San Benito County, CA

PRESS RELEASE

December 10, 2025

STATE CONTROLLER HAS GRANTED THE COUNTY’S REQUEST TO CONDUCT AN AUDIT OF THE COUNTY’S INTERNAL FINANCIAL CONTROLS IN RESPONSE TO FAILURES BY THE AUDITOR’S OFFICE TO DETECT AND PREVENT FRAUD AND EMBEZZLEMENT

Today, the State Controller notified the County Counsel that its Local Government Oversight Team has been instructed to conduct an audit of San Benito County. On October 21, 2025, the Board of Supervisors formally requested that the State Controller conduct an audit in response to multiple failures by the auditor’s office. The Board of Supervisors is committed to identifying any deficient internal controls and taking all actions necessary to protect taxpayer dollars. Most importantly, this action by the State Controller is necessary to restore trust and confidence in our government.

It is expected that the audit will begin promptly and that the State Controller will ultimately provide the Board with its findings and conclusions as well as recommendations to reform its internal controls to detect and prevent fraud. The report will be presented to the Board of Supervisors at a future meeting where the Board will consider the report and take action on the recommendations.

In the past two years, the County has suffered two incidents of fraud and embezzlement leading to a potential loss of over $1,100,000 in taxpayer funds due to failures in the auditor’s internal controls to detect and prevent fraud. The Board is concerned that there may have been other instances of which the Board is unaware and only an audit by the State Controller will disclose whether that has occurred. The Community of San Benito County needs to know if there have been other incidents. 

The most recent incident occurred on October 15 in which the County Treasurer advised the County Administrative Office of a suspected fraudulent payment by the County. A breakdown in the auditor’s fraud preventative procedures led to the fraudulent payment of $696,602.02 in County funds to a fictious construction company.

This is now the second time in two years that the County has been the victim of fraud involving significant sums of taxpayers’ money. In 2023, the County suffered the loss of $360,755.79 due to embezzlement by two former library employees. The embezzlement was never detected by the auditor’s office, which authorized the payments.

The Auditor’s office is managed by the County Auditor-Controller, who is a countywide elected official and is NOT overseen, directed, or managed by the County Administrative Officer or by the County Board of Supervisors.