By CATHY BUSSEWITZ
THE PRESS DEMOCRAT
Federal auditors are recommending that Sonoma County be ordered to return at least $2 million in disaster aid received after the floods of 2006, saying proper contracting procedures and other guidelines were not followed.
But county officials said several of the issues had been cleared by the Federal Emergency Management Agency, which provided the disaster funding, and on other issues federal auditors were inaccurate.
The audit, conducted by the Office of the Inspector General of the U.S. Department of Homeland Security, covers six of the 154 projects the county conducted in the wake of the severe flooding. The heavy rains took out chunks of roadway, damaged the region’s major water supply system and threatened several homes.
The inspector general’s office was established in 1978 to investigate fraud and wrongdoing in government agencies.
The auditors recommend that FEMA should disallow about $2.1 million in federal money the county spent to repair the Sonoma County Water Agency’s levee roads and dam at its Mirabel Infiltration Facility on the Russian River, to restore the banks of Sonoma Creek along Happy Lane and repair damage along Pine Flat Road.
FEMA will make the final decision whether the county must return the money, and agency officials said they are unlikely to follow the inspector general recommendations. The final decision will not be made until all of the 154 projects are complete.
The bulk of the funding that the inspector general questioned, $1.5 million, was challenged because the county did not follow federal procurement standards for work on the Mirabel facility and Sonoma Creek.
“As a result, full and open competition did not occur, and FEMA has no assurance that contract costs were reasonable,” the auditor wrote in the March 2 report.
The audit says the county selected a contractor from an on-call list and paid on a “time and materials” basis without written contracts. Such contracts are supposed to be limited to 70 hours of emergency work, with additional work put to competitive bidding, the audit said.
County officials said that under emergency conditions, there was no time to put a contract out to bid, a process that could take weeks.
The 2006 flooding hit in early January. The Mirabel Dam project began later that month and ended in late March, while the Happy Lane repair project was conducted from mid-February until early June. The projects took more than 70 hours, said Brad Sherwood, spokesman for the Sonoma County Water Agency.
“We supply the most vital services to our communities,” Sherwood said. “This is where the river meets the road. There’s no time to have an open bidding process when your water pumps are not working.”
According to documents, the county chose Ghilotti Construction Co. for both projects because of the company’s ability to respond quickly with equipment and operators.
Regular capital improvement projects go out to bid, but the county has a list of contractors to turn to in an emergency, Sherwood said.
County officials said they already had dealt with this issue when FEMA denied those project charges for the same reason several years ago. The county appealed FEMA’s denial, and the federal agency eventually allowed the charges, a process that began in 2006 and ended in 2008.
“It was ultimately approved and obligated by FEMA, and now the OIG is coming back in and taking us back to square one,” said Dawn Flowers, accountant in the county auditor’s office.
The inspector general’s report disagreed with FEMA’s decision and said the county did not carefully monitor and document contract charges.
“FEMA’s practice has been to allow contract costs it considers reasonable regardless of whether the contracts comply with federal procurement regulations,” the auditor wrote. “We do not agree with this practice unless lives and property are at risk, because the goals of proper contracting relate to more than just cost. Without full and open competition, FEMA has little assurance that contract costs are reasonable.”
FEMA has the final say on whether to follow the inspector general’s recommendations.
“Many times, I’m going to say in the 90 percent range, we do not follow through on those findings, because they are not accurate in nature,” said William Roche, infrastructure branch chief for FEMA’s Region Nine. “If there’s a fraud situation, FEMA has to go along with that decision.” But nothing in the report had to do with fraud, he said.
In addition, FEMA will wait until all the projects are completed, at which time it will conduct its own final audit, Roche said.
Rene Lee, an inspector general spokeswoman, said her office does not comment on specific audits.
Another $500,000 worth of repairs to the Mirabel River dam was questioned because the auditors said the damage was not the direct result of the disaster. “The county did not repair the dam before the disaster to ensure proper performance during emergency periods, leaving it susceptible to additional damages,” the auditor wrote.
This is another expense FEMA had originally denied, but then approved after the county appealed.
“We do feel that the damage to that deflatable rubber dam was caused by the flooding,” Sherwood said.
The inflatable dam below Wohler Bridge is used during peak demand months to back up water, which is diverted to infiltration ponds that in turn replenish underground water supplies that feed the agency’s pumps.
Sherwood acknowledged that there were prior problems with the dam, which he said the water agency addressed by changing its operational methods. “The storm came in with such power, and the water levels rose so quickly, that there was no way we could deflate that dam quicker, even under our standard operating procedures,” he said
The audit also questioned the cost of repairs to Pine Flat Road northeast of Healdsburg, which was damaged in a landslide that took out part of the roadway and a supporting embankment. It recommended disallowing $67,264 used in that project because a FEMA inspector in May 2006 concluded that no work had been completed. County officials disagreed.
“We have all the documentation tracked back to that project and pictures to prove that the work was done,” Flowers said.
Tom O’Kane, the county’s deputy director of public works, said the repair project began in March 2006 and was completed in September 2006. O’Kane said the report, written by a FEMA official in May of that year, was inaccurate because it stated that no work was completed on the project.
“In this case, it appears there was a clerical error on the part of FEMA. They put the wrong date,” O’Kane said.
“There are hundreds of local agencies that will be appealing these audits, because we’re not the only one that received an audit like this,” Sherwood said.