[Sacramento County] Grand Jury Looks Into County’s COVID Spending

Report Calls For Independent Audit Of How County Officials Used $181 Million In Federal CARES Act Funding

Millions in federal funds for COVID-19 response went to the Sacramento Sheriff’s Department, which vowed to not follow pandemic protocol, and now the Sacramento Grand Jury is calling for an independent audit.

The title of the report, released Wednesday, speaks volumes — “Sacramento County Board of Supervisors Abandons Responsibility for COVID-19 CARES Act Spending.”

A statement from the County Superior Court reads, “The Sacramento County Grand Jury is calling into question the use and distribution of more than $181 million received in federal CARES (Coronavirus Aid, Relief and Economic Security) Act funding by the Sacramento County Board of Supervisors. Following a nearly year-long secret investigation, the Grand Jury has learned that in the midst of a countywide emergency, the Supervisors made questionable and opaque maneuvers that skirted the intent of the CARES Act, to the benefit of County coffers and with scant regard for the needs of its citizens.”

As first reported by the Sacramento OBSERVER, the County Board of Supervisors allowed then County Chief Executive Officer Nav Gill to give $132.86 million of its federal pandemic response funds for “payroll for public health and safety employees,” with the Sheriff’s Department receiving 78%, $104.2 million, of that money.

The OBSERVER obtained documents from a whistleblower that detailed the spending.  Residents were outraged upon learning of the County’s action, especially in light of the disclosure that Public Health Officer Dr. Olivia Kasirye had made a request for money for COVID-specific needs and was initially denied.

County officials were forced to explain themselves.

Gill and Deputy Executive Bruce Wagstaff said they were flipping the money in order to keep it all and not have to give the unallocated portion back to the federal government.

According to the Grand Jury report, “The County Executive and CEO asserted that since there was no deadline on use of County General Fund dollars, switching the Sheriff’s County General Fund allocation with CARES Act funds would guarantee that the entire $181 million of CARES Act funding ($147.97 million FY 2019-2020/$33.1 million FY 2020-2021) would be retained by the County.”

The report goes on to state, “Switching County General Fund dollars with CARES Act funds may have provided the County with flexibility to maximize all the available federal and state funds that carry spending deadlines. However, the Grand Jury found that this maneuver had adverse consequences to the local community at a critical time in County history.”

At the time, officials implied that the community should be grateful that, in doing so, there would be no loss to much-needed services. Supervisors claimed ignorance of Gill’s actions.

Members of the community weren’t buying it and called it an old-fashioned bait and switch. Among the most vocal was well-connected activist Kula Koenig. Koenig, the founder of Social Justice PolitiCorps and a member of what became known as a the People’s Budget Coalition, literally called the Board of Supervisors on their “bullshi**.” Koenig’s expletive-filled public comment during a December 16, 2020 County meeting on the spending went viral. She called the report “validating.”

“Sometimes when we’re doing this work and you’re screaming and hollering and thinking, ‘Does anyone else think this is crazy?’ You start to think, ‘Am I crazy?’” Koenig said. “Are we just these crazy activists that they say we are? But this was kind of like, ‘Yes, in your face.’”

Koenig says she was asked by County Supervisor Phil Serna and new County CEO Ann Edwards, who replaced Gill, to not speak out about the County’s CARES Act spending in an effort to help the situation blow over. She didn’t and it didn’t.

Someone filed a formal complaint and a grand jury investigation resulted.

The Grand Jury Report says the comprehensive review of the County’s budgeting process uncovered a failure to operate with transparency.  “The result of this failure undermined public confidence in government during a countywide emergency. The County Board of Supervisors failed to engage in governance and oversight at a critical moment,” the report reads.

The Grand Jury clearly states what the County did or didn’t do, but is unclear on whether or not those actions violated federal requirements and recommends that the Board of Supervisors appoint an independent panel to conduct an audit of its CARES Act allocations.

The Board of Supervisors and County Sheriff’s Department have 60 days to respond in writing. “Each grand jury report and response is unique,” said County Public Information Director Kim Nava, who declined to “speculate how long a response may or may not take.”

“The Board of Supervisors will provide a comprehensive response to the Grand Jury’s findings and recommendations. This response process will include a presentation at an upcoming Board meeting, during which the Board can provide input, review and approve the response to the findings and recommendations,” Nava said.

Most officials the OBSERVER tried to reach for comment declined to do so.

“The Sacramento County District Attorney’s Office was not listed as a governmental agency that was required to or invited to respond,” Chief Deputy District Attorney Rod Norgaard said in a statement. “The report contemplates further actions by the Board of Supervisors and it would not be prudent for the District Attorney’s Office to comment at this time.”

Kim Pedersen, Deputy Director of Superior Court of California, County of Sacramento’s Satellite Court Operations and Communications also issued a statement: “Unfortunately, since the matter continues as an investigation, the court, Grand Jury Advisor or Grand Jury foreperson is unable to comment at this time.”

The spending and the report could have far-reaching ramifications as federal officials attempt to, at least retroactively, crack down on misuse of COVID-19 funds, large and small.

The Grand Jury also investigated the City of Sacramento’s spending of its $89.6 million CARES Act funds, finding that the City and County’s use of the money were vastly different — the City distributed nearly all of its allotment to community agencies and businesses to help alleviate COVID-19 impacts, as intended.

“This whole thing with the CARES Act is a microcosm of how the City and the County act when it comes to doing policy work that is centered around social justice and helping people who really need it,” Koenig said. “The County is really focused on law enforcement and is really focused on not being transparent.

“It is really focused on just doing things the way that they want to do and on bureaucracy. The City, it’s not perfect, but they’re way better in terms of at least trying to do right and involve people in discussion.”

The Observer
by Genoa Barrow
February 22, 2022