trustees and start again,” she said at the June 23 meeting.
The board of supervisors not only has the authority to appoint members to the cemetery board but also to replace them. Under Section 9026 of the California Health & Safety Code, the Board of Supervisors is allowed to appoint itself to serve as the governing board of the cemetery district “in such cases where it is deemed to be necessary and/or appropriate.” The Grand Jury said the supervisors should consider exercising this authority to bring the cemetery district in compliance with generally accepted practices and state requirements.
The supervisors’ response said wholesale replacement of the board was “not warranted and would detract from the local control that is vital to the success of the District in meeting the needs of and being responsive to the community.” It also said intervening as the acting board was impractical because the county would have to go through the expense of determining how many registered voters reside in the district boundaries to determine if a protest to the cemetery board’s replacement was successful.
Vander Poel delivered his answer to Aguilar, and the rest of the cemetery district, when he called on the cemetery board members to use their experience and training to do the best job for the people they serve.
“A lot of attention brought to the Tulare Cemetery District. I think a lot more has to do with the relationship, or lack thereof, between board members versus the actual appearance and operation of the cemetery district,” Vander Poel said. “Everything I see as a constituent of Tulare is a tremendous improvement in the grounds and finances of the cemetery district.”
The sentiment was shared by cemetery board chair Presant in the closing remarks of this the cemetery district’s response to the Grand Jury report. Present noted that despite the turmoil of the past, the district now enjoys a larger annual budget, reduced operating costs, better fiscal oversight and reporting, more staffing and improved grounds. The board unanimously agreed with the grand jury’s findings board meetings packets are frequently incomplete and not all board members are provided information to which they are entitled. In his letter, Presant said additional office staff was hired in January 2020 to alleviate the workload on the cemetery manager to meet the board’s needs.
The board also unanimously agreed with the grand jury’s finding that its accounting issues could be addressed with new software. Presant said the all financial documents have been inputted into QuickBooks software going back to the 2018-19 fiscal year in addition to the hiring of two certified public accountants.
“The Tulare Public Cemetery has changed dramatically in the last several years and is now an improved organization,” Presant concluded.